Given the (on average) more affluent and educated masses on LinkedIn compared to Twitter and Facebook, and the fact that LinkedIn appears to be the preferred social networking site of registered investment advisors, it would appear that LinkedIn should be a prime target for IROs. However, we have not seen LinkedIn being used to the same effect as Twitter and even Facebook for public companies’ investor relations.
So the question becomes, how can a company use LinkedIn as an investor relations tool? Here are just a few ideas to get started:
- Ensure that your company profile is accurate and links to your corporate website and/or blog;
- Ensure key management profiles are actively and accurately maintained, and linked to the company;
- Have key management participate in relevant LinkedIn Groups where they can demonstrate their industry expertise;
- Have key management profiles include links to corporate social media sites (blog, Twitter, Facebook Page, etc.);
- Upload investor materials to management profiles; and,
- Most importantly, build relationships!
We have all heard the old adage, "it's not what you know, it's who you know that counts." In today’s age of social media and social networks like Facebook, Twitter, LinkedIn and others, many online networkers seem obsessed with how many friends, followers and connections they are able to show on their social media profiles. However, I am sure most would agree that “who you know” is far more relevant than “how many you know”. I would much prefer to be a part of a small but highly engaged network of professionals rather than having a “network” of hundreds or even thousands of people I don’t know.
The bottom line here: People with strong networks get more things done more effectively than people with large, loose networks with little in the form of member engagement.
Remember, to keep your network engaged, keep your connections up-to-date. Let your network know what you’ve been doing lately and have planned for the near term. Status updates on Facebook, Twitter and LinkedIn are great for this.
The majority of investors rely on some formal analysis when making their investment decisions. For public issuers, sell-side coverage is valuable for attracting investors who might not otherwise have you on their radar screen. Ultimately, the role of the sell-side analyst is to convince institutional accounts to direct their trading through the trading desk of the analyst's firm. Clearly, establishing formal research coverage should always be a priority for a public issuer.
The challenges for small-caps
In general, the sell-side focuses more on larger-cap companies, due, at least in part, to the larger flow of trading commissions. As a result, many smaller companies have fewer sell-side analysts covering their stock. In fact, obtaining sell-side research coverage can be one of the biggest challenges for small-caps.
While many small-cap companies try to make up for their lack of sell-side coverage by paying for research from independent providers, paid for research simply does not measure up. For starters, the credibility of paid for research is often in question (as companies might only post, or pay for, positive reports). In fact, according to research by Marcus Kirk
at the University of Florida, “paid-for analysts issue relatively less accurate forecasts and more optimistic recommendations than sell-side analysts.” Add to that, paid for research simply does not have the leverage of sell-side research – the sales force.Persistence pays off
It might be difficult and it might take considerable time to win the attention of the sell-side, but persistence typically pays off. To increase your chances
, in addition to strong business fundamentals, you need to make sure your investment proposition is compelling and effectively communicated to the right audiences. Simply put, the investment in a well-executed investor relations strategy with an emphasis on building relationships with the sell-side is time, money and effort well spent.
You have a day full of investor meetings planned and you just finished several hours updating your PowerPoint presentation and have now sent it for printing. Like in the past, you were planning on uploading the slide deck as a PDF to your website following your meetings to share with other investors; however after all that time and effort, you wonder what else can be done to maximize the return from your investor presentation. How can you expand its reach?
For starters, rather than uploading the presentation to your website as a PDF, upload it instead to SlideShare.net
and embed the SlideShare presentation into your website. Then use Twitter and an email blast to your distribution list to let people know that your presentation is available on SlideShare and your website. Why SlideShare?
SlideShare is the world’s largest online presentation-sharing site with over 55 million visitors and 120 million presentation views per month. Uploading presentations to SlideShare is quick, costs little or nothing, and allows presentations to easily be shared or embedded almost anywhere online. The popular presentation sharing service, is becoming an increasingly important way for investor relations departments to publish their investor presentations, fact sheets, annual and CSR reports, and corporate videos. Add a synchronized audio recording
Augment your online presentation further by making an MP3 audio recording when you deliver the presentation. Then, upload the MP3 file to SlideShare, link it to your presentation, synchronize the audio with your slides and viola, you have a slidecast!
In today’s environment of increasing scrutiny of publicly traded entities, it can be advantageous to post corporate governance information on your website where it is easily accessible to the investment community.
