If asset management firms had any question as to the importance of social media as a communications tool, they had better look at what millions of their customers up to.
The number of worldwide social networking accounts surpassed e-mail accounts at the 790 million mark in July 2009, according to Morgan Stanley.
And seven of the 20 most visited websites in September 2010 were social networks or social media publishing tools, according to Alexa (see chart).
In 2008, only 14 of the 70 asset management companies that Corporate Insight tracks, or 20%, were using social media. Today, 62% are using social media and another 23% plan to use it, Corporate Insight found. And since January 2009, 15 major asset management firms have launched Facebook pages and 14 have launched Twitter profiles.
And customers apparently welcome this interaction. Eighty percent of social media users interact with companies, not just friends, up from 32% in 2008, said Michael Ellison, president of Corporate Insight. "Social media users want to interact with firms they like," he said. "It seems that much of the financial services industry has finally awoken to the reality that social media is here to stay."
While traditional marketing messages inundate consumers at the rate of 3,500 to 5,000 messages a day, up from 500 to 2,000 messages a day in the 1970s, consumers have more control to tune out these advertisements and messages through Tivo and DVRs, Ellison noted. Social media provides a provocative new way for asset managers to communicate with customers-on terms that the customers choose.
Asset management firms are primarily posting links to market commentary from their investment professionals on social media, with 51% using Twitter and Facebook for this purpose, according to Corporate Insight. However, 11% of asset management firms are also offering customer service and answering questions from Twitter and Facebook users via their company profiles.
That is followed by 9% using these social media outlets for general marketing and promotions, 13% to promote their website, and 9% to list job opportunities.
In addition, asset management firms are paying attention to what customers are saying about their company on social media. This is an excellent way to receive timely consumer feedback and monitor one's brand, Ellison said.
"The opportunities that social media present-to improve customer satisfaction and strengthen brand identity-are simply too compelling for financial institutions to ignore," Ellison said.
But asset management executives realize they need to do a more creative job of using social media, Corporate Insight found. Forty-two percent rated their social media strategy as average for the industry. Only 29% through their efforts were considerably above average for the industry, and just 5% thought they were the best in the industry.
Asked what they thought was holding them back, the executives cited compliance, other competing priorities, regulatory constraints, lack of resources, lack of clear guidelines from regulators and no clear return on investment. Only 41% of companies have been actively measuring ROI.
As to what is a good example of use of social media by an asset management firm, Corporate Insight cites TIAA-CREF's micro site, myretirement.org, where the company not only provides investing and saving strategies but accepts user-generated content on travel and leisure, learning and interests, health and fitness, and volunteering and social activism.
In addition, TIAA-CREF launched its Facebook page in April 2009 and has since attracted 14,700 followers. The company posts financial tips, product promotions and market and economic commentary once or twice each day. It also runs contests, such as the current "Raise the Rate." TIAA-CREF asked viewers to enter groundbreaking ideas to get Americans to save more. The company selected what it thought were the 10 best ideas and is now asking viewers to vote on the one they like the most. The winner will receive a $50,000 cash prize plus a trip for two to the "South by Southwest" film and music festival in Austin, Texas.
On Twitter, TIAA-CREF's handle is "TC Talks." The firm posts three to six tweets every business day, primarily retweets of news items affecting the financial markets. However, it also accepts questions for its chief investment strategist and answers customer service questions.
Corporate Insight said the reason why TIAA-CREF's social media presence is so effective is because it "lets consumers drive the conversation. The brand is along for the ride but doesn't dominate." Also, it is on all of the major social media outlets with reinforcing messages.
Corporate Insight also gives high marks to AXA Equitable's two Twitter and one Facebook page, launched in May 2010, particularly the AXA_Gorilla Twitter page that features its 800-lb. Gorilla from the long-running "Wake Up" campaign.
Posts highlight the firm's online resources and product offerings, point to retirement researchand mix in some off-color commentary on pop culture.
The tweets are produced in the Gorilla's voice and tone and also include lnks to audio tweets. In one recent tweet, the Gorilla says. "One reason I'm tweeting is to remind people not to ignore their #retirement. The other is I'm hoping to get a 3 picture deal in Hollywood."
In another: "@usnews has an article, "21 Ways To Cut Expenses In #Retirement." I can give you a thousand reasons to read it. http://bit.ly/a0Jtou"
Balentine, an asset management firm headquartered in Atlanta and with $880 million in assets under management, uses four social media outlets to communicate with its customers.
"We find social media a phenomenal way to get content to audiences," said Tonia M. Edwards, communications and marketing manager for Balentine. "We are trying to bring a new media spin to a traditional industry and are finding great results. We are very excited about the potential of social media and are excited to see some steady growth."
Social Networks Dominate
The 20 Most-Visited Websites
Data as of September 2010