Social media takes back seat for investors: survey

Social media may have a lot of influence on society, but it has yet to win over investors making decisions about where to put their money.

A new survey says traditional media such as TV and newspapers are the most trusted sources for investing advice and information, well ahead of Twitter, Facebook and LinkedIn. Blogs were the considered the most credible social media source (an obvious plug).

The BMO InvestorLine survey says 57 per cent of investors rely on traditional media sources, whereas only one-third look to social media for information.

As for finding information they could trust, 61 cited traditional media, while 24 per cent said social media.

Of course it's not surprising investors aren't picking stocks based on what their friends post on Facebook or from 140-characters on Twitter. Still, the results show there are limits to social media.

"It's interesting to see that, while an increasing number of Canadians have been embracing social media for a variety of reasons, investors still prefer more 'traditional' media sources for the information and advice they need," said BMO InvestorLine president and CEO Viki Lazaris.

The survey is reassuring for investors who are still relying on information printed in newspapers or heard on TV for their stock tips. It's also vindication for some companies that remain nervous about jumping on the social media bandwagon.

Most public companies walk a fine line between being active on Twitter and Facebook, have drafted social media policies for their staff and hire lawyers to ensure their content doesn't run afoul of securities regulations.

A 2010 Harvard Business Review study on social media shows corporations see it as a 'one-way promotion tool,' but had yet to use it in their favour. Of the 2,100 organizations surveyed, 32 per cent saw social media as a high priority by the executives.

That's despite a growing number of surveys showing that social media is considered a prerequisite for companies today, even if investors aren't using it. A BRANDfog social media survey from 2012 showed 81 per cent of respondents believe social media engagement is a necessity for corporations, while 66 per cent felt it was a better way for business leaders to connect with investors.