Investor Relations 2 0 - Global Benchmark Study 2012 - University of Leipzig

Investor Relations 2.0 – Global Benchmark Study 2012 1 Investor Relations 2.0 – Global Benchmark Study 2012 1

INVESTOR RELATIONS 2.0 – GLOBAL BENCHMARK STUDY 2012

Financial Communications, Online Dialogue and Mobile Information


About the authors 107

Appendix 114

References 111

IR 2.0: Management summary Global benchmark and summary of findings Independent variables Implications for investor relations practice

95 96 99 104

IMPRINT

Ansgar Zerfass & Kristin Koehler

Investor Relations 2.0 – Global Benchmark Study 2012: Financial Communication, Online Dialogue and Mobile Information

Leipzig: University of Leipzig, 2012. With special thanks to Anika Mueller and Isabel Reinhardt for their great support. The use of the charts and data from this report in own presentations and publications is permitted when quoting the source “© University of Leipzig / Investor Relations 2.0 – Global Benchmark Study 2012” with every figure and reference. Digital distribution and publishing of this report as well as storing the file on online platform by third parties is prohibited. This document is available for free at www.slideshare.net/ communicationmanagement. © June 2012 by the authors. All rights reserved.

CONTENTS

Methodology and sample 06

IR 2.0: Dialogue and relationship building Dialogic approach on IR websites Dialogic approach on external platforms Social media dialogue index and summary Best practices for IR 2.0 dialogue

51 54 59 67 70

IR 2.0: Social media activities Social media use in investor relations Intensity of social media use Social media activity index and summary Best practices for IR 2.0 activity

13 14 33 37 42

About this study 03

IR 2.0: Mobile applications Mobile applications in investor relations Social media mobility index and summary Best practices for mobile applications

82 83 87 89


ABOUT THIS STUDY


INVESTOR RELATIONS 2.0 – GLOBAL BENCHMARK STUDY 2012

Key Facts

Empirical study by the University of Leipzig with insights into how investor relations officers (IROs) in the

United States, Germany, United Kingdom, France, and Japan are using social media to enhance their

investor relations programs.

Annual study, conducted for the third year in a row.

Analysis of 190 global corporations including the 150 largest companies listed on DJIA (Dow Jones

Industrial Average, USA), FTSE (Financial Times London Stock Exchange Index, UK), CAC (Cotation Assistée

en Continu quarante, France), DAX (Deutscher Aktien-Index, Germany), NIKKEI (Nihon Keizai Shimbun Index,

Japan), the top 10 companies in regard to market cap, and the top 10 companies in regard to performance

of the US mid- and small-cap indices Russell Midcap and Russell 2000.

Topics of the Study

Current state of Investor Relations (IR) 2.0 in an international context, especially how DJIA, FTSE, NIKKEI,

DAX, and CAC-listed companies are engaging online (tools, platforms, applications).

Benchmark of large-cap companies in different major markets and emerging best practices for online IR.

IR 2.0 trends and potential developments and opportunities for large-caps as well as small- and mid-cap

companies.

Relevance of social media in financial communications, e.g. impact on volatility, share performance, trading

volume, foreign investment, free float, retail shareholders, or shareholder activism.

Investor Relations 2.0 – Global Benchmark Study 2012 5

BACKGROUND AND RESEARCH QUESTIONS

Financial markets are experiencing turbulent times. An atmosphere of high uncertainty is prevalent among

investors and other stakeholders within the financial community. Even more, the internet and especially social

media are increasing the amount of information and rumors distributed.

Listed companies are facing the challenge of engaging in a digital dialog to (re-)build reputation and gain trust

in a highly volatile communication environment. However, financial communications in practice still focus on

investor relations websites as previous studies have shown (Koehler 2011, Köhler 2010). A strategic approach

towards an IR 2.0 engagement is still missing for most companies worldwide, even so it offers the possibility of

greater transparency, increased interaction with a broader public and the potential for new financial stakeholders

(Koehler & Zerfass 2011).

The study at hand closes the research gap within investor relations and social media by analyzing IR

departments’ social media engagement. Research questions comprise the three areas of social media activity,

online dialogue and mobile information, and concentrate on differences within the five major markets US,

Germany, UK, France and Japan.* Due to the longitudinal design, developments within IR 2.0 can be

demonstrated and trends named which are especially seen within a dialogic approach towards shareholders

online. A new framework implements dialogic features and the relationship-building potential of IR 2.0 and

offers the possibility for an international benchmark and a strategic approach for companies towards online IR.

* Social media and equity culture obviously act as intervening variables (comScore 2011, DAI 2011).


METHODOLOGY AND SAMPLE


METHODOLOGY

Method

Content analysis of companies’ investor relations websites and external social media platforms within a

sample of 190 global companies including the 150 largest companies listed on DJIA (USA), FTSE (UK),

CAC (France), DAX (Germany), NIKKEI (Japan), the top 10 companies in regard to market cap, and the top

10 companies in regard to performance of the US mid- and small-cap indices Russell Midcap and Russell

2000.

Analysis included platforms and tools, predominant functions, topics, ratio between obligatory information

and published news via social media, possibility for feedback, dialogue and relationship building with

stakeholders, mobile applications, number of users, links, and service features.

Period of analysis: December 2011 – March 2012 (independent variables: January 31, 2012).

Content analysis of IR websites covered three months, plus last annual general meeting (AGM), last two

quarterly earnings announcements, one analyst conference (obligatory measures).

Content analysis for external platforms covered one month (but not within quiet period) plus obligatory

measures as for the IR websites.

Independent variables: industrial sector, sales market, index membership, free float, percentage of retail

shareholders, number of employees within the IR department or staff responsible for IR, analyst coverage,

foreign investors, volatility, share performance, trading volume (domestic market, US market), shareholder

activism.


METHODOLOGY

Statistical Analysis

Statistical analyses based on the methods of social sciences (descriptive and analytical statistics), using

SPSS software tools.

Results have been statistically evaluated by Pearson's chi-square (x²), Monte Carlo, Kruskal Wallis or

Wilcoxon tests and are classified as significant (p ≤ 0.05) where appropriate.

Statistically significant group differences were tested with variance analyses, and dependencies were tested

via correlations. For this purpose, the correlation coefficient was determined for each instance, either

Pearson's or Spearman's Rho, depending on the data volume. The higher these values, the stronger the

correlation – with a maximum value of 1 with an overall probability value of α = 0.05. Significant facts are

listed in the footnotes.

Development of Investor Relations 2.0 indices for ranking and benchmarking the companies included within

the sample (see Koehler 2011, Köhler 2010 for the conceptual framework and indices in previous years).

Investor Relations 2.0 indices 2012:

Social Media Activity Index (based on social media use and intensity of use, p. 37 of this report)

Social Media Dialogue Index (p. 67 of this report; see also Droller 2012, Koehler 2011, Linke & Mahnke

2012, Murtarelli & Invernizzi 2011, Köhler 2010, Habermas 1990 for theoretical background and

applications in communication research)

Social Media Mobility Index (p. 87 of this report).


External social media platforms

Content sharing platforms

SlideShare

YouTube

Flickr

Scribd

Microblogs

Twitter StockTwits

Social communities

Facebook Google+

Business platforms

XING LinkedIn

IR related platforms

Retail Investor Conferences StockTwits

SOCIAL MEDIA TOOLS INVESTIGATED IN THIS STUDY

Analysis includes online activities on corporate websites and external platforms

Tools on companies‘ IR websites

RSS feed Podcast Webcast

Video/Vodcast Weblog

Social media newsroom Chat Wiki

Social bookmark Tagcloud

Facebook buttons / Like Twitter buttons / Tweet

Google+ buttons / Plus one Share buttons (different platforms)

Links to external platforms Mobile website

IR app Virtual and hybrid shareholder meeting

Online voting of shares (before AGM takes place) Text message (SMS) service

QR code Rating function

Feedback function

StockTwits can be used both as a micro blog and as IR related platform.


Corporations and stock indices within this study

SAMPLE

N = 190 (no. of top 30 listed companies in DAX, DJIA, FTSE, CAC, NIKKEI and top 10 market cap & top 10 performance of Russell Midcap and Russell 2000).

Listed companies in the US (large-, mid- and small-caps)

30

30

30

30

30

DJIA DAX FTSE CAC NIKKEI

Listed companies in the US, Germany, UK, France, Japan (large-caps)

30

20

20

DJIA Russell Midcap Russell 2000


SAMPLE IN DETAIL: INTERNATIONAL LARGE-CAPS

Free float: percentage of shareholders owning less than 5% of shares outstanding; retail shareholders (or small investors): no. of individual shareholders who purchase relatively small lots of stocks for own portfolio (in contrast to institutional investors); trading volume domestic market: no. of overall shares traded on a daily basis at domestic stock exchange (mean values for 52 weeks, Japan: 200 days); trading volume US market: mean values for direct listings or American Depositary Receipt ADR (for 52 weeks, Japan: 200 days; without DJIA); volatility, share performance: mean values for domestic market (stock exchange) within last 250 trading days; shareholder activism: see Hoffmann et al. 2011 for theoretical background. N=150 for sales market, industrial sector, free float (standard deviation SD = 78.7), trading volume domestic market (SD = 28,825,899.4); N = 149 for share performance (SD = 20.5), volatility (SD = 11.0); N = 144 for analyst coverage (SD = 10.8); N = 129 for shareholder activism (SD = 3.2); N = 112 for trading volume US market (SD = 1,524,785.2); N = 74 for retail shareholders (SD = 10.7); N = 72 for foreign investors (SD = 19.4); N = 52 for employees in IR (SD = 4.7). Rounding errors may occur within a permitted context.

Study includes companies listed in DJIA, DAX, FTSE, CAC, and NIKKEI

Independent variables (mean values)

Employees in IR department (no. of employees)

8

Free float (in %) 78.7

No. of retail shareholders (in %) 15.2

Analyst coverage (no. of analysts) 21

No. of foreign investors (in %) 45.6

Trading volume – domestic market (no. of shares traded daily)

13,579,442.3

Trading volume – US-market (no. of shares traded daily)

665,180.1

Volatility (in %) 32.8

Share performance (in %) -3.9

Shareholder activism (no. of resolutions supported by less than 90% of shareholder votes during last AGM)

2.8

Industrial sector (no. of companies in %)

Automobile 5.3% Insurance 3.3%

Banks 8.7% Media 2%

Basic Resources 11.3% Pharma/Healthcare 7.3%

Chemicals 4% Retail 3.3%

Construction 2% Software 1.3%

Consumer 13.3% Technology 5.3%

Financial Services 2.7% Telecommunication 6%

Food/Beverages 4.7% Transportation 3.3%

Industrial 10% Utilities 6%

Sales market (no. of companies in %)

B2B B2C Both

30.7% 16.7% 52%


Study includes companies listed in Russell Midcap and Russell 2000

SAMPLE IN DETAIL: US SMALL- AND MID-CAP COMPANIES

Free float: percentage of shareholders owning less than 5 % of shares outstanding; retail shareholders (or small investors): no. of individual shareholders who purchase relatively small lots of stocks for own portfolio (in contrast to institutional investors); trading volume domestic market: no. of overall shares traded on a daily basis at domestic stock exchange (mean values for 52 weeks, Japan: 200 days); trading volume US market: mean values for direct listings or American Depositary Receipt ADR (for 52 weeks, Japan: 200 days; without DJIA); volatility, share performance: mean values for domestic market (exchange) within last 250 trading days; shareholder activism: see Hoffmann et al. 2011 for theoretical background. N = 40 for sales market, industrial sector; N = 39 for free float (SD = 17.6); N = 38 for volatility (SD = 28.86), share performance (SD = 52.0); N = 37 for shareholder activism (SD = 2.1); N = 32 for analyst coverage (SD = 7.4). N = 2 for employees in IR department, retail shareholders (no mean values provided due to small data base); N = 0 for foreign investors, trading volume US market. Rounding errors may occur within a permitted context. For German small- and mid-caps see Koehler 2011.

Industrial sector (no. of companies in %)

Basic Resources 12.5% Media 5%

Chemicals 10% Pharma/Healthcare 22.5%

Consumer 17.5% Retail 2.5%

Financial Services 2.5% Software 7.5%

Industrial 7.5% Technology 2.5%

Insurance 2.5% Utilities 7.5%

Independent variables (mean values)

Employees in IR department (no. of employees)

(–)

Free float (in %) 76.5

No. of retail shareholders (in %) (–)

Analyst coverage (no. of analysts) 15

No. of foreign investors (in %) (–)

Trading volume – domestic market (no. of shares traded daily)

1,957,646.8

Trading volume – US-market (no. of shares traded daily)

(–)

Volatility (in %) 54.5

Share performance (in %) 9.3

Shareholder activism (no. of resolutions supported by less than 90% of shareholder votes during last AGM)

1.9

Sales market (no. of companies in %)

B2B B2C Both

40% 22.5% 37.5%


INVESTOR RELATIONS 2.0: SOCIAL MEDIA ACTIVITIES


95.8%

4.2%

no. of companies using social media on IR website (in %)

no. of companies not using social media on IR website (in %)

42%

41%

4%

13%

no. of companies using external platforms (in %)

no. of companies using external platforms with IR topics (in %)

no. of companies using external platforms with IR channels (in %)

no. of companies not using external platforms at all (in %)

Social media established on IR website / External platforms less targeted

SOCIAL MEDIA USE IN INVESTOR RELATIONS

N = 190 (no. of top 30 listed companies in DAX, DJIA, FTSE, CAC, NIKKEI, top 10 market cap & top 10 performance of Russell Midcap and Russell 2000). All companies with at least one social media tool on IR website or being present with IR topics/specific IR channel on at least one external platform analyzed within this study (see p. 10 for an overview). Presence on IR channels refers to specific accounts on which only IR topics are published. Presence on platforms with IR topics includes corporate accounts on which other topics are published as well.

Companies using social media on the IR website

Companies using external social media platforms


100% 97% 100% 100% 80% 95% 100% 77%

0%

20%

40%

60%

80%

100%

Number of companies using social media nearly unchanged from 2011 - 2012

SOCIAL MEDIA TOOLS ON CORPORATE INVESTOR RELATIONS WEBSITES

(29) (29) (30) (30) (30) (30) (30) (30)

(24) (23)

(19)

(20)

DJIA DAX FTSE CAC NIKKEI Russell Midcap

Russell 2000

N = 190 (no. of top 30 listed companies in DAX, DJIA, FTSE, CAC, NIKKEI and top 10 market cap & top 10 performance of Russell Midcap and Russell 2000). Number in brackets shows absolute number of companies with at least one social media tool on IR website.