Transparency is a cornerstone of credibility
For many investors, the strength of a company’s leadership team will be a key investment criterion. While posting management and board biographies is a good way to introduce the people involved, biographies do not provide much insight into how critical decisions are made and/or disclosed. In addition to listing all of the directors and providing their bios, best practice is to include details of key charters and policies (or, preferably, the actual charters and policies in their entirety).
Your website should be a convenient source of information for investors
Rather than asking investors to search for corporate governance materials elsewhere on their own, or making them leave your website by providing a link to SEDAR, these materials should be included directly on your website. Moreover, corporate governance information should be easy to find through the company’s website navigation, and preferably be included in the main navigation. Investors will appreciate the convenience afforded and, as an added benefit, you keep them on your website rather than losing them to a third party site.
Looking for more visibility for your company’s website? Or perhaps you’re in the process of developing a new site and you want to make sure it gets noticed. While you may have heard of advertising or otherwise paying for improved search engine results, the obvious, and often overlooked, strategy to improve your search engine rankings is to focus on organic search engine optimization.
Organic SEO is the process of improving the visibility of your site’s search engine rankings via natural or unpaid for means. Organic SEO typically involves improving the content, infrastructure, or other technical elements of your site.
This means that when writing copy for your website you should give strong consideration to how your content might influence search engines finding your site. This is especially important when writing copy for your site's homepage or front door.
Search engines use the content of your homepage to determine what your website is about. Search engines then use this information and match it to 'search phrases'. So in writing your homepage you need to consider what search phrases might be used by someone trying to find a website similar to yours. In addition to copy rich in keywords, you need to give consideration to URLs, headings and sub headings, blog post titles and internal links.
Investing in a social media strategy provides returns in the form of improved SEO
Google’s crawlers love websites that have lots of inbound links. This is one of the reasons why social media can be such an important element of your online marketing efforts. In addition to the ability to better engage customers and other stakeholders, social media can (and should) result in lots of inbound links to your website. In short, the more people love your content, the more Google will want to return those results in the search engine results pages.
If you haven’t heard this already, content is king. Well, content is what drives the web at least. In general, the more useful and interesting your content is, the more effective your website will be. Content is what informs people, and search engines, about the purpose of your website and the expertise your company has on a particular subject matter. As such, you would expect companies to place a high emphasis on developing well-written, strategic content for their website.
Unfortunately, many companies, especially smaller businesses, tend to underestimate the power of well-written website copy – almost as if they view text as just something used to fill in the white space between images and other media. In such cases, content tends to be poorly written, full of spelling errors and grammatical mistakes, and it’s simply not compelling (let alone strategic). How then are these websites supposed to be effective at winning over (or even attracting) your target audience? [Yes, this is a rhetorical question.]
If you want to create value and drive traffic to your website – if you want your website to be an effective marketing tool for your business, products or services – you have to place a lot of value on your content. Following the ten tips below is a good starting point:
1. Begin with a plan. Brainstorm, conceptualize, strategize;
2. Keep you target market in mind. Keep the content relevant to them;
3. Write effective headings – with visitors and search engines in mind;
4. Be concise and to the point;
5. Start paragraphs with conclusions, then elaborate;
6. Use action words and calls to action;
7. Avoid using jargon or complex language;
8. Keep content current / fresh;
9. Make your content unique; and finally,
10. If you’re not a good writer, find or hire someone who is.
No communications strategy is complete without a digital component. In fact, online networking should be an integral part of any marketing plan these days. However, the skills needed to make a splash with social media have yet to be mastered by many small businesses. As a result small business suffers.
Among the challenges for small businesses are figuring out how to use social media strategically and finding the time to keep their fractured audience engaged and their profiles updated. Content is king! But many small businesses find it hard to come up with enough content for their social media presence.
At Heisler Communications, our aim is to help clients build awareness and profile while achieving deeper levels of engagement with target audiences. Our services range from developing digital communications strategies and content production – to website design and development, multimedia marketing and strategies to leverage the potential of blogs and social media.
A quality investor relations website is a valuable dissemination tool that can inform and influence opinion. Given the size of audience that it is possible to reach, it pays to develop the most content rich site possible. Having rich, up-to-date content is key to building a quality investor relations website. The most oft cited frustration for online audiences is out-of-date information. Posting new content as soon as it is available, periodically reviewing all content for relevance and checking links to ensure that older information is still accessible are all ways to increase user satisfaction.
With increasing competition for investor dollars, a robust, user-friendly IR section can support the generation of new interest in your company while at the same time ensuring that existing shareholders have quick and easy access to the information they require. A quality IR website can also “level the playing field” among issuers as it is relatively easy (and relatively inexpensive) for a smaller issuer to provide the same level of information to investors as a larger one.
