IN WHAT may be an indication that U.S. IR websites are no longer able to attract and hold the interest of investors, traffic to IR websites hosted by Thomson Financial has slumped to all-time lows, according to the Alexa website information company.
Alexa, owned by Amazon.com, measures traffic only of people who have the Alexa toolbar installed on their computers and is not considered a complete measure of site traffic. However, it is nonetheless valid to observe general trends over time.
The graph above shows page views over the past three years for Thomson’s corporate-ir.net domain, which is the website address the company uses to host hundreds of public companies’ investor relations websites. It shows a steady decline, with page views reaching all-time lows in recent months.
The slump comes at the same time that U.S. stock market indexes have been on the upswing (see charts below) and as more people around the world are connected to the Internet. This suggests that investors may be giving up on using Thomson-hosted corporate IR websites as a source of information.
This is consistent with our view, based on in-depth benchmarking of 525 IR websites around the world, that average U.S. investor relations websites have fallen far behind global standards — and are now in danger of becoming irrelevant to the investment process.
Competition for attention
Corporate IR websites also are competing for attention with a wide range of new investment resources, not least of which are investment blog networks like Seeking Alpha, which provides free earnings call transcripts, and an improved Yahoo! Finance, which is facing growing competition from the year-old Google Finance and others.
The trend should concern IR departments because it means they could be losing the ability to communicate their companies’ stories directly to the market and also measure interest in their companies based on website traffic.
Companies must put in place the resources and expertise to manage their IR websites better, a task being made more complex with growing recognition of the web by regulators.
If you would like an independent assessment of your IR website and recommendations for how you can make it an attractive destination for investors, our IR Website Scorecards are an effective tool. Alternatively, our continuous benchmarking service gives you twice-yearly reviews of your site, access to members-only guidelines and an annual scorecard with tailored recommendations.
Update1: Not singling out Thomson. I’ve received a couple of emails from people who don’t understand the implications of this story. So, just for clarification, I’m not saying people are purposefully avoiding Thomson IR sites because of the URL or because they’re hosted by Thomson. They’re simply not visiting IR websites hosted by Thomson as much as they were before, and I’m suggesting that this is because the sites don’t offer investors a compelling reason to visit them. I’m using Thomson because it’s the biggest, because the domain is widely used, and because I think its Alexa results are probably reliable for the domain I used. You probably can take Thomson as a proxy for U.S. IR websites generally, but I couldn’t say that in the story because I have no way to verify it across every U.S. IR website. Hence, I refer only to Thomson in this story, but you can probably take it to mean the “average U.S. IR website” since Thomson claims to have 2,600 IR website clients. Also, don’t go running to Shareholder.com because that’s likely not going to help either. The solution is to start putting the proper resources and expertise in place to manage this Interweb thing properly. It’s a case of use it properly, or lose it.
Update 2: Same thing not happening elsewhere. For what it’s worth, several of our European clients report that their traffic is booming like never before. Anecdotally, that supports what I wrote two years ago in an IR Magazine article (see The Digital Divide). I said then that IR websites in the U.S. were falling behind while European large-caps — German, UK, and Nordic companies especially — were generally offering a much more compelling and credible web experience to investors. At the time, then-NIRI president Lou Thompson reportedly quoted me in a speech and was shot down by the audience of U.S. IROs for daring to suggest such a thing. But recently, other consultants have been saying the same thing. Ask yourself why we would make this stuff up? What on earth do we have to gain from potentially ostracizing the entire U.S. IR community? Please don’t shoot the messenger. The problem is not with us.