RSS feed

Podcast

Video

Webcast

External links

Tagcloud

Like button

Tweet button

Share button Plus One

button

QR code

SMS service

IR app

Mobile website

Wiki

Blog

Other

DJIA

RSS feed

Podcast

Video

Webcast

External links

Like button

Tweet button

Share button

IR app

Mobile website

Wiki

Blog

Other

RSS feed and webcast used by most corporations / Variety of tools increased in 2012

N = 143 (2012); 142 (2011) (no. of companies listed in DAX, DJIA, FTSE, CAC, NIKKEI using the mentioned applications on their IR website). Other: e.g. social media survey, virtual shareholder magazines, interactive annual reports, personalized websites. Share button within the 2011 study included like and tweet button. New tools within the survey compared to last year: tagcloud, plus one button, QR code and SMS service. Monte Carlo significance test showed significant differences between groups (here: indices) for the following tools: podcast, webcast, external links, tagcloud, share button, text message (SMS) service, mobile website and blog.

ONLINE TOOLS ON IR WEBSITES: INTERNATIONAL LARGE-CAPS

2011

2012

DAX FTSE CAC NIKKEI

0

10

20

30

0

5

10

15

20

25

30


Top Russell companies already turn quite actively to specific tools on the IR website

ONLINE TOOLS ON IR WEBSITES: US AND GERMAN MID-/SMALL-CAPS

N = 30 for DJIA (2012); N = 20 for Russell Midcap (2012); N = 20 for Russell 2000 (2012); N = 30 for DAX (2011); N = 50 for MDAX (2011); N = 50 for SDAX (2011) (no. of companies within sample using the mentioned tools on IR website in percent). New tools within the survey in comparison to last year: tagcloud, plus one button, QR code and text message (SMS) service. Pearson chi-square and Monte Carlo significance test found significant differences between groups (here: US indices) according to the following tools: video, podcast, external links, tagcloud, like button (Facebook application), tweet button (Twitter application) and IR blog.

0%

20%

40%

60%

80%

100% RSS feed

Podcast

Video

Webcast

External links

Tagcloud

Like button

Tweet button

Share button

Plus One button

QR code

SMS service

IR app

Mobile website

Blog

Other

DJIA Russell Midcap Russell 2000

0%

20%

40%

60%

80%

100% RSS feed

Podcast

Video

Webcast

External links

Like button

Tweet button

Share button

IR app

Mobile website

Blog

Other

DAX MDAX SDAX

USA 2012

Germany 2011


DAX

DJIA

FTSE CAC

NIKKEI

1-5 6-10 11-20

DAX

DJIA

FTSE CAC

NIKKEI

N = 143 (2012); 142 (2011) (no. of companies listed in DAX, DJIA, FTSE, CAC, NIKKEI using the mentioned applications on IR website). Other: e.g. social media survey, virtual shareholder magazines, interactive annual reports, personalized websites. Share button 2011 included like and tweet button. SAP AG with 22, BASF SE with 21 social media tools. Pearson chi square and Monte Carlo significance test showed no significant differences between groups (here: indices).

0

Larger range of social media tools applied on IR websites in 2012

ONLINE TOOLS ON IR WEBSITES: GLOBAL COMPARISON 2011/2012

2011

2012

10

20

30

0

5

10

15

20

25

30

more than 20 different applications


Among US large-caps, use of social media buttons and links increased significantly

DJIA (USA): SOCIAL MEDIA USE ON IR WEBSITES 2009–2012

N = 30 (no. of DJIA listed companies using different tools on IR website). Index composition has remained unchanged since 2009. New tools in this year´s study: plus one button, social media newsroom, QR code, virtual and hybrid shareholder meeting (no virtual shareholder meeting held by analyzed DJIA companies).

30 28

24

18 17

14 12 12

10 8

6 5

3 3 2 2 2

26

29

18

14 14

17

1 0

10

1 0

3

28

25

6

9

18

13

4 4

0

5

10

15

20

25

30

DJIA (no. of companies 2012) DJIA (no. of companies 2011) DJIA (no. of companies 2009)


Notable rise in the number of mobile applications and IR apps, but still on a low level

DAX (GERMANY): SOCIAL MEDIA USE ON IR WEBSITES 2009–2012

N = 30 (no. of DAX listed companies using different tools on IR website). Index composition changed between 2009 and 2011 (Salzgitter AG replaced by HeidelbergCement AG), but remained unchanged since 2011 study. New tools in this year´s study: plus one button, social media newsroom, QR code, virtual and hybrid shareholder meeting (no virtual shareholder meeting held by analyzed DAX companies).

29

26

16 14 14

11 11 11

9 8 8

6 5

4 3 3 2

28

22

15 13

8

12

3

7

0 0 1

3

27

21

6

15

8

13

6

2

0

5

10

15

20

25

30

DAX (no. of companies 2012) DAX (no. of companies 2011) DAX (no. of companies 2009)


DJIA corporations most intensely release information via social media on IR website

NUMBER OF PUCLICATIONS ON THE IR WEBSITE: INTERNATIONAL LARGE-CAPS

N = 143 (no. of companies with social media on IR website listed in DAX, DJIA, FTSE, CAC, NIKKEI). Number of publications via the mentioned social media tool on IR website. Other: e.g. social media survey, virtual shareholder magazines, interactive annual reports, personalized websites. Tools within the study not shown above: Wiki (SAP AG as the only company with wiki on IR website), IR app, mobile website, QR code, AGM online voting, virtual shareholders meeting and text message (SMS) service (understood as mobile applications within study, for an overview and specific results see pp. 82 –94). Monte Carlo significance test found significant differences between groups (here: indices) for the following variables: publications via podcast, publications via webcast and external links. Kruskal Wallis H-Test found significant differences between groups (here: indices) for the following variables: publications via podcast, publications via webcast , publications via share button, publications via IR blog and external links.

32

1

12

5

20

2

20

2

81

75

99

86

60

11

49

95

14

1

47

45

56

41

68

50

34

19

9

11

8

97

41

37

60

44

24

3 7 16

2

91

12

2

29

26

73

55

14

19

8 2

1

0

90

55

45

45

23

1 4

5 16

7

0

0

50

100

150

200

250

300

350



0

100

200

300

400

500

600

700

800

900

0 50 100 150 200

Most corporations use webcasts, but less intensely than share buttons or blogs

NUMBER OF PUBLICATIONS ON IR WEBSITES: CORRELATION WITH TOOLS

N = 182 (no. of companies with social media on IR website). Bubble size represents the overall usage for each tool on the IR website by displaying the number of publications via the mentioned social media tool in relation to the number of companies using the mentioned social media tool. Correlation analysis (Spearman`s rho) confirms significant dependencies between no. of publications and videos (r = 0.539), share button (r = 0.516), Like button (r = 0.497), IR blog (r = 0.492), Tweet button (r = 0.477), podcast (r = 0.435), Plus One button (r = 0.403), webcast (r = 0.317) and social media newsroom (r = 0.170).

USE /

PU

BLI

CA

TIO

NS

(no.

of public

atio

ns

via s

oci

al m

edia

tool

on the

IR w

ebsi

te)

USE / COMPANIES (no. of companies using social media tool on the IR website)

Video

Webcast

Share button

Tweet button Like button

Podcast

Blog

Social media newsroom

Plus One button


Financials most common topic overall, followed by CSR, AGM & other IR related issues

TOPICS OF SOCIAL MEDIA PUBLICATIONS ON THE IR WEBSITE

N = 182 (no. of companies with social media on IR website). Topics refer to mandatory information to be published by the issuer (the listed company). Traditionally published releases means all ad hoc or other IR releases on IR website. Topic “Other” refers to non-mandatory IR related topics and includes e.g.: appearance of the company on external conferences, important awards/achievements for the company, general introduction of the company, its products, employees etc. Pearson chi square and Monte Carlo significance test found significant differences between groups (here: social media publications and IR releases traditionally published) according to the topics “Mergers & Acquisitions”, “Cooperation”, “Strategic company decisions”, “Corporate governance” and “F&E”.

100

2

4

116

183

74

152

143

186

162

192

30

76

315

433

0

5

13

19

21

44

78

107

169

205

243

317

324

465

814

0 200 400 600 800 1000

Director´s dealings

Liquity problems, debt overload

Corporate governance

Litigations

Corporate actions

Dividend

Change in board of management, important personal decisions

M&A´s

Strategic company decisions

Cooperation, joint ventures, strategic partnerships

F&E, new products, inventions, patents

Annual general meeting

CSR

Other

Financial figures

no. of social media publications on IR website no. of IR releases traditionally published on IR website


IR blog Strongest significant correlation between IR blog and sustainability topic (r = 0.676) Correlations also found with the following topics: cooperation (r = 0.532), litigations (r = 0.473) and changes in board of management (r = 0.473)

Video Various correlations found; financial figures (r = 0.497) and cooperation (r = 0.437) on top

Podcast Highest results for financial figures (r = 0.494) and dividends (r = 0.345)

Webcast Correlations only exist for financial figures (r = 0.318) and AGM (r = 0.242)

N = 182 (no. of companies with social media on IR website). Correlation analysis with Spearman`s Rho confirms significant correlations between tools on IR website and topics as indicated within table.

CORRELATIONS BETWEEN TOPICS AND TOOLS ON THE IR WEBSITE

Blogs seem to be most suitable for CSR topics / Financials connected with diverse tools

Like button Strong correlations exist with the topics sustainability (r = 0.528) and F&E (r = 0.465)

Tweet button F&E (r = 0.487) correlates highest with tweet button Sustainability (r = 0.474) follows on second rank

Plus One button Strongest correlation with sustainability (r = 0.463) F&E (r = 0.406) correlates as well

Share button Sustainability (r = 0.450) and financial figures (r = 0.446) correlate strongest with share buttons


USE OF EXTERNAL SOCIAL MEDIA PLATFORMS: GLOBAL LARGE-CAPS

Presence with IR topics increased among all indices / Specific IR online channels still rare

N = 131 (2012);118 (2011) (no. of companies within sample on external platforms, here: SlideShare, Twitter, YouTube, Facebook (2011); XING, LinkedIn, RIC, SlideShare, YouTube, Facebook, Twitter, Flickr, Scribd, Stocktwits or Google+ (2012). Comparison of presence with corporate topics, presence with IR topics, presence with specific IR channel on external platforms. Monte Carlo test shows significant differences between the indices for XING and Facebook (p ≤ 0.05).

DJIA 2012 DJIA 2011 DAX 2011

DAX 2012 FTSE 2011 FTSE 2012

CAC 2011 CAC 2012

NIKKEI 2011 NIKKEI 2012

30 29 30

22

7

1

30 29 30

17

4 2

30

22

30

18

1 0

30

24

30

14

0 0

11

15

10

6

0 0 0

5

10

15

20

25

30

35


USE OF EXTERNAL PLATFORMS: US AND GERMAN MID-/SMALL-CAPS

US mid- and small-caps active with corporate topics / IR issues less targeted

N = 30 for DJIA (2012); N = 20 for Russell Midcap (2012); N = 20 for Russell 2000 (2012); N = 50 for MDAX (2011); N = 50 for SDAX (2011) (no. of companies within sample on external platforms with IR topics, here: SlideShare, YouTube, Facebook, Twitter (2011); RIC, SlideShare, YouTube, Facebook, Twitter, Flickr, Scribd, Stocktwits or Google+, XING, LinkedIn (2012)). Comparison of presence with corporate topics, presence with IR topics, presence with specific IR channel on external platforms. Monte Carlo test shows significant differences between the indices (for YouTube, Twitter, Facebook, p ≤ 0.05).

30 30

7

17 15

2

13 12

1

29

15

2

24

10

3

0

5

10

15

20

25

30

35

DJIA 2012 Russell Midcap 2012 Russell 2000 2012 MDAX 2011 SDAX 2011


0

5

10

15

20

25 SlideShare

YouTube

Twitter

Facebook

USE OF EXTERNAL PLATFORMS: CORPORATE CHANNELS AT A GLANCE

N = 130 (2012); 77 (2011) (no. of companies with IR 2.0 engagement on external platforms, here: SlideShare, YouTube, Twitter, Facebook (2011); RIC, XING, LinkedIn, SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+ (2012)). Monte Carlo test shows significant differences between the indices (for XING and Facebook, p ≤ 0.05).

LinkedIn and Twitter with the highest adoption rates among international large-caps

2012

2011


0

5

10

15

20

25

30 Flickr

SlideShare

YouTube

Scribd

Facebook

Google+ Twitter

StockTwits

RIC

LinkedIn

XING


DJIA DAX FTSE CAC

IR Twitter

IR Slide Share

0

1

2

3

4

5

6

7

no. of co

mpanie

s

USE OF EXTERNAL PLATFORMS: SPECIFIC IR CHANNELS AT A GLANCE

N = 12 (2012) / 3 (2011) (no. of companies with specific IR channels on external platforms, here: SlideShare, YouTube, Twitter, Facebook (2011) / RIC, XING, LinkedIn SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+ (2012)). Due to sample size (N=12) no statistical tests were conducted.

Corporate use of micro blog StockTwits slightly exceeds other platforms

NIKKEI

2012

2011

Russell 2000 Russell Midcap

IR Twitter IR StockTwits

RIC

IR SlideShare

IR Scribd

IR StockTwits

IR StockTwits

IR StockTwits

RIC

0

1

2

3

4

5

6

7

no. of co

mpanie

s


NUMBER OF PUBLICATIONS ON EXTERNAL PLATFORMS: GLOBAL LARGE-CAPS

N =131 (no. of companies within sample on external platforms with IR topics, here: RIC, SlideShare, YouTube, Facebook, Twitter, Flickr, Scribd, Stocktwits or Google+, XING, LinkedIn (2012)). Number of publications via the mentioned tool. Monte Carlo test shows no significant differences between the indices according to number of publications (p ≤ 0.05).

