Broadband is the next big thing, and leading the way – at least in the UK and continental Europe – is Raw Communications. The London-based firm has made its name pumping broadband video to special terminals at financial firms, signing up around 70 top institutions worldwide. Whether you’re a brokerage analyst trumpeting your morning recommendations or a CEO with a message to get off your chest, RAWfinancial/broadband delivers high bandwidth video around the world, past firewalls and onto the PCs of investment decision-makers.
Then Reg FD came along and made such private programs going exclusively to top institutions rather dubious. So Raw has launched RAWfinancial.com to allay selective disclosure concerns. As Raw CEO Ab Banerjee explains, it’s a narrowband version of the original service so it can reach second and third-tier institutions which don’t necessarily have access to the broadband version. The site also features a listing of upcoming events with distribution deals through the likes of Yahoo or Interactive Investor, so news of your webcast travels far and wide.
Raw is already a big fish in the UK and Europe, with close to half of the Eurotop 300 and 44 of the FTSE 100 using Raw’s broadband network. Now Raw is touting RAWfinancial for US companies, which may still need some more convincing about all the benefits of video.
‘If you compare Europe and the US, Europe is well ahead in video while the US is primarily audio driven,’ says Banerjee. ‘This is because video over the internet in the US is still complicated, and companies have stayed with narrowband audio. But there’s good reason to move to video because we get it out to the top institutions worldwide. It’s a simple way of getting your key management in front of European institutional investors as well as US ones.’
While Raw broadcasts morning meetings for nine out of the top 15 UK brokerages, Banerjee reports that buy-side players are more interested in company presentations. ‘Fundamentally, fund managers are more interested in the corporate presentations than they are in the sell-side morning meetings. Direct contact with senior management is certainly one of the key decision-making factors for investors.’
For broadband and web distribution through Raw, expect to pay around $7,000 (£5,000) per event. That gets you a fully indexed presentation along with feedback about who actually watched the presentation. The cost doesn’t include the actual production, however, which you can do yourself or get Raw to do for you.
Horse’s mouth IR
The word portal is no longer on the in list. No wonder, then, that Cantos doesn’t mention it. Instead, go to cantoscomms.com and you find ‘the corporate space on the internet – where companies come to tell their story direct.’
The site kicked off in May with Safeway, the UK supermarket chain. The usual features of any IR site are there – press release headlines and a share price chart, for example. Then there’s the ‘straight from the horse’s mouth’ material that Cantos hopes will attract a large segment of the investment community: video interviews with the CEO and financial director as well as a ‘virtual site tour’. There’s also an invitation to e-mail questions directly to senior management.
Cantos has since signed up another dozen companies ranging from WH Smith to smaller players like De La Rue and MotherCare. Even South African Breweries is represented , signaling Cantos’ international aspirations, according to deputy chief executive Iraj Ispahani.
The business model is straightforward: companies pay to post their information and registered users view it for free. ‘One of the reasons companies pay for Cantos is that we deliver an audience. Moreover, we have a built-in mechanism to provide feedback about which institutions watched, or how many people on the buy side and sell side watched particular programming.’
Furthermore, Cantos is ‘investing in relationships with the investment community to get qualitative feedback, like what kind of additional programming they want.’ So far 120 different institutions have registered, and Ispahani says he has developed ‘deeper relationships’ with 40 of these. Another 1,500 or so individual investors have also registered. ‘It’s a one-communications world,’ proclaims Ispahani. ‘For companies this is an excellent opportunity to respond to Reg FD in an imaginative way. Investors should feel they have met the company without having left their desks.’
Next on the agenda for Cantos is a product geared toward smaller companies, tailored for their smaller budgets and programming needs. Meanwhile, Ispahani plans to forge more relations with small-cap fund managers.
Cantos isn’t meant to replace one-on-ones or analyst meetings, or even a company’s own IR web site. Rather the aim is to complement the existing IR program. ‘Most companies have consumer-oriented web sites with poor functionality, no buzz and it’s difficult to navigate your way around. If the investment community goes to a UK company’s web site, they don’t necessarily go back, and the sites don’t have built in CRM (customer relationship management). With that we can get important stats for them,’ Ispahani continues. ‘Our other advantage is that we’re an aggregator of content, an aggregator of audiences. So we allow companies to tell their story to a much wider audience of people.’
DIY TV
So you’ve got on a shopping spree and have your broadband distribution (RAWfinancial) and you have your video webcasts featured on an aggregator site like Cantos. But how do create the content in the first place? Who videos your CEO and makes him look good for a worldwide audience, be they employees, customers or the investment community? There are professional video crews, of course, but there’s also the do-it-yourself solution. That’s what enteraction tv [sic] is newly touting for the IR community.
Enteraction started out focusing on interactive TV and broadband content for the consumer market through such platforms as BT and NTL in the UK. But there are only 38,000 customers connected to these types of digital services. ‘Where there’s bandwidth to spare is in corporate intranets and extranets,’ points out enteraction’s CEO, Mark Cullen. Thus enteraction turned to companies like E*trade that wanted its own TV station. Other projects on the go include a retail bank and a commercial bank. ‘For the first time, these banks can talk to their customers using high quality, relatively high speed video as a communications tool.’
