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Corp Comms: A look at the shop window
27/09/2007
By Andrew Cave
September 2007
http://www.thecrossbordergroup.com
A decade ago, as the internet age got under way,there were two types of public companies: those with websites and those without. It didn’t matter much if company web pages often looked the same, with a voguish popularity for revolving globes and graphics that took ages to appear. Neither was it that much of a drawback if visitors couldn’t do much when they got onto the sites; slow dial-up connections and the lack of interactivity meant not much opportunity was lost.
At least firms with websites were on board the internet revolution. Taking the trouble to safeguard the rights to a website under the company’s name and creating a corporate website was a statement of intent. Those that didn’t establish a web presence quickly or were caught out by someone else claiming rights to their obvious domain name looked outflanked and embarrassed.
How times have changed. Or have they? According to Richard Carpenter, development director of creative communications agency Radley Yeldar, more than half the 1,683 companies quot ed on the London Stock Exchange’s Alternative Investment Market (AIM) don’t have corporate websites. And, while it is unheard of for a company in the top 350 of the FTSE rankings not to bother, Carpenter says many of them don’t go a lot further than erecting a basic and limited website.
But that situation is changing, partly because of regulatory intervention. On AIM, an amendment to the market’s rules came into force on August 20, stipulating for the first time that companies listed on the market must provide online access to their annual reports. It will mean hundreds of new corporate websites, though Carpenter doesn’t expect many to be more than simple internet shop windows.
‘The rule change is forcing companies to supply online information they have not previously provided relating to the direction of the business, details about the directors and financial data and records,’ he says. ‘But some of them will do the bare minimum and that will not reflect the companies in the best light.’
Other regulatory changes will also push companies to take more care over how they promote themselves online. The new Companies Act, enacted at the end of last year and coming into effect in stages this year and in 2008, introduces provisions that make it easier for companies to communicate with their shareholders electronically.
Default position
In the past, shareholders could ask to be sent announcements electronically; the changes reverse this default position. Companies will now have to ensure their articles of association allow them to communicate electronically with shareholders. If not, they have to pass a resolution and write to all shareholders asking whether they would prefer information in printed or electronic format. If a shareholder fails to respond within 28 days, a company can assume that he or she agrees to being communicated with via a website.
Companies will still have to send a letter or postcard to advise investors that the material is available online but the option to default to electronic communications for the first time is likely to be a factor that leads companies to improve their online offerings.
Most suppliers of corporate websites say these changes are about time. ‘Corporate websites have not moved on a lot in 10 years,’ says Carpenter. ‘A lot of them have become basic repositories of information, resources that are useful but not necessarily getting across companies’ key messages. They can be badly constructed, too. Companies would not put out printed information without the correct branding and key messages, so why do it online?’
Jonathan Hynes, senior partner at corporate communications agency Smiths Partnership, agrees. Annual reports are often presented on websites as downloadable PDF files – basic electronic versions of the printed offering – rather than genuine internet products with interactive material, videos and attractive web packaging, he points out.
‘Investor relations communications revolve around the annual report but we don’t think companies are really taking advantage of the opportunities,’ Hynes adds. ‘Some companies create separate websites for their annual reports or special sections that take the chance to tell investors about the business, but a lot don’t.
‘Many use template investor relations formats and PDF annual reports, which is all about cost-cutting and has nothing to do with communicating through differentiation. It [should be] about how much you can engage with the online reader. The annual report is the main way companies talk to shareholders. Investors want to hear the company’s story and get an impression of the business – and the first place they go is the company’s website. Firms get one opportunity to get it right and demonstrate that they take it seriously.’
Keeping the punters happy ‘Through recent improvements in web technologies regarding translated and localised content, corporate websites are becoming effective ways to present company information to broader external and international audiences. Badly designed websites with poor usability, however, can have adverse effects on the company,’ notes Andrew Wood, head of production at Glass, a digital communications agency that works with clients including law firm Allen & Overy, Lloyds TSB and Diamond Trading Company, the sales and marketing arm of De Beers.
‘For example, a major section of most corporate websites is the media area. The fast pace of journalists’ work means that under tight deadlines they need answers fast and don’t want to wait for large downloads. Worse still for journalists is the need to go through a registration process to have access to press releases – not a good thing if you’re looking for positive coverage of your company.
Corporations spend millions on PR, and yet the press sections of their websites often fail to meet journalists’ most basic information needs. In a recent usability study, journalists found answers to only 68 percent of their questions across a range of corporate sites.’
Most journalists will readily volunteer their pet hates about corporate websites, ranging from the difficulty in finding the composition of the board to examples of ‘online newsrooms’ that aren’t updated regularly, or ‘contact us’ sections that merely direct them to an email address and fail to supply media relations phone numbers.
But corporate websites are not just designed for the media: what matters most is how they communicate with the financial community.
‘Most analysts say a company’s website is the first thing they look at when preparing a view on the company or getting ready to hear a management presentation,’ says Al Loehnis, director of corporate communications agency Investis. ‘If a company’s own website can’t be the undisputed authority on that company, how can it expect people to get their information? From an investor’s point of view, it may be taken to mean the company doesn’t care about its shareholders and doesn’t want to communicate with them.
‘Essentially, a corporate website is a shop window for the company’s shares. If it doesn’t look good, people won’t buy them. And it leaves a bad impression when people can’t find the information they need. Other problems include poorly thought-out structure, insufficient navigation aids and a failure to update. And then there’s technology and design: people don’t like pressing keys that don’t work and trying to open windows that won’t open.’
So what makes a good corporate website? ‘Very simply, a good website puts the needs of its users first,’ says Wood. ‘A decade after all the hype over user experience, businesses still run the risk of putting their own self-interests before those of their audience – and by doing so they alienate the very people they are trying to reach. All too often sites are built around impressive new technologies rather than the needs of their users.
‘Businesses have to offer their customer s value, but this should not have to mean they lose sight of their own business objectives. Instead, they should take the time to discover and understand precisely who their audience is, and in turn offer a service that is both useful and desirable. The majority of users when visiting a website think about completing a task, and they want to complete this task as simply as possible.’
God in the details
Loehnis believes it is also about quality and style. ‘The overall standard should be as good as that in print documents,’ he says. ‘Companies would never let printed media go out with spelling mistakes and bad grammar but that attitude does not shine out of a lot of websites. The difference is that printed documents are discrete projects; they go out once and get replaced later whereas websites need to live out on the street. It takes a lot of effort to constantly update them; there are cost implications if you’re going to have a team of five people doing that.’
Rob Day, director of website design agency Liquid Light, believes serious consideration should also be given to the display of live share prices and news feeds. Most companies outsource this activity and have a link on their site that takes readers to a third-party site, he says, because the provision is complicated and technical and they are not set up to do it.
But this may mean the third-party site does not dovetail with the feel of the website as a whole. Companies can add ‘bolt-on’ features that are more customised, although this can be expensive.
‘You need to figure out why people are coming to the site in the first place,’ Day says. ‘Provide content in the most appropriate way and ask yourself whether that always means having everything in PDF documents. And make sure you make it accessible to people with vision impairments and those who use screen readers. Don’t use Flash technology: web search engines can’t find it and some web browsers won’t work well on it.’
Day also warns companies against assuming there’s only one way to build a website, or adopting a ‘cookie cutter’ approach. ‘The trap is that a lot of companies seem to perceive corporate websites as a duty rather than something they should be providing for a good reason in the best possible way,’ he notes. ‘One size definitely doesn’t fit all.’
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