What Makes for Effective Investor Relations Sites? Part 38: Make the Investment Case
February 15, 2011
It’s a curious thing, but most company investor relations sites do not come right out and state why you should invest in the company. In marketing terms, most sites engage in what can be referred to as a “Soft Sell” where they lay out information for the visitor and allow the visitor to come to their own conclusions. This is a perfectly valid approach, but in certain circumstances a more direct approach may be more effective.
When a company devotes a page on their investor relations site to making the case why investors should invest in their company, they are really telling the investor what they think is important about their company. This is valuable information as it allows an investor to quickly see if the company’s priorities line up with his own. For example, set out below is the “Why invest” page from Aviva, the insurance company. As you work your way through their statement, you quickly get a sense that cash flow, diverse offerings in a large market, growth and increasing dividends are where they put their emphasis. It is a good example not only of what the company offers for investors, but also of the way the company will run its business.
At this point I should point out that it would be unusual to see such forthrightness on an American listed company’s web site. This is because under the United States legal and regulatory scheme, companies are not allowed to make a solicitation to either buy or sell a security, unless that solicitation is either preceded or accompanied by a prospectus.
As a result, most companies choose not to venture into the regulatory tar pit that might expose them to claims of soliciting for the purchase or sale of their securities. It’s yet another example of the unintended consequences of well meaning regulation.
In this series:
Previous post: Search
Next post: Differentiation
What Makes for Effective Investor Relations Sites? Part 37: Help Your Visitors Find What They Are Looking For
February 9, 2011
I suffer from what some people think of as a typical male problem: I hate to ask for directions. Fortunately, in the case of travel directions, GPS technology has cut down on the number of times I look like a complete idiot by getting lost. Unfortunately, I haven’t overcome my aversion to asking for directions when it comes to looking up information on a computer.
There are perhaps a number of reasons for this, including preferring the thrill of the hunt in chasing down the exact piece of information I’m searching for and, the belief that if I have to work for the information, I’m more likely to remember it.
However, I think there are probably more deep-rooted psychological reasons at work as well. In my youth I had to devote a lot of time and effort learning how to comb through card reference cabinets in libraries using the Dewey decimal system. Not only that, but when I got to college, they changed the library reference system to something called the Library of Congress classification system and I had to spend more time and effort learning that system. So I have a lot invested in the manual search method and even though it’s now forty years later, I intend to get a return on my investment. Besides, in the old days, where you could get help in your search was at the reference librarian’s desk, and the reference librarians that I dealt with always seemed to be rather imposing ladies with thick glasses who I was afraid would look down their noses at the things I wanted to look up.
So I continue to be weighted down with the baggage of my youth when I search for information about companies on their investor sites and would rather spent fifteen frustrating minutes searching for information than let a computer do it for me.
Fortunately, younger people who have grown up with computers (and people less bull-headed than myself) are not so handicapped and will gladly use a search function. So placing an investor specific search function will help site visitors find what they want quickly. Many websites have general search functions for the entire web site that can be helpful, but often they will return far too many results and you find yourself no better off than if you had pursued the manual search method. A better solution for finding financial information is a function that focuses only on the investor area of the web site.
One site that has an investor specific search function is Dell, which I’ve set out here.
One of the interesting things the Dell search function does is to allow you limit your search by content type, report type and year. If you were looking for something very specific, such options would allow you to home in very quickly on what you were looking for.
Even an old-timer such as myself might be lured into using it.
In this series:
Previous post: First Impressions
Next post: Investment Case
What Makes for Effective Investor Relations Sites? Part 36: First Impressions Matter
February 2, 2011
There is an old saying that “You never get a second chance to make a first impression”. As if that weren’t a daunting enough thought, the journalist Malcolm Gladwell, in his book Blink: the power of thinking without thinking claims that people make many important decisions within the first two seconds of viewing an object. The implication for investor relations web sites is clear: the first view a reader gets of the investor page is crucial in how they will think about the company as an investment.
First, a word of caution: Investor relations sites operate under the constraint of having to use the overall design criteria for the firm’s entire web site, so visual ‘look and feel’ are not what I’m referring to here. Rather my concern regarding first impressions relates to the completeness, logic and clarity shown on the initial page.
