Advisory intelligence: Nasdaq’s ConnectIR sees use surge as investor relations goes virtual
This year several IR trends – from changes on the sell side as a result of Mifid II to greater competition for capital and an increasing focus on ESG – combined with a global pandemic, pushing a traditionally tech-cautious IR community to really embrace the online tools at its disposal.
As Covid-19 swept us all into a virtual world, James Tickner, assistant vice president and head of product and analytics at Nasdaq IR Intelligence, says the firm’s Nasdaq IR Insight platform – which saw its ConnectIR feature added in 2019 – has seen a real spike in use.
'What the 2020 pandemic environment has done is really accelerate some of the existing trends,' he explains. Talking about the increase in users of Nasdaq’s IR services, he says this is 'certainly driven by virtual meetings, by companies wanting to connect directly with investors and analysts to manage the whole promotion, scheduling and measurement of events.'
To give an example of the sort of traffic surge he’s been seeing, the company’s ConnectIR service, designed to help manage event scheduling and participation, saw a 23 percent increase in active users in Q3 2020.
Some tech caution remains, however – and 'quite rightly,' Tickner says, adding that this can be seen in the way tools are used. 'A lot of companies are getting comfortable with [ConnectIR] for post-earnings meetings or sell-side events, for example, before they use it for marketing to non-holders.'
What many companies are looking for when they begin exploring new tech tools is an increasing level of sophistication around their IR program strategy, Tickner explains: 'Companies want to be more sophisticated in how they manage their contact base, and how they manage their executives’ time with those contacts.'
Nasdaq is conscious of the way data use is evolving and the different ways companies want to analyze information. 'It’s likely IROs are going to want to combine some of the context we have as a result of working with over 3,000 global issuers, with their own in-house or proprietary information [in the future],' notes Tickner.
The firm is already taking steps to offer greater integration, with some examples clearly driven by 'new normal' trends. For example, ConnectIR now integrates directly with Zoom. It also offers an Excel add-in for those who prefer to work in a Microsoft Office environment or alternatives for those who prefer a more visual dashboard, while recommendations from Nasdaq’s Strategic Capital Intelligence team are also integrated into the platform, for a more streamlined targeting process.
These recommendations stem from a targeting strategy Nasdaq offers its clients, with recommendations for 'the right firms, and specifically the right contacts, for you to engage with over the coming year,' for example, as well as in-platform tools. The natural question for many companies afterwards is: how effective was that?
'When it comes to measurement, the key thing to look at is the relationship over a period of time, rather than the impact of single meetings because often they form part of a larger campaign to bring a certain investor in,' says Tickner.
Nasdaq does have numbers on the typical return on investment when it comes to meetings, however. 'The average successful campaign with a prospective investor typically constitutes two meetings, one of which includes management, and buy-in should be expected within two quarters,’ says Tickner. ‘But for some of the large global firms, for example, we often see up to six or seven meetings with a company prior to it initiating a position.'
This sort of analysis is useful internally to the IR team but is also something IROs can share with senior executives who want to understand how effective their time is when out meeting investors, he adds.
In many ways, understanding the data concerning your company and where your IR team and executives are focused shows that companies are waking up to how investors already treat data – and ESG is a great example of this.
'So many on the buy side are going out and retrieving ESG information – they are scraping it themselves,' says Tickner. 'They are modelling it in their own way so that it is proprietary to them and, for companies, it’s sometimes difficult to understand how that differs from some of the ratings that are out there.
'Companies [now] want to understand what data points investors are looking at to assess them and Nasdaq assists in a number of areas from benchmarking disclosure through to ESG targeting and the messaging and dissemination of data.'
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