What is wrong with Citigroup investor relations or fish where the fish are.

@IRWebReport discusses @Citi‘s usage of new media tools to communicate with investors. Unfortunately, investors are not rushing in to chat with @Citi. So, @Citi ends up using tools designed for conversation simply for information dissemination wasting valuable opportunities, money and time.

So, why investors do not talk to @Citi? Consumers seem to enjoy this opportunity. The answer is quite simple… if you know how to fish, of course. You do? Well, then, you know that you fish where the fish are. Are there plenty of consumers on Twitter and Facebook? Yes, there are. You can also add YouTube, iTunes podcasts, some social bookmarking, and voila – you have a social media presence for your consumers where you can engage in conversation with them… yes, conversation. In fact, they are already actively talking, complaining, praising, and so on. @Citi has everything going for them.

But do we have plenty of professional investors on Twitter and Facebook? Investors who look for a chance to talk with CEO or ask questions they could not ask during the last earnings call? The answer is no. In fact, if @Citi investor relations people would walk over to the financial analysts in the room next door they would probably discover that financial analysts are not allowed to go to social media sites during work hours! I know of quite a few investment organizations that do not allow their investment teams go to Twitter and Facebook during work hours. I am sure it will change eventually, but even then if professional investors have to ask an investor relations professional on Twitter, in my opinion, it means such IR person should be fired. One of the responsibilities of IR is to develop good close relationships with the analysts – making them comfortable to pick up a phone and call you rather than use Twitter.

Does it mean that @Citi is wasting money? Yes. But there are also retail investors. Washington and NIRI always want companies to focus more on retail folks, and, let’s be honest, IR professionals never have time for them. So, social media can be a perfect solution. But the content and the presentation for retail folks should be different than for professional investors. And, sorry to say that, return on investment with retail investors is negligible, if not negative. But should we worry about @Citi’s ROI? Certainly not. @Citi IR team can play with all these cool new social media gadgets as much as they want – if they lose money, they can always ask for more bailout from the American taxpayers!

1 comment:

Dominic Jones said...

I disagree only to a point. True, professionals are restricted from participating in social media by their firms' compliance departments and unworkable FINRA rules. But they *are* using social media to monitor information. It's now baked into Bloomberg and a variety of other services, for instance. Also they have an obligation to keep track of *all* information if they are fiduciaries.

Unlike other fields, though, information is money in investing. Analysts and professional investors aren't natural information sharers. If you have a question whose answer you think might complete a mosaic of information that could give you an advantage, you won't ask that question in public. So engagement in an IR setting is always going to be less than in other environments. Also, IR professionals haven't shown up in social media as much as they should, so why ask questions that probably won't get an answer? Where IR does show up, I expect we'll see some engagement, but nothing like in other contexts.

If we are going to take "engagement" to mean comments and online conversation, then we are using the wrong metrics in an IR context. Views, clicks etc are much better metrics in this area. And in that sense, Citigroup could do better by improving the relevance and visibility of its social media information. But as it stands, they're getting more attention than they were before they started using social media.

Citigroup isn't wasting any money on social media because the cost of these things is negligible. That's like saying the company is wasting money on phone lines when the phones aren't ringing.