How Digital is Driving Big Time Investment Decisions | Brunswick Group

How Digital is Driving Big Time Investment Decisions

LinkedIn and Search Rival Traditional Media on Trust as Big Investors Rely on Digital and Social Media for Vital Information

The opportunity for communicators to use digital media and platforms for marketing seems fairly well understood these days. Notwithstanding recent controversies, digital platforms have proven that they can provide an effective venue for brands to connect with consumer audiences, large and small. 

But the value of digital media in more complex stakeholder situations has, over the years, been considerably less clear, particularly when it comes to investor relations. Meanwhile, too many IR specialists continue to behave as though investor interactions should be conducted person-to-person or through media relations with a small selection of titles.

New data from the annual Brunswick Investor Survey demonstrates that digital can no longer be viewed as an optional nice-to-have in an investor relations context. 

New data from the annual Brunswick Investor Survey demonstrates that digital can no longer be viewed as an optional nice-to-have in an investor relations context.

The survey tests attitudes about communications, research and information-gathering from a mixture of buy-side investors and sell-side analysts in North America, the U.K., Europe and Asia.

According to the most recent survey, 90 percent of investors regularly use digital platforms and channels to investigate companies and issues, while 70 percent report making investment decisions on the basis of something they learned from digital research.

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Needless to say, search engines and online publishers are the most used digital sources, but social media plays a significant role as well. 48 percent of investors regularly turn to LinkedIn for their research and 42 percent rely on Twitter.

When it comes to LinkedIn, investors trust what they’re finding. Other social platforms are less trusted. While LinkedIn enjoys a favourable +26 net trust score, Twitter scores a -17 trust deficit while investors give Facebook a trust deficit of -50. (Brunswick calculates a “net trust score” based on the difference between the levels of total trust and total distrust that investors have in a platform.)

LinkedIn’s +26 trust score is comparable to more traditional media outlet CNBC at +42, while Twitter’s -17 negative rating level pegs with Fox Business News’ own -17 trust deficit.

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Search engines also remain critical to investor relations success. Unsurprisingly, search engines are the most used platform for digital research and investigation. But they are also the most trusted online channel, with a +50 net trust score. That’s a near-perfect match with the New York Times, who enjoys a +51 net trust score among investors.

For communicators responsible for investor relations, the message is unmistakeable: Digital has a crucial role to play. And the typical content on the corporate website isn’t sufficient.

The good news is that there are some quick wins: Ensuring investor relations content is well optimised and supporting that content with a carefully targeted paid search campaign, especially around important financial milestones. 

The bigger opportunity is with LinkedIn.

In many organisations, the social network for professionals is often the responsibility of the HR team. Traditionally, that’s made sense. It’s impossible to question LinkedIn’s value as a networking and recruiting tool. As a result, virtually every significant business has its own company page which are being utilised to widely varying degrees of effectiveness.

Meanwhile, in recent years, LinkedIn has become a powerful platform for much more. To maximise its value for investor relations, communicators should consider the following:

  • Publishing investor relations content to your LinkedIn company page. Consider scaled down versions of elements published to the website, explanations and insights adapted from investor calls, and visually rich treatments of data.
  • Creating a digital executive profiling programme for key executives with content published from their own profiles. With careful planning, leading execs can have a valuable presence and deliver their perspective to investors and other stakeholders with minimal risk. And content published from individual accounts is consumed and shared at higher rates than similar content published from company pages.
  • Delivering this content to carefully selected stakeholders through the LinkedIn platform with a small-scale spend.

Needless to say, any steps must be fully compliant with local laws and regulations.

But the opportunity is compelling. By including the right mix of digital platforms in your approach to investor relations, you can provide information and shape your story for investors at the place and time of their own choosing. Adding value rather than force-feeding can only help enrich and improve any investor relations effort.

Thanks to my colleague Noah Kristula-Green, an Associate with Brunswick Insight, for managing the survey and for his valuable contributions in preparing this article.