The Web offers the Investor Relations team an opportunity to appeal directly to their target audience. According to an investment bank sector analyst quoted in the London Stock Exchange's Investor Relations Best Practices Guide, "The first port of call for a trader, analyst or investor is generally the website of a company and they all expect to get information from that website at the same time as the newswires publish the information."
The Securities Exchange Commission (SEC) here in the United States is echoing and facilitating this view. On July 30, 2008, the SEC released new guidance on how companies can comply with Fair Disclosure Regulations (Reg FD). SEC Chairman Chris Cox called the new rules, "a big step forward for investors."
Based on the new SEC guidance, "If a company's website is RSS enabled and it releases financial information and any other material information through that website, that should satisfy the new Reg FD requirements. This is because financial analysts and investors can opt-in and subscribe to that information via RSS news readers or choose to have that information emailed to them as soon as it is published. Companies will be able to save considerable amounts of money in bypassing wire services where the cost of a single release can be upwards of $1,200 and often more," notes Tom Formeski, Silicon Valley Watcher and former Financial Times journalist.
According to IR Web Report, "The SEC's move is significant because it can cut disclosure costs for companies that today use paid PR wire services to distribute their disclosures. It could also encourage companies to make investments to improve their investor relations websites and facilitate the use of blogs for communications with investors."
As OpenCrowd's accompanying chart shows, this should quickly cause Investor Relations sites to move from Archives to becoming much more of a Hub that consolidates key information, views and opinions about the company and at the same time offers investors options to interact with that information in the form of comments and discussions. The SEC is encouraging this view by noting in their recent guidance that "while companies and their employees are liable for information they post on blogs or discussion forums, they have no duty to correct inaccurate information posted in comments on their site by third parties."
Once information and views are effectively presented and managed via an Investor Relations hub, there is likely to be a rapid evolution to having sub-sets of information distributed out via the web to social networking sites like Twitter, Facebook and iGoogle. According to Universal McCann, content consumption outside a company's website is up 153% in the first 9 months of 2008 and 53% of online users are consuming information outside a publisher's site. This is prompting companies to create strategies around how to manage their brand via the Web and a key tool in this emerging area is the "social media release" – an update on the traditional press release that is specifically geared at "streaming" a company's information to the points of widest consumption via syndication technologies.
Over time, the role of the Investor Relations team is likely to move beyond just presenting and distributing key information about the firm to shape the market's perception of their brand and they will instead, become the curators of both their own and the world's view of their company. Embeddable code, "vine" technologies and tag scraping will enable them to scour the web to "harvest" content and views and use that to create more robust communities, discussions and brand associations.
To learn more about OpenCrowd's view of Investor Relations Website Evolution, please contact us directly at to request a copy of our white paper and/or set-up a discussion about how you can leverage our insights to become a market leader in this space.
