Although there is some discourse regarding which type of investors that investor relations professionals should have focused communications with, it is clearly evident that social media targets potential and current individual investors, or otherwise known as retail investors. Investor Relations tactics that target institutional investors are conferences with institutional investors, road shows, report preparations, etc. Although theses are tactics that can be applied to the individual retail investors, typically IROs would not spend the time engaging in tactics, such as one-on-one meetings with them because of the time limitations and efficiency of such activities with investors with small stakes in the company. Like it or not, investor relations departments focus on the entities that are able to handle high volumes of the company’s stocks and/or securities.
Investor Relations departments are using social media sites to respond to retail investors in the masses. Annual reports, 10Qs, 8ks, etc are published online in the SEC’s EDGAR database for anyone to access making research for investing that easy for the individual. Also, IROs are using sites such as Twitter, blogs, and Facebook to respond to individual requests. Social media sites have made it very simple for investor relations professionals to respond quickly to individual investors because of the various web alerts companies have set up (such as this). These web alerts track what is being said about a particular company and (at the discretion of IR departments) allows IR professionals to engage in platforms where the message will be amplified. Examples of “amplified messages” are “re-tweets” on Twitter, status updates on Facebook, and discourse in major blogging communities.
My question regarding social media and investor relations professionals is will the frequency of IR activities will change based on the usage of social media for IR?
On the table below, Alexander V. Laskin, Ph.D., conducted a survey which explored how often investor relations professionals engage in certain activities. (full article can be found here). 
Based on the table, the most frequent activity for IR professionals is “responding to requests…” My opinion is that this figure representing the frequency may either increase dramatically, or decrease based on the usage of Social media for IR.
Reasons:
INCREASE: Because social media creates a platform in which retail investors can air their questions and have the questions answered in a timely fashion, it may motivate them to engage with IR departments and keep online discourse moving; therefore making the IR activity of ”responding to requests…” an activity that is frequented often.
DECREASE: Because social media encourages a discussion forum that not only investors and IR departments engage in, but also investors with other investors, the specific questions and requests made by investors to IR departments may decrease. The availability of information on social media sites seems never-ending, and perhaps many questions can be answered through FAQs pages or forums. In this situation, IR departments may find themselves correcting misguiding information online and answering specific inquiries.
Social media’s effect on IR is a subject worth exploring because it has a significant impact on communication with investors. Although IR departments do not specifically focus on retail investors to communicate with, social media targets them. If IR departments can tailor messages effectively using social media, not only will it cut time in responding to individual requests, but also will engage a audience (retail investors) without sacrificing time spent on other IR activities.
