Ask anyone in the IR industry and they’ll agree – there is one inalienable truth when it comes to investor relations: the US is best. Think about it. The US has the biggest and best IR institute, it pays the highest salaries, it produces the best annual reports, it leads the way when it comes to corporate branding, its disclosure practices put the rest of the world to shame, it is at the cutting edge of webcasting, it…
Hang on a minute. Let’s not get carried away. Is the US really the best when it comes to webcasting? For some time, there has been a growing body of opinion that US-listed companies are not at the pioneering vanguard of streaming media. Could it be that they are no longer top dogs in the world of webcasting? That is what one firm decided to find out.
In association with Investor Relations magazine, SimplyWebcast – a webcasting firm based in the UK, admittedly – conducted an objective study of webcasting, comparing US and UK companies. The FTSE100/Fortune 100 Streaming Survey aimed to produce the first authoritative analysis of the use of streaming media. Along the way, SimplyWebcast hoped to identify key trends and benchmark UK experience with the Fortune 100.
Through a site-by-site assessment of webcasting practice, employing specific measurement tools and judgement criteria, the assessment provided a snapshot of webcasts from Q1 2001.
To maintain objectivity, sites were ranked against a 30-point scoring system mostly focusing on quantitative facts. Corporate URLs were assessed against a list of questions, for example: is streaming media being used? What type of webcasting is being used (video/audio/ slides)? For what reason is it used (results, meetings, events)? Which formats are offered (RealPlayer, Windows Media Player, Quicktime)?
The results make for interesting reading. For one thing, the use of streaming media is still fairly low. In the Fortune 100, despite the inception of Regulation FD, just 62 percent of companies currently use streaming on their external web sites. Webcasting is even less prevalent in the FTSE 100 with just 47 percent of companies using it. Encouragingly, what webcasting does exist is generally used for IR purposes. Some 58 of the 62 webcasting Fortune 100 companies (93.5 percent) and 42 of the FTSE’s 47 (89 percent) use streaming media for this reason.
The key difference lies in the use of video technology. In this area the UK is pushing up the best practice bar, while many US companies seem content to ignore it. In the FTSE 100, of the 47 companies that use streaming media, 39 (83 percent) incorporate streaming video. In the Fortune 100, just 31 (50 percent) of the 62 have elected to use it.
Video delay
One can speculate as to the reasons why the US should be languishing in this regard. Could it be that, having adopted webcasting early, many US-listed companies see no need for further development? Perhaps the difference is down to a technology gap. Video needs more bandwidth than audio streaming and Europe is leading the way in broadband penetration. That could go some way to explaining another prominent difference between the FTSE 100 and the Fortune 100. In the former, 23 companies (49 percent of those that webcast) offer the user fast connection. In the Fortune 100, meanwhile, just 18 companies (29 percent of those offering streaming media) offer this choice.
‘The truth is, we were surprised by the findings,’ says Stephen Watson, MD of SimplyWebcast. ‘We didn’t expect video penetration to be so high in the UK compared to the US. Two years ago, we did a similar research exercise in the UK and there were literally a handful of companies videocasting – it was very much a marginal part of IR.’
So Fortune 100 companies compare poorly with the FTSE 100 in terms of video streaming. And that makes the next statistic all the more surprising: 38 companies (81 percent of those with webcasting) on the FTSE 100 incorporate slides with their webcasts. On the Fortune 100, the number is just 29 (47 percent).
Webcasts that incorporate slides do not require substantial bandwidth or technological expertise. And so it would be reasonable to assume that US companies would adopt slide show presentations to supplement their otherwise non-visual audio webcasts. Not so.
There are other aspects of streaming media in which FTSE 100 companies outperform those on the Fortune 100. Some 31 FTSE 100 companies (66 percent of those with webcasting) offer fully indexed webcasts in which the user can click straight to the part of the presentation they want.
In the UK, this is considered a fairly basic feature of a webcast yet in the Fortune 100, just 26 companies (42 percent) provide it.
The survey suggests UK companies are approaching webcasting more creatively. Indeed, as part of the study, SimplyWebcast conducted some qualitative analysis to gain a better understanding of what constitutes best practice. It rated webcasts on accessibility (is the webcast easy to find, simple to start, and easy to operate?); technical delivery (is it available in different formats with clear and fast access?); production values (is it fully indexed with good sound and picture quality?); design (does the webcast package clearly reflect the event and the corporate identity?); and support (does it contain good supporting material and is it user-friendly?).
Work order
In many of the qualitative sections, the FTSE 100 and Fortune 100 produce similar results – and both need work. For example, there needs to be an improvement in picture quality across the board. In the FTSE 100, 32 companies (68 percent) had picture quality rated as good. In the US, just 35 of the companies with streaming media (56 percent) could say the same. Equally, just 36 FTSE 100 companies and 48 Fortune 100 companies (both 77 percent) had webcasts with designs supporting the corporate identity.
That said, the Fortune 100 does outperform the FTSE when it comes to providing support to users. Some 53 of the 62 companies using streaming media furnish the user with some kind of feedback mechanism. In the FTSE 100, just 17 of the 47 companies (36 percent) that webcast provide this. With points awarded for three criteria in each of these fields, the resulting spreadsheet looks more like binary code than useful data but it does help to apply a quantitative approach to a qualitative study. And that is useful in determining which companies emerge as webcasting superstars.
In the Fortune 100, seven companies score 13 out of a possible 15 points; in the FTSE 100, that number is eight. There are four companies that score 14 on that scale. One, Barclays, is in the FTSE 100; the other three, ExxonMobil, Microsoft and Boeing are in the Fortune 100. But two companies truly stood out as leaders in the field. General Motors (in the Fortune 100) and BP (in the FTSE 100) were deemed to be outstanding in their use of streaming media, both scoring 15 points. And before you point a cynically accusing finger – no, neither employs SimplyWebcast.
Obviously, there are some companies that will dismiss webcasting as a luxury they can’t afford. ‘I don’t buy that,’ refutes Watson. ‘I think if you’re in the FTSE 100, you have an obligation in a way to present your brand online. For those companies in the FTSE 350, you can learn from the US. Audiocasting is a great way to get started and the entry level isn’t prohibitively expensive. You just have to ask yourself, Do we buy into sharing and presenting our information in an online environment?’
Watson is optimistic that webcasting will soon be standard practice in IR. ‘The application is gaining currency all the time,’ he remarks. ‘I think it is something that everybody will do in the future.’
And his advice for companies hoping to provide best practice webcasting? ‘Just do it. Experiment. Take a view,’ he offers. ‘And I’d urge our US friends to take a look at the really good UK and European examples that are out there.’
For more on the survey, contact Stephen Watson on +44 (0) 20 7430 4500 or e-mail [email protected].
Key statistics
|
UK (%)
|
US (%)
|
|
| Design supports corporate identity | 76 | 77 |
| Webcasts with good picture quality | 68 | 56 |
| Webcasts used to discuss financial results | 76 | 98 |
| Webcasts available in two formats | 38 | 93 |
| Audience feedback mechanisms | 36 | 85 |
Base: 47 of the FTSE 100 and 62 of the Fortune 100 that do webcasts
Features of excellent practice
-Webcast is easy to find, simple to start, and easy to operate
-Webcast is available in different formats with clear and fast access
-Webcast is fully indexed with good sound and picture quality
-Webcast package clearly reflects event and corporate identity
-Webcast contains good supporting material and is user-friendly
Source: SimplyWebcast
