Social media of little importance as an investor relations channel

Private investors prefer online portals, corporate websites and print media as information sources

While social media are increasingly establishing themselves as corporate communication channels, the relevance of Twitter and other social media for investor relations and financial communications is controversial.

In the context of her master thesis project at the Iserlohn Business and Information Technology School (Professor Dr. Christoph Moss), the author examined the information behaviour of private investors with regard to listed companies. A total of some 100 private investors frequently using the Internet were interviewed in the summer of 2015.

Key finding: Private investors mostly use online portals, newspapers, magazines and corporate websites for their investment decisions. Only one third of the respondents use social media such as blogs, forums, Wikis or social networks like Facebook or Google+ for this purpose.

Only just about half of the private investors interviewed generally believe that it makes sense for listed companies to make financial information available via the social web. This is all the more interesting against the background of the fact that all respondents use the Internet and almost two thirds of them have a social media profile. This number is expected to be much lower for private investors using the Internet less heavily.

The social media channels used most frequently by private investors include forums (47%), Wikipedia (38%) and blogs (23%). The Twitter platform, which is increasingly being used by companies and has been accredited as a channel for disclosures by public US companies under Regulation FD since 2013, is used regularly by only 9% of the investors interviewed.

At the bottom line, the survey shows that the advance of social media has influenced private investors‘ information behaviour only little so far. 

As far as the direct dialogue with companies is concerned, social media do not score well, either. Traditional e-mails remain the preferred form of contact for private investors (60%), followed by contact forms on a company’s website (39%) and personal contacts at the shareholders‘ meeting (26%). Only 9% prefer to get in touch with a company via social media.  

At the bottom line, the survey shows that the advance of social media has influenced private investors‘ information behaviour only little so far. More than half of the respondents do not expect this communication channel to gain relevance in future. The findings are consistent with the results of other studies and with companies‘ reluctance to use social media for financial communication purposes. By contrast, surveys among institutional investors both in the USA and in Europe indicate a growing relevance of social media for the procurement of information (blogs) by professional investors. This target group appears to be the actual driver of the development of investor relations on the social web.

103 private investors participated in the online survey during a 7-week period. The questionnaire consisted of 21 questions regarding investor relations on the social web. 83 of the 103 participants were male, while 20 were female. Respondents aged 18 to 29 represented the largest age group (33%), followed by 30-to-39-year-olds (22.3%). The survey is not weighted and thus not representative.

IR.on Aktiengesellschaft
Anna-Lena Mayer

Phone: +49 221 91 40 976
E-mail: anna-lena.mayer(at)