In terms of navigation, does your company’s IR web site remind you of a speedboat, a luxury liner or a battered old dinghy minus the plug? Is a virtual trip through your company story as refreshing as a Caribbean cruise, or does it leave investors feeling seasick?
Or worse still, do they just maneuver astern by clicking on the back button, never to return? Your site may not be making much of a splash in the investment community, but fear not – the IR web site repair service is open for business.
The Indian ISP WWW Communications identifies three essential elements of any successful web site. First you must establish the user’s needs and your own aims. Second, the developer must have the technical and design skills to produce the desired outcome. Third, there must be a logical development process to take the initial concept through to the completion of a functional site.
‘Your investor relations web site should be designed for a focused audience,’ says Mark Wilson, director of digital communications at BamberForsyth:Fitch, an international consultancy which specializes in corporate reporting. ‘It has to meet the needs of fund managers, analysts and individual investors. It should therefore be shaped to suit that audience,’ he adds. Trouble is, many sites aren’t.
Problems at launch
‘Some IR web sites take a frustratingly long time to access, and others just won’t open at all,’ complains Boston-based private investor Joseph Vitale, who conducts his research from home.
Surprisingly, browser-specific formatting is still a problem. ‘When designing your web site, try to ensure it is compatible with older browsers,’ says Stuart Anderson, creative director of online design at Financial Dynamics. There is, moreover, no excuse for your site not to be compatible with Macintosh users and their software. If you don’t cater to them, you may be excluding up to 20 percent of your potential private investors.
As for speed of access, not everyone has fast ethernet or ADSL. Small investors who conduct their research from home may have a slow modem connection. In order to avoid frustrating these investors because of slow connection times, get rid of superfluous graphics and optimize those images that you really need. ‘It’s a matter of knowing your audiences,’ says Anderson. ‘Find out who’s looking at your site and tailor it to their needs.’
An overcrowded gangway
John Quinlivan, sales actuarial director at Scottish Equities, grumbles that on some web sites he has to waste hours hunting for the information he really needs because the home page is so congested.
Finding information on your site should not be a treasure hunt. The simple solution is to keep your home page uncluttered and easy on the eye, with a clear itinerary for users. ‘Your web site should have a clear and homogeneous style throughout, with a consistency of tone, language and design,’ says Wilson ‘This will not only reinforce the company’s brand, but also give users a clear idea of how to navigate through the site in order to find exactly what they need.’
‘There is no need to clutter your opening IR page with all manner of information,’ agrees Anderson. ‘Keep it simple. One of the great things about the web is that you can ease problems of navigation by providing links to relevant information and to the most popular pages.’
Heavy traffic
One UK-based sell-side analyst in the chemicals sector tells of her biggest frustration: ‘Web sites that slow right down or crash because they are unable to cope with the volume of traffic at peak times, for example when financial results are posted.’ She identifies Bayer and BASF as two of her favorite IR web sites because ‘they rarely suffer from slowdowns or crashes. And on results day, they post all relevant information as soon as it is available.’
‘The most common problems occur during conference calls,’ points out Joseph Oughourlian, a New York-based director at SG Cowen. ‘Quite often, I am unable to open PowerPoint slides or to hear what people at the presentation are saying. Sometimes the connection disappears altogether, which can be very frustrating.’
According to BamberForsyth’s Wilson, there is no excuse for poor connectivity, since companies should be able to anticipate the level of demand. If things do go wrong, he adds, companies must have the technical back-up to get the site working again as quickly as possible. ‘If an IR web site is down for a prolonged period at, say, results time,’ he states, ‘it could easily lead to numerous investors calling the company and putting the IR department under extreme pressure – defeating the purpose of having an IR web site in the first place.’
Slow data rates and crashes can be avoided provided the domain name server is well configured and fast. It has to be designed to cope with extreme peaks of traffic. ‘Don’t get your server on the cheap,’ says Anderson from FD. ‘Companies should ensure that they have enough bandwidth, especially when they publish their results online. Their provider will know who is visiting their site and when, and can advise on what sort of server would suit them and how much bandwidth they need.’
The compass is broken
Your investors have heard of Odysseus wandering the sea for ages but they’re unlikely to want to emulate the experience when they surf the web. Don’t leave them adrift. One UK-based sell-side analyst complains that on some sites, bad design can make it difficult to find exactly what he needs. Oughourlian of SG Cowen concurs, finding it particularly irritating when he can’t find basic information such as a contact number for the company’s IR department.
‘One of the reasons for having an IR web site is to limit the number of telephone calls to the IR department,’ concedes Wilson. ‘But some companies are so keen to deliver online that they forget to give you a contact number. Investors do sometimes want to talk to real people.’
