Investor relations at a company with an identity crisis is no picnic. An IRO in such straits finds that the company’s analysts are confused and irritated, that its investors wind up poorly informed or downright neglected, and that even good news is ignored. That’s why an increasing number of IROs are focusing on their companies’ core identity and ensuring that their brands come across loud and clear in all financial communications, from the annual report to the web site to the roadshow.
Stephen Turner, principal and creative director at Turner & Associates in San Francisco, defines a brand as ‘a promise that’s going to be fulfilled day in and day out.’ A company’s brand is the essence of what it believes itself to be doing, including the way it differentiates itself from its competitors. Any company can create a brand identity, regardless of whether or not it has a consumer product to sell.
Alan Brew, a San Francisco-based principal of Addison, observes that Coca-Cola boasts one of the world’s best-known brands and yet isn’t marketing its trademark beverage. ‘What is Coke?’ he asks. ‘It’s colored water with flavoring. They don’t market that. They market Coke values. And other companies should be doing the same thing.’
To convey a central set of values, IROs and other corporate communicators must work together. ‘Every communication is a brand communication,’ says Brew. ‘One department can’t develop its own voice in isolation from the overall corporate ethos.’
Brew points to British Airways as a company that has successfully clarified its identity and mission in its financial communications. British Airways realizes that ‘an airline is not about its physical equipment, it’s about the service given,’ says Brew. Because British Airways sees its role as transporting people to their destinations, its communications feature passengers instead of 747s.
Branding can also be an opportunity to clear up misunderstandings among investors. When Turner designed Yahoo’s first annual report, he made sure that the look and feel reflected the company’s ‘young, friendly, humorous and colorful’ personality. But Yahoo wasn’t satisfied with simply reinforcing its identity; the company ‘wanted to define what they’re not, more than what they are,’ recalls Turner. So, in the annual report he emphasized that Yahoo is not merely a search engine by painting a picture of how Yahoo really sees itself – as a media company.
Consistency, above all
Ideally, financial communications should develop and reinforce brand identity. In order for brands to be presented effectively, IROs and other communicators need to be consistent. All departments – from IR to marketing – ‘must be reading off the same page,’ says James Harris, president of Elemental Interactive in Atlanta.
Michel Viau, president of Ove Design & Communications in Toronto, agrees, saying: ‘The point is to avoid confusion. In the investment community, there’s a humongous amount of material to sift through. Amidst the clutter, identity must be clear and concise.’
Repetitiveness can be a virtue in branding. ‘Typically, to gain any mind share in an audience, you need nine separate instances where a person comes in contact with a message before remembering it,’ says Turner. ‘If you come to them with nine separate, different messages over time, it’s useless.’
In IR as well as marketing, such a lack of subtlety isn’t always an easy sell. ‘When you’re on the inside looking out,’ says Turner, ‘it feels like you’re saying the same old thing over and over.’ Defining an identity can begin with the annual report. Harry Cornelius, director of corporate identity and branding for Ove, likens identity to a signpost. ‘Most companies are unfocused,’ he says. ‘Companies that have an identity are going some place.’ When a company knows and articulates what it stands for, the implications for various audiences are far-reaching. For example, notes Cornelius, ‘If you’re the we-try-harder company, that affects how you compensate people within the organization.’
The IR department is one place to start defining corporate identity. Of course, IROs should confirm that the brand messages they create are ones the whole organization can embrace. To ensure broad support, IROs ‘must have access to the gurus at the top,’ says Ove’s Viau.
Not all companies have an identity from the get-go. ‘A lot of times the companies we work with don’t have any brand at all,’ says Bill Cahan, creative director and principal at Cahan & Associates in San Francisco. Creating an arresting annual report can be a way of shaping the company’s identity in the market. For instance, after Cahan designed Adaptec’s annual report as a children’s book, the company went on to create its web site and planned sales and marketing events with the children’s book theme as a keynote.
To help a company recognize and refine its identity, Cahan asks questions about the target audience for the annual report and what type of reaction the company wants to elicit. Cahan then performs a process he has trademarked as ‘Visual Rorschach’ by bringing in 50 annual reports from companies in the same industry and asking for reactions. When Cahan showed the adventuresome Adaptec executives an array of these reports, ‘They went to the most aggressive pile and said, This is kind of boring. Other companies went to the most conservative pile and said, This is pushing us.’