US and German corporations release most IR topics via external social media platforms 4

69

52

7

98

58

44

10

6

2

47

8

66

98

90

52

46

12

0

26

8

9

62

24

14

6

6

0

31

4

0

0 3

0

10

11

0

0

43

0

0 7

8

3

0

0

0

100

200

300

400

500

600



0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0 10 20 30 40 50 60 70 80 90 100

Flickr

YouTube

Twitter and StockTwits most intensely used / Flickr related to Wal-Mart’s publications

NUMBER OF PUBLICATIONS ON EXTERNAL PLATFORMS: CORRELATIONS

N = 97 (no. of companies with IR 2.0 engagement on external platforms, here: SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+). Bubble size represents the intensity of usage by displaying the number of publications via the mentioned external platform in relation to the number of companies using the mentioned social media platform. Wal-Mart (DJIA) on Flickr with 527 published photos (Standard deviation SD for number of publications via Flickr: 46.4). Companies present on Scribd with IR topics: Chevron Corp., AT&T Inc., Hewlett-Packard Inc. and Cisco Systems Inc. (IR channel). Kruskal Wallis test showed no significant differences between groups (here: indices). Correlation analysis (Spearman`s rho) confirms significant dependencies between no. of publications and SlideShare (r = 0.205), YouTube (r = 0.248), Flickr (r = 0.337), StockTwits (r = 0.218) and Google+ (r = 0.193).

USE /

PU

BLI

CA

TIO

NS

(no.

of public

atio

ns

via e

xter

nal pla

tform

s)

USE / COMPANIES (no. of companies using external platforms for IR purposes)

Twitter

StockTwits

Facebook

Scribd Google+

SlideShare


Financials no. 1 topic as on IR website / AGM more convenient for external platforms

TOPICS OF SOCIAL MEDIA PUBLICATIONS ON EXTERNAL PLATFORMS

4

100

2

183

116

74

143

152

186

192

162

0

76

315

30

433

0

1

1

6

7

19

26

58

66

71

91

123

160

247

815

1184

0 500 1000 1500

Corporate governance

Director´s dealings

Liquity problems, debt overload

Corporate actions

Litigations

Dividend

M&A´s

Change in board of management, important personal decisions

Strategic company decisions

F&E, new products, inventions, patents

Cooperation, joint ventures, strategic partnerships

Translations

CSR

Other

Annual general meeting

Financial figures

no. of social media publications via external platforms no. of IR releases traditionally published on IR website

N = 97 (2012); 77 (2011) (no. of companies with IR presence on external platforms, here: SlideShare, YouTube, Twitter, Facebook (2011); SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+ (2012)). “Translations”: publications with the same content translated e.g. from French or German in English.


Flickr Dependencies between Flickr and financial figures

(r = 0.339) F&E (r = 0.260) is also correlated to Flickr Scribd Strongest correlation with F&E (r = 0.441) Litigations (r = 0.310) correlated as well StockTwits Strongest correlation with financial figures

(r = 0.540) Cooperation (r = 0.474) and other IR related topics

(r = 0.452) are also strongly related

Google+ Significant correlation with other IR related topics

(r = 0.337), change in board of management (r = 0.299) and strategic decisions (r = 0.252)

SlideShare Strongest correlation with sustainability (r = 0.469),

followed by financial figures (r = 0.453)

YouTube Again, strongest correlation with sustainability

(r = 0.336), but weaker as with SlideShare Significant, but medium correlations with other IR

related topics (r = 0.311) and financials (r = 0.308)

Twitter Financials as strongest correlated topic (r = 0.407) Others (r = 0.393) and strategic decisions are also

picked out as central themes on Twitter (r = 0.333)

Facebook Sustainability on top (r = 0.325), followed by

financials (r = 0.312) Surprisingly, other IR related topics with relatively

weak correlation (r = 0.276)

N = 97 (no. of companies with IR presence on external platforms, here: SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+). Correlation analysis with Spearman`s Rho confirms significant correlations as indicated within table . For Flickr, the high standard deviation due to Wal Mart’s (DJIA) individual performance have to be taken into account when interpreting the results; for Scribd, the low presence of companies (only four DJIA companies use Scribd, AT&T Inc and Chevron Corp. as well as Cisco Systems Inc., influence results as well.

CORRELATIONS BETWEEN TOPICS AND EXTERNAL PLATFORMS

CSR best communicated via SlideShare and YouTube, Financials via StockTwits and Twitter


CAC tops FTSE with number of publications via social media in relation to IR releases

INTENSITY OF USE: IR WEBSITES VS. EXTERNAL PLATFORMS 2011-2012

N = 143 (IR website 2012); 142 (IR website 2011); 97 (external platforms, here: SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits, Google+, 2012), 77 (external platforms, here: SlideShare, YouTube, Twitter, Facebook, 2011) (no. of companies). Intensity of use = number of social media publications on IR website or on external platforms / number of IR releases traditionally published (ad hoc releases, IR news) on average. Kruskal Wallis test confirms significant differences between the indices for intensity of use between IR website 2012 and external platforms 2012, (p ≤ 0.05).

1.4

1

0.6

3

1.6

9

0.6

3

2.4

9

1.0

3

2.5

4

0.6

9

2.2

1

0.8

5

2.7

9

0.8

5

1.0

3

0.5

6 0.7

9

0.5

7

1.4

5

0.4

3

1.1

8

0.5

8

0.6

7

0.1

2 0.5

4

0.1

9

0

0.5

1

1.5

2

2.5

3

INTE

NSIT

Y O

F U

SE

(no.

of so

cial m

edia

public

atio

ns

/ no.

of IR

rel

ease

s traditi

onally

publis

hed

o

n a

vera

ge)

All indices DJIA DAX FTSE CAC NIKKEI


AGM, sustainability and corporate governance with highest growth

TOPICS ON THE IR WEBSITE RANKED BY INTENSITY OF USE 2011-2012

N = 143 (2012); 142 (2011) (no. of companies listed in DAX, DJIA, FTSE, CAC, NIKKEI). Index composition for DJIA and DAX has remained unchanged since 2011. Changes regarding index composition for FTSE, CAC and NIKKEI have been applied (see appendix for more details).

0

2

4

6

8

10

12

no. of social media publications on the IR website / no. of IR releases traditionally published 2012

no. of social media publications on the IR website / no. of IR releases traditionally published 2011


Annual shareholders‘ meeting as no. 1 social media topic in relation to ad hoc and IR releases

TOPICS EXTERNALLY RANKED BY INTENSITY OF USE 2011-2012

N = 97 (2012); 77 (2011) (no. of companies with IR presence on external platforms, here: SlideShare, YouTube, Twitter, Facebook (2011); SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+ (2012)).

0

5

10

15

20

25

30

no. of social media publications via external platforms / no. of IR releases traditionally published 2012 no. of social media publications via external platforms / no. of IR releases traditionally published 2011


TOPICS IN SOCIAL MEDIA: GLOBAL COMPARISON AMONG LARGE-CAPS

Internal: N = 143 (no of companies with social media on IR website listed in DJIA, DAX, FTSE, CAC and NIKKEI). Kruskal Wallis test confirms significant differences between the indices according to the topics “financial figures”, “annual general meeting”, “dividends”, “change in board of management”, “cooperation”, “strategic company decisions” and other IR related topics (p ≤ 0.05). Correlations analysis with Eta confirms significant dependencies between the indices according to the topics “financial figures” (η = 0.368, p < 0.001), “annual general meeting” (η = 0.381, p < 0.001), “dividends” (η = 0.393, p < 0.001), “change in board of management” (η = 0.341, p < 0.001), “M&A`s” (η = 0.262, p = 0.040), “cooperation” (η = 0.350, p < 0.001), “strategic decisions” (η =0.305, p = 0.006), “CSR” (η = 0.306, p = 0.006) and other IR related topics (η = 0.374, p < 0.001). External: N = 97 (no. of companies with IR engagement on external platforms, here: SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+). Kruskal Wallis test confirms significant differences between the indices according to the topics “annual general meeting”, “cooperation”, “F&E”, “others” and “translations” (p ≤ 0.05). Correlations analysis with Eta confirms significant dependencies between index and “financial figures” (η = 0.306, p = 0.006), “dividends” (η = 0.283, p = 0.016), “cooperation” (η = 0.251, p = 0.05), other IR related topics (η = 0.381, p < 0.001), “translations” (publications with the same content translated e.g. from French or German in English) (η = 0.340, p = 0.001).

No significant differences among indices in reference to topics released in social media

DAX

IR website (internal)

External platforms

Financial figures

Financial figures

AGM AGM

Other topics

Other topics

FTSE


External platforms

Financial figures

Financial figures

Sustain-ability

Sustain-ability

AGM AGM

NIKKEI


External platforms

Financial figures

Financial figures

Inventions, F&E

Inventions, F&E

Other topics

Coopera-tion

CAC


External platforms

Financial figures

Financial figures

Other topics

Trans-lations

AGM AGM

DJIA

Rank IR website (internal)

External platforms

1 Financial figures

AGM

2 Other topics

Financial figures

3 Sustain-ability

Other topics


External Use of Social Media Index + External Intensity of Use Index

Usage of social media on external platforms (no. of different tools) +

intensity of use (no. of publications via social media / no. of IR ad hoc and news releases) on external platforms

Internal Use of Social Media Index + Internal Intensity of Use Index

Usage of social media on the IR website (no. of different tools) +

intensity of use (no. of publications via social media / no. of IR ad hoc and

news releases) on the IR website

Internal Social Media Activity Index + External Social Media Activity Index

SOCIAL MEDIA ACTIVITY INDEX: USE AND INTENSITY OF USE

US and German large-caps with same level of activity

N = 190 (no. of companies). Indices based on mean values. Kruskal Wallis test confirms significant differences between the indices for Internal Social Media Activity Index, External Social Media Activity Index and Social Media Activity Index (p ≤ 0.05). Correlation analysis (Spearman`s rho) confirms significant dependencies between Internal Social Media Activity Index and External Social Media Activity (r = 0.659), Internal Social Media Activity Index and Social Media Activity Index (r = 0.874), External Social Media Activity Index and Social Media Activity Index (r = 0.932).

31.5 31.7

63.2

28.3

35.1

63.4

21.8 19.8

41.6

24.3 19.5

43.9

9.6

4.5

14.1 15.3

10.1

25.4

12.2

6.7

18.9

Internal Social Media Activity Index (average) External Social Media Activity Index (average) Social Media Activity Index (average)

DJIA DAX FTSE CAC NIKKEI Russell Midcap Russell 2000


US large-caps most active, other indices vary among use and intensity of use

ACTIVITY ON CORPORATE IR WEBSITES: INTERNATIONAL COMPARISON

N = 182 (no. of companies with social media on IR website). Bubble size displays the intensity of use (number of social media publications on IR website per company on average divided by the number of IR releases traditionally published per company on average) in relations to the number of social media tools on IR website per company on average. One-way ANOVA test found significant differences between groups (here: indices) according to the number of social media tools on IR website and intensity of use on the IR website (activity on IR website =no. of social media publications / no. of IR releases traditionally published). Kruskal Wallis one-way analysis of variance found significant differences between groups (here: indices) according to usage and intensity of use of social media tools on IR website.

0

0.5

1

1.5

2

2.5

3

0 2 4 6 8 10 12

USE no. of social media tools

on IR website per company (average)

IN

TEN

SIT

Y O

F U

SE

no.

of so

cial m

edia

public

atio

ns

on IR w

ebsi

te /

no.

of IR

rel

ease

s traditi

onally

publis

hed

(ave

rage)

DJIA DAX

NIKKEI

CAC

FTSE

Russell Midcap

Russell 2000


0

1

2

3

4

5

6

0 1 2 3 4 5 6

Russell Midcap

German large-caps run more platforms / DJIA corporations with more intense use

ACTIVITY ON EXTERNAL PLATFORMS: INTERNATIONAL COMPARISON

DJIA

DAX

NIKKEI

CAC

FTSE

Russell 2000

IN

TEN

SIT

Y O

F U

SE

no.

of so

cial m

edia

public

atio

ns

on e

xtern

al pla

tform

s /

no.

of IR

rel

ease

s traditi

onally

publis

hed

(ave

rage)

USE

no. of external platforms used per company (average)

N = 158 (no. of companies with IR 2.0 engagement on external platforms, here: SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits and Google+). Bubble size displays the intensity of use (number of social media publications on external platforms per company on average divided by the number of IR releases traditionally published per company on average) in relations to the number of external platforms used per company on average. Kruskal Wallis one-way analysis of variance found no significant differences between groups (here: indices) according to usage and intensity of use of external social media platforms.


Internal and external activities strongly related to each other within top positions

SOCIAL MEDIA ACTIVITY INDEX: INTERNATIONAL BENCHMARK (TOP 10)

N = 190 (no. of companies). Indices based on mean values. Activity Index: Alcoa Inc. and Intel Corp. with same score. Internal Activity Index: Deutsche Telekom AG and Johnson & Johnson Services Inc. as well as BASF SE and Intuit Inc. with the same score. External Activity Index: Alcoa Inc. and Royal Dutch Shell plc as well as Münchener Rück AG and Henkel AG with same score. Kruskal Wallis test confirms significant differences between the indices for Internal Social Media Activity Index, External Social Media Activity Index and Social Media Activity Index. (p ≤ 0.05). Correlation analysis with Spearman`s rho confirms significant dependencies between Internal Social Media Activity Index and External Social Media Activity (r = 0.659), Internal Social Media Activity Index and Social Media Activity Index (r = 0.874), External Social Media Activity Index and Social Media Activity Index (r = 0.932).

Social Media Activity Index

Rank Company Index

1 Deutsche Telekom DAX

2 SAP AG DAX

3 BASF SE DAX

4 Cisco Systems Inc. DJIA

5 Wal-Mart Stores Inc. DJIA

6 Alcoa Inc.

Intel Corp.

DJIA

DJIA 7

8 Johnson & Johnson Services Inc. DJIA

9 Royal Dutch Shell plc FTSE

10 Münchener Rück AG DAX

External Social Media Activity Index

Company Index

BASF SE DAX

Deutsche Telekom AG DAX

SAP AG DAX

Alcoa Inc.

Royal Dutch Shell plc

DJIA

FTSE

E.I. DuPont de Nemours & Co. DJIA

Wal-Mart Stores Inc. DJIA

Deutsche Bank AG DAX

Cisco Systems Inc. DJIA

Münchener Rück AG / Henkel AG DAX (both)

Internal Social Media Activity Index

Company Index

SAP AG DAX

Johnson & Johnson Services Inc.