The website and all other electronic disclosure media should be considered an extension of your normal disclosure practices and are therefore subject to the same laws, rules and regulations. At least in Canada, the corporate website is not a substitute for regular continuous disclosure through an approved newswire, but rather an adjunct to proper disclosure practices. The IR section should provide a constant flow of valuable supplementary information to all investors on a regular basis, keeping them well informed and allowing them to make quality investment decisions. Best Practices for Publishing News Releases to IR Websites:
In today’s world of instant, or real-time, information flows and with the corporate website being a go to source for the latest, verified information on any given company, more and more listed issuers are incorporating automated, real-time news release publishing to their sites. Manually uploading news releases to the website results in delays to publishing, or worse yet, omissions. Delays and omissions provide the wrong message to investors and other stakeholders – that your website is not the best place to look for the most up to date information on your company. Leading IR website vendors such as Q4 Web Systems
, DisclsourePlus and others make automated, real-time news release publishing a cinch. You can also purchase the feeds for your releases direct from most newswire services.
In addition, we recommend posting all of an issuer’s news releases on the website and that releases be archived for at least a year. Archive releases by year, using specific links, rather than providing one large list that takes a long time to search.
The experience, track record, and perceived competency of a public company’s management team plays a crucial role in the investment decisions of most investors. Management is not only judged based on its performance, it’s judged based on how well it communicates that performance. This communication is a primary contributor to management’s credibility.
Credibility takes time to develop and also requires building and maintaining relationships with key stakeholders in the investment community. If relationships with these key stakeholders are part of the foundation for credibility, then every time a company communicates with these key stakeholders is an opportunity to either build, or erode, credibility. Management should adhere to five simple rules to ensure that as many of these opportunities as possible result in building, maintaining, or restoring credibility.
Rule #1 – Manage expectations
It sounds simple: Never promise what you cannot deliver. Managing the expectations of the investment community is integral to building credibility. When not managed properly, share prices can be quite volatile. Managing expectations involves knowing what to say, how much to say and when to say it. Management needs to be aware that there are benefits and risks to providing or not providing varying amounts and certain types of information to the ‘Street’. For example, providing limited and/or unspecific information provides flexibility, but may not satisfy investors’ needs in terms of measuring your performance.
Rule #2 – Set milestones or objectives
Investors require road signs beyond basic financial measures to gauge a company’s performance, especially for a smaller company, whose financial results may fluctuate or take time to develop in its early stages. Management should clearly articulate its company’s corporate milestones and other objectives within the context of the long-term business strategy to allow investors to measure their progress. With every successful achievement of a milestone, a management team builds credibility in the eyes of the investment community.
Rule #3 – Identify key performance indicators (KPIs)
How is an investor to properly evaluate the potential of a company if he or she does not know how management itself measures the Company’s success? Management should publicly communicate those key measurements that, in its mind, reflect their company’s performance. By disclosing these key measurements, known as key performance indicators (KPIs), management not only demonstrates that they really understand their business, but also provides a framework for investors to keep score from the sidelines.
Rule #4 – Be forthright in all communications
In both good times and in bad, it is crucial that management be forthright in all communications. When things are going well, communications should relate successes to milestones, key performance indicators, and execution of strategy. When a company encounters rough waters, more than at any other time, management should maintain open lines of communication, disclosing the issues, the rationale behind them and the action plans to rectify them. Companies should have well-defined crisis communications plans to ensure that the company’s executives know what to do and how to properly respond when bad news hits. Responding inappropriately during a crisis can cause irreparable damage to credibility.
Rule #5 – Provide consistent messaging
Companies have a broad range of stakeholders with which they communicate with every day – investors, analysts, suppliers, customers, and special interest groups to name a few. All company spokespeople, whether designated investor relations spokespeople or frontline workers, such as customer service representatives or sales staff, should be delivering consistent and clear messages. Inconsistent communications can cause confusion in the marketplace, posing a significant risk to credibility. A Company should have a disclosure policy in place outlining a limited number of specific people who are responsible for communicating with the investment community and financial media, with unambiguous guidelines for communications by others in the organization.
A strategic investor relations program is required to effectively build, maintain, or in some cases restore, credibility as well as to effectively convey and increase the general awareness of a company’s business prospects and strong growth opportunities. Strong management credibility can result in a higher valuation relative to peers – as the investment community attributes greater value to the likelihood of strategic growth initiatives being successfully implemented. Adhering to the five rules outlined above will help management shape the opinions of key audiences and preserve investor confidence.