S.E.C. Gives Social A Shot

By Neil Steinberg

We’ve been the beneficiary over the past few years of the corporate communications and brand marketing suites embracing video story telling as a mindshare driving tactic and the categorical imperative that has become social media. However, one area that we’ve definitely seen lagging is when it comes to Investor Relations. You would think IR would benefit more than any element in the corporate suite from turning a 3,000 word release into a two minute video or a 140 character tweet but it has been a slow grind. We’ve actually had the chance to distribute video content from global brands on our www.thenewsmarket.com platform around earnings releases and helping distill complicated spreadsheets into effective sound bites. We’ve also created annual reports for other clients such as PwC but this has definitely been the exception rather than the rule.



Much of this is dictated by Regulation FD, which mandates public companies to disclose all material information to shareholders at the same time.  The S.E.C. has been slow to shape policy as media has evolved thus the dependence on the press release. It wasn’t until 2008 that they allowed websites and blogs to serve as disclosure points for investor communications. However fast forward five years and little has been done to address social media. Earlier this week, after an inquiry which began following Netflix’s CEO Reed Hastings posting a note on his Facebook feed containing what was construed as material share information, the S.E.C came out and made a ruling which definitely impacts our clients. They ruled that publicly traded companies CAN use Social Media channels like Twitter and Facebook for shareholder communications under the presumption that “corporations have to make clear which Twitter feeds or Facebook pages will serve as potential outlets for announcements”.

The key part about the ruling is that in “Field of Dreams” terms, if you build it, they will come. As companies begin to look at these channels as IR communications channels the possibilities are endless. Imagine a Vine video showing earnings pie charts mixed with pictures of key projects from the quarter, or an interactive Facebook app showing revenue by region and business unit or just a produced video telling the company’s story in a way that can be easily understood by investment bankers and retail investors alike.

The SEC just gave brands a new channel to tell their investor stories…. Curious to see how they use it.

Shameless plug… Check out the great video that our team did with PwC for their 2012 Global Annual Review. Get in touch with us to figure out how we can help you.