The Speed of the Audience.

• Author: Marlowe, Justin
• Position: IN PRACTICE: PERSPECTIVE

When you hear "financial communication" you probably think of the comprehensive annual financial report (CAFR) management's discussion and analysis (MD&A). Or maybe the annual budget transmission letter. Or perhaps a well-designed website. You probably don't think of social media. But you should. As today's young folks like to say, if it's not on social media, it didn't happen.

On social media, for better or worse, citizens act like customers. They want useful information, and they want it in real time. For state and local governments that's both an opportunity and a challenge. Social media is a cheap and easy way to share financial information with a huge audience. When used well, it can also put the right information in front of the right people at the right moment, and that can produce financial and other benefits. For instance, studies have shown that "followers" and "likes" can influence a company's stock value, and that views expressed in social media can predict future stock prices. (1)

But it's also a challenge because, unlike the CAFR or the budget, governments don't control the content that appears in social media. Influencers of all sorts, many of them poorly informed and reckless in their intent, can quickly take over the conversation. Nonetheless, many financial communications experts agree that the opportunities are too great to pass up. Today's state and local finance officials must move at the speed of the audience.

That raises a key practical question:

How can state and local finance officials use social media effectively, but appropriately? In particular, how can they share information quickly, but in ways that are transparent, balanced, and thoroughly grounded in a historical and financial context? This is a tall order.

A good place to start is to pay careful attention to your jurisdiction's financial mood or narrative. What overall tone do your communications on social media convey to citizens, taxpayers, journalists, and others? And is that the tone you intend to convey?

To illustrate, consider this brief case study from Twitter. Financial officials in the 50 largest U.S. cities and the 50 largest counties have established 53 official Twitter accounts. They include city and county auditors, budget offices (including independent budget offices and those run by mayors/executives), revenue officials like assessors and tax collectors, and chief financial officers (CFOs)/treasurer/comptrollers. Some of these officials are...