A FORMER employee of a large IR website vendor has written a damning insider’s account of how such firms bully their clients into buying off-the-shelf packages that fail to deliver value to companies and their investors.
Lily Napier, who spent six years as a senior IR consultant for Hemscott, the UK equivalent of Thomson Financial and Shareholder.com, says in an online article that big IR website providers are motivated to “sell, sell, sell — with the result that identical off-the-shelf websites solutions are churned out at a terrifying rate for all companies, whatever their size or sector.”
And she adds that the services big vendors sell often fail to meet the needs of their corporate clients and their investors.
“Little or no thought is given to key issues such information architecture and usability, accessibility compliance or even how to simply tailor a message to a particular target audience,” says Napier.
Direction has changed
She says companies “are bullied into buying ‘investor centres’ with a mass of expensive ‘interactive’ tools such as share price calculators and charts” that few investors actually need from an IR website when they have better sources for such information.
Meanwhile, information that investors actually need — such as strategy, management value, market leadership, news commentary, brand position and sector education — is ignored because they cannot easily be mass produced.
Napier, who moved in November to custom website developer twentysix London, says “the direction of online investor communications has changed in recent years… [and] companies need a much more consultative approach from their website providers.”
Decline of the big IR website vendors
As you might be able to tell, Lily Napier’s tell-all account of life behind the aggregators’ walls has me grinning from ear to ear. I’ve never liked cookie-cutter websites, so reading such an account from a former insider is like welcoming someone over from the Dark Side.
However, I also think that Napier’s move is indicative of something more fundamental taking place in the IR website industry. Companies’ needs have grown more complex and the big vendors’ model is not suited to meeting their requirements.
For me, the most concrete sign that the “mass customization” model was broken came almost a year ago, in January 2006, when Shareholder.com founder Ron Gruner sold his company to Nasdaq. Gruner is an exceptionally smart businessman — and a nice one, too.
I didn’t say anything at the time because I like Gruner, but Nasdaq didn’t do their homework on that deal. What they got was a business that had pushed the limits of where the hosted IR website business can go — and it still isn’t competitive with services that companies can get from custom site builders.
Companies seek differentiation
Increasingly, companies are looking to differentiate themselves on the Web, but that’s not something the big cookie-cutter website vendors are able to provide.
That doesn’t mean the days of the big aggregators are over. They’ll be around a long time yet. But the the quality of their client base will deteriorate, leading to even less innovation and customization than we have today.
The future is with smaller custom website developers and with internal web communication departments. We are likely to see more defections from the big aggregators to smaller firms and to corporations themselves.