Heartport, a recently-public company in Redwood City, California, hired Cahan to create an eye-catching annual report. ‘We’ve developed technology that does heart surgery in a minimally invasive way. Our first annual report was going to convey that new way of thinking,’ says IR associate Teresa Martino. Cahan designed an oversized book with heavy cardboard covers and two holes cut through it, playfully suggesting the small incisions made during heart surgery performed with the company’s technology.
Reactions to the unusual annual report varied. ‘There were some lighthearted analyst reactions,’ Martino recalls. ‘I can’t put this in my file cabinet. I can’t put it away. And I said, You’re not meant to put it away. I want it on top of your bookshelf.’ While some investors were delighted with the creativity of Heartport’s choosen approach, others balked at the expense.
Cahan’s response? ‘Heartport had no image,’ he says. ‘In one fell swoop, people understand everything they need to know about the company in a simple and dramatic way. I don’t know if you can put a price on that.’ He also notes that some companies configure their annual reports to double as corporate brochures, saving on the expense of separate publications.
Media full stop
Branding for new media isn’t a radical departure from branding in the physical world. ‘New media is old media. It’s media full stop,’ says Addison’s Brew. ‘If you sound like a different company online, that’s a no-no,’ says Turner. While the visual vocabulary and tone of a web site should be compatible with written or oral communications, the experience of an online visit must also jibe with the overall corporate identity, according to Elemental’s Harris. ‘If you’re a cutting-edge company, having data that’s a year old is a problem,’ he says. Likewise, if a company emphasizes friendliness and self-service but has a difficult-to-use web site, the brand will suffer. Harris points out that IBM fulfils the promise of its name – International Business Machines – by linking to more than 200 international web sites in many languages.
Many experts frown on too much technical wizardry on IR websites. Nancy Slome, managing director, interactive, for Addison in New York, compares jazzy-but-incoherent web sites to ‘TV commercials that nobody understands.’ She advises companies to research whether their audience has high-speed modems and high-resolution monitors before introducing plug-ins and other fancy features on their sites. ‘If mom-and-pop shareholders are coming in through America Online, you have to deal with them,’ says Slome. ‘You can’t have technology that AOL doesn’t support today.’
Most IR web sites feature online annual reports, which range from one-page highlights of financial information to interactive extravaganzas. ‘The print annual report has to be reinterpreted for the web.’, says Brew.
Harris agrees, arguing that the message and vocabulary of the online and written annual reports must be the same, but the two shouldn’t necessarily share a common look or format. He points out that a company making a video of its annual report would bore viewers if the narrator did nothing but read the printed version aloud. Similarly, online annual reports should take advantage of the possibilities presented by the new technology, to chart financial statistics and animate parts of the presentation, for example. Harris also maintains that online financial data need to be updated as quarterly results come out, not on an annual basis.
Evolution over time
Some companies decide to embrace a new identity when the old one is outdated or has ceased to work. Ove’s Viau explains that American Barrick Resources in Toronto renamed itself Barrick Gold Corporation four years ago to reflect its international flavor and its emphasis on gold mining. Belle Mulligan, Barrick Gold’s IRO, describes the name change as ‘more representative of where the company was and what we were doing.’
For Barrick to live up to the promise of its new name, Mulligan points out that ‘the look and feel of the materials need to be good quality.’ She also contends that the gold bars in the corporate logo send a message: ‘They are indicative of us. This is a company with good management as well as good technology.’
The most difficult challenge for companies is this: Over time, what is it about a brand that should change and what should remain constant? Some companies choose to re-brand to signal that the company is striking off in a new direction. ‘Creating a decisive change in identity,’ remarks Ove’s Cornelius, ‘can alert the investment community to something going on.’
Other companies choose to expand on their existing message. Turner advises charting five-year plans, with each year’s theme building on the previous one. He recalls that Yahoo’s first annual report was so successful that management wanted a repeat performance. Turner maintained ‘the same identity elements’ (color, tone of message, creative concept) the next year, but sent a new message emphasizing communications with consumers and advertisers, which grew out of Yahoo’s identity as a media company.
Although re-branding can help a company, it only works when communications are expressing a true change within the organization. If the message is simply wishful thinking, investors will see through the hype and react negatively. Experts recommend truth in advertising, with financial communications serving as a mirror that reflects the essence of the organization. ‘Companies have to be who they say they are,’ concludes Addison’s Slome.
