US IROs may not know too much about their corporate Web site, but they have no doubt that they like it. That’s one of the conclusions that can be drawn from the recent survey Utilizing Technology in the Practice of Investor Relations, carried out by Rivel Research Group for Niri.
And it’s not so surprising. After all, we are being bombarded from all quarters with predictions of world domination by the Web; and to admit to ignorance or disinterest is to risk being labelled a Luddite. As one respondent to the survey said: ‘We want to show that we aren’t in the Stone Age.’
Indeed, for companies the new technofear is not a fear of being unable to make the damn thing work; it’s a fear of being left behind as the new platform for almost all kinds of business transaction – including communications – takes its place as the most crucial commercial forum of the frighteningly near future. In other words, the fear arises out of the widespread conviction of the general importance of the Web in the future and the equally widespread uncertainty about its specific effects now.
One potential effect within corporations is on the roles of individuals and departments. Already companies are jostling responsibility for their Web site: sometimes it is the domain of corporate communications; sometimes it in the hands of MIS.
Among the 200-odd survey participants, which ranged from the small to the large (14 per cent represented companies with market caps under $100 mn; 37.5 per cent were from companies over $1.5 bn), a total of 169 either had a home page or were planning one. Among these 169, corporate communications was the department most likely to be in charge of the Web site, at 41 per cent. A quarter of the companies’ sites were run by the IR department; a quarter by MIS. Marketing departments were in charge of the site at 21 per cent of the companies.
But these are overall figures which disguise a degree of variation by size of company. In particular, at smaller companies (under $500 mn) the IR department is more likely to be in charge of the site, whereas at bigger ones the dominance of corporate communications is even greater.
Another area of variation by size of company was in the amount spent on the Web site. No surprise there, but the degree of variation – from an average $10,700 for small caps to $48,300 for the biggest – does seem excessive.
However these cost figures need to be treated with some caution, because it was one area where Rivel Research faced a paucity of available information. That, in turn, was because a full 64 per cent of the IROs questioned were uncertain about the cost of the page.
Uncertainty was also expressed by some respondents about the overall IR goals of the Web site. One noted: ‘We really don’t know what to expect in terms of the investor relations benefits but we’re certainly expecting some.’ Another said: ‘I don’t know what our goals are. It doesn’t cost much. The Internet is not important now for business but I believe it will be in the future. I guess that’s why we’re doing it.’
But sentiments like this were in the minority. Most of the IROs questioned felt, at the very least, that the Web was another means of disseminating information out and of increasing their company’s visibility and people’s awareness of it. They felt it showed their companies to be forward-looking; had the potential to speed up access to their corporate and financial information; improve interaction with shareholders and stock analysts; and widen the shareholder net, particularly by encouraging customers to invest in their shares.
Another benefit was perceived to be the Web site’s potential to save time and reduce costs. This comment encapsulated the view of many: ‘Our goal is wider dissemination of our story. Another is a reduction in what I call nuisance calls – Send me a copy of your 10Q or, I didn’t get a copy of your press release.’
Again, there was some variation among companies of different sizes in terms of their investor relations goals, much less in terms of the primary target audiences.
When it came to the actual primary users, there was a clear majority falling into the same group: those who were uncertain about who was visiting their site. Just over half were unable to identify users; with the second largest contingent (30 per cent) saying that customers were the primary audience. This fits fairly well with the stated target audiences as far as customers are concerned, but shows that companies have so far failed to attract anything like the desired number of institutional surfers – whether brokers, buy- or sell-side analysts or institutional investors – to their sites; and have yet to attract the levels of attention they were hoping for from individual shareholders.
So does that mean there is widespread dissatisfaction with the achievements of Web sites? Well no; not exactly, anyway. Respondents were asked to rate their degree of satisfaction with overall use of their page on a scale of 1-5. About a third (32 per cent) gave a neutral rating; 22 per cent a positive rating; and 12 per cent a negative one.
But the biggest group? Yep, you guessed it – our friends in the ‘uncertain’ camp. Some 34 per cent simply weren’t sure if they were satisfied or not. Put together with the neutral brigade, that means there’s not much clarity about satisfaction levels from two thirds of respondents.
Yet there is little uncertainty about the need for a site. The survey covered teleconferencing as well as the Web and, remarkably, while 73 per cent of the companies interviewed said they currently used teleconferencing, 84 per cent either already had a Web site or expected to have one within a year.
Perhaps, as one respondent says, it is just because everyone else is doing it. Or because nowadays, as another put it, ‘Not having a home page is like not having a listing in the telephone book. We basically see it as a minimum level of doing business, as a necessity in the current business environment.’