Deutsche Telekom AG

DJIA

DAX


Intel Corp. DJIA

Microsoft Corp. DJIA


Schneider Electric SA CAC

Nissan Motor Co. Ltd. NIKKEI

BASF SE / Intuit Inc. DAX / Russell Midcap


More tools on the IR website / Intense use of external platforms in comparison to 2011

SUMMARY: SOCIAL MEDIA ACTIVITY IN INVESTOR RELATIONS

Nearly all companies within the sample employ social media on the corporate IR website; less than 50

percent are present with IR topics or even IR specific accounts on external social media platforms.

Only slight differences between major markets according to applications applied on the IR website:

RSS feeds and webcasts remain on top; use of share buttons and external links rises significantly.

Growing number of different tools offered on the IR website; increased external engagement as one reason

(share buttons, links etc. directly refer to IR presence on external platforms).

Among the external platforms, Twitter and LinkedIn experience most popularity among corporations;

specific IR channels are still rarely used; slight country-specific differences in reference to preferred platforms.

Higher adoption rate of external social media platforms among European large-caps in comparison to

2011, Japanese blue chips lag behind their international competitors.

On average, DJIA and DAX companies perform on the highest level according to social media activities;

DAX corporations more active on external social media platforms, DJIA corporations on the IR website.

Only slight differences between top companies of US mid- and small-caps listed in Russell Midcap and

Russell 2000, but they lag behind US large-caps, especially in regard to activity on external platforms.

US small- and mid-caps even outperform Japanese blue chips listed in NIKKEI index.

Financials, sustainability, AGM and other IR related topics most commonly published via social media:

Sustainability best communicated via SlideShare and YouTube, financials via StockTwits and Twitter; blogs

most suitable for CSR topics, financials should be communicated on diverse tools on the IR website.


BEST PRACTICES FOR IR 2.0 ACTIVITY


SAP (DAX) WITH VARIOUS IR SERVICES ON THE CORPORATE WEBSITE

SAP`s corporate news room is prominently linked from the IR website, includes IR relevant topics with comment function and link to accompanying webcast

Text message (SMS) service, RSS feed, links to external platforms: Youtube, SlideShare, Twitter, Facebook, StockTwits

Investor presentations at a glance: podcasts, webcasts, live streaming


CISCO`S (DJIA) SOCIAL MEDIA NEWSROOM ON THE IR WEBSITE

Twitter feed

Facebook activity

Blog posts

News releases Podcasts

Social buttons

One interface for all corporate news


IMPRESSIVE ACTIVITY: WAL-MART`S (DJIA) ANNUAL SHAREHOLDERS‘ MEETING ONLINE (IR WEBSITE, TWITTER, FLICKR)

527 photos about “AGM“ which show retail shareholders presentations of the

management live acts Event is updated every minute

by the company for its shareholders Shareholders participate within conversations as well Hashtags structure conversations Twitpics provide impressions from the event

https://twitter.com/

http://www.flickr.com/photos/walmartcorporate/sets/72157626665378495/



BASF (DAX) WITH SPECIFIC IR CHANNELS ON TWITTER & STOCKTWITS

727 Tweets 628 Following 1,794 Follower (overall)

Personalized account with photo and name of IR manager

Disclaimer

Links and Stickertags

StockTwits: More than 150,000 investors, market professionals and public companies share information and ideas about the market and individual stocks, producing streams that are viewed by an audience of over 40 million across the financial web.


http://stocktwits.com/BASF_IR


TRANSLATIONS ON TWITTER BY GERMAN AND FRENCH LARGE-CAPS, BUT NOT BY JAPANESE COMPANIES

NTT (NIKKEI) provides its information only in Japanese

Air Liquide (CAC) translates its earning announcements into English

Fresenius (DAX) translates changes in management into English





INTEGRATED COMMUNICATIONS ON SLIDESHARE CHANNELS

607 views and14 downloads of preliminary results release / English versions in general more popular than German ones

SAP (DAX) Links to several platforms: Facebook, Twitter, ...

As the only company within FTSE, Royal Dutch Shell offers SlideShare presentations

Pfizer (DJIA) implement tweets and links on SlideShare channel

http://www.slideshare.net/royaldutchshell

http://www.slideshare.net/sap

http://www.slideshare.net/sap

http://www.slideshare.net/Pfizer


CONTENT SHARING PLATFORM SCRIBD RARELY USED FOR IR PURPOSES

HP`s account with IR topics:

Four DJIA companies use Scribd for IR topics: AT&T, Chevron, Cisco & HP

Possibility for download and print

32,396 total reads

Cisco`s IR channel:

http://www.scribd.com/hewlettpackard

http://www.scribd.com/Cisco IR


Deutsche Bank, Daimler (DAX) and Cisco (DJIA) use Flickr channels for IR

FLICKR PROVIDES IMPRESSIONS FROM IR EVENTS

Deutsche Bank (DAX) uploaded photos about its AGM 2011 and sustainability approach

Cisco (DJIA) with impressions from analyst conferences

Daimler (DAX) provides pictures about annual press conference

http://www.flickr.com/photos/deutschebank/sets/72157626441221380/

http://www.flickr.com/photos/daimlerag/sets/72157629242515965/

http://www.flickr.com/photos/cisco_pics/sets/72157622916363342/

http://www.flickr.com/photos/deutschebank/sets/72157626685986469/


INVESTOR RELATIONS 2.0: DIALOGUE AND RELATIONSHIP BUILDING


Theoretical background

Social Media Dialogue Index

DIALOGUE AND RELATIONSHIP BUILDING THROUGH ONLINE IR

Dialogue-oriented (interactive) communication

Dialogic communication

Structuration

Automatic dissemination

Constant actualization

Possibility for feedback

User comments

Company‘s reaction to comments

User rating

Internal Investor Relations (website) Dialogue Index

External Investor Relations (platforms) Dialogue Index

Personalization

Source: Own display in reference to Droller 2012, Koehler 2011, Kent & Taylor 2002, 1998. Dialogic features and relationship-building potential of computer-mediated communication: IR website, extension through social media (see Murtarelli & Invernizzi 2011 for a research overview). Dialogue-oriented communication vs. dialogue: Dialogues are characterized by the exchange of speakers’ roles, dynamics and openness of the process, and a certain lack of control (Zerfaß 2010). Different intentions of dialogic communication: information, persuasion, argumentation – only argumentation as precondition for relationship building (Habermas 1990):

Trustworthiness of source


IR website External platforms

DIALOGUE AND RELATIONSHIP BUILDING ANALYSED WITHIN THIS STUDY

Structuration

Automatic dissemination

Constant actualization

Possibility for feedback

User comments

Company‘s reaction to comments and ratings

User rating

Personalization

Source: Own display in reference to Droller 2012, Koehler 2011. On XING, LinkedIn and RIC, only IR presence on channel comprised. No reactions and comments collected on StockTwits. Tweet: Message on Twitter/ StockTwits (maximum of 140 signs). Stickertag: Tweet is assigned to specific ticker symbols via $. Hashtag: Tweet is assigned to specific topic via #. Retweet (RT): Forwarding of somebody other`s tweet via @. Direct message: Answering another Twitter user directly (cannot be displayed due to private conversation).

Trustworthiness of source

Links (all platforms), Hashtags (Twitter, StockTwits), Stickertags (StockTwits)

Number of publications via external platforms (all platforms)

Photos, videos (Facebook, Google+), Twitpics (Twitter), contact information

Disclaimer, IR contact information (all platforms)

Activation of comments (all platforms), activation of channel comments

(YouTube), possibility for downloads (SlideShare, Scribd)

Comments by users (all platforms), Retweets (Twitter)

Like button (Facebook), Plus One button (Google+)

Reactions by the company to users’ actions (comments, ratings) (all platforms),

mentions (Twitter)

RSS feeds e.g. for IR blog, IR app, SMS (text message) service

Links, tagclouds, social bookmark, IR wiki, social media newsroom, mobile website,

QR code

Videos, webcasts, podcasts with feedback function,

Like, Tweet, Plus One and share buttons, rating function

Comments and ratings by users, e.g. blog posts, live chat, hybrid/virtual AGM or ratings on IR releases, blog posts etc.

Reactions by the company to users’ actions (comments, ratings)

Websites with personalized contents, IR blog, videos, personal contact information

Number of publications via social media on IR website

Implementation of structuration and networking function


11

43

7

14

3

12

1 0

3

1 0

5

10

15

20

25

30

35

40

45

50

2009 2011 2012

DJIA DAX FTSE CAC NIKKEI Russel Midcap Russel 2000

45

7

16

3

12

1

13

0

14

1

7

0

5

10

15

20

25

30

35

40

45

2011 2012

11

DJIA expands leading position / France, UK and Japan catch up to German blue chips

DIALOGIC APPROACH ON IR WEBSITES: GLOBAL OVERVIEW 2009-2011

N = 182 (2012); 142 (2011) (no. of companies with social media on IR website). No significant differences between indices found.

9

15

3

5

10

2

7

1

9

0

4

1

0

2

4

6

8

10

12

14

16

2009 2011 2012

No. of companies with social media tools on the IR website offering

feedback possibilities

No. of social media tools with feedback possibilities

on the IR website


NIKKEI

Most comments and ratings by users on US corporate IR websites / DAX on second rank

DIALOGIC APPROACH ON IR WEBSITES: TOOLS AND COMMENTS/RATINGS

N = 143 (no. of companies with social media on IR website listed in DAX, DJIA, FTSE, CAC, NIKKEI). Number of publications with possibility of feedback or comments and number of comments or ratings e.g. blog comments, recommendations via likes, tweets , plus ones or shares. No significant differences between indices found.

DAX

CAC

FTSE

no. of IR publications with feedback possibility

no. of comments/ratings by users




no. of comments/ratings by users no. of IR publications with feedback possibility no. of comments/ratings by users no. of IR publications with feedback possibility


All indices DJIA DAX FTSE CAC NIKKEI

6

32

9

232

1,906

33

34

17

53

151

0 500 1,000 1,500 2,000

DJIA


US blue chips on top again / DAX companies completely without counters

DIALOGIC APPROACH ON IR WEBSITES: USE OF BUTTONS WITH COUNTERS

133 133 20 57

4,522

3,929

498

67 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Tweet button with

counter

Like button with

counter

Share button with

counter

Plus one button with

counter

DJIA (no. of publications via mentioned tool) DJIA (no. of reactions by users)

1 1 15

0 10 4

472

0 9 9 8 8

55

2 9 3

43 43

0 12

148

222

0 8 0

50

100

150

200

250

300

350

400

450

500

Tweet button with counter

Like button with counter

Share button with counter

Plus one button with counter

FTSE (no. of publications via mentioned tool) FTSE (no. of reactions by users) CAC (no. of publications via mentioned tool) CAC (no. of reactions by users) NIKKEI (no. of publications via mentioned tool) NIKKEI (no. of reactions by users)

N = 143 (no. of companies with social media on IR website listed in DAX, DJIA, FTSE, CAC, NIKKEI). Number of social buttons with counters and number of reactions. Each counter displays the number of times that a post/news release has been recommended on social networks such as Facebook, Twitter, Google+ or other social media services. Adding counter s may increase interaction by users as they can see how other readers are participating. No significant differences between indices found.


N: 143 (2012); 142 (2011) (category analyzed for companies using social media on the IR website). Basic functions of social software, see Zerfaß & Sandhu 2008): information (e.g., RSS feeds), structuring (e.g., social bookmarks, wikis), interpretation (e.g., podcasts, video casts, and blogs) and networking (e.g., social communities). Category in content analysis: Degree to which each function is fulfilled: 3 = fully applies (to 100 per cent appropriate), 2 = partly applies (implements ”largely applies“, ”partly applies“ and ”does rather not apply“), 1 = does not apply at all (to 0 per cent appropriate). Each function is not exclusively linked to a specific tool but there are predominant functions of specific tools but other functions are fulfilled to a minor degree as well. The examples indicate the function which is fulfilled to a major degree. External platforms are not part of the differentiation of functions due to platform inherent functions by definition, e.g. the social network Facebook, the microblog Twitter (see p. 9). However, all different functions can be fulfilled to a certain degree by social media (both by tools on a website or external platforms).

18

67

8

55

123

75

127

83

2

1

8

5

0 50 100 150

information

structuring

interpretation

networking

2012

DIALOGIC APPROACH ON THE IR WEBSITE: BASIC ONLINE FUNCTIONS

Networking via social media gains importance among listed corporations worldwide

11

85

14

103

124

56

124

37

7

1

4

2

0 50 100 150

information

structuring

interpretation

networking

fully applicable partly applicable not applicable

2011


DJIA networks, DAX informs and structures, FTSE and CAC with balanced engagement

BASIC SOCIAL MEDIA FUNCTIONS: INTERNATIONAL DIFFERENCES

Basic functions of social software according to Zerfaß & Sandhu (2008): information (e.g., RSS feeds), structuring (e.g., social bookmarks, wikis), interpretation (e.g., podcasts, video casts, and blogs) and networking (e.g., social communities). Category in content analysis: Degree to which each function is fulfilled: 4 = fully applies, 3 = largely applies, 2 = partly applies, 1 = does rather not apply, 0 = does not apply at all. Each function is not exclusively linked to a specific tool but there are predominant functions of specific tools but other functions are fulfilled to a minor degree as well. External platforms are not part of the differentiation of functions due to platform inherent functions by definition, e.g. the social network Facebook, the micro blog Twitter (see p. 9). However, all different functions can be fulfilled to a certain degree by social media (both by tools on a website or external platforms). N = 150 (category analyzed for companies using social media on the IR website). Average = mean score; SD = standard deviation; F = F-ratio for one-way ANOVA F-test statistic. Results significant for p < 0.05. Rounded figures. Significant differences between groups (here: indices) according to social media functions found.

