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Digital Media Usage by the Investment Community
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Transcript of Digital Media Usage by the Investment Community
Analyst and Investor Survey: Use of Social and Digital Media
NIRI 2011
Abu DhabiBeijingBerlinBrusselsDallas/Fort WorthDubaiFrankfurtHong KongJohannesburg
LondonMilanMunichNew YorkParisSan FranciscoStockholmViennaWashington, D.C.
Survey Methodology
Online data collected between 21 July and 12 August 2010
Invitations sent to individuals sourced from Ipreo database, in USA and Europe. The following job titles were invited to participate:
– Buy side: Analyst, Portfolio Manager, Portfolio Manager / Analyst, Director of Research, Research Associate
– Sell side: Analyst, Director of Equity Research, Research Associate
Data from the 2010 survey has been weighted (in terms of country and respondent type)
to allow accurate comparison to the 2009 survey
Quantitative research with buy-side investors and sell-side analysts across Europe and the USA, designed to understand usage of Digital Media in the investment process
6/14/2011 | 2
Sources of Information
6/14/2011 | 3
Information Sources
Respondents identified information direct from companies as the most influential factor in their investment decisions, which has increased in importance since last year. Real time subscription services and primary market research are the next most influential sources
Information direct from companies
Real time subscrption information services
Primary market research
Analyst research*
Business media (nat'l, int'l, trade press) - online
Business media (nat'l, int'l, trade press) - in print
Digital Media (blogs, message boards, social networking sites)
52%
19%
15%
8%
3%
2%
1%
44%
18%
19%
8%
4%
3%
3%
2009
2010
Information direct from companies
Real time subscrption information services
Primary market research
Analyst research*
Business media (nat'l, int'l, trade press) - online
Business media (nat'l, int'l, trade press) - in print
Digital Media (blogs, message boards, social networking sites)
84%
64%
49%
45%
36%
16%
6%
73%
59%
55%
45%
33%
24%
11%
2009
2010
Q. Please rank the following information sources, in terms of how much they influence your investment decisions or recommendations. Base: All, 2010 (401), 2009 (448)
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TOP INFORMATION SOURCE TOP THREE INFORMATION SOURCES
Information From Companies
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In terms of information from companies, direct interaction with management was identified as the most influential. Regulatory filings, company news releases and conference calls are of secondary importance
Direct interaction with man-agement
Regulatory filings
Company news releases
Investor / corporate presentation
Conference calls, webcasts
Company website
Company Digital Media presence
50%
19%
15%
7%
7%
2%
1%
Q. Regarding information direct from companies, please rank the following in terms of how much they influence your investment decisions or recommendations? Base: All (401)
Direct interaction with management
Conference calls, webcasts
Regulatory filings
Investor / corporate presentation
Company news releases
Company website
Company Digital Media presence
73%
62%
52%
50%
50%
12%
1%
TOP INFORMATION SOURCE TOP THREE INFORMATION SOURCES
Changing Importance of Information
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Real time subscription information services were cited by more than half of respondents as having become more important in their work over the past year. Online business media has also become more important, but to a lesser extent than in 2009
Q. Which, if any, of the following information sources have become more important to you in your job in the past year? Base: All, 2010 (401), 2009 (448)
MORE IMPORTANT IN THE PAST YEAR
Real time subscrption informa-tion services
Business media (nat'l, int'l, trade press) - online
Blogs, micro-blogging services, message boards
Social networking sites
Business media (nat'l, int'l, trade press) - in print
Other Digital Media
55%
39%
29%
13%
10%
4%
46%
45%
30%
14%
7%
1%
2009
2010
Digital Media
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Digital Media – As an Information Source
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There has been little change in the use of blogs, message boards and other forms of Digital Media for following companies since 2009
Q. Do you read postings on the following for company or business information? Base: All, 2010 (401), 2009 (448)Q. Do you post business or investment information in any of the following ways? Base: All, 2010 (401), 2009 (448)
READ POSTINGS POST INFORMATION
Blogs
Social networking sites
Micro-blogging services (eg Twit-
ter)
Message boards
8%
5%
5%
2%
5%
4%
5%
2009
2010
n/a
Blogs
Message boards
Social networking sites
Micro-blogging services (eg Twit-
ter)
47%
27%
17%
11%
43%
30%
13%
2009
2010
Digital Media – Investment Decisions
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Blogs have become increasingly influential over the past year in terms of prompting investors and analysts to investigate an issue. Message boards have declined in importance in this aspect, as has their influence on investment decisions
Q. Have you ever read any information posted on a blog, micro-blogging service or social networking site that has prompted you to investigate an issue further for your work? Base: All, 2010 (401), 2009 (448)
Q. Have you ever made an investment decision or a recommendation after initially sourcing information from a blog, micro-blogging service or social networking site, which then lead you to conduct additional research? Base: All, 2010 (401), 2009 (448)
PROMPTED TO INVESTIGATE AN ISSUE MADE AN INVESTMENT DECISION
Blogs
Message boards
Social networking sites
Micro-blogging services (eg Twit-
ter)
52%
31%
14%
11%
47%
39%
11%
2009
2010
Blogs
Message boards
Micro-blogging services (eg Twit-
ter)
Social networking sites
18%
5%
4%
2%
20%
14%
5%
2009
2010
Digital Media – Future Importance
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Investors’ and analysts’ views of the future importance of Digital Media in investment decisions has not changed over the past year. Three in five feel that it will play an increasingly important role in the future
Q. Do you think that Digital Media such as blogs, micro-blogging services or social networking sites will play an increasingly important role in investment decisions in the future? Base: All, 2010 (401), 2009 (448)
2009
2010
17%
17%
41%
43%
29%
25%
7%
8%
Yes, definitely Yes, probably No, probably not No definitely not
Key Takeaways
• Never underestimate your direct influence on the investment community
• Efficiently allocate resources - both time and financial
• Focus on creating and delivering substantive, creative content leveraged across multiple IR channels
Current Trends
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What’s Trending Now?
Past - United Breaks GuitarJuly 2009- August 2009
Close price prior to media storm was $3.31 on 7/2. Price dropped 1.81% to $3.25 day of story on 7/3.
Slight increase in trading volume day of media storm, price drops 1.8%, peers dropped between 0.1% to 3.4% pointing to negligible to no impact due to coverage.
Shares climbed due to positive July airline traffic figures. UAL’s highly levered position coupled with rebounding demand and decreased fear of cash problems, positioned UAL to benefit significantly from the potential economic upturn.
UAL hit its weekly low at $3.07, down 7.25% from story breaking.
Present - Nestle-Greenpeace March - April 2010
Close price day prior to media storm on 3/15 was CHF52.23, and climbed 0.55% to CHF52.52 day of event.
Trading volume spiked during the heaviest media coverage. Aside from the CSR damage, the company’s palm oil supply was uncertain after terminating its contract with Sinar Mas.
NESN hit its weekly low at CHF51.55, down 1.88% from start of media storm.
Shares of NESN sold off following a shareholder meeting where management announced it wouldn’t try to increase its holdings in L’Oreal, but rebounded on better than expected earnings.
Future
Increased Integration Real-time Professional Insights