Getting e-help

Perhaps your company plans an IPO and IR is a top priority in a brand new world. Maybe your firm threw up a corporate site a few years ago to capitalize on product sales while IR was given short shrift. Maybe a clever teenager does it for you. Maybe you don't even have a web site. Or maybe you are new on the job but you already know the power of the web.

You know, for example, that many investors, large and small, expect to use the web as a primary source of information. You know you can leverage the technology to help you do your job faster and cheaper. Importantly, you know a comprehensive IR web presence means you'll be repeating yourself less often.

Where to start? In many cases, it is the providers that are hunting you down. You may have met personalities who can create a brilliant corporate site, but think 'IR' is a self-help club. 'First, you need someone who understands IR and second, who understands this powerful medium,' says Martin Flaherty of Elemental, an Atlanta-based interactive communications consultant. 'It has changed the world. Just look how many people went to the internet to get the Starr report.'

Before you shop around for a web site provider, of course, you'll need to convince senior management it would be a worthwhile expense. Often, management perceives concrete expenses but nebulous benefits. 'Changes can be easy to feel but harder to quantify,' says Marc Bivona, vice president of interactive media at VCG. 'There is indeed a learning curve, and extra upfront expense, but rewards can be found down the road.'

To start with you can tell them you'll have more money managers and analysts following your company. Since CEOs are often large shareholders, that translates into dollars in their pocket. Analysts, especially, are hounds for information. You can be sure if you give them something that is valuable, they - or their underlings - will use it. Moreover, the web lets you do global IR 24 hours a day, seven days a week. An up-to-date site allows you to project a positive image to the investment community.

Next up, you can argue that a decent IR web site will cut costs and save time. Shareholders can choose to receive press releases, annual reports and other financial data online rather than getting them in the mail. 'Anyone who gets information over the web is not taking up staff time over the phone,' says Robert Wheeler at the Dallas-based Investor Relations Group. 'You can reduce the cost of printed material, postage and faxing by fulfilling information needs electronically.'

If all of that fails, you might wish to casually note that in a proxy contest, your company's viewpoints will be disseminated fast and efficiently. That usually does the trick.

Once you've got the go-ahead you'll find that service providers come in all sorts of sizes and shapes. Some are web design experts, others specialize in corporate design and can provide a web site. Some site designers concentrate on the IR component alone. Some offer 'outsource solutions' including a range of auxiliary IR products. Some can 'host' your site, while others use a third party vendor. And, of course, you can still consider complete development and maintenance of your site by in-house IT personnel.

When Julie Lorigan left Digital Equipment to assume the newly-created position of IR director at e-commerce software maker Open Market Inc, she had to be decisive about which IR functions could best be handled in-house and which should be farmed out. 'A good group managed the corporate web page, but I needed someone to focus more readily on IR information,' says Lorigan. 'It takes a lot of time to make a good IR web site. It helps you stay fresh, both technically and creatively, to have somebody dedicated to helping you manage the process.'

Consider your goals, too. Basically, you want to help shareholders while saving your staff time. But try to define your target audience. Find out what different firms can bring to the table to fulfil your mission. Once you and your provider agree, its time to flow-chart the project and nail down pricing.

Two great expectations

Over the last year, investors have come to expect instant and comprehensive information via the web. 'Nothing is more noticeable in a room than a cobweb,' remarks Rob Adler, president of Corporate Communications Broadcast Network (CCBN). 'Keeping your web site current brings with it challenges as well as rewards. You must have your act together. In many ways, you will be judged on your act.'

A good web site makes IR departments the direct source of immediate and unfiltered information. 'A credible site allows the company to be on a par with information sources such as Bloomberg or First Call,' adds Adler.

'Many investors use the web as a primary source of information about a company,' agrees Michael O'Brien, account executive at Shareholder Direct, which includes web sites among the range of investor relations technologies it offers. 'It is vital to get your press releases on the web fast.'

Push technology is the second growing trend. Investors expect to use the internet to add their names to a mailing list and be kept aware of press releases. 'As these and other transitions take place over the next year or two, it will completely change the way IR is done,' says Robert Colt, vice president of web information specialist StockMaster.

Lots of providers are sinking plenty of money into the bet that the internet is a potent IR tool. Professionalism in the field is growing. In the meantime, IR directors can count on a growing list of providers eager to show off their silicon.

An IR site's design considerations differ somewhat from the rest of the corporate site. Investors want detailed information and they don't want to namby-pamby around to get it. No spinning logos, please. Just fast downloads.

'People searching an IR site don't care if it's pretty,' says IRG's Wheeler. 'They just want to get information. If you go into too much design trickery, investors won't come back.'

Design includes navigation - your site's organization and presentation. In other words, how investors will experience what you have to offer. 'The fact is, your IR web site will give far more an impression about your company than anything else you do as an IR director,' claims CCBN's Adler. 'Have it complete and easily navigable.'

'IR-related web sites may have every single piece of information you need,' remarks Ross Felix at Admaster Communications in New York. 'Unfortunately, if it takes you 15 clicks to get it, you will simply waste money and put off investors.'

Felix is also convinced that investors want a plethora of links. 'If they know they can come to your site to access other sites, such as Edgar, you will get more traffic. It gives them value to come to your site in addition to the actual content you have provided,' he says.

CCBN's Adler sees it differently. 'Don't link out,' advises Adler. 'You have gone to a lot of trouble to bring the user to you. Don't send him across the street to go to the bathroom. He might not come back. There is no reason why you cannot have, for example, SEC filings within your own site.'

Do's and don'ts

Finally, here are a few do's and don'ts for those looking to get started for the first time or upgrading their sites this year.

o Do make sure your server fits your requirements. Your server is the computer where your site is 'hosted'. The choice is important because it can have a major effect on speed of access. You can host your site in-house with trained personnel and securities precautions. Or you can have a 'facilities managed server'. Both solutions are relatively expensive.

A less expensive option is sharing bandwidth among many sites. 'This can be fine if your site has little functionality and you just want to post information,' says Freddie Veres at London-based Interactive Bureau. 'The downside is that if any one of the other sites sharing your space suddenly experience a lot of traffic, the pipe closes down to a trickle.'

o Do be consistent. Make sure the design and content of different mediums (annual reports, brochures, web sites, etc.) is the same. 'Often, a company's internal IT department develop the web site,' notes Jo Sumner at London-based consultants CGI. 'That's fine, but remember you must also get across your branding and corporate values.'

o Don't assume web site production stops the day you finish the initial site. It's just beginning. Maintaining the site, whether in-house or beyond, requires dedication. Get your information strategy in order and make sure you have the resources to maintain the site.

And finally...

o Don't allow your web master to bully you off the home page. Ensure there is a direct link from the home page to the IR section - clearly marked, say, 'investor information'. Ironically, Oracle Corporation's award-winning site makes it difficult to find the IR section, listing it off the main page under 'corporate information'. On the positive side, however, Oracle clearly highlights its latest financial release on its home page.