Social media function Index No. of

companies Average

Statistical parameter

SD F p

Information

DJIA 30 1.73 0.583 6.303 ≤ 0.001

DAX 30 1.83 1.020

FTSE 30 1.37 0.928

CAC 30 1.30 0.651

NIKKEI 30 0.90 0.803

Structuring

DJIA 30 0.87 0.937 6.759 ≤ 0.001

DAX 30 1.00 0.743

FTSE 30 0.70 0.794

CAC 30 0.90 0.845

NIKKEI 30 0.10 0.305

Interpretation

DJIA 30 1.90 0.995 6.593 ≤ 0.001

DAX 30 1.73 1.015

FTSE 30 1.43 0.817

CAC 30 1.47 0.937

NIKKEI 30 0.80 0.664

Networking

DJIA 30 1.60 1.248 10.711 ≤ 0.001

DAX 30 1.13 1.167

FTSE 30 0.73 0.740

CAC 30 0.93 0.691

NIKKEI 30 0.13 0.346


Views on YouTube (average per company)

IR videos on YouTube highly viewed, but comment function not offered or not used

DIALOGIC APPROACH EXTERNALLY: SLIDESHARE, YOUTUBE AND SCRIBD

N = 65 (no. of companies with IR 2.0 engagement on YouTube, SlideShare and Scribd). Views on SlideShare, YouTube and Scribd in mean values. No companies within NIKKEI and CAC present with IR topics on SlideShare. For Scribd, the low presence of companies (only four DJIA companies use Scribd – AT&T Inc, Chevron Corp., Cisco Systems Inc., Hewlett-Packard Inc. – influence results as well. Standard deviation SD for Views on SlideShare: 2,826.58 (DJIA), 442.53 (DAX), 6,219.64 (FTSE). Standard Deviation SD for Views on YouTube: 46,990.82 (DJIA), 2,141.29 (DAX), 3,650.93 (FTSE), 7,519.52 (CAC), 645.81 (NIKKEI). Standard Deviation SD for Reads on Scribd: 2,036.5 (DJIA). Kruskal Wallis test showed no significant differences between groups (here: indices).

Views on SlideShare (average per company)

Downloads on SlideShare:

DJIA:

ø 25 downloads (per company)

DAX:


FTSE:


Reads on Scribd (average per company)

nearly half of the companies (47 out of 97) on YouTube deactivate the

possibility for users’ channel comments

1,873

637

3,631

14,500

1,337 1,186

2,848

7,056

1,018



Most comments made by investors of DJIA companies / Japanese corp. react actively

DIALOGIC APPROACH EXTERNALLY: RATINGS, COMMENTS, REACTIONS

N = 97 (no. of companies with IR engagement on external platforms, here: RIC, SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+). Rating elements only on Facebook (Like Button) and Google+ (Plus One Button). Comments involve retweets on Twitter, reactions involve mentions on Twitter. No comments and reactions on StockTwits collected. On YouTube, possibility for comment according to channel and single videos is given. Standard deviation SD for no. of ratings/ no. of publications: 0.2133 (DJIA), 0.2373 (DAX), 0.1915 )FTSE), 0.1411 (CAC), 0.185 (NIKKEI). Standard Deviation SD for no. of comments/no. of publications: 5.1022 (DJIA), 1.1696 (DAX), 1.1097 (FTSE), 1.2350 (CAC), 0.4078 (NIKKEI). Standard deviation SD for no. of reactions/ no. of comments: 0.0866 (DJIA), 0.1682 (DAX), 0.0512 (FTSE), 0.2329 (CAC), NIKKEI (0.4787). Kruskal Wallis test shows significant differences between the indices according to no. of ratings / no. of publications via social media and no. of comments/ no. of publications via social media (p ≤ 0.05).

0.128

4.091

0.072

0.118

0.617

0.101

0.069

0.872

0.079

0.071

0.916

0.129

0.040

0.108

0.375

0.0 1.0 2.0 3.0 4.0 5.0

No. of ratings / no. of publications via social media on external platforms (average per company)

No. of comments / no. of publications via social media on external platforms (average per company)

No. of reactions / no. of comments on external social media platforms (average per company)



NIKKEI beats other indices concerning followers / IR channels less popular

DIALOGIC APPROACH ON EXTERNAL PLATFORMS: FOLLOWERS

N = 97 (no. of companies with IR engagement on external platforms, here: SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+). No. of followers based on mean values. Presence on IR channels refers to specific accounts on which only IR topics are published. Standard deviation SD for fans on Facebook: 475,386.42 (DJIA), 248,837.25 (DAX), 127,039.28 (FTSE), 5,190.58 (CAC), 18,568.56 (NIKKEI). Standard deviation SD for fans in Google+: 165,359.1 (DJIA), 913.57 (DAX), 24.8 (FTSE), 134.35 (CAC). Only one NIKKEI company present with IR topics on Google+. Standard deviation for YouTube: 15,400.84 (DJIA), 952.15 (DAX), 603.32 (FTSE), 1,111.83 (CAC), 10,013.49 (NIKKEI). Standard deviation SD for Twitter: 83,442.85 (DJIA), 10,704.27 (DAX), 13,023.31 (FTSE), 4,152.00 (CAC), 4,404.42 (NIKKEI). Standard deviation SD for StockTwits: 16.27 (DJIA), 18.93 (DAX). Kruskal Wallis test shows significant differences between indices (for YouTube, Twitter, Facebook, p ≤ 0.05). Wilcoxon test shows significant differences between fans on Facebook 2011 and 2012 (p ≤ 0.05).

Facebook followers (average per company) Ø 94,570 (2011: 10,874)

Google+ followers (average per company) Ø 41,201

Twitter followers (average per company) Ø 20,507 (2011: 4,369)

YouTube followers (average per company) Ø 3,640

Followers on platforms with IR topics (average per

company) Ø 23,049

Followers on IR channels

(average per company) Ø 361

StockTwits followers (average per company) Ø 30

Fans on Facebook and Google+ (average per company)

Facebook Google+

192,245

97,452

75,196

5,369

261,697

78,265

640 180 137

303,981



DIALOGIC APPROACH ON EXTERNAL PLATFORMS: LINKS & DISCLAIMER

N = 97 (no. of companies with IR engagement on external platforms, here: RIC, SlideShare, YouTube, Twitter, Facebook, Flickr, Scribd, StockTwits or Google+). Number of links to IR website. Number of companies with disclaimer on their accounts. Kruskal Wallis test shows significant differences between indices regarding no. of links (p ≤ 0.05). Monte Carlo significance test showed no significant differences between groups according to no. of companies with disclaimer (here: indices).

Structuring via links accounts most for Twitter / Disclaimer highly important for IR

No. of links on external platforms (all companies)

Disclaimer on external platforms

807

146 128

46 76

16 15 5

85

4 32 14

97

12 0 5 0

100

200

300

400

500

600

700

800

900

Links to IR website Links to external platforms

17

15

6

5

2

1

0

0

Facebook

StockTwits

YouTube

Twitter

Flickr

Google+

Scribd

SlideShare

No. of companies with disclaimer


N = 83 (no. of companies with IR engagement on external platforms (here: Twitter or StockTwits). No. of dialogue oriented elements on Twitter and StockTwits refer to IIR topics. Kruskal Wallis test confirms significant differences between the indices regarding to mentions and retweets on Twitter (p ≤ 0.05).

DIALOGIC APPROACH EXTERNALLY: TWITTER VS. STOCKTWITS

Twitter seems more relevant than StockTwits for IR purposes / StockTwits more specific

StockTwits follower (average per company)

Ø 30

Twitter StockTwits

Twitter follower (average per company)

Ø 20,507 (2011: 4,369)


123

275

11

41

40

202

11

9

39

116

6

30

37

198

6

26

2

22

0

0

0 50 100 150 200 250 300

Mentions

Hashtags

Twitpics

Retweets

6

92

13

6

96

13

0

62

0

0

0

0

0

0

0

0 20 40 60 80 100 120

Mentions

Stickertags

Hashtags


N = 83 (no. of companies with IR engagement on external platforms (here: Twitter or StockTwits). Number of companies with live tweeting on Twitter and StockTwits. Topics within live tweeting (only “Annual general meeting” and “Financials”). Live tweeting: More than one tweet during conferences (live or via telephone), AGM, presentations etc.

DIALOGIC APPROACH ON TWITTER & STOCKTWITS: LIVE TWEETING

Live tweeting starts to experience popularity, especially for earnings releases and AGM

No. of companies using live tweeting

5

2

8

2

3

1

5

0

1

0 0

1

2

3

4

5

6

7

8

9

Live tweeting on Twitter Live tweeting on StockTwits


27

9 9

0 0

5

10

15

20

25

30

Financial figures Annual general meeting

Topics on Twitter (all indices)

Twitter: ø 21 Tweets within each live tweeting session

StockTwits: ø 18 Tweets within each live tweeting session


German IROs use country-specific network XING / LinkedIn with general popularity

DIALOGIC APPROACH ON BUSINESS NETWORKS: XING AND LINKEDIN

N = 141 (LinkedIn), 33 (XING) (no. of companies with IR employees on LinkedIn and XING). No differentiation between private and business related use possible (private profile of IRO). Figures are based on mean values. Monte Carlo test shows significant differences between the indices and presence on LinkedIn and XING( p ≤ 0.05).

No. of companies with IROs on business networks

8

20

1 0

7

19

3

26

4

24

1 1

6

21

1 0

2

5

0 0

7 8

0 0

7

3

0 0 0

5

10

15

20

25

30

one IR employee on LinkedIn more than one IR employee on LinkedIn

one IR employee on XING more than one IR employee on XING



DIALOGIC APPROACH ON XING & LINKEDIN: NUMBER OF CONTACTS

N = 141 (LinkedIn); 33 (XING) (no. of companies with IR employees on LinkedIn and XING). Figures are based on mean values. Only contacts of IRO with highest no. of contacts collected. Kruskal Wallis test shows significant differences between the indices on XING and LinkedIn (p ≤ 0.05).

US mid-cap IROs well connected on LinkedIn compared to international large-caps

LinkedIn contacts

(average per IRO)

XING contacts

(average per IRO)

Russell Midcap 265 DAX 231

DJIA 239 FTSE 14

CAC 216 CAC 9

Russell 2000 179 DJIA 0

FTSE 175 NIKKEI 0

DAX 150 Russell Midcap 0

NIKKEI 73 Russell 2000 0


N = 190 (no. of companies). Indices based on mean values. Kruskal Wallis test confirms significant differences between the indices for Internal Social Media Dialogue Index, External Social Media Dialogue Index and Social Media Dialogue Index (p ≤ 0.05). Correlation analysis (Spearman`s rho) confirms significant dependencies between Internal Social Media Dialogue Index and External Social Media Dialogue Index (r = 0.607), Internal Social Media Dialogue Index and Social Media Dialogue Index (r = 0.845), External Social Media Dialogue Index and Social Media Dialogue Index (r = 0.917).

SOCIAL MEDIA DIALOGUE INDEX

DJIA with most dialogic and dialogue-oriented elements

Internal Social Media Dialogue Index Use of dialogical tools on the IR website (no. of different tools with feedback function) + intensity of use (no. of publications with feedback function

/ no. of IR ad hoc and news releases + no. of publications with feedback function / no. of publications via social media) + intensity of

feedback (no. of comments and ratings / no. of publications with feedback function) + degree of

implementation of networking function

Internal Social Media Dialogue Index + External Social Media Dialogue

Index

External Social Media Dialogue Index Use of social media on external platforms with feedback possibility (no. of different tools) + intensity of use on external platforms (no. of

publications via social media / no. of IR ad hoc and news releases )+ dialogue oriented elements (e.g. links, disclaimer, hashtags) + intensity of dialogue (no. of comments and ratings / no. of publications

with feedback function + number of company reactions / no. of comments)

22.8

32.5

55.3

10.2

19.9

30.1

7.4

16.8

24.3

9.1

17.3

26.4

5.4 5.0

10.4

4.5 6.6

11.1

1.5 4.8 6.3

Internal Social Media Dialogue Index (average) External Social Media Dialogue Index (average) Social Media Dialogue Index (average)



N = 190 (no. of companies). Internal Dialogue Index: Schneider Electric SA and Nissan Motor Co. Ltd. as well as Alcoa Inc. and Intuit Inc. with the same score. External Dialogue Index: AT&T Inc. and Microsoft Corp. as well as IBM Corp. and American Express Co. with the same score. Dialogue Index: BASF SE, Deutsche Telekom AG and SAP AG with the same score. Kruskal Wallis test confirms significant differences between the indices for Internal Social Media Dialogue Index, External Social Media Dialogue Index and Social Media Dialogue Index (p ≤ 0.05). Correlation analysis (Spearman`s rho) confirms significant dependencies between Internal Social Media Dialogue Index and External Social Media Dialogue Index (r = 0.607), Internal Social Media Dialogue Index and Social Media Dialogue Index (r = 0.845), External Social Media Dialogue Index and Social Media Dialogue Index (r = 0.917).

US blue chips dominate international dialogue ranking

SOCIAL MEDIA DIALOGUE INDEX: GLOBAL BENCHMARK (TOP 10)


Rank Company Index

1 Microsoft Corp. DJIA


3 Intel Corp. DJIA

4 General Electric Co. DJIA

5 AT&T Inc. DJIA

6 Hewlett-Packard Co. DJIA


8 BASF SE

Deutsche Telekom AG

SAP AG

DAX

DAX

DAX

9

10

External Social Media Dialogue Index

Company Index

Hewlett-Packard Co. DJIA

AT&T Inc.

Microsoft Corp.

DJIA

DJIA

3M Co. DJIA

IBM Corp.

American Express Co.

DJIA

DJIA

Bank of America Corp. DJIA


BMW AG DAX

Chevron Corp. DJIA

Internal Social Media Dialogue Index

Company Index

Intel Corp. DJIA



General Electric Co. DJIA


Schneider Electric SA

Nissan Motor Co. Ltd.

CAC

NIKKEI

SAP AG DAX

AT&T Inc. DJIA

Alcoa Inc./Intuit Inc. DJIA/

Russell Midcap


Dialogue as the next level in online investor relations

SUMMARY: DIALOGUE AND RELATIONSHIP BUILDING IN ONLINE IR

* The possibility for feedback is given, but communication remains monologic. Monologues are characterized by a clear distinction between speaker and receiver, no change of roles occurs, communication is planned and controlled (Zerfaß 2010).

Dialogue and relationship building are increasingly recognized as next level in online financial

communications. Dialogues are characterized by the exchange of speakers’ roles, dynamics and openness of

the process, and a certain lack of control (Zerfaß 2010). This can be challenging for a department which has

to obey disclosure policies.

