Enhanced visibilityJunior firms are using social media to unearth new investors
Miners used to rely on a tweeting canary to keep them alive. Today, the mining companies are the ones tweeting, and it might be breathing life back into a suffocating market.
The use of social media to sell products is nothing new. But for the mining industry, and its juniors in particular, it's just coming into its own.
David Duggan, president and CEO of Viral Network Inc., is helping many of them navigate into what he believes to be a valuable but largely untapped reserve of investors.
"Mining businesses in general are behind the times in latching on to this shift," he said. "We make our clients more visible in the online space, so that investors who are already looking for companies like theirs can find them more easily."
Those selling in the mining markets have been struggling of late. Siddarth Rajeev, vice-president and head of research at Fundamental Research Corp., has increasingly seen investors look away from what are often risky ventures.
"Activity in the junior mining sector has gone down significantly," said Rajeev, who cited the TSX when noting the market is down 30% compared with last year. With smaller track records upon which to rely, junior companies seem to have been the hardest hit.
"People have been avoiding the juniors since February or March of this year," said Rajeev. "In the mining sector, particularly the junior mining sector, [investing] is more speculative. People invest based on hearsay, and [most of them] are short term."
Because of this, investors are being more assiduous in doing their homework and are exercising discretion when it comes to putting their money on the table. Keen discernment, he said, has been all but absent in the last few years because the market has been active and the opportunities manifold.
"Now, definitely, things have changed," he said. "I think now [investor s] spend more time examining their opportunities."
That's where Duggan and his company have come into the picture.
"I noticed that co mpanies were not taking advantage of the new shift in communication, and so I was quick to jump at the opportunity to pair the two up," he said.
He uses a sophisticated platform to maximize the exposure of messaging through both standard and more obscure social media. He also helps his clients build websites and deliver products such as web-inars, newsletters and email campaigns.
In an industry that, contrary to most consumer goods and services enterprise, hasn't until now been pushed to move to social media as an essential tool of commerce, the task has faced some impediments.
"One of the initial hurdles we had to overcome was the lack of understanding," he said. "Social media and online communications don't take away from [investor] relationships; they actually enhance them and make them easier."
It's no wonder that Duggan, only 24 years old, and with a contemporary belief that social media represents the next primary form of communication in investor relations, ensures education is an integral element of his sales pitch.
His clients seem to have learned well and are now seeing significant increases in traffic to their websites, with large numbers of new people looking at their company profiles, following tweets and Facebook updates and attending webinars.
Duggan believes the effort must be sustained if companies want to secure investor dollars.
"Two or three years ago, it only would have taken two to six touch points [to secure an investor]," he said. "Now we're finding it takes at least eight to 15 exposures before they are comfortable enough to make a purchase."
Their online analytics have proffered some interesting demographic facts, too. "We're seeing about 49-50% of people who engage with our clients are under the age of 35," said Duggan.
The statistics suggest not only that they're attracting younger investors but also that they're seeing traditional investors using varied media to gather the sort of information today's picky buyers seem to be demanding.
For Duggan, the current struggles facing the mining industry present an opportunity, not just for him but also for those looking to increase their investor profiles. "It's a perfect example showing why what we're doing is so relevant." •