Investors are likely to lose patience if they can’t find what they’re looking for. Therefore, make navigation easy for them. Clear sectioning is fundamental here, and shortcuts to the most used information can again be very helpful. As the communication strategists Kraker & Co point out, ‘[Investors] want the information they want. No more. No less. If you fail to give it to them, they’re unlikely to listen to anything else you have to say.’
The map is out of date
‘The biggest problem with some of these web sites is getting the latest company information, in a printable format if possible,’ says Robin Asquith, a fund manager at JP Morgan Fleming Asset Management. ‘News on a certain company may be fed through from Reuters, but when I look for a full report on the company web site, I can’t find it because it only gets posted a few hours later.’
According to Ian Mitchell, an analyst at Brown Shipley, ‘The most irritating thing is when you find stuff that is out of date or when you can’t find it at all’.
Make sure that information is posted in a timely manner. When your financial PR agency has written up your press releases, interim results or AGM agenda and sent the information out via newswire, it can be automatically channeled to your web site, too. XML, a new web programming language, makes this easy.
Fog on the horizon
Other problems occur when information is incomplete. One analyst complains: ‘On one particular web site a company announced a capital increase without even mentioning the magnitude of the increase.’ She also points out that on a corporate governance level, there are still many companies that make it difficult for shareholders to vote online for the annual meeting, and complains that some do not even publish invitations to shareholder meetings.
‘IR web sites are taking on an increasing importance, particularly for small investors,’ says Mitchell. ‘If a company’s web site isn’t complete, it seems like either they don’t care about investors or they are inefficient. I don’t know which is worse.’
There’s only one solution here: make sure the information offered on your site is complete, and that you do everything in your power to follow best practice for online publications. Smaller IR teams may protest that they cannot afford to spend enough time on their online IR. ‘Easily solved,’ says Anderson. ‘There are many highly reputable companies to which they can outsource their online IR, while still ensuring that they maintain control over the content.’
Excessive cargo
‘Sometimes there’s too much information to plow through to find the things that are relevant for the analysis that I have to conduct.’ says Robin Asquith at Fleming. ‘It would be good,’ he suggests, ‘if I could customize the flow of information that comes through to me, so that I don’t have to sift through huge amounts of material just to find what I want.’
Mitchell from Brown Shipley concurs, ‘I’m looking for a one-stop shop where I can find analyst presentations, particularly on results day. These presentations are the single most useful tool I can find on a company’s web site.’
‘With more disclosure and increasing interest in corporate social responsibility, IR web sites have to be capable of organizing an ever-increasing amount of information in a way that investors can understand,’ affirms Wilson. ‘Sites must be designed to grow with a specific audience itinerary in mind, since they will be expected to give investors access to specific types of resource without wasting their time.’
The course ahead
For now, not many shareholders choose to receive annual reports online instead of a hard copy. Yet the development of online reporting could represent healthy long-term savings for companies since it can substantially reduce the amount spent on printing and sending out reports. ‘But to get more uptake, companies need to add more value,’ suggests Wilson. ‘The big challenge will be to convince people of this value. For example, if companies provided Excel versions of their financial tables online, this could prove a far more useful tool than paper versions of the same thing.’
Wilson predicts that within a few years, all public companies will make several years’ worth of reports available online, which will, among other advantages, facilitate comparison of dividend payments and share price performances over a number of years and between companies.
‘Even the best IR web sites, which are generally those with the most resources and internal support, have room for improvement,’ concludes Wilson. To start with, most are not yet particularly interactive, and they don’t encourage dialogue. According to FD’s Anderson, personalized web sites, which let viewers tailor the information on a customized company page, are the way forward. BP’s DataDesk is the first of such sites. Such innovations, he says, are steps ‘towards making your IR web site a more useful, interactive and customizable tool.’
Inspiration
Trintech, an Ireland-based supplier of secure payment solutions quoted on Nasdaq and the Neuer Markt, has received numerous accolades from investors following the recent upgrade of the company’s IR web site. According to private shareholder Bruce Ashmore, ‘The web site is one of the best around from an investor relations perspective.’ He explains the site is ‘clear and easy to use and follow. It contains all the relevant information, it’s up-to-date and it is a very presentable format.’
‘Our site is far more investor-friendly now,’ claims Ruth Cotter, IR manager at Trintech. ‘As our starting point for the redesign, we looked at the past winners of the Investor Relations Magazine Awards for best IR web site, particularly in the areas most relevant to our investor base. After exploring and analyzing their strengths, we tailored our web site accordingly, basing its development on what we considered to be best practice in our field.’
Trintech’s main priorities were to ensure the site is clean, crisp, well-organized and easily navigable. There are no frills to clutter the screen or slow down users’ computers. ‘All in all,’ Cotter adds, ‘we have a streamlined, excellently branded, stylish, one-stop shop packed with company information.’
Adds Breda Leonard, group head of marketing communications at Trintech, ‘Our new design has helped us to dramatically reduce the number of clicks on that back button.’