Just a few companies already use a dialogic approach and provide tools with feedback possibilities on the IR

website or comment functions on external social media platforms, answer users’ comments, handle critics

openly and do not delete unpleasant topic-related contributions.

US large-caps as most dialogic on both, IR website and external platforms. Users within the US highly

participate in online conversations referring to IR related topics.

Whereas dialogue is still best practice, a dialogue-oriented or interactive approach is already employed:*

Disclaimers, personalization, links, download options, share buttons, rating and other platform-specific

functions offer preconditions for online conversations. Disclaimers are important for IR due to a legally

sensitive area in which trust in source is important for relationship building. Yet, the use of disclaimers and

personal profiles (contact information, photos, etc.) is not established on external social media platforms.

In reference to views, Facebook seems more relevant than Google+ for reaching investors and getting in

conversations with shareholders; Twitter more used than StockTwits, however StockTwits appears better for

targeting investors; IR related videos highly requested on YouTube; SlideShare with country-specific demand.

Business networks established within financial community: LinkedIn with high popularity among IROs

worldwide (despite Japan); US mid-cap corporations are well connected.


BEST PRACTICES FOR IR 2.0 DIALOGUE


DIALOGIC APPROACH ON IR WEBSITE: GE (DJIA) WITH SPECIFIC IR BLOG

Blog ”GE Reports“ as established IR blog / Now also frequently commented by users

Comment function actively used: Nearly no comments made by users in previous years / changed in 2012

http://www.gereports.com/





CORPORATE BLOG WITH IR TOPICS BY EXXON MOBIL (DJIA)

Several debates on ”Perspectives“ Blog by ExxonMobil, also including controversial issues

e.g. debates about financial issues, sustainability, oil prices, political decisions, energy policy

http://www.exxonmobilperspectives.com/

http://www.exxonmobilperspectives.com/


Readers recommend IR topics via social media counter buttons

INTEL’S (DJIA) NEWSROOM INTEGRATES SOCIAL MEDIA ACTVITIES

Various topics shared by readers on Twitter, Facebook, Google+ and other platforms, e.g. M&As, financial figures, cooperation and strategic company decisions

Possibility for comments within news room (here: 58,825 views, but no comments) Tags and tagcloud structure information

Log-in option (newsroom similar to online community) Additionally: Intel Investor Community for stockholders (on IR website)

http://newsroom.intel.com/community/intel_newsroom


DIGITAL HUB FOR WAL-MART‘S (DJIA) SHAREHOLDERS´ MEETING

Digital hub on the IR website combines Twitter and Facebook comments, YouTube videos, Flickr photos, live streams via webcast, downloadable content, press releases and extensive information about the event

Conversations both on the IR website and external social media platforms Facebook and Twitter


MoxyVote supports communication with retail shareholders and vote of J&J proxies

J&J (DJIA) FIRST PUBLIC COMPANY ON ACTIVIST SITE MOXYVOTE

Johnson & Johnson corporate blog with IR topics / Tagcloud structures blog posts

Shareholder activist site dedicated to retail investors who can join for free and vote their proxies electronically. 165,000 users by April 2012; growing by 15,000 to 20,000 users per month. Can be linked to individuals’ brokerage accounts to vote proxies online. Shows users how different advocacy organizations voted their shares / Users can choose to automatically align their votes. Corporations can engage on MoxyVote as part of the proxy process. URL: www.moxyvote.com


Listening to shareholders: Prudential (FTSE), Bayer and BASF (both DAX)

ONLINE SURVEYS TO GET TO KNOW FEEDBACK FROM SHAREHOLDERS

Prudential (FTSE): Shareholders‘ feedback on financial reports requested

Bayer (DAX): Shareholders‘ opinion about the IR website

BASF (DAX): IR online survey 2012 – shareholders‘ satisfaction with online performance

http://www.investor.bayer.com/no_cache/en/specialbuttonbar/bewerten/pid/2

http://2011hy.prudentialreports.com/index8782.html?pageid=3

http://www.basf.com/group/investor-relations_de/index


DIALOGIC APPROACH EXTERNALLY: RETAIL INVESTOR CONFERENCES RIC

Exhibit Hall chat with IR employees, download IR material, investor kits (here: Provecturs Pharmaceuticals, Inc.)

Live Auditorium IROs give live presentations for registered users; Q&A sessions with audience afterwards (here: NAPTP)

Retail Investor Conferences (RIC) is a platform for hosting virtual conferences which addresses both institutional and individual investors (83 % individuals, April 2012; approx. 10,000 registered investors). Each month, 10 companies give IR presentations to a virtual audience and offer the possibility for discussions online (streams cannot be recorded / other examples chosen here than SAP and Deutsche Telekom). URL: www.retailinvestorconferences.com

SAP, Deutsche Telekom (DAX) and National Retail Properties (Russell 2000) on RIC

http://retailinvestorconferences.com/



VIRTUAL CONFERENCES: CONVENIENT FOR INDIVIDUAL INVESTORS

Q&A: “Could someone tell me why the maximum number of members in an investment club is twenty?“ (Claude Hawkins)

Investor Lounge Social networking with other individual investors contact other individual investors via

chat or private messages Q&A`s discussions




WIDE RANGE OF COMMENTS AND COMPANY REACTIONS ON FACEBOOK

Negative comments on financial figures at Deutsche Bank`s (DAX) Facebook wall, however Deutsche Bank replied / no deletion of comments

Affirmative comments on Caterpillar`s (DJIA) Facebook wall

Toyota Motor (NIKKEI) rejects reactions to comments in general: ”In general, we do not reply to comments.“ Cisco Systems (DJIA) invites its shareholders to

ask questions about acquisitions

https://www.facebook.com/caterpillar

https://www.facebook.com/DeutscheBank

https://www.facebook.com/pages/Toyota-Motor-Corporation/287409713223



STOCKTWITS ENABLES INVESTORS TO GET SPECIFIC FINANCIALLY RELEVANT INFORMATION

Company profile

Stickertag (ticker symbol: $SAP)

Safe Harbor Statement

Embedded SlideShare presentations

Link to webcasts

IR contact: name, email, (phone number)

Links to website & other external platforms

SAP (DAX) on StockTwits (other companies are e.g. BASF, Deutsche Telekom, Royal Dutch Shell, Cisco, Chevron, Intel)

http://stocktwits.com/SAPinvestor?q=sap

http://stocktwits.com/SAPinvestor?q=sap


SHARING KEY FACTS FROM IR EVENTS TO INVESTORS VIA LIVE TWEETING

Royal Dutch Shell (only FTSE company on StockTwits) live tweeted earning announcements on StockTwits

Daimler (DAX) shared key facts from the annual general meeting with hashtag ”#HV“ (German for AGM)

http://stocktwits.com/Shell?q=shell



INVESTOR RELATIONS 2.0: MOBILE APPLICATIONS


Overview of mobile tools on IR websites analyzed within this study

MOBILE APPLICATIONS IN INVESTOR RELATIONS

Mobile applications

Mobile website

IR app

Virtual / hybrid shareholders

meeting

Text message (SMS) service

AGM online voting

QR code

Quick response (QR) codes link to the internet by

scanning the codes with a smart phone. They are used to give access to additional

content e.g. in printed publications.

Shareholders’ meetings held on a virtual basis or as virtual and physical get together in

combination with the possibility to vote in real-time

via the internet.

The possibility to vote shares online before the annual

general meeting takes place and without the need of

personal appearance at the event.

Software application designed to run on mobile device like smart phones or tablets. After download, IR

apps automatically and directly offer up-to-date

investor relations information provided by the company,

e.g. share price, IR presentations, IR calendar.


3

1

3

1

8 3

2

2

3

3

2

6

3

9

11

1

3

8

7

1

2

5

1

1

2

4

0 5 10 15 20 25 30 35

DJIA 2012 DAX 2012 FTSE 2012 CAC 2012 NIKKEI 2012 Russell Midcap

USE OF MOBILE APPLICATIONS FOR IR: INTERNATIONAL COMPARISON

Increased provision in comparison to 2011 / Especially IR apps gain importance

Mobile website

IR app

Virtual/hybrid shareholders meeting

QR code

Text message (SMS) service

N: 143 (2012); 142 (2011) (no. of companies listed in DAX, DJIA, FTSE, CAC, NIKKEI using different tools on IR website). Four companies provide two IR apps, including Allianz SE (DAX), Royal Bank of Scotland (FTSE), BAYER AG (DAX) and Siemens AG (DAX). No annual comparison could be conducted for Russell Midcap and Russell 2000 companies as well as for the tools QR code, SMS service and virtual/hybrid shareholders meeting. Russell 2000 companies offer none of the mobile applications mentioned above. Pearson chi-square and Monte Carlo significance test found significant differences between groups (here: indices) for the tools mobile website and SMS service.

2012

2012

2012

2012

2012

2011

2011

DJIA 2011 DAX 2011 FTSE 2011 CAC 2011 NIKKEI 2011 Russell 2000


USE OF MOBILE APPLICATIONS FOR IR: AGM ONLINE SERVICES

N = 190 (all companies). Five companies offer hybrid shareholder meetings – Intel Corp. (DJIA), Microsoft Corp. (DJIA), Allianz SE (DAX), Münchner Rück AG (DAX) and Terex Corp. (Russell Midcap). Pearson chi-square showed no significant differences between groups (here: indices) according to the possibility of voting shares online before the AGM takes place.

Possibility to exercise voting rights online – widely used / Virtual or hybrid AGM not established

within the sample offer their shareholders the possibility to vote their shares online before the AGM takes place

132 companies

within the sample hold hybrid shareholder meetings (possibility to follow live by webcast and to vote in real-time)

5 companies

within the sample holds a virtual-only shareholder meeting: Illumina Inc. (Russell Midcap)

1 company


DAX and FTSE are leading the field / DJIA and NIKKEI less advanced

MOBILITY FUNCTION ON IR WEBSITES: INTERNATIONAL OVERVIEW

N = 182 (no. of companies with social media on IR website). Assessment of mobility function by companies‘ IR department. Category in content analysis: Degree to which the company intends to meet the needs of mobile internet users by offering different tools on the IR website, e.g. mobile website, IR apps, QR codes, SMS service, online proxy voting: 4 = fully applies, 3 = largely applies, 2 = partly applies, 1 = does rather not apply, 0 = does not apply at all. Pearson chi square and Monte Carlo significance test found significant differences between groups (here: indices) according to the function mobility on IR website.

0

2 1

0 0 0 0 0

5

3

0 0 0 0

6 4 5

7

1

3

1

20

14

16

12

15 14

12

4 4 5

11

8

3

7

0

5

10

15

20

25

DJIA DAX FTSE CAC NIKKEI Russel Midcap Russel 2000

fully applies largely applies partially applies does rather not apply does not apply at all


German and UK corporations outperform US large-caps / NIKKEI least mobile at all

SOCIAL MEDIA MOBILITY INDEX: GLOBAL BENCHMARK (TOP 10)

N = 190 (all companies). BASF SE and Siemens AG as well as Daimler AG and Unilever plc with the same score. F-ratio for one-way ANOVA F-test statistic = 4.784. Results significant for p ≤ 0.05. Rounded figures. Significant differences between indices according to mobility index found.

Mobility Index

Rank Company Index

1 Allianz SE DAX

2 Royal Bank of Scotland FTSE

3

BAYER AG

Siemens AG

DAX

DAX

5 BASF SE DAX


7

Daimler AG

Unilever plc

DAX

FTSE

8

SAP AG

Rolls Royce Group plc

Volkswagen AG

DAX

FTSE

DAX

9.6

14.7

12.4

7.6

4.8

9.7

5.9

Social Media Mobility Index (average)

DJIA

DAX

FTSE

CAC

NIKKEI

Russell Midcap

Russell 2000

Social Media Mobility Index Use of mobile applications on the IR website (no. of different

mobile tools) + degree of implementation of mobility

function


High usage rates of mobile applications (mobile websites, apps) as well as social networking sites or blogs

on mobile devices among online users in general (comScore 2012); growing number for investors, analysts,

financial journalists (DES & DVFA 2011, Forrester 2011). Corporations should account for the demand of

their shareholders and other members of the financial community, and offer mobile IR services on their

corporate websites.*

In comparison to 2011, mobile applications are increasingly offered by corporate investor relations. Yet,

provision by international large-caps is still on a low level.

IR apps experienced highest growth rate among mobile applications; mobile website implemented most by

international corporations.

Possibility to exercise voting rights online is widely used; virtual or hybrid annual shareholders’ meeting is not

established at all.

German and British large-caps score highest in social media mobility index. US, French and Japanese large-

caps offer their shareholders less mobile services.

Within the US, mid-caps listed in Russell Midcap catch up with large-caps listed in DJIA in regard to mobile

applications. Two of the Russell Midcap corporations within in the sample offer virtual and hybrid

shareholders’ meetings.

Best practices already show the possibilities for corporate mobile services. However mobility as an important

service feature and growing demand among (financial) users is not yet accounted for by most international

large-caps.

Mobility as important service feature within online IR / Utilization still at low level

SUMMARY: MOBILE APPLICATIONS FOR INVESTOR RELATIONS

* Mobile use of external social media platforms does not depend on companies’ mobile activities in particular. However, corporate engagement on external social media platforms serves the growing number of mobile users.


