Global blue chips snub Facebook for IR

The 500 million active users of Facebook make it the most popular social media forum in the world. Yet this widespread popularity in the personal sphere has so far failed to crossover into the investor relations community. A global study of corporate social media use, conducted by Q4 Web Systems, found that under half of public companies (45 per cent) use Facebook for IR, while over two-thirds (67 per cent) use Twitter.

To find out why this is, IR magazine decided to investigate the Facebook presence of a panel of 15 companies with a significant global presence. The panel is made up of the top 5 constituents by market capitalisation featured in the S&P 500, the S&P Europe 350 and the S&P Asia 50.

Out of the 15 companies we looked at, eight of them either do not have an official Facebook account or do not provide a link to it on their corporate website: HSBC, Exxon Mobil, Apple, Samsung Electronics, China Construction Bank, China Mobile, Industrial and Commercial Bank of China and Taiwan Semiconductor Manufacturing Company.

The other seven companies – Vodafone, Nestlé, Novartis, BP, Chevron, IBM and GE – have a Facebook page but told us that they don’t use it for IR purposes (except for a few financial results posted by BP).

All of these blue chip companies are headquartered in typically tech-smart locations in the US, Europe and Asia, and all shy away from using Facebook to communicate with investors. Why is that?

Some companies view Facebook as unnecessary for IR. ‘At Vodafone, Investor Relations does not currently use Facebook,’ confirmed the UK telecommunication company. ‘We already interact with our global investor base through a variety of electronic means including our website and via email.’ The Swiss pharmaceuticals company Novartis takes a similar line. ‘We currently do not use social media channels such as Facebook to engage with the investor community, but we are using this channel to engage with the public at large,’ explained a company spokesperson.

Other reasons for snubbing Facebook are largely pragmatic. Nestlé, for instance, won the award for ‘Best use of technology’ in last year’s IR Magazine European Awards. It is shortlisted for the same award this year, having recently brought out an IR app for the iPad. ‘Facebook has not featured in comments from our investors as something that they feel would enhance our investor communications,’ says Roddy Child-Villiers, Head of Investor Relations at the Swiss food & beverages company. ‘Equally, we know from our experience with our many brand Facebook pages that the management of an IR Facebook presence to the level of professionalism and responsiveness that we demand of our existing IR activities would be extremely resource-heavy.’

Elizabeth Sun tells a similar story from the other side of the world. She works in the corporate communication division at Taiwan Semiconductor Manufacturing Company and cites her lack of capacity as the reason for not using the social networking site for IR.

Of the 15 companies, BP has come the closest to dipping an IR toe in the water. It began using Facebook as a crisis management tool while it was under fire for the oil leak in the Gulf of Mexico. Later on, the UK oil company posted varied content on its wall with varied results.

‘We are now slowly moving into a wider arena which covers not just the recovery efforts in the Gulf but other happenings in BP, including the quarterly results, sustainability report and more recently the energy review,’ says Gerry Bye, Investor Relations Manager at the UK-based oil company. ‘Some of these corporate publications/announcements have been well received and others have had a mixed reaction mainly as the audience is not a pure investor audience.’

As the remarks from Nestlé, Novartis and BP illustrate, the problem does not seem to be with Facebook itself. Almost half of the companies we looked at have an official presence on the social networking site. Moreover, the percentage of Fortune Global 100 corporations on Facebook increased by 13% between 2009 and 2010, according to data released by the PR firm Burson-Marsteller.

The real issue seems to be with investor demand. The general public use Facebook, not investors. Facebook is meant to be social after all. It is about collecting friends and being liked. Essentially, it is a popularity contest which companies don’t want to lose by posting share prices and financial results – however much they may have improved in the last quarter!

Of course, as many Facebook dissenters will know, one of the dangers for companies not on Facebook is that other Facebook users could still be talking about them in their absence. Take Exxon Mobil as an example. The company is not on Facebook but a search for it on the social networking site brings up numerous protest pages, with names such as ‘Boycott Exxon Mobil’.

Nonetheless, it would appear that IR professionals are much more at home on Twitter. Chevron is among the companies that prefer the micro-blogging service to Mark Zuckerberg’s creation. ‘At this time, we do not use Facebook for IR purposes,’ says Justin Higgs, Media Advisor at Chevron Corporation. ‘However, we do tweet quarterly earnings results, interim updates and dividend announcements.’

[Article by Silvia Molteni, IR magazine]

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