How to float above the crowd

Companies looking to launch themselves on the world’s stock markets need to get the fundamentals of their website right to win investors over, David Bowen says.

Featured sites

Rusal, Suek, Metalloinvest, ProfMedia, Metallurgical Corporation of China, Ausnutria… not the best known companies in the world, but interesting because they are all Russian or Chinese groups that either have or plan to launch themselves on the stock markets. The Initial Public Offering (IPO) market is booming, with countries such as these outpacing the developed world.
What are they doing on the web? and what should they be doing? The answer to the first is ‘something’; to the second, ‘probably not enough.’
The discussion may seem rather old-fashioned in a world of social media, e-books and goodness knows what – but it’s critical. What is the role of the investor area on a corporate website?

Comply or fry

When the business web was developing in the mid- to late 1990s, investor relations folk got all excited about it. They saw they could use sites to make critical announcements simultaneously around the world – something the regulators were demanding in their fight against insiders’ advantage.
If you talk to IR people now, this is often still their focus – the great terror is that technology (or the web manager) fails them and a critical announcement is not put out on time.
The problem with this emphasis on defence against the regulators is that the broader benefits of the web can too easily be put to one side.

Think customer

First, within the investor relations area, be driven by what your stakeholders need, not by what the regulators tell you. Obey the rules, of course, but also work out who you really want to talk to and treat then as customers – just as your colleagues in marketing would.
Go further, try some market segmentation. Who are these ‘customers’? Bowen Craggs uses three groups (though there can be more): analysts who know the company, analysts researching it and individual (private) shareholders. We know that the first group needs easy access to historical data, the next comprehensive background, the latter a friendly and practical service. So give them what they want.
Second, do not let your whole website be by driven investor relations, because it will both miss its main targets and be deadly dull. West European and US companies started this way in the 1990s, but have realised since that they are wasting an invaluable asset. Jobseekers and customers usually make up the big visitor numbers: it makes sense to serve them first. Institutional investors and analysts are individually vastly more valuable, of course, but their small number means they can be steered quickly to the information they need, rather than be indulged all over the site.
Do not, in particular, let your home page be dominated by press releases aimed at investors and journalists. They will get them anyway by e-mail, by RSS or through Bloomberg or Reuters; they are highly unlikely to see them first on a corporate website.

The wrong pitch

ProfMedia has a short home page paragraph that tells us that it is the “largest diversified media holding in Russia”. But all the other stories on the page are technical/regulatory announcements: ‘Rambler Media: Shareholder notification’ is the first, and it gets less exciting after that.
Most of the IPO companies I looked at have similar releases on their home page. Metallurgical Corporation of China leads with this headline: ‘Han Changlin inspects ACRE and 3MCC’. How many visitors would have any idea what that means?
Do not try to counter this dullness with visual tricks. ProfMedia has a spinning object (an asteroid?), Ausnutria flashing tins of baby food alongside people dressed up as kangaroos, Metalloinvest a sequence of pictures and slogans. Animation like this is unoriginal, it adds little to the visual effect and tends to push more useful material out of sight without scrolling. Also – key in a world where fashions change – it looks as though your company is well behind the trend.

What to invest in

Moving onto the positive, what should you do? Try to match the best in the world for sophistication. In some countries web design is dominated by IT companies; it is unlikely you will get anything graphically interesting or unusual from them. Shop abroad if you need.
Involve all your internal stakeholders. Ask them how they want the web to be used, and draw up a strategy to serve them. All of them. This does not in any way mean downplaying the importance of investors – if the company is using its assets in the best way possible, who benefits more than the shareholders?
To put it another way, catch up. Last year’s FT Bowen Craggs index showed a growing gap in quality between corporate websites from the US and western Europe, and those from elsewhere. IPOs should afford some of those ‘elsewhere’ companies a chance to catch up and even leapfrog the west. Sadly, there seems little evidence that this is happening. But it’s not too late.

First published 27 January, 2010
< Back to Commentaries