Now enteraction hopes public companies will opt for the DIY solution for communicating with internal audiences as well as external audiences like analysts and investors. For $420,000 (£300,000), enteraction will install TV Studio in a Box, a combination of traditional TV equipment and PC-based technology. ‘It’s a do-it-yourself TV studio,’ says enteraction’s communications director, Michelle Gordon. ‘It allows companies to become media companies in their own right. Rather than relying on a third party, they can do it all in-house.’
Cullen says enteraction is the middle ground between a real $2.1 mn (£1.5 mn)TV studio and ‘cheap and cheerful – let’s put up a video camera and see what happens.’ Using ‘virtual set technology’ – imagine your CEO against the backdrop of a Manhattan skyline instead of his drab office – Cullen says enteraction offers a ‘cost-effective solution that looks well made, well thought out, with strong communications potential.’
Still, $420,000 seems like a lot, unless you consider that many companies have already stumped up tens of thousands for a single taping of, say, an analyst day.
Cullen points to JP Morgan’s own full-scale TV studio in London. ‘They went the full broadcast route and spent lots of money, not to mention the number of skilled people they need to run it. With enteraction you spend less money, it fits into a smaller place, and it can be run by just two people.’
Info in
So far our shopping spree has concentrated on getting information out. What about getting information into the IR department, ranging from sell-side research to targeting information? Multex is already a big name in the distribution of third-party research to securities professionals via the web. Going head-to-head with Thomson Financial/First Call, Multex provides research from around 700 firms globally to a network of up to 30,000 buy-siders. Now Multex is launching MultexIR, an integrated platform for IR professionals that will compete with the likes of Thomson Financial/Carson’s IRChannel.
‘This is a huge market, one we can’t ignore,’ says Andrew Reid, head of global strategic development at Multex. ‘MultexIR carves out the information IROs need, wraps it all up and makes it meaningful.’
Around 500 companies already subscribe to Multex.com, with about half of those outside the US. Now Multex is launching MultexIR with two further tiers of service on top of its basic market news, fundamental data, research and earnings estimates. The second tier includes 13F ownership data from JM Lafferty and contact management facilities that came with Multex’s acquisition of Buzz last year. The top-level service includes Lafferty’s sophisticated automated targeting tools. Pricing hasn’t been finalized but should range from $12,000 a year up to $30,000 for the full service.
Real-time quotes
It seems like anyone who’s anyone is looking at investor relations as a potential market. Take ADVFN.com, for example, a leading UK market information site. It has 40 mn page impressions a month and was awarded best investor web site by Shares magazine earlier this year. But such adulation does not pay the bills. ADVFN.com mostly gives private investors free stuff like real-time quotes, with just a smattering of advertising on the site as well as premium paid-for information. No wonder they’re looking to IR departments to help line their pockets. First to throw in a bit of change is Orange, the UK mobile phone company. From its IR web site you can get real-time Orange quotes from the London Stock Exchange and Euronext. There are also some rudimentary stock charts and information on trading volume. ADVFN.com also has plans to create an ‘IR shop window’ on its own site to profile companies that buy its real-time feeds.
‘We have all this high quality data anyway, so this is just another way to deliver the information,’ comments David Jones, head of sales for investor relations at ADVFN.com. ‘It’s the real-time feed that differentiates us from other share price providers,’ adds Jones, who has also signed up Friends Provident as a customer. The UK insurer is set to demutualize in early July and will offer its former policy holders real-time quotes and charts from the outset.
You might wonder if private investors really need real-time stock prices on the web sites of the companies they follow. Many online brokerages throw them into the package they offer small investors while every professional investor has his preferred terminal like a Bloomberg. Indeed, the ADVFN.com page on Orange’s site pales in comparison to Reuters Share Monitor, a Java-enabled, interactive charting tool on the IR sites of companies such as Nokia, Aldata, Sonera and Perlos. Prices on Share Monitor are delayed, sure, but it has bells and whistles galore.
XML what?
Finally a brief look at the nitty-gritty nuts and bolts behind IR web sites. Battling it out for the hearts and minds of IROs are two giants, CCBN and Shareholder.com, which have both just introduced XML-based products. XML (extensible mark-up language), for the technologically uninitiated, is a web programming language that allows information from a variety of sources to be integrated in real-time in a uniform format on the web.
Still not clear on what XML is? To add confusion to confusion, there are now at least two new XML-based IR products to choose from: CCBN’s IR-XML and Shareholder.com’s irXML (differentiated by capitalization, a carefully placed hyphen and not much else).
According to Shareholder.com president Ron Gruner, irXML ‘is about freedom and control.’ Up until now IR departments have had two options: manage the IR site in-house or, as more and more companies are doing, farm out the whole works to vendors like Shareholder.com and CCBN or European competitors like Hugin and Investis. These vendors do their best to make the IR pages look just like the rest of a company’s site while standardizing the format and range of information. With XML, an IRO has a new option: keep the IR site on the in-house server – thereby maintaining greater control over the look and feel – while the vendor feeds in the back-end information such as stock charts, quotes, earnings estimates and SEC filings.
At the rate CCBN and Shareholder.com are going, most IR sites will be converted to XML within a matter of months. It’s the unstoppable march of new technology – join in or be stomped.
