There was a time when most blue-chip companies worth their salt would produce an annual fact book. Ranging from pocketbook to almost encyclopedic proportions, the aim was to give an easy-to-access breakdown of key numbers, operations, sites, activities, staff and so on. It was a ready reference tool for those who knew the company inside-out, or a quick introduction for those checking out a potential investment for the first time.
Whatever the reasoning for their production, design agencies loved them. Just as lucrative as the annual report market – and in some cases more so – they were usually produced six months or so after the annual report so that the in-house team could have some breathing space, giving a nice fillip to mid-year activity at design agencies.
Then came recession in the late 1980s and early 1990s and resource-eating fact books were suddenly not quite such a popular option. And then came the web. What’s the point in creating another separate, hard copy publication with all the added cost that entails when you can just put it all up on the web?
Saved by clarity
‘The fact book had a near-death experience,’ says Martin Flaherty of Elemental Interactive in Atlanta. ‘It went away for a great number of firms. Companies that are doing them now are on a mission to establish clarity.’
Philip Mann, a partner at London-based Bamber Forsyth, sees another factor in the equation. He believes that fact books were really popular in hard copy form when the content and structure of annual reports was quite rigid. ‘Companies felt that they couldn’t put all the information in the annual report and so they needed another vehicle.’
Large companies on both sides of the Atlantic are still producing hard copy fact books or corporate profiles, although they tend to be more defined in their reasoning than in the past. Indeed, many companies are opting to put them out in hard-copy and up on the web at the same time. The reasons given for doing them are fairly varied, but certainly the desire for greater transparency and understanding of the business is key. Many are published in the wake of a major corporate restructuring or merger to help get audiences up to speed with the new entity. Others simply opt to produce a comprehensive document as much for internal audiences as their financial followers. Still more produce a smaller corporate profile document to hand out at results times, to potential investors and on roadshows.
Two routes
Opinion is split in the advisory and corporate world as to hard copy and web options. Certainly, many are still choosing to take both routes. ‘I think there’s a place for both,’ says Robert Moser, a partner at London-based communications consultancy Merchant. ‘Companies need to be able to give people something to take away but at the same time they only have a value if they are kept up-to-date and the potential to update on the web is far greater.’
However, Hervey Parke, director of investor relations at IBM, isn’t so sure. He points out that any attempt to produce a fact book when you’re dealing with fast-moving products such as are currently being developed for the web is bound to run into difficulties. ‘To try and keep that current is a humongous task,’ he says, adding that he gets occasional requests for such a publication but thinks it would be too large a drain on his IR resources to warrant producing.
‘Our clients are asking us to develop online and print versions at the same time,’ says Nancy Slome, managing director of interactive media at Addison in New York. ‘Like the corporate photo of the board, a hard-copy fact book is out of date as soon as it is printed. The web brings timely information and it’s not as if you have to go back and reprint.’
The trouble, adds Slome, is that companies have not quite yet got to grips with the fact that keeping web-based fact books up-to-date takes one heck of a lot of investor relations resources. It’s not simply a matter of saying the web is easy to update and cheap; it takes time and money. ‘I think we’re in a transition mode. We’re starting to see clients ask us, What is the value in doing that? Where will the resources be coming from? What are the time limits involved with our web endeavors?’
But get this advice from Morgan Molthrop at GA Kraut & Co in New York: ‘Printing a fact book is not even necessary in our judgement. In the age of instant technology and wide access to the internet, the web allows users to pick and choose information without having to wade through the whole of the document. In addition, information on the web can be easily updated, providing a much more valuable tool for investors than a book that is already stale on its publication date.’
Molthrop adds that concerns about the financial community not having access to the web are increasingly outdated. And, as he points out, most of the portfolio managers he comes into contact with are in their 20s and perfectly at ease with internet technology. ‘This is supplemental information for sophisticated investors,’ he adds. ‘With the web you can create a format which you can update. One of the most important things is to create a fact book that analysts can download into their models.’
First point
Nancy Burton at Tor Pettersen & Partners in London concurs with Molthrop’s thinking on the general trend toward putting fact book type information onto a corporate web site. Her firm conducted a survey of US and UK fund managers and analysts earlier this year and found that the web would be their first point of reference for background material of this nature. ‘We’re suggesting that this type of information should be online. No analysts or fund managers we talked to found that the least bit of a concern,’ she says, adding that it’s often not convenient to simply call up a company and request a hard copy when you are out of time zone and easy postal reach.
But Burton adds that her clients – including Rio Tinto who opt to produce a hard-copy annual report, annual review and 60-page data book – still want to have a hard-copy option available too. She believes that is particularly the case in heavily regulated businesses.
Inevitably, though, the web will become more and more important as a source for this type of ‘backgrounding’ by investor relations departments. So what type of things can we expect to see in the future? Elemental Interactive has been at the very forefront of corporate literature web development and is currently working on a project which will help bring the fact book ‘alive’ for one of its corporate clients. ‘There’s a desire to really use the animating and interactive technologies that are now available to take a core part of the company and build a little applet to give a free-standing demonstration on the web,’ says Martin Flaherty, adding that such an interactive fact book can really help develop understanding of a company by non-specialist audiences.
Maybe the best is yet to come.
