Using Traditional Online Channels
We will examine the main applications of traditional online media in investor relations (IR) below.
Online Annual Report
Despite many predictions of its decline, the annual report remains the single most important source of corporate information (ACCA, 2013) as Figure 11.1 illustrates, with 63 percent of investors surveyed regarding it as the most valuable input to the investment decision.
The annual report has been the dominant document of corporate performance for listed companies since the Companies Act of 1900.1 As the number of stocks in investment portfolios has grown, having a single source of information has become even more vital. Annual reports have also changed, with more qualitative content.
Investors and analysts differ in their preferred method of reading corporate information, but traditional forms dominate according to ACCA (2013), with the online static report as the favored format (54 percent) with printed reports not far behind (45 percent). According to ACCA (2013), 45 percent of surveyed investors are using XBRL (eXtensible Business Reporting Language). The main benefits of XRBL is the ability to extract performance data in a standard format and thus compare performance between companies more easily, although there remains a lack of standardization in the use of taxonomies.
Figure 11.1 Information required by investors (© ACCA 2013)
IR Microsite
IR microsites are now well established as the primary places for current and historic investor information. The corporate IR microsite should be well publicized as the place where all material investor information will be uploaded.
Investor Information Packs (IIPs)
IIPs are a useful tool, being a compendium of the most helpful resources for an investor starting the fundamental analysis stage. They usually consist of relevant presentations and performance reports, and include specialized documents such as corporate history and product overviews. Compressing the most useful documents into a zip file for easier downloading is the usual practice.
IR Newsletter
A monthly e-mail newsletter containing links to relevant news stories, reports, and video content is a helpful way of keeping analysts and investors informed. Each e-mail should contain an “unsubscribe” link to allow recipients to quickly discontinue the service when they no longer need it.
In addition to the annual report, the use of videos on the IR microsite is now common. With the growth of international investing, this is a helpful way of allowing remote investors to make some assessment of the quality and style of the corporate officers. The most common content is a 5 to 10 minute interview with the CEO following the results presentation. This is helpful to local analysts and investors who missed the results, international investors, and also private investors who would not have been able to access the results presentation.
Live Web Conferencing
Web conferencing is now an established method for connecting remote investors to your results presentations and other corporate events, as well as enabling investors to explore the history of corporate presentations through an accessible archive. Whether remote participants should be able to ask questions in the Q&A slot is something that companies have different policies on, but is worth investigating. Whether the Q&A slot should be recorded and uploaded is another policy choice which should be decided following consultation with participants, who may value privacy.
Search Engine Advertising
A few companies (such as BP plc, see Figure 11.2) do utilize search engine advertising to ensure that they are prominent in the search results for any related terms and to take people direct to the relevant page. This practice is worth experimenting with to see if it has a noticeable effect on the number of enquiries or home page traffic.
Figure 11.2 Search engine advertising (© Google 2013)
The Personal Touch
Customer loyalty is an important aspect of all purchase behavior, even the purchase of stocks. As an intangible product, the purchase of stocks involves high levels of trust, and the building of personal relationships is a key factor in both attracting and retaining customers. Stock Exchanges are personal networks as well as financial markets, and penetrating the relevant networks is a large part of a successful promotional strategy.
Online contact can seem both impersonal and intrusive, and it is important to mitigate these risks by including personal touches. We suggest adopting sales methods such as keeping a private note of relevant personal facts about key contacts, sending personal e-mails occasionally, seeking key contacts out at conferences and other events, sending Christmas cards and small corporate gifts, etc.
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1 The Joint Stock Companies Act of 1844 introduced a mandatory balance sheet, but this requirement was removed in 1856, until the 1900 Company Act. (Maltby, 1998)