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How IROs Leverage Digital Technology



How IROs Leverage Digital Technology

Marketwired recently participated in IR Magazine’s West Coast Think Tank, an invitation-only forum where senior investor relations officers congregate to discuss timely topics. In the process of preparing for the event we discovered a few ways that the IR community is using digital technology to more effectively reach and engage investors, shareholders, analysts and target media.

Playing to a visual world

More and more, IROs are incorporating photos and video into their IR websites and using infographics to emphasize important data in their earnings reports.

Driving this visualization trend are two key factors:

  • Our brains are programed to recall visuals at a faster rate than any other data. Humans generally lose concentration after eight seconds because of the increasingly digitalized lifestyle we live. It’s also difficult to filter out irrelevant stimuli – people are more easily distracted by multiple streams of media. In fact, the ability to multitask has increased dramatically in a digitalized world.
  • Visual content on Google and other search engines – images, video and other multimedia elements – tends to gain higher placement because it may act as a quality signal. In particular, YouTube videos are given preferential treatment (possibly because Google owns YouTube).
Plantronics incorporates videos of featured products on its IR website to draw in and engage visitors.

Plantronics incorporates videos of featured products on its IR website to draw in and engage visitors.

Salesforce uses infographics to highlight important points in its earnings reports.

Salesforce uses infographics to highlight important points in its earnings reports.

Last year IR Magazine featured an article on how public companies are bringing their earnings releases into the infographic age and predicted the start of a major trend in visualizing financial reporting. The article states: “This new approach offers a company new tools to put its numbers and commentary in an easy-to-understand context, drawing the most important figures from the P&L statement or balance sheet to front and center. A more graphical framework also allows companies to give greater focus to management quotes, guidance, key accomplishments and important strategic initiatives. In short, these new visual releases are an opportunity to rethink an antiquated and conventional form of financial communication to make the information more readily readable for fast-moving financial press, investors and other constituents.”

Leveraging social media

For some time IROs have been monitoring social media to find out what analysts, shareholders and other stakeholders are saying about their brand and industry. Using social channels to gain market intelligence is one thing, but most public companies have shied away from being an active participant to avoid risk from a legal and regulatory standpoint. Still, in 2013 when the SEC first issued guidelines for new disclosure rules that allowed companies to use Facebook, Twitter and other social networks provided they meet specific requirements, there were some early adopters. Although the number of IROs using social channels are growing, for the most part public companies have not embraced social media for material disclosure. But many are using Twitter and other social sites to invite shareholders and other stakeholders to their earnings calls, inform them of the availability of earnings releases and encourage them to share financial results.

Here are some of Cisco’s tweets leading up to and supporting its Q2 FY16 earnings call:

Cisco uses Twitter to promote its Q2 FY16 Earnings Webcast.

Cisco uses Twitter to promote its earnings webcast.

Cisco announces when it will begin sharing highlights and links to its press release.

Cisco announces when it will begin sharing highlights and includes a link to its press release.

Cisco tweets its revenue highlights.

Cisco tweets an image of its revenue highlights.

Technology is transforming investor relations

There’s no question that digital technology is slowly but steadily transforming investor relations. From incorporating photos, videos and visual data on mobile-friendly IR websites to make the investor experience better to using social sites to broadcast breaking news and facilitate information-sharing, digital technology has ushered in a new era of investor relations. In fact, the way a public company represents itself on its website and on social channels can be a competitive differentiator that impacts how investors and the financial community view it as a potential investment.

 


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