CommSec
05 November 2018
The power of online communities
CommSec
This article was written with contribution from Nick Paradise, Social Media Moderator at CommSec
Over the last decade there’s been a mass adoption of smartphones and a shift in the way people behave online. Australians are spending more time online, often using multiple screens, and consuming vast amounts of content every day. And it’s only going up.
How much time do Australians spend online?
Recent figures show that almost eight out of ten Aussies use social media, and 87% of them use their mobile phone to access it. Fifty-nine percent of Australians access social media every day or most days, and over a third of people check social media more than five times per day (35%).1
We often go online to chat with friends, share photos, or be entertained by cat videos. But the very same platforms we use to socialise can also be used to gather knowledge that we can apply in our offline lives.
Online communities, real life benefits
One of the areas where users can reap real life benefits is online communities. These discussion-based platforms can provide the opportunity to participate in smart, focused conversations on specific topics (unlike the more casual chatter you might find on Instagram or Facebook).
The power of online communities is forged in meaningful interactions that satisfy our desire for social proof (the idea that another person’s interpretation of a situation is more accurate than ours and that it will help us reach a decision).2 At a basic level, social proof is simply using a friend or a family member as a sounding board. At a deeper level, it could be exchanging trading strategies with an investor who has similar goals as you.
Chances are you’ve probably used an online community without even realising it. Have you ever browsed restaurant reviews on Yelp or asked your Facebook friends to recommend a product? These are both online communities. One of their core benefits is that you don’t need to be in the same room, or even the same country, to form meaningful relationships with other members and learn from their collective wisdom.
Online communities for investors
An online community can act like a virtual meet-up for investors. Connecting with a wide range of people means members can canvas opinions on a particular stock or company, compare their investing experiences with others, and discuss almost any topic.
Every financial decision is important, and the more data you have, the more equipped you’ll be to make an informed decision. While there’s plenty of news and research available for investors, these sources can lack the nuance of peer-to-peer conversations. Being able to discuss something quickly and candidly is often invaluable for investors. And unlike social media platforms like Facebook, you can post on an online community with a degree of privacy and anonymity (which means you might be able to speak more openly about your investing experiences!)
Lifting the bar on user-generated content
Online communities often provide rating systems where members can help promote high quality content and report poor quality content. For example, on Reddit, members can up-vote or down-vote individual posts to increase or decrease their prominence. This method of peer appraisal means the good stuff rises to the top.
Most online communities will also employ an experienced moderator to make sure conversations are respectful and above board. Not only can online communities help you solidify your ideas, thoughts, and opinions, but they can function as a virtual family who provide support to one another. At the end of the day, it comes down to the people rather than the platform itself.
Want to join CommSec Community?
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[1] https://www.yellow.com.au/wp-content/uploads/2018/06/Yellow-Social-Media-Report-2018-Consumer.pdf
[2] Aronson, E., Wilson, T.D., & Akert, A.M. (2005). Social Psychology (5th ed.). Upper Saddle River, NJ: Prentice Hall.
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