BEST PRACTICES FOR MOBILE APPLICATIONS


ALLIANZ (DAX) OFFERS WIDE SPECTRUM OF MOBILE SERVICES

Allianz IR apps for iPhone & iPad

Diverse mobile services

http://itunes.apple.com/en/app/allianz-investor-relations/id389732303?mt=8

https://www.allianz.com/en/investor_relations/shareholder_service/mobile_services/page1.html





ROYAL BANK OF SCOTLAND (FTSE) SCORES HIGH IN MOBILE IR

Investor app and document library for iPad

“This app is a great way for analysts, investors and journalists to stay informed and access key documents and webcasts wherever they are, it allows us to provide our comprehensive disclosures in a very clear and accessible way“, Richard O´Connor, Head of Investor Relations.

http://www.rbs.com/news/2012/04/RBS-launches-investor-and-media-ipad-app.html

http://itunes.apple.com/app/id512311030





SAMPLE INVESTOR RELATIONS APPS BY BAYER, SIEMENS, WAL-MART

Annual report apps, e.g. by Bayer and Siemens (both DAX) IR apps, e.g. by Wal-Mart (DJIA), Unilever (FTSE), and SAP (DAX)

http://itunes.apple.com/us/app/siemens-annual-report-2011/id488730697?mt=8



http://itunes.apple.com/en/app/bayer-annual-report/id501352285?mt=8

http://itunes.apple.com/en/app/bayer-annual-report/id501352285?mt=8

http://www.unilever.com/mediacentre/news/unileverlaunchesinnovativeapp.aspx

http://itunes.apple.com/us/app/walmart-investor-relations/id518152594?mt=8

http://itunes.apple.com/de/app/sap-investor-relations-publications/id436785507?mt=8


BASF (DAX) WITH MOBILE WEBSITE, QR CODE AND TEXT MESSAGES

Mobile website including stock chart, details about BASF share, dividend and corporate actions, investor releases, calendar and events

SMS service offers information about BASF share price

QR code allows direct access to mobile IR website

http://www.basf.com/group/corporate/en/investor-relations/news-publications/ir-mobile

https://m.basf.com/group/corporate/mobile

https://m.basf.com/group/corporate/mobile

http://www.basf.com/group/corporate/en/investor-relations/share/sms-service/index


Different download options for mobile usage on various platforms

FRANCE TELECOM (CAC): PERSONALISED MOBILE ANNUAL REPORT

Mobile versions available for iPad, iPhone, tablets, smart phones, blackberries and eBook readers


INVESTOR RELATIONS 2.0: MANAGEMENT SUMMARY


SOCIAL MEDIA ACTIVITY, DIALOGUE AND MOBILITY INDEX

Differences reveal country-specific usage patterns in online investor relations

N = 190 (no. of companies). Indices based on mean values. Kruskal Wallis test confirms significant differences between the indices for Social Media Mobility Index, Social Media Activity Index and Social Media Dialogue Index (p ≤ 0.05). Correlation analysis with Spearman`s rho confirms significant dependencies between Social Media Mobility Index and Social Media Activity Index (r = 0.428) as well as Social Media Dialogue Index (r = 0.298) and between Social Media Activity Index and Social Media Dialogue Index (r = 0.905).

Internal Social Media Activity Index + External


Social Media Mobility Index (only investor relations

website)

Internal Social Media Dialogue Index + External


63.2

55.3

8.7

63.4

30.1

14.2

41.6

24.3

11.9

43.9

26.4

7.7

14.1 10.4

4.8

25.4

11.1 8.7

18.9

6.3 5.9

Social Media Activity Index (average) Social Media Dialogue Index (average) Social Media Mobility Index (average)



Top 10 corporations ranked by social media activity, dialogue and mobility

GLOBAL BENCHMARK OF INVESTOR RELATIONS 2.0 ENGAGEMENT

N = 190 (no. of companies). Indices based on mean values. Kruskal Wallis test confirms significant differences between the indices for Social Media Mobility Index, Social Media Activity Index and Social Media Dialogue Index (p ≤ 0.05). Correlation analysis with Spearman`s rho confirms significant dependencies between Social Media Mobility Index and Social Media Activity Index (r = 0.428) as well as Social Media Dialogue Index (r = 0.298) and between Social Media Activity Index and Social Media Dialogue Index (r = 0.905).


Rank Company Index

1 Deutsche Telekom DAX

2 SAP AG DAX

3 BASF SE DAX



6 Alcoa Inc.

Intel Corp.

DJIA

DJIA 7

8 Johnson & Johnson Services Inc. DJIA


10 Münchener Rück AG DAX


Company Index



Intel Corp. DJIA

General Electric Co. DJIA

AT&T Inc. DJIA

Hewlett-Packard Co. DJIA


BASF SE

Deutsche Telekom AG

SAP AG

DAX

DAX

DAX

Social Media Mobility Index

Company Index

Allianz SE DAX

Royal Bank of Scotland FTSE

BAYER AG

Siemens AG

DAX

DAX

BASF SE DAX

Royal Dutch Shell plc. FTSE

Daimler AG

Unilever plc.

DAX

FTSE

SAP AG / Volkswagen AG

Rolls Royce Group plc

DAX

FTSE


Corporations intensely engage in social media / Online dialogue still a challenge

SUMMARY OF FINDINGS: GLOBAL INVESTOR RELATIONS 2.0

The Investor Relations 2.0 Global Benchmark Study 2012 provides insights into how companies in France,

Germany, Japan, the UK and the USA master financial communications using the social web. International

differences in usage patterns show culture-specific relationships with shareholders and other financial market

participants as well as in social media adoption.

The longitudinal design reveals recent developments in the field, for example a more active use of social

media and integration of new tools, the emergence of a dialogue and relationship building approach, and

the use of mobile applications among international large-cap companies.

Companies listed in all stock market indices implement social media on their IR websites. External social

media platforms remain less employed, but are on the rise compared to previous years.

In 2011, US companies were on the forefront of IR 2.0 engagement. This research reveals that German

large-caps have caught up and perform on the same level as US large-caps in regard to social media

activities or even outperform in the field of mobile applications. UK and French corporations improved their

engagement, Japanese large-caps still least active within the sample.

However, US large-caps as early-adopters and frontrunners are leading in the field of dialogic approaches

to online investor relations. Dialogue and relationship building can be seen as the next level and challenge

within online IR.

Online and social media activities of corporations listed in the US indices Russell Midcap and Russell 2000

outperform Japanese large-caps, but are still below those of US large-caps. Yet, in some dimensions like

mobile service and business networks US mid-caps even outperform their blue chip competitors.


Index membership accounts most for differences among companies’ online activities

SOCIAL MEDIA ACTIVITY INDEX AND INDEPENDENT VARIABLES

Social Media Activity

Index:

explains 56.1 % of companies‘ social media

activities (η=0.749)

Trading volume – domestic market:

weak correlation

(r = 0.244)

No. of employees in

IR department:

medium correlation

(r = 0.329)

Analyst coverage:

medium correlation

(r = 0.375)

Volatility:

weak negative correlation

(r = -0.177)

No. of foreign investors:

medium correlation

(r = 0.446)

N=190 (no. of companies). Correlations analysis with Eta confirms significant dependencies between index in which company is listed and Internal Social Media Activity Index (η = 0.569, p < 0.001), External Social Media Activity Index (η = 0.699, p < 0.001). Correlation analysis with Eta found significant dependencies between sales market and External Social Media Activity Index (η = 0.2862, p = 0.033) as well as between industrial sector and Internal Social Media Activity Index (η = 0.2362, p = 0.05). Correlation analysis with Spearman`s Rho confirms significant correlations as indicated within table. Besides, correlation analysis with Spearman`s Rho shows significant dependencies between Internal Social Media Activity Index and volatility (r = -0.176), trading volume (domestic market) (r = 0.204), no. of foreign investors (r = 0.321), analyst coverage (r = 0.397) and no. of employees in IR department (r = 0.273). Correlation analysis with Spearman`s Rho found also significant dependencies between External Social Media Activity Index and no. of employees in IR department (r = 0.324), analyst coverage (r = 0.303), no. of foreign investors (r = 0.436), trading volume (domestic market) (r = 0.230) and volatility (r = -0.151).

no significant dependencies between Social Media Activity

Index and

• Industrial sector • Sales market • Free float • No. of retail

shareholders • Share performance • Trading volume – US-

market • Shareholder activism


SOCIAL MEDIA DIALOGUE INDEX AND INDEPENDENT VARIABLES

Social Media

Dialogue

Index:

explains 43,7 % of companies dialogic approach in social

media (η = 0.661)

Industrial sector:

explains 33.5 % of companies dialogic approach in social

media (η = 0.579)

Trading volume – domestic

market

medium correlation (r = 0.335)

No. of employees in IR

department:

medium correlation

(r = 0.301)

Analyst coverage:

weak correlation

(r = 0.293)

Volatility:

weak negative correlation

(r = -0.200)

No. of foreign investors:

weak correlation

(r = 0.270)

Shareholder activism:

weak correlation

(r = 0.169)

Industrial sector influences dialogic approach of online investor relations

N=190 (no. of companies). Correlations analysis with Eta confirms significant dependencies between index in which company is listed and Internal Social Media Dialogue Index (η = 0.434, p < 0.001) as well as External Social Media Dialogue Index (η = 0.541, p < 0.001). Correlation analysis with Eta found significant dependencies between industrial sector and Internal Social Media Dialogue Index (η = 0.419, p = 0.003). Correlation analysis with Spearman`s Rho confirms significant correlations as indicated within table. Besides, correlation analysis with Spearman`s Rho shows significant dependencies between Internal Social Media Dialogue Index and volatility (r = -0.190), trading volume (domestic market) (r = 0.275), analyst coverage (r = 0.275) and shareholder activism (r = 0.153). Correlation analysis with Spearman`s Rho found also significant dependencies between External Social Media Dialogue Index and no. of employees in IR department (r = 0.280), analyst coverage (r = 0.233), no. of foreign investors (r = 0.288), trading volume (domestic market) (r = 0.330) and volatility (r = -0.177).

no significant dependencies between Social Media Dialogue

Index and

• Sales market • Free float • No. of retail

shareholders • Share performance • Trading volume –

US-market


56.2

49.11

38.56 38.2

33 32.6 30.94 26.29 25.68

21 19.33 19.15 18.35 16.92 16.17 15.96 13.2 11.67

0

10

20

30

40

50

60

Software, technology and telecommunication corp. with most dialogic online IR

SOCIAL MEDIA DIALOGUE INDEX AND INDUSTRIAL SECTOR

N=190 (no. of companies). Kruskal Wallis test shows no significant differences between the groups (here: industrial sectors).

Social Media Dialogue Index (average)


SOCIAL MEDIA MOBILITY INDEX AND INDEPENDENT VARIABLES

N=190 (no. of companies). Correlation analysis with Spearman`s Rho confirms significant correlations as indicated within table. Correlation analysis with Spearman`s Rho shows significant dependencies between Social Media Mobility Index and index (r = -0.259), number of foreign investors (r = 0.249), number of employees in IR department (r = 0.226), analyst coverage (r = 0.264), trading volume (domestic market) (r = 0.206). Correlations analysis with Eta confirms significant dependencies between index in which company is listed and Social Media Mobility Index (η = 0.335, p < 0.001).

Social Media

Mobility

Index:

explains 11,2% of companies‘

mobile IR activities

(η=0.335)

Trading volume – domestic market:

weak correlation

(r = 0.206)

Analyst coverage:

weak correlation

(r = 0.264)

No. of foreign

investors:

weak correlation

(r = 0.249)

Mobility corresponds with trading volume, analyst coverage and foreign investment

no significant dependencies between Social Media Mobility

Index and

• Industrial sector • Sales market • No. of employees in IR

department • Free float • No. of retail

shareholders • Share performance • Trading volume – US-

market • Shareholder Activism


Index membership accounts most for differences between corporations

SOCIAL MEDIA ENGAGEMENT AND INDEPENDENT VARIABLES: SUMMARY

Corporations’ activities and dialogic approaches are most influenced by the indices companies are listed in.

However, the industrial sector accounts for online dialogues as well: Software, technology and

telecommunication corporations employ most dialogic online IR.

Social media activities can positively influence the number of foreign investors, analyst coverage and trading

volume within the domestic market; volatility is negatively influenced.

A dialogic or dialogue-oriented approach within online and social media investor relations as well as the

employment of mobile services positively influence trading volume (domestic market), analyst coverage and

number of foreign investors. Volatility is negatively influenced by online dialogues.

This research also shows that social media activities as well as dialogic approaches depend on the number

of employees within the IR department. Obviously, engaging online requires personal resources and is not

made “on the run”. Mobile services are not related to the number of staff.

Surprisingly, no dependencies between IR social media engagement and trading volume within the US

market (direct listing or ADR), free float, number of retail shareholders, shareholder activism or share

performance can be found within this study. However, some IROs who are very engaged in social media

report on increased trading volumes in comparison to their peers; shareholders increasingly use activist sites

(e.g. MoxyVote) and financial communities (e.g. SeekingAlpha); new platforms are evolving (e.g. StockR).

Future studies should continue to focus on the potential influence of corporate social media engagement on

variables like trading volume or shareholder activism, especially for mid- and small-cap companies as well.

There are no differences within social media engagement between B2B or B2C companies within this study.


Corporations worldwide increasingly implement social media within their online investor relations activities.

Whereas social media is largely employed on the IR website; external platforms are less worked with.

Social media on the IR websites will further establish as a standard approach. RSS feeds, webcasts, videos

etc. will become mainstream and are increasingly in demand by shareholders and other users. Links to all

external platforms have to be implemented as well to make the IR website the companies “home base” when

it comes to shareholders’ information and conversations within the WWW.

External platforms as distinctive feature: Corporations’ engagement on external social media platforms will

improve to the extent that shareholders can look for information online and on specific platforms. Significant

correlations between external engagement and number of foreign investors, analyst coverage, trading

volume and (negatively) volatility can already be found. As best practices will further evolve and experiences

are created by corporations, external platforms will become an integral part of online IR as well.

At the moment, there is not the one “right” external platform. The micro blog Twitter and the business network

LinkedIn are most actively used by corporations globally. IR related content on the social network Facebook

and content sharing platforms YouTube or SlideShare experience interest by online users, too. As strategic

approaches towards online and social media IR further evolve, specific IR channels or financial social media

platforms will become more established. Users could be better identified and targeted with relevant

information. Corporate channels imply the downside that topics are too diverse to attract investors’ and

analysts’ interest as a valuable information and communication platform. As seen with the emergence of

MoxyVote or other activist sites, communicating with (retail) shareholders online as well as integrating social

media within the proxy process will gain further importance.

Future trends within online investor relations: Social media activities

IMPLICATIONS FOR INVESTOR RELATIONS PRACTICE

* See Macnamara & Zerfass 2012, Macnamara 2012.


Dialogue and relationship building as the next level of online investor relations: Really getting in a virtual

dialogue with shareholders and other members of the financial community is demanding and does not only

require new technical platforms, but resources, structures, a strategic online approach and especially the

company’s willingness and ability to listen and participate in these conversations*.

US large-caps clearly lead the field within dialogic online investor relations at the moment. As seen with

social media activities, they will prospectively be challenged by other countries and indices (large-caps, but

also mid- and small-caps) in regard to online conversations.

