Webcast war

At this moment in time, it’s fair to say Richard Coope is the world expert on IR webcasts. He has studied each and every web site of all the FTSE 100 and Fortune 100 companies over the last few months, poring over them in search of webcasts. And this is the second year in a row that he has undertaken this monumental task.

Coope’s goal was to identify trends, applications and best practice in streaming media while tracking changes between 2001 and 2002. He also set out to benchmark the UK experience against the Fortune 100. And that’s where the national rivalry comes into play. When it comes down to it, the ultimate question – for companies, shareholders and service providers alike – has to be who’s the best.

Since Coope works for Simplywebcast, a UK-based streaming media company which teamed up with Investor Relations magazine for this second annual survey, he could be suspected of a UK bias. But this Washington, DC-born Brit denies any favoritism as he decrees that the UK has overtaken the US in the webcasting war. ‘I’m certainly not flying the flag for Britain,’ he laughs, adding that the rigorous methodology removes any possible bias. Simplywebcast’s site-by-site assessment of webcasting used detailed measurement and judgment criteria. With 32 points to be won, there were 25 quantitative factors and nine more qualitative elements under scrutiny (see Assessment criteria, below). The results are surprising – and encouraging.

Reality mismatch

The use of the web as a medium for IR is a hot topic these days on both sides of the Atlantic. In the US, the Securities & Exchange Commission is expected to propose a sweeping overhaul of corporate disclosure and make corporate web sites a primary and obligatory channel for shareholder communications. Meanwhile, the Company Law review by the UK’s Department of Trade & Industry’s suggests results should be speedily posted to the web then only later – or never – printed. The message implicit in both these developments is that companies must catch up with the technology – that the IR web revolution hasn’t happened yet.

Retorts Stephen Watson, managing director of Simplywebcast, ‘There’s a mismatch between this perception and reality in that companies are doing more than you think. Usually it’s the other way around, with lots of noise about new technology but no real applications. With webcasting, there’s actually much more going on than most people imagine.’

The spread of webcasting is especially pronounced in the UK, where the number of FTSE 100 companies using streaming media has gone from 47 to 83 in the last year, overtaking the US where the number of Fortune 100 companies doing webcasts rose from 62 to 76. And make no mistake, webcasting is definitely the domain of investor relations. Around 95 percent of companies using streaming media use it for investor relations.

Anti-cookie-cutter

If Simplywebcast brings any bias to the survey, it is the philosophy that a webcast should be a brand-building experience as well as a communications tool. The survey’s qualitative assessment was skewed in favor of ‘custom’ webcasts and against ‘cookie-cutter’ webcasts such as those produced by CCBN or Raw Communications.

‘Everyone’s in a format rut, and innovation is pretty limited,’ Watson says, while Coope adds, ‘Particularly in the US, there is a standardized approach to webcasting. It’s effective and it does the job. But what it lacks is personalization. And it’s so widespread that even custom webcasts often follow the same template.’

So the best practice guidelines that emerge from the survey are based on the idea that webcasting is not just about satisfying disclosure obligations. ‘Some companies undertake webcasting with branding, design and production values in mind, and they’re the ones that are pushing the envelope,’ Coope says.

The best webcasts, then, are consistent with a company’s design theme and are embedded in the corporate home page instead of opening up in a separate RealPlayer window or, worse still, taking you off-site to a service provider’s portal. Other factors that raise the quality of a webcast are to do with navigation. Is it a click away from the corporate home page? Or is it buried and difficult to find? ‘Investors need signposts,’ Coope remarks.

UK pulls ahead

For the second year, the UK is leading the way in the use of video, with 64 video webcasts among the FTSE 100 compared to only 28 US ones. It seems that in the UK, traditionally live results meetings for the City are naturally migrating to video webcasts. In the US, by contrast, with companies and investors geographically scattered, teleconference calls and add-on audio webcasts are the norm for earnings results. Indeed the US video webcasts identified in the survey are rarely used for investor relations; they are more likely to be product or training videos from companies like Motorola and Dell.

Still more surprising than the number webcasting is the number not webcasting. In light of Reg FD and similar guidelines in the UK, why do 17 companies in the UK and 24 in the US not webcast? Simplywebcast went out of its way to double-check these laggards and ensure they didn’t have webcasts buried somewhere on their sites. The list of companies without streaming media includes some unexpectedly consumer-oriented and IR award-winning names: Philip Morris, Texaco, Sears Roebuck, Bristol-Myers Squibb, Pfizer and Wal-Mart in the US; Tesco, Centrica, Dixons and MMO2 in the UK.

