A decade ago, conferencing via phone, video or web was the next big thing. Unlike so many next big things from the 1990s, however, conferencing has lived up to the promise. It was already spreading fast when Reg FD gave it the final push in 2000, making earnings calls and webcasts practically compulsory for public companies.
The technology didn’t stop there, though. With broadband internet now widespread, conferencing providers have been able to keep introducing new tricks. For example, web conferencing – or sharing documents and other files while speaking over the web – is being adopted by IR teams for internal company use, and firms are becoming more comfortable with webcast and teleconference add-ons such as Q&A queuing and online polling. With a variety of services to choose from, what are IROs actually using?
Valda Colbart, IR officer at Ohio-based Rurban Financial, is a client of Premiere Global Services and a fan of new web-based tools. Like practically all US IROs these days, she uses webcasts to supplement her company’s quarterly earnings calls. She also uses live audio and PowerPoint presentations on the web for internal communications. Colbart likes the real-time monitoring element now available for teleconferences: she can see who is signed in and listening, and who is waiting in the queue to ask questions. ‘Certain types of individuals ask certain types of questions,’ she says. ‘Queuing allows us to prepare. An investment banker might be next, and we know the type of question he or she will probably ask.’
Since beginning to use these services in 2002, Colbart has seen marked advances in the technology. She says conferencing services have been fine-tuned so they are now easier to set up and more user-friendly, with a greater number of options available.
Beyond quarterlies
Lawrence Spencer, director of IR at Idacorp, an Idaho-based energy company, is a typical conferencing user. He employs Shareholder.com for audio conferencing and webcasting five times a year, for quarterly earnings calls and the annual meeting.
The new generation of IROs is represented by Carol Miceli at Cambridge, Massachusetts-based Genzyme. She turns to Thomson Financial for webcasting more often than once a quarter, citing disclosure regulations as the main reason. She says webcasts should be standard practice for all communications with the financial community, so Genzyme’s analyst days, investor conference presentations and other IR events are webcast in addition to its quarterly calls and AGM.
‘On occasion we do special teach-ins for investors, showcasing additional information on a special topic of interest to the financial community,’ Miceli says. ‘We also provide video streaming for internal employee meetings, allowing the audience to see the speaker on the web almost in real time. It’s the evolution of webcasting – exciting and more interactive.’
Looking ahead, Miceli would like to see more accurate transcriptions; some vendors use automated transcribers, which can mean lots of typos. She also wants better audio quality, noting occasional interruptions or echoes – and she’s not the only one. Since suffering an interruption during one conference call, Gene Truett, vice president of IR and credit at Harsco, puts enormous value on call clarity. ‘It is so important to make sure a call doesn’t get interrupted, especially when you have your CEO, CFO and the rest of the senior management team, and you are presenting to the public,’ he explains. ‘Seamlessness is critical.’
Back to basics
That desire for quality is one reason some companies prefer simple conference calls and webcasts, and avoid special features. One of the biggest challenges service providers face is to keep developing new, interactive options while maintaining the seamlessness and clarity that IROs like Truett insist on.
Video webcasts, for example, are popular in Europe but hardly used at all in the US. Mary Jensen, director of IR at Essex Property Trust, a Palo Alto-based real estate investment trust, is sticking with plain audio teleconferences and webcasts. ‘We’re not into the newest, trendiest products,’ she says. ‘We like what works and has been proven to work.’ On the other hand, Jensen likes using multimedia features for internal communications such as monthly web conferences in which employees interact with the CEO.
Elizabeth Sharp, vice president of IR at Smith & Wesson, uses basic audio for quarterly calls, webcasts and internal company meetings, but she’s intrigued by the idea of video. ‘It would be terrific if they could stream video of investor conferences,’ she observes. ‘It really gives investors the opportunity to see the presenter in action and gives them one more connection with the company, one more sensory input.’
Jensen, who uses Thomson Financial and WebEx, salutes the progress in conferencing technology, but she thinks there’s still room for improvement in the visuals. ‘PowerPoint slides can take a long time to load, especially if there are complex graphics involved,’ she explains. ‘It could be very efficient to do some of our investor targeting right from our offices, with a nice presentation and investors able to see our CFO and CEO, instead of going on the road.’
Some companies see cost as an obstacle when deciding on multimedia enhancements to webcasts. Lori Owen, IRO at San Jose-based Xilinx, enjoys all the new features that have developed recently, but says high costs can make her hesitate to take full advantage. ‘I would like to see the price continue to drop as it still seems fairly expensive to me,’ she notes.
But technology can save money, too. Sharp sees webcasting reducing the cost of Smith & Wesson’s earnings call because it has reduced numbers on the dial-in teleconference and continues to reduce them as more of the audience switches to the webcast.
The latest buzz in conferencing is podcasting, which lets listeners download recordings to portable music players. But rather than setting the IR world ablaze, podcasting is being adopted slowly as an add-on distribution channel for the webcast. Companies are curious, especially considering the huge popularity of podcasting for mainstream media, but few have actually started using it for conference calls.
In fact, the availability of new technology is not an issue because conferencing companies keep producing innovations. Rather, the question is whether companies are willing to adopt the new tools. What matters is that there’s choice. The menu keeps expanding, and IROs can pick and choose, deciding over time what their favorite flavors are.