Communication style will also be of importance: an argumentative rather than informative or even persuasive

communication style serves as a precondition for relationship building.** Shareholder conversations online

can be challenging for a department that has to obey regulatory provisions and disclosure policies. However,

it is established practice to deal with institutional investors and analysts offline in one-on-ones or other

personal meetings. IR has the expertise in such conversations in which non-disclosed information is not

intended to be communicated. The experiences are to be transferred to online communications. Even today,

there are best practices of how to engage with shareholders online.

Mobile applications and mobile use of social media platforms will gain importance within investor relations.

This study shows that mobility is currently not focused on by international large-caps. This will probably

change as mobile usage further grows and IR apps, mobile websites etc. are demanded by shareholders.

The virtual-only AGM is not likely to establish broadly within the next few years, whereas the hybrid AGM

offers an additional service to shareholders who are not able or do not want to physically attend.

Future trends within online investor relations: Social media dialogue and mobility


* See Macnamara & Zerfass 2012, Macnamara 2012. ** See Habermas 1990.


Social media governance: Next to platforms and relevant content, corporations are challenged to implement

governance structures for social media*: These regulatory frameworks for the strategic management of social

media activities in organizations are an indispensable requirement for a successful establishment. Obviously,

the IR department is not a single player within the company. Frameworks include support from the C-Suite,

financial and personal resources, technical infrastructure, social media strategy for the whole corporation

and IR in particular, interdisciplinary workforce or exchange with other departments involved in social media

strategy and operations (communications, legal, HR, IT etc.), guidelines, trainings for employees (not just for

communicating in social media, bur for planning, strategy and evaluation as well).

Architecture of listening: A strategic approach towards social media involves, in the first place, to identify

relevant stakeholders, conversations and platforms through “listening”. Monitoring the social web is already

compulsory for every communication department in order to identify chances and risks, regardless of whether

an organization is active on the social web or not.**

Regulatory compliance: As for financial communications in general, online and social media IR has to fully

comply with legal restrictions and regulatory demands. Web disclosure will certainly remain an issue for

regulators and corporations likewise.

Individual approach: Corporations are challenged to develop an individual approach to social media which

fits into their specific corporate cultures and is related to equity culture and social media adoption within

financial markets. Especially for small- and mid-cap corporations it will be important to have an online and

social media strategy that does not only rely on best practices of large-cap peers and currently hyped

platforms, but accounts for overall IR strategy (shareholder targeting, equity structure) and aims.

Challenges for online and social media investor relations


* See Zerfass & Linke 2011; Zerfass, Fink, & Linke 2011. ** See Macnamara 2012.


ABOUT THE AUTHORS


ABOUT THE AUTHORS

Prof. Dr. Ansgar Zerfass, University of Leipzig

Ansgar Zerfass is a professor of communication management at the University of Leipzig, Germany. He serves as

executive director of the European Public Relations Education and Research Association, Brussels, and editor of

the International Journal of Strategic Communication, Routledge Publishers, USA. He has published 28 books

and more than 140 journal articles and book chapters on corporate communications. Ansgar Zerfass holds

management and leadership responsibilities in several organizations and has been member of the management

board of a state-owned company during his previous career in the business world. Since several years, he has

been engaged in cross-national research projects in the field of online communications and social media,

measurement and evaluation, communication trends and competency building for communication managers.

www.communicationmanagement.de | [email protected]


ABOUT THE AUTHORS

Kristin Koehler M.A., University of Leipzig

Kristin Koehler, M.A., is a researcher and doctoral candidate with the University of Leipzig's Department of

Communication Management, Germany. Her research covers investor relations, social media and online

communication, as well as communication management. Additionally, Ms. Koehler is a project manager for the

Academic Society for Corporate Management and Communication, a non-profit initiative by blue-chip

companies and several universities in Germany. Kristin Koehler holds a degree in Communication Management,

Political Science and Business Administration from the University of Leipzig (Germany) and University of

Manchester (UK). She has held internships and freelance positions in the field of investor relations, public affairs,

and corporate communications.

www.communicationmanagement.de | [email protected]


ABOUT THE UNIVERSITY OF LEIPZIG

University of Leipzig, Department of Communication Management and Public Relations

The University of Leipzig is considered to be one of the leading research institutions and think tanks for Strategic

Communication and Public Relations in Europe. Its Communication Management Master's Program (ranked

number one among German PR university programs) is the first of its kind to consistently integrate corporate

management and communications. The research activities of the department are documented in more than 70

German and English books and in more than 300 journal articles and book chapters.

>> www.communicationmanagement.de >> www.slideshare.net/communicationmanagement


REFERENCES


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APPENDIX


SAMPLE IN DETAIL

Each index represents the top listed companies in the respective country/at the respective stock exchange.

From each index, the top 30 constituent companies according to weight within size indices were chosen to

enable a comparative design: The German DAX and the US DJIA both consist of 30 values. The Japanese

Nikkei comprises 225, the French CAC 40 and the UK based FTSE 100 the 100 most highly capitalized listed

companies. DJIA and NIKKEI are price-weighted stock market indices; DAX, CAC and FTSE are market-value-

weighted indices.

Index composition according to March 2, 2012.

DJIA: 3M Co., Alcoa Inc., American Express Co., AT&T Inc., Bank of America Corp., Boeing Co., Caterpillar

Inc., Chevron Corp., Cisco Systems Inc., Coca-Cola Co., E.I. DuPont de Nemours & Co., Exxon Mobil Corp.,

General Electric Co., Hewlett-Packard Co., Home Depot Inc., Intel Corp., International Business Machines

Corp., Johnson & Johnson Services In., JPMorgan Chase & Co., Kraft Foods Inc., McDonald's Corp., Merck &

Co. Inc., Microsoft Corp., Pfizer Inc., Procter & Gamble Co., Travelers Cos. Inc., United Technologies Corp.,

Verizon Communications Inc., Wal-Mart Stores Inc., Walt Disney Co.

DAX: adidas AG, Allianz SE, BASF SE, Bayer AG, Beiersdorf AG, BMW AG, Commerzbank AG, Daimler AG,

Deutsche Bank AG, Deutsche Börse AG, Deutsche Lufthansa AG, Deutsche Post AG, Deutsche Telekom AG,

E.ON AG, Fresenius Medical Care AG & Co. KGaA, Fresenius SE, HeidelbergCement AG, Henkel AG & Co.

KGaA, Infineon Technologies AG, K+S AG, Linde AG, MAN SE, Merck KGaA, Metro AG, Münchener Rück AG,

RWE AG, SAP AG, Siemens AG, ThyssenKrupp AG, Volkswagen AG


SAMPLE IN DETAIL CONTINUED

FTSE: Anglo American plc, AstraZeneca plc, Barclays plc, BG Group plc, BHP Billiton plc, BP plc, British

American Tobacco plc, BT Group plc, Centrica plc, Diageo plc, GlaxoSmithKline plc, Glencore International plc,

HSBC Holdings plc, Imperial Tobacco Group plc, International Power plc, Lloyds Banking Group plc, National

Grid plc, Prudential plc, Reckitt Benckiser Group plc, Rio Tinto Group plc, Royal Bank of Scotland plc, Rolls-

Royce Holdings plc, Royal Dutch Shell plc, SABMiller plc, Standard Chartered plc, Tesco plc, Tullow Oil plc,

Unilever plc, Vodafone Group plc, Xstrata plc (Changes according to the composition of the sample in comparison to 2011`s study: Glencore International plc, International Power plc and Royal Bank of Scotland plc replaced Aviva plc, BAE Systems plc Scottish and Southern Energy plc.)

CAC: Air Liquide SA, Alstom SA, Arcelormittal SA, AXA SA, BNP Paribas SA, Carrefour SA, Danone SA, EADS,

Essilor Intl. SA, France Telecom SA, GDF Suez SA, L'Oréal SA, Lafarge SA, Legrand SA, LVMH SA, Michelin SCA,

Pernod Ricard SA, PPR SA, Publicis Groupe SA, Renault SA, Safran SA, Saint Gobain SA, Sanofi-Aventis SA,

Schneider Electric SA, Societe Generale SA, Technip SA, Total SA, Unibail-Rodamco SA, Vinci SA, Vivendi SA (Changes according to the composition of the sample in comparison to 2011`s study: Legrand SA, Publicis Groupe SA, Safran SA and Technip SA replaced

Alcatel-Lucent SA, Vallourec SA, Veolia Environ. SA and Credit Agricole SA)

NIKKEI: Canon Inc., Denso Corp., East Japan Railway Co., Fanuc Corp., Fast Retailing Co. Ltd., Hitachi Ltd.,

Honda Motor Co. Ltd., Inpex Corp., Japan Tobacco Inc., KDDI Corp., Komatsu Ltd., Mitsubishi Corp.,

Mitsubishi Estate Co. Ltd., Mitsubishi UFJ Financial Group Inc., Mitsui & Co. Ltd., Mizuho Financial Group Inc.,

Nintendo Co. Ltd., Nippon Steel Corp., Nissan Motor Co. Ltd., NTT Corp., NTT Docomo, Inc. Panasonic Corp.,

Seven & I Holdings Co. Ltd., Shin-Etsu Chemical Co. Ltd., Softbank Corp., Sony Corp., Sumitomo Corp., Takeda

Pharmaceutical Co. Ltd., Tokyo Marine Holdings Inc., Toyota Motor Corp. (Changes according to the composition of the sample in comparison to 2011`s study: Fast Retailing Co. Ltd., NTT Docomo and Nintendo Co. Ltd. replaced

Toshiba Corp., Kyocera Corp. and Mitsubishi Electric Corp.)



The Russell Midcap Index measures the performance of the mid-cap segment of the US equity universe. As a

subset of the Russell 1000 it includes approximately 800 of the smallest securities based on a combination of

their market cap and current index membership. The Russell 2000 Index measures the performance of the small-

cap segment of the US equity universe. It includes approximately 2000 of the smallest securities based on a

combination of their market cap and current index membership.

Index composition according to January 31, 2012.

Russell Midcap top 10 holdings: Consolidated Edison Inc., Ecolab Inc., El Paso Corp., Equity Residential, HCP

Inc., Intuit, Intuitive Surgical Inc., Marsh and McLennan Cos., Noble Energy Inc., Spectra Energy Corp.

Russell Midcap top 10 performers: Dendreon Corp., Illumina Inc., IPG Photonics Corp., Manitowoc Co. Inc.,

Netflix Inc., Orchard Supply Hardware, Regeneron Pharmaceutical, Terex Corp., Solutia Inc., Westlake Chemical

Corp.

Russell 2000 top 10 holdings: American Campus Communities Inc., Biomed Realty Trust Inc., Clean Harbors

Inc., Henry Jack & Associates Inc., Home Properties Inc., Kilroy Realty Corp., National Retail Properties Inc.,

Parametric Technology Corp., Salix Pharmaceuticals Ltd., World Fuel Services Corp.

Russell 2000 top 10 performers: Amicus Therapeutics Inc., Bon Ton Stores Inc., Celldex Therapeutics Inc.,

Friendfinder Networks Inc., Georgia Gulf Corp., Gtx Inc., Idenix Pharmaceuticals Inc., McEwen Mining Inc.,

Orexigen Therapeutics Inc., Usec Inc.

(Due to acquisitions that took place during the study period Succesfactors Inc., Inhibitex Inc. and Netlogic Microsystems have been replaced by Bon Ton

Stores Inc., Kilroy Realty Corp. and Salix Pharmaceuticals Ltd. according to the index composition of February 28, 2012.)



German indices MDAX and SDAX are market-value-weighted indices.

Index composition according to January 6, 2011.

All companies within each German index were part of analysis in the 2011 study (see Koehler 2011).

MDAX: Aareal Bank AG, Aurubis AG, Axel Springer AG, BayWa AG, Bilfinger Berger SE, Brenntag AG, Celesio AG, Continental AG, Demag Cranes AG,

Deutsche EuroShop AG, Deutsche Wohnen AG, Douglas Holding AG, ElringKlinger AG, EADS, Fielmann AG, Fraport AG, Fuchs Petrolub AG, GAGFAH

S.A., GEA Group Aktiengesellschaft, Gerresheimer AG, Gildemeister AG, Hamburger Hafen und Logistik AG, Hannover Rückversicherung AG, Heidelberger

Druckmaschinen AG, Hochtief AG, Hugo Boss AG, IVG Immobilien AG, Kabel Deutschland Holding AG, Klöckner & Co. SE, Krones AG, LANXESS AG,

Leoni AG, MTU Aero Engines Holding AG, Praktiker Bau- und Heimwerkermärkte Holding AG, ProSiebenSat.1 Media AG, Puma AG, Rational AG,

Rheinmetall AG, RHÖN-KLINIKUM AG, Salzgitter AG, SGL Carbon SE, Sky Deutschland AG, STADA Arzneimittel AG, Südzucker AG, Symrise AG, Tognum

AG, TUI AG, Vossloh AG, Wacker Chemie AG, WINCOR NIXDORF Aktiengesellschaft

SDAX: Air Berlin PLC, alstria office REIT AG, Amadeus Fire AG, Balda AG, Bauer AG, Bertrandt AG, Biotest AG, C.A.T. oil AG, CENTROTEC Sustainable AG,

CeWe Color Holding AG, Colonia Real Estate AG, comdirect bank AG, Constantin Medien AG, CTS Eventim AG, Delticom AG, Deutsche Beteiligungs AG,

DEUTZ AG, DIC Asset AG, Dürr AG, elexis AG, Gerry Weber International AG, Gesco AG, GfK SE, Grammer AG, GRENKELEASING AG, H&R WASAG AG,

Hawesko Holding AG, Highlight Communications AG, Homag Group AG, Hornbach Holding AG, Indus Holding AG, Jungheinrich AG, Koenig & Bauer AG,

KUKA AG, KWS SAAT AG, Medion AG, MLP AG, MVV Energie AG, PATRIZIA Immobilien AG, Pfleiderer AG, SAF Holland S.A., Sixt AG, SKW Stahl-

Metallurgie Holding AG, Ströer Out-of-home Media AG, TAG Immobilien AG, TAKKT AG, Tipp24 SE, TOM TAILOR Holding AG, VTG AG, Wacker Neuson

SE


@ Universität Leipzig 2012