There are many ways to go about this, but one I like is the Investor home page of the Intercontinental Hotel Group.
As seen here, the first page has a menu on the left hand side that not only lists standard items such as share price, news and financial information, but also has sections on IHG in depth, About the hotel industry and Definitions. Parts of the page are also devoted to the firm’s hotel brands, most popular investor information sections and a brief description of the firm’s strategy.
To me, it makes a great first impression; everything is where you can find it, not a lot of hunting is involved and it seems pretty logically laid out. The icing on the cake is that it goes beyond the mere requirements of regulations in discussing the company, its brands and strategy.
My conclusion is that this is a well thought out investor home page, although I will confess that it took me more than two seconds to come to that conclusion (sorry Malcolm Gladwell).
In this series:
Previous post: Acquisitions and Divestments
Next post: Search
What Makes for Effective Investor Relations Sites? Part 35: Acquisitions and Divestitures
January 24, 2011
When you attend a baseball game in the United States, one of the ritualistic sounds that greets you as you enter the ballpark is something along the lines of: “Scorecards! Get your scorecards here! You can’t tell the players without a scorecard!” When you succumb to the vendor’s pitch and get your scorecard, you find that you can understand and follow the game better. The reason I bring this up is that for some companies, you really do need a scorecard to understand the current composition and operations of the company. This is because the operating units that comprise the business today may not be the same as they were two or three years ago.
I am speaking here of companies that regularly engage in the acquisition and divestiture of businesses. Not all companies fall into this category, as many companies grow primarily through organic growth. However if you have ever tried to understand the income and balance sheets of companies that frequently buy and sell parts of their businesses, you know that it is very helpful to have a cheat sheet detailing what occurred when. Otherwise you can find yourself looking at a year when revenues rose 25%, assets grew by 15% and debt took an exponential jump with no clear explanation at hand. It can be a very frustrating experience. For such companies, a listing by year of the major acquisitions and divestitures engaged in by the company can go a long way towards helping the diligent investor understand the company’s past performance. Such a listing can also offer other insights, as it can show the astute investor where the company is choosing to expand and cut back.
There doesn’t seem to be a standard spot for listing companies bought and sold. ENI, the Italian energy company, places their listing within the strategy section, while Tyco chooses to discuss the topic in its history section. Both approaches are set out below. As long as an intelligent investor can find the information, I think that is all we can reasonably ask for.
 |
 |
| click images to enlarge | |
In this series:
Previous post: Video
Next post: First Impressions
What Makes for Effective Investor Relations Sites? Part 34: Video
January 10, 2011
I heard a startling statistic the other day; every minute, 24 hours of video are uploaded to YouTube.
When I tracked this down on the YouTube web site, I discovered that not only was the statistic correct, but that 2 billion videos a day are watched on YouTube. I confess to being shocked as I rarely look at a video uploaded to the web. This may be because I spend my day looking at financial web sites and not sites devoted to funny videos about pets. But it did spur me to thinking that perhaps the future of investor web sites should incorporate more video. There is a saying on Wall Street that “You need to feed the ducks” and what the ducks seem to enjoy these days is video.
So I went off in search of finance related videos on investor web sites that went beyond merely running a video camera during the annual meeting or the latest analyst presentation. It was somewhat like hunting for truffles in that I had to nose around a bit (I did not have to use a pig, however), but I managed to come up with a couple of interesting examples.
Dell uses video not only to have their chairman introduce things, but also to feature periodic interviews with management about a variety of topics ranging from quarterly results to business unit strategies.
The videos are usually posted on their investor relations blog, Dell Shares: this is a screen capture of their video featuring a discussion of their storage strategy.
Another company that does a good job with video material is SABMiller, the brewing company. I found that SABMiller had an extensive collection of videos, 147 in all, in the presentations section of their investor site. The subjects of the videos ranged from interim results discussions to interviews with the management team to analysis of the markets for their beers.
In fact, they have so many videos available that they separate them into topic for the viewer to browse, as you can see from the screen shot.
With the technologies and bandwidth available to investor web sites these days, it seems that more companies should be making information available in this manner.
In this series:
Previous post: Management
Next post: Acquisitions and Divestments
Copyright (c) 123RF Stock Photos
Get our updates
 |