When British Airways launched the company’s new web site aimed at private investors in February of this year, there were dark mutterings about privileged disclosure and discrimination.
But it wasn’t like that. In fact BA was one of the first to take the step of grouping together the information most frequently sought by smaller, retail investors. ‘We try to direct private investor traffic to that corner of the site for information that they are particularly interested in,’ explains BA’s Caroline Slater, who ran the project. ‘It is very different from the sort of thing institutional shareholders look for.’
Designing IR web sites for discrete user groups may turn out to be a future trend as online IR evolves. The result, far from exclusivity for one audience versus another, may in fact be greater inclusiveness.
George Stinnes, who heads investor relations at BA, explains that britishairways.com is essentially a ticket sales site, while a click-through takes you to bashares.com, dedicated to IR matters. However, the URL which is being publicized to BA’s many private shareholders is bashareholders.com. This offers FAQs, registrar information and other specific retail investor information, in addition to all the information analysts or institutional investors would typically seek – downloadable Excel spreadsheets, investor day presentations and full speaker transcripts.
Indeed, Stinnes had Reg FD firmly in mind when launching the new URLs. And from the point of view of functionality, ‘Two clicks will get you anywhere’ was the guiding principle. Spare use of graphics to enhance speed was another structural key.
With a team of just two in the investor relations department, Stinnes uses web consultants Marchcom to manage the company’s site. Requests from shareholders for paper documents are routed directly to a mailing house for increased speed and efficiency. Another key functional point was maintenance. ‘You shouldn’t design something that you haven’t got the resources to keep up-to-date,’ says Stinnes. ‘Old information is worse than no information.’
Recipe for success
UK food retailer Iceland is another company whose main site, iceland.co.uk, is strongly consumer-oriented, with online shopping on view on the home page. The IR section of the site is one click through from the menu. Once there, the IR index lists what are by now pretty much the common ingredients of the online IR recipe:
1 corporate profile
1 statement of prospects
1 five-year summary
1 annual report
1 analysts and summary of estimates
1 events calendar
1 news and press releases
1 e-mail news alerts
1 share price data
1 contacts
1 presentations
1 FAQ
Though the IR site is run by Iceland’s financial PR consultant, Hudson Sandler, the IR pages were originally put together through an out-of-the-box IR web design solution supplied by site designers investor-relations.co.uk.
Since Iceland, investor-relations.co.uk has gone on to supply over 100 other sites based on a similar formula. According to managing director Peter Briggs, the template has its roots in best practice online IR from the US. ‘We do not create content.
We provide clients with the means to communicate online. They can update the templates, or they can get us to do it, providing online video or conference calls, helping with compliance and so forth.’
As a result of standardization, investor-relations.co.uk can supply a basic site for around £10,000. The monthly maintenance charge is usually around £500, which compares favorably against the six-figure set-up costs shouldered by some large corporates. Keith Hann of Hudson Sandler certainly thinks so. ‘The cost is low. Investor-relations.co.uk buys in share price feeds and broker estimates cheaply and efficiently,’ he explains.
‘The speed of setting up the IR site at Iceland was also a key consideration,’ Hann continues. ‘The rest of the commercial site had been developed internally at Iceland and they wanted something on the IR side to run alongside their internet shopping launch. It needed to be finished in time to coincide with a product launch. Overall, this suits the client’s needs very well and has attracted favorable comments from a variety of sources.’
Cost and whether and what to outsource are prime considerations for many businesses when planning or revamping their online IR offering. If Iceland’s was a cheap, effective and off the peg, then BP’s differed markedly.
Coming alive
In March 2000 BP spent about $1 mn on a complete overhaul of its IR web pages. This included moving all of the company’s social, environmental and financial reporting to one place, called Alive.
For BP this involved new multimedia technologies, online video capability and commissioning new content for its investor center plus a range of on-screen tools. The company also moved to new infrastructure, using a bigger, more robust and more secure server. The investment was considerable and the result has netted a range of awards – not least from this publication.
‘We previously had an online investor center for about three years,’ explains Teresa Clifford, who is responsible for managing e-communications at BP. ‘Then, from our experience and in cooperation with our IR people on both sides of the Atlantic, we decided what the new priorities were for our audience,’ she says. ‘We wanted more interactivity. – the share price, the ability to see what your holding is worth, check your dividends, look up historical prices. Before Alive, the investor relations section of the site was more like a summary of our paper documents.’
Clifford reports that BP did draw a distinction between institutional and private shareholders. ‘Professional shareholders are unlikely to want to calculate the value of their shares using an online tool. They would be interested in the news elements and in analyst presentations. Private investors can see everything the professional investor can see. In fact it brings that sort of disclosure and information closer to them. They can see presentations and download slides, spreadsheets and the like, just as analysts can.’
