Face time rather than Facebook still drives investment decisions
A unique role for digital media
Interestingly, while digital sources may not yet have a significant direct effect on investment decisions, they are becoming increasingly important as sources of information that lead to further research. As with last year, blogs continue to lead the charge: 52 per cent of respondents have read a blog post that has led them to further investigate an issue, up 5 per cent from 2009. There was a similar three-percentagepoint increase in the number of those who were prompted to further investigation by a posting on a social media site, such as Facebook. The only category to see a decrease was message boards, dropping from 39 per cent to 31 per cent, but this is likely explained, in part, by the inclusion of a new category in this year’s survey: micro-blogging services such as Twitter, where posts prompted 11 per cent of respondents to do additional research.
Lessons for application
If anything, the findings from the 2010 survey amplify the implications of 2009’s. The influence of communications direct from companies on the investment community should not be underestimated.
While the apparently limited influence of digital media controlled by companies may give pause for thought, we do not believe it should dissuade investment of time and resources in new channels of communication. In fact, the participants in the survey bear this out. A full 60 per cent believe it will play an increasingly important role in investment decisions in the future. The increasing reliance on digital media as sources for information that leads to further research is likely to be the proverbial “tip of the iceberg.”
Familiarity with new channels will continue to develop over time, and companies will be able to trade upon the trust and understanding they have built with the investment community to engage in new conversations in new ways through digital channels. Though the transition will take time, we believe innovative approaches, such as those undertaken by Brewer-Hay at eBay, will become the rule rather than the exception.
Digital media - Investment Decisions
Blogs have become increasingly influential over the past year, in terms of prompting investors and analysts, to investigate an issue. Message boards have declined in importance in this aspect, as has their influence on investment decisions
Changing importance of information sources
Real time subscription information services were cited by more than half of respondents as having become more important in their work over the past year. Online business media has also become more important, but to a lesser extent than in 2009
Amanda Duckworth is a Partner and Brandon Borrman and Jason Golz CFA are Directors in Brunswick’s San Francisco office. Andrew Gunn is a Director in Brunswick’s London office and a member of Brunswick Research, the firm’s opinion research practice.