Reasons for not webcasting are varied. One IRO told Coope, ‘We just don’t want our mugs on TV. Besides, if we slip up, it will always be out there.’ The investor relations director at a property company in London reports that senior management doesn’t want to webcast because they would rather analysts and investors visited them in person to see their operations. Another UK company, which has a small shareholder base, wants to focus on personal relationships with investors and believes webcasting would be a backwards step. However it is developing a special site with ‘personal’ corporate videos of management and operations.

Some IROs are waiting for the technology to improve. One was discouraged from producing a webcast for his own company when he watched a poor quality Royal Bank of Scotland webcast. In other cases it’s a people problem. Simplywebcast recently produced a video for a large UK company which was to be posted on the web for ‘on-demand’ viewing. The quality was great, with three cameras and professional production values. But the company’s communications director wasn’t happy with the way senior management presented to the cameras and scrapped the project.

Style divergence

Watson is scathing about video webcasts with bad production quality. Too often there’s one camera at the back of the room and poor sound quality, which results in a distinctly bad brand experience – worse for a company than not webcasting in the first place. ‘The IR web site will soon be a critical part of a company’s reputation management, and webcasting will be a part of that,’ he says. ‘Think of all the care that’s lavished on annual reports. Soon it will all move onto the web, and it’s important that companies get to grips with it now.’ Or, as Richard Coope concludes succinctly, ‘Best practice: seems simple, but so often it’s lacking.’

If there’s one thing that bothers Coope after all his webcast watching, it’s tiny PowerPoint slides. ‘Why do they make them so small?’ he complains. ‘There’s so much important information on them, but some of them are so minute you can’t read the numbers. Maybe they work on a large screen at the live meeting, but they don’t come across on the web. It doesn’t take much more bandwidth to make them bigger.’

Of course, Coope’s vision may be a little blurry after gazing at countless web pages from 200 of the world’s largest companies. And what’s more, he has recently finished looking at the rest of the FTSE 250 companies for a more in-depth study of streaming media in the UK. Those results will be presented in the next issue of Investor Relations magazine.

For more on the survey, contact Stephen Watson at +44 (0)20 7430 4500 or e-mail [email protected]

Assessment criteria
Quantitative questions
1 Is streaming media being used?
2 What type of webcasting is being used? (video/audio/synchronized & downloadable slides)
3 In what area is it being used? (IR, product, communications)
4 For what reason is it used? (results briefings, annual meetings, investor events)
5 Which formats are offered? (RealPlayer, Windows Media Player, Quicktime)
6 What connection speeds are offered? (standard, fast/broadband)
7 What registration facility is offered? (online registration, e-mail address required)
8 Is Q&A included in webcast? (Q&A available, indexed Q&A)
9 What additional features are available? (CEO interviews, speaker bios, downloads, specific content for private investors, indexed highlights, feedback facilities)

Qualitative questions
1 Webcast accessibility
Is the webcast easy to access and find?
Is the webcast easy to navigate with clear functionality?
Is this an effective online facility?
2 Webcasting production values
Does the webcast have good picture quality?
Does the webcast have good sound quality?
Is the quality of the actual recording of a high standard?
3 Design and brand experience
Is the webcast effectively integrated into the web site design?
Does the webcast add to the company’s online presentation?
Does the webcast reflect the company’s brand values?

Coope comments
Barclays was cited last year and it’s up there again in 2002 because it found a winning formula and stuck to it. Experiencing this webcast is to experience best practice, from arriving at Barclays’ home page to the end of the Q&A.
BP was doing some exciting things last year, like webcasting Nelson Mandela’s lecture or a merger announcement with a four-country teleconference. It was also developing live interaction. Now BP is leaning toward a more standardized approach. They’re still doing the right things, but lack sexiness, Prudential uses streaming media creatively and archives a lot of webcasts, which should put them right at the top. But the picture and sound quality of their most recent webcast was terrible – just one camera and a handheld mic.

When you see something good, it really stands out. It doesn’t take much thinking to do something exciting, it just takes thinking. And Compaq did its thinking. A fantastic webcast to watch, use and interact with. It comes down to simple, clear communication and design practices.

Intel webcasts a number of seminars and developer forums, some of interest to investors and analysts. Of course the scale is massive, with embedded videos and some webcasts with their own micro-sites. Classy.
Conoco’s webcast is simple and effective – just what’s needed.