Even with a large IR team, as well as four staff working with Teresa Clifford specifically on the site, BP cannot do everything itself. Pauffley, handlers of the company’s reporting needs, supplies content. Razorfish provided cutting-edge technical design. More content is drawn from around the business, including the equity operations area and company secretariat, while the site is hosted by IBM and Sema provides day-to-day technical support.
Since launch, site usage has doubled. At critical times such as during quarterly reporting and for specific releases, the news center page impressions have reached 90,000 per week. There is no doubt in Clifford’s mind that the site has been a success and cost-effective in terms of the paper and working time saved by providing documents online. But she is quick to add that the requirements of the site are constantly being upgraded and remodeled, to follow the direction of the developing company-shareholder relationship.
Over at BP’s rival, Shell, the corporate structure imposes particular disciplines on the online IR offering, as Catherine Kelly, manager of the company’s investor relations site, explains. ‘It is oriented much more towards the analyst and the professional investment community. This has a lot to do with the fact that we are made up of two large, separate businesses. Royal Dutch and Shell Transport each trade in their own right. They have come together to own the Royal Dutch Shell Group in a 60/40 relationship. Each company has different shareholder groups, with 97 percent of Shell Transport’s shareholders based in the UK, and 41 percent of Royal Dutch investors in Holland, 40 percent in the US. This makes catering to private shareholders particularly difficult because their needs are so different. But we are currently addressing this.’
Another key focus for the site is the speed at which information is posted. ‘We put our information up there bang on time,’ says Kelly. ‘Press releases are generally up within two minutes. Speed and quality of delivery are very important. It’s got to be 100 percent correct. We see it very much as a communications tool to get to the analysts and the institutions.’
Kelly adds that in this regard Shell draws information from around the group and then translates it into HTML format. For that matter, the site offers HTML, PDF, PowerPoint and Excel formats to suit the needs of particular user groups. For example, streaming presentations are offered in both Windows Media Player, which tends to be the preferred medium for investors in the US, and RealPlayer, which Europeans like better.
They might be giants
One great difference between the two oil giants is that Shell carries out all aspects of updating and site management internally. It buys in skills when it needs to, but the bulk of the work is carried out in-house.
‘As we upgrade the site we will look at the best resources we can find internally and externally,’ say Kelly. ‘But it won’t be just a question of outsourcing it. Once it’s set up, the maintenance is easier to do internally because we are more familiar with our own business than any outside consultant can be.’
Along with just about everyone you speak to involved in maintaining investor relations web sites, Shell is busy upgrading and revamping its site. New features, particularly interactive ones and those aimed at particular shareholder and other visitor groups, are expected to come on stream by the end of this year.
This points to the one axiomatic truth about all IR web sites – that change is happening rapidly and exponentially. Peter Briggs of investor-relations.co.uk sums up the position: ‘Online investor relations has only been going on for a couple of years in this country. We are still in the stone age. It is all there in front of us. We are at a very basic level and there are all sorts of exciting things about to happen. The internet and TV are starting to come together and even relatively small sites will have far more interesting content like recorded videos, for example, within two to three years.’
‘IR sites are going to become significantly more interesting,’ pronounces Briggs. And that’s a warning to anyone in IR who thinks web sites just get loaded up and left to their own devices. It’s also a challenge to those who want to exploit the medium to the best advantage of both the company and its stakeholders – in the broadest sense.
Pauffley’s half dozen
Roger Burgess is a director at Pauffley, a UK consultancy, advising Nokia and Credit Suisse as well as BP. He identifies six key principles of IR web sites.
1. Integrate your web site with your IR strategy.
Your web site is not something separate from the other things you do with your IR team. In the climate of Regulation FD, the web is going to become the premier channel for disclosure.
2. Look at best practice and ask your audience what they want.
See what other companies are offering and speak to the analyst, professional investor and retail investor communities.
3. Place a strong emphasis on architecture.
Visitors to IR web sites are usually searching for specific information and want to get it quickly. Ease of navigation and usability are crucial.
4. Integrate the branding and design of the IR site with the parent site and with other published material.
It should be a homogeneous brand experience – sorry for the jargon, but the IR site is part of the corporate brand and needs to support it.
5. Carefully consider the technical spec in advance.
Most advanced clients have worked out their policies on issues like which browser versions to design for, their attitudes to third-party technologies like Flash, the hosting environment, and so on. But some have not. You can glean a lot of information about users from the log statistics of your existing corporate site.
6. Understand that in launching an IR web site you are committing to maintaining a channel of communication.
The day the site goes live is day one of a new information channel. So think about how to resource it in terms of information, people and money. Don’t underestimate what it takes to keep that channel live and interesting. Make sure it integrates with your internal functions, especially with your compliance functions.
