New Research: 79% of Buy-Side Trust Corporate Websites Over External Sources

21 October 2014

By John Schoeler

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Getting inside the head of the buy-side investment community is the main goal of any IRO. Not only understanding what kind of information is most likely to pique their interest, but also understanding how they prefer to interact with IR content.

No other company better understands the general wants, needs and behaviours of buy-side investors better than Rivel Research Group. Rivel is the market leader pertaining to investor research and providing IROs with a keen understanding of how investors interact with their content and how they like to be engaged with.

Recently, Rivel released an excellent new study as part of their Intelligence Council, entitled: The Buy-Side?s Take on IR Websites: Attitudes and Practices of the Global Buy-Side . In the report, they share the results of 355 in-depth phone interviews conducted with Buy-siders around the globe. The study shines a new light on how buy-side portfolio managers and analysts are using IR websites, what features they find most useful and what areas they feel could stand from the most improvement.

Rivel was kind of enough to share with Q4 some key findings from the report regarding the buy-side?s use of IR websites. Below, we would like to share some of those findings along with a bit of our own perspective.

?Corporate Website, the most trusted source:

Rivel 1

Findings taken from 2012 buy-side Rivel study, sample size 404 buy-side professionals.

This makes sense as the corporate website is the most direct line of communication between the buy-side and the company, aside from a face to face meeting with the IRO. As the buy-side continues to get more comfortable with online tools, they are going to spend more time on the website. Likewise, that digital literacy also means they are now more savvy to the fact that many outside sources can misconstrue information as they are not bound to the same material requirements.

Take advantage of this sentiment by offering your buy-side analysts a unique experience that communicates a clear investment proposition. Your website should clearly display your strategy, Why Invest and include key figures At-a-Glance. This should reinforce the message that a portfolio manager or analyst just heard you talk about either one-on-one or during a conference presentation. Consistency of messaging builds credibility and promotes transparency.

Design Matters

Rivel 2

Findings taken from 2012 buy-side Rivel study, sample size 404 buy-side professionals.

Go figure that the buy-side feels the same way about web design as everyone else on the internet. You probably know from your own experience that a poorly designed website can be a real turn off and more often than not lead you to seek outside resources. This applies twofold to buy-side professionals who need to be able to easily and quickly interact with your online content. Having an intuitive, visually pleasing website, which is consistent with your overall branding is going to encourage them to explore your content further and get better acquainted with your investment proposition.

Making use of rich content like images, videos and charts is a great way to make your website more appealing. Strong, clean multimedia content can turn complex information into easy to understand tidbits. Just by quickly scanning a website that makes use of a visual layout, the buy-side is able to pick out key metrics and company info that makes their job easier. On top of all of that, it?s just a more engaging experience and will encourage buy-side investors to come back to your website and make it a part of their regular research process. This makes the buy-siders life easier as well as lessening the load for the IRO fielding questions which can be easily answered on the website.

Make key reporting content front and center

Later in the study, Rivel asked which parts of the IR website the buy-side was looking to find quickly versus what content they often found was difficult to find. The results were very interesting and telling of a lot of the experiences we have heard here at Q4. While most companies were keenly aware that the buy-side was on the lookout for earnings releases and made sure to make that material readily available, they were dropping the ball in other areas like recent investor presentations and historical financial data.

Earnings materials are essential to any buy-side analyst in their research on a company. Most companies know this, and as a result, earnings releases are more often than not readily displayed. What many companies seem to be missing out on is making their other earnings materials more accessible. In many ways, investor presentations are just as valuable as earnings reports to a buy-side analyst. Yet the professionals surveyed indicated that the investor presentations are often the most difficult to find.

This can be fixed by tying content together. In addition to having relevant earnings content found on multiple place on the IR website, having a Quarterly Results view which aggregates all relevant content on each quarter – hosting the earnings release, include the corresponding presentation, access to webcast, transcript and anything else that might be useful for an investor researching that time period of the company. This way, the information is easy to find and investors are able to get a clearer picture on how the individual materials relate to each other and tell the story of that time period.

Along with additional findings around the topics above, they also shared key findings around the following:

  • Where the buy-sides goes to find company webcasts
  • Expectations around keeping key info on the site
  • Features of a ?best in class? IR website
  • What regions are making the most use of IR websites
  • Actual quotes from surveyed buy-side professionals on what they look for from an investor relations website

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