LONDON — A new study from Brunswick shows that investors and analysts are increasingly making buy and sell decisions based on the digital and social media profiles of executives and companies.

The consultancy’s annual Digital Investor Survey, now in its 10th year, tracks the digital and social media behaviour of buy-side investors and sell-side analysts around the world, analysing how they consume information online – and the implications for how companies and CEOs communicate.

According to the 2019 survey, digital usage among investors for research is now ubiquitous, with 98% reporting that they use digital sources to investigate and conduct research. Moreover, most investors (88%) are making decisions based on information they have learned online. This is up from 70% last year and represents a huge change since 2015, when only 41% made investment decisions from digital sources.

The biggest shift in this year’s survey, however, is the rapid evolution in expectations of top executives. Half of investors say that they now use digital platforms to learn what CEOs are saying, a 21-point increase over last year. And 59% of sell-side analysts now use digital to stay connected with CEOs.

Brunswick partner Marshall Manson (pictured), who is responsible for Brunswick’s digital specialism across Europe, the Middle East, Africa and other key markets, told the Holmes Report that the leap in investor interest in CEO’s digital activities was the “biggest surprise by far” from the research.

“We were sensing it but I don’t think any of us would have predicted the jump would be that big,” he said. “Most investors use the internet, but the fact that so many are now making decisions on online behaviour from senior executives and the corporate leadership is new.”

According to Manson, this suggests that executives who lack a strong, personal digital profile and content strategy are creating a new communications risk: “Building an effective individual digital profile is not just an essential component in a successful investor relations strategy, it is now a necessity for maintaining shareholder value and competing with peers that are more active in digital and social media.”

He added that the survey demonstrated a measurable link between communications and the bottom line: “It really does show that communications has a direct and significant impact on share price. As an industry we’ve always wondered, but the research makes it absolutely clear: there’s a line between great communications and business performance.”

Search engines and online publishers like blogs remain the most used digital sources. Social media platforms are also important tools for investors: LinkedIn remains the most important, with 63% of investors using the platform for research. Twitter is the second most used social platform, with 55% of those surveyed using it for research, while 56% of investors report using Wikipedia.

The popularity and prominence of podcasting is also reflected, with 48% of investors saying that they use financial podcasts as an information source. Podcasts are also the platform most used to make an investment decision after search engines and blogs.

Younger investors and analysts are also using social media not just for research but to make investment decisions: of those aged between 20 and 29, 44% have used Twitter for this purpose; 29% have invested based on something they learned on Whatsapp; and 20% acted based on something they learned on Reddit.

The survey also found that investors trust what they find online. Though not quite at the same level as top tier financial media, trust levels for digital platforms compare favourably to other traditional publishers. Information from search engines is trusted to a similar degree as the BBC, the New York Times, and CNN, and LinkedIn is more trusted than MSNBC, TechCrunch and Politico.

Trust in Twitter, YouTube, Reddit, and Whatsapp is lower than the biggest digital platforms, but is comparable to publishers like Axios, the Huffington Post, and Vox.

Brunswick outlines three takeaways for communications professionals: ensure senior executives are using digital and social to reach and engage investors, starting with LinkedIn; expand your digital playing field to include elements such as podcasts, as it is still underused by mid-cap companies for investor relations purposes; and ensure search and reference material is looked after, from a corporate communications perspective.

Manson said the results were relevant for everyone involved in a company’s digital and social media presence: “It absolutely underscores the importance of thinking holistically about the kind of stories you are telling on digital and social.

“It’s not enough to just talk about brands, or the corporate story, or the investor story; the leadership also needs a voice. The age of convergence is upon us and if you’re not bringing all these elements together you are missing an opportunity and could even do damage.”