In the last year the web has made the transition from cutting-edge vehicle into must-use tool for the investor relations community. Indeed, an online arms race seems to threaten IROs as companies compete fiercely to put as many bells, whistles and buzzers as they can on their investor relations sites.
Yet reality bears little relationship to many of the sites being built. Investor relations departments often have very little idea which people – or how many people – are visiting the IR part of their corporate web sites, making everything from setting budgets to design decisions problematic.
A few years ago, such confusion would have seemed almost absurd. Predictions were that web sites would automatically collect detailed data about virtually every action that visiting net surfers took. And massive amounts of data are getting sucked up. But in few areas of the internet is the difference between raw data and useful information more apparent than in situations dealing with web site activity. Presented in dizzying variety and abundance, most statistics look valuable at first sight but in the end prove relatively meaningless. Perhaps facing the greatest condemnation is the concept of ‘hits.’ Because they’re relatively easy to get, hit statistics are the most visible numbers used when it comes to talking about web site activity.
‘Sites always mention the number of hits per day,’ says Michael Look, manager of investor relations at Silicon Graphics. Hits, however, aren’t really a measure of surfing activity. ‘What hit counts really do is tell you how many times a server was accessed,’ Look says. Every time the server spits something out, it calls the activity a hit – whether what’s been sent is an entire text-only page or an animated exclamation point. Given that one web page can have dozens of different graphic elements, and that one person can access a site dozens of times, hits help IT departments calculate hardware needs far better than they help IROs figure out how their site is actually being used. ‘If you were to visit our site, you could be recorded as 1,000 hits, depending on how much searching you did,’ Look says.
If hits don’t work, what does? Nothing, perfectly. But an increasing number of tools are becoming available which web site designers and operators can work with to provide partial solutions. All depend on operator needs, desires and budgets.
Site-based software
Most sophisticated web site operators stay away from the concept of ‘hits’ altogether. Instead, they measure ‘page views’ – the number of times individual pages are opened. ‘You can see the number of times a page is served up to somebody,’ says Tony Dirksen, senior manager of IR at Microsoft Corp.
Windows NT utilities and myriad other packages are able to gather quite a lot of information about site activity. But the brush is still a broad one. ‘There are some tracking tools that are available that are built in as part of the internet server,’ Dirksen says of the Microsoft package. ‘It will as a matter of course be able to track the number of visitors who are going to a site, or the number of visitors who are going to a particular page,’ Dirksen explains.
Site-based software packages can provide some broad details about site visitors. For one, they can quickly and easily collect domain names and find out some technical details about their users. ‘You can find out what kind of operating systems people who look at your site are coming from,’ says Rob Adler, president of Boston’s CCBN, a specialist IR site designer. Domain names can provide clues as to whether users are sophisticated or not; different types of consumers use AOL versus, say, Interport or CompuServe.
Nationality is also easily caught by site-based software. The numbers show whether visitors to the site come from Australia, the UK or anywhere else, Dirksen says. In fact, Microsoft found that quite a few of the people visiting its IR site were from Australia, and modified its system accordingly.
Crunching data
Interpreting all the data that streams from a web site’s tracking logs can prove a challenge. Untangling all this information – and maintaining the software that generates it – can be both time-consuming and expensive. ‘There is software you can purchase that allows you to count those kinds of things,’ Adler says. ‘You can buy different packages that come with different levels of sophistication. It’s something you wouldn’t want your IR department to do on their own,’ he says.
The software can cost from a couple of thousand to $10,000 for a traffic reporter; and the in-house programmers have to make it work. Faced with this situation, many companies are resorting to a relatively simple solution: outsourcing to companies that specialize in turning mounds of incom prehensible data into easily comprehensible charts, tables and graphs. ‘It’s pretty much a data transfer of log files to us on a daily basis,’ says Toni Werner, senior manager, marketing communications at Ipro, a San Francisco-based company that specializes in analyzing web site data.
Ipro’s fees start at $750 a month. For that, customers get a selection of reports transmitted directly to their desktops; a dedicated account manager who can help them understand what the information on their screen means; and tracking software that is installed and then regularly updated on their systems. A lot of this is stuff that could be done in-house, Werner admits. But catching the attention of a Y2K-obsessed information services department can be a difficult enough job in and of itself.
Most of the professionals who want traffic analysis are marketing or communications people rather than technology whizzes, Werner says. Ipro now has about 250 clients, with most of them using the data to show advertisers that sites really are generating traffic.
Audience measurement
If site-based information isn’t enough, an alternative has emerged. Audience measurement-oriented tracking does for the internet what AC Nielsen does for television: it directly measures audience activity by observing the user, not the information provider. Television’s one way transmission model makes this technique essential. It’s ironic that the web, though two-way, has come to the same thing. The two companies that dominate this side of the internet measuring business recently combined to create a single operation, Media Metrix in New York.
Media Metrix and the company it joined forces with, RelevantKnowledge, use slightly differing systems. Media’s has 40,000 users mail in floppies once a month; RelevantKnowledge gets daily updates from a smaller audience zapped in daily from user machines. All this data doesn’t come cheap; subscription-based reports start at $50,000 a year, says Media Metrix spokeswoman Stacie Leone. While the information is proving valuable for advertising-oriented sites, its utility for the investor relations community is less certain.
‘We report on about 15,000 web sites in several different, very broad categories,’ Leone says. ‘We can do page level measurement, but if traffic levels are too small the system doesn’t work,’ she says.
And that’s the rub for IR executives. Nestled deep in their home organization’s sites, most investor relations pages don’t generate huge numbers of visitors. Media can report on sites receiving visits from as few as one tenth of 1 percent of all users. But that translates into 61,000 people a month, not a far cry from the 100,000 visitors a month Microsoft’s IR site sees. Not many IR sites will generate that kind of traffic.
Mmm… cookies
Some IR departments are resorting to a much simpler way to get user data: asking for it. Companies that want to keep really tight track of user activity can demand users register before they’re even able to log on. The problem with doing this is that many people don’t want to go through the time and trouble, and surrender of privacy involved in the registration process.
‘You can’t force people to register,’ Adler says. It is, however, possible to persuade them to register. One of the favorite tools companies are using to do that is a promise to send out important information. Data transmitted ranges from newsletters and press releases to notification of key events and conferences. According to Investor Relations’ 1998 survey of global IR practice, less than a quarter of IR departments currently use this so-called ‘push’ technology. But that should change dramatically: e-mail newsletters to investors were listed as one of the next year’s top innovations by IR departments worldwide.
Because of an internet technology known as ‘cookies,’ users need to register only once. After that, every time they log on to the site where they’ve registered, a small piece of software the cookie installed will tell the site they’ve arrived and track the user’s activity as they make their way through the site.
Privacy concerns, however, have made cookies a somewhat controversial tool, and many investor relations people are shying away from them. There are even special programs that protect PCs against picking up cookies on the web. ‘We don’t do anything like cookies,’ Microsoft’s Dirksen says.
Whatever tools people do use, tracking web activity is proving an ever more important, and useful, task.
