Whether you call it social media, digital communications or Web 2.0, all these forms of interactive media are clearly reshaping the practice of investor relations.

What’s driving this trend? Consider some of the following statistics:

• 72% of internet users are part of at least one social network, which translates to 940 million users worldwide

• 85% of professional financial service providers under 50 are using social media

• 89% of journalists using blogs, 65% social networking , 52% micro-blogging (Twitter)

This episode attracted noticeable coverage in the media - actually mainly from Reuters which has a vested interest in old guard IR notice system PR Newswire - and prompted an important discussion. Is this the beginning of the end for the IR industry’s core notification tool? Is the nature of the digital world we live in changing the game for what’s acceptable compliance? Well, perhaps. More specifically, it is indicative of the fact that digital communications is an increasingly important part of an integrated approach to the practice of Investor Relations.

In fact, the US Securities and Exchange Commission long ago acknowledged this reality, when it deemed a company’s website and/or blog an acceptable form of fair disclosure (with a slight caveat: “under certain circumstances”). In Hong Kong, the Securities and Futures Commission mandates that any price sensitive information must be released through the Hong Kong Stock Exchange’s website.

Acknowledging this shift in how their stakeholders are researching, analyzing and forming opinions, some of the world’s largest publicly traded companies are ramping up their digital influence. For example, Shell, BASF, Rio Tinto, Sun Systems, Dell all now regularly “tweet” updates about IR related news.

It is also becoming increasingly common for publicly listed companies to engage stakeholders to correct the record or broaden awareness about an important corporate issue using digital channels. Case in point, the popularity of blogs penned by Professor Kwong of Petroasian or the chairman of Soho China demonstrates that using social media as an IR communication tool is gathering momentum and most importantly is well received by investors and shareholders.

The detractors counter that this trend may harm individual and less-sophisticated investors who cannot access blogs and websites as quickly as professionals. Others worry that not everyone will get the information or the risk of violating regulatory guidelines far outweighs the “novelty” of these new technologies.

These are reasonable points, but from our perspective, quite short-sighted. To not acknowledge that your target audience is increasingly consuming information through a proliferation of traditional and non-traditional channels is like betting that you will surely come out ahead of the house every time you go to Macau.

We think it is better to take a balanced approach. There is no question, compliance with regulatory guidelines is fundamental and no one should advocate for the wholesale replacement of traditional IR tools with the glossy new digital ones.

A better rule of thumb is to think about your IR communications strategy as an information continuum.

Publish information equally and accurately through a variety of traditional and digital channels and create a hub that documents all available mediums to receive information as it’s made public.

Most importantly, keep the fundamentals of good IR squarely in your sights as your simultaneously wowed and overwhelmed by the avalanche of emerging digital and social media technologies. That is to say, as you evaluate and consider the right balance and approach for your organization, you should always ask yourself: “How can I best create a compelling investor story through great content and information that will help my organization stay in compliance, compete more effectively for capital and inform my shareholders?”

Google’s move may have appeared groundbreaking, but what it really demonstrated is their IR teams focus on taking an integrated approach to communicating with their investor community.

For further information about Ketchum’s online IR communications, please contact:

Josh Nova (Vice president - Corporate and Technology Practice)

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Sharon Fung (Vice president - Financial Communications)

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