Guest Post by Luanne M. Wing
INTERNET video is a phenomenon that is making overnight stars of start-up entrepreneurs. Innovative videos provide information, as well as compelling and creative visuals of products and services that may never have seen the light of day. Video morphs yesterday’s media of passive text and still photographs into captivating visuals that enables consumers to connect the dots better and faster. Whether thirty seconds or three minutes long, reach and frequency multiply exponentially and a host of multi-functional devices easily serve up video to savvy consumers and Investors. Internet video is informative, yet entertaining, and the medium and transport method make viral marketing a reality for even the smallest of companies.
|Investors Speak: What should your vids cover?|
|“Bios, industry comparables, strategy/plan of attack, what they need to succeed.”
“Strategy, Competitive Positioning, Unique Advantages within their industry, Debt Information.”
“Strategic information that would show me weaknesses and how the company is being proactive to add value to the company.”
“Who they are and where they are trying to go and how.”
“Past and future growth opportunities, earnings, cash flow in relation to similar companies.”
“Competitive strategy, earnings, management team.”
“Independent opinion from independent sources.”
The broad appeal of Internet video viewing is reflected in the rise of companies such as YouTube.com, MSN video, MySpace, and Google Video, to name a few. Popular culture aside, media and advertising dollars are being redirected to online formats and the development of content that can be displayed on cell phones and other multi-functional devices. Internet and media advances are defining a new state of connectedness and reach for businesses large and small. The delta between innovators and early adopters that embrace Internet tools in infancy and the early majority that follow conservatively behind them, has every reason to narrow.
So, how effectively are SmallCap companies engaging this medium to reach prospective investors? A recent study by an MBA marketing Capstone team at the University of Dallas revealed that Internet video is under-utilized as a medium for connecting investors with SmallCap companies. A survey of Wall Street Hedge Fund and SmallCap 600 Investor Relations Managers found that investors and SmallCap companies are slow, in general, to adopt Internet video as a marketing or prospecting tool. Marketing methods and relationship management tend to rely on the tradition of personal selling techniques. Websites are pervasive, but the use of Internet video to connect SmallCap companies with investors is lagging.
Investors receptive on online video
The survey revealed that investors rank the Internet as the most popular source of investment information. They were receptive to sourcing investment information through Internet video. A few early adopter SmallCap 600 firms surveyed indicated that they had developed videos specifically targeted to investors. They reported success in using Internet video as a medium to reach and market to investors. Survey results indicate that they have a better grasp of the content requirements investors are seeking, and are better able to leverage this medium as a result.
The SmallCap 600 and Wall Street investor survey contained several questions about content that SmallCap companies develop for prospective investors. The most compelling finding was the identification of an information disconnect that exists between what SmallCap companies think investors want to know and what investors are looking for in analyzing a prospective company. Fix this disconnect, and the revolutionary benefits of leveraging Internet video will tangibly benefit SmallCap company marketing efforts.
Surveyed investors consider financial metrics critical content, including reference to key ratios such as the P/E ratio and profitability. The majority of SmallCap 600 companies surveyed ranked content focusing on their company’s competitive strategy highest. The minority of SmallCap 600 companies that had developed Internet based videos targeted to investors, ranked financial content higher. Investors and SmallCap 600 companies selected key products and services, company history, and market trends as the next most relevant categories of information in analyzing investment opportunities. The survey reinforced the importance of aligning and delivering content that investors are seeking. This is a key factor in making content and Internet video effective and engaging to investors.
SmallCaps will allocate $11,000 per year to web video
Project research revealed that most investors surveyed found Internet videos to be more credible if produced by a third party, such as the media, versus by the SmallCap company. Findings also indicate that significant opportunities exist for firms managing Investor Relations on behalf of SmallCap companies, to add value by offering Internet video content development services targeting investors. Viral marketing management services, leveraging Internet video, forums, and blogs will improve audience reach and frequency metrics for SmallCap companies and will help to stretch conservative budgets. The majority of SmallCap 600 survey respondents allocated between $50,000 and $100,000 for annual web-based marketing efforts. The survey revealed that they would be willing to allocate $11,000 annually, for Internet video.
Surveyed investors were receptive to viewing SmallCap investor information by video and are already familiar with viewing online videos. The survey revealed that investment information is regularly sourced online from three major sites, including Yahoo!Finance, CNN/Money and Bloomberg. All the right elements are in place to produce targeted messaging to investors using this versatile medium.
Why not connect the dots between key strategies and profitability through high-frequency, high-reach Internet video that matches the needs of the investors with the goals of the SmallCap companies? Picture the number one ranking jewelry retailer’s 2007 off-mall strategy, showing a flagship retail store leveraging the proximity benefits of a prosperous, high-density, multi-use town square development. Add visuals of an online jewelry catalog and a news discussion of improving gross margin by expanding direct sourcing. The result is increased investor insight into their retailing diversification and revenue strategies.
Investors and SmallCap companies are an ideal, under-tapped audience for a video medium that is informative, engaging, and all about expanding market connections. Content development for Internet video is a value-added service investor relations firms should offer SmallCap clients to leverage what has quickly become mainstream media. Everybody’s watching!
Text © 2007 by Luanne M. Wing
Wing, Luanne M., Justin Aten, Amy Lipkin, Eileen Puhringer. The Opportunity Network: Creating Opportunities for SmallCap Companies and Investors to Connect. Dallas: University of Dallas, 2007
About the Author:
Luanne Wing has worked in technology engineering and business process optimization for over 15 years. She recently graduated with her MBA from The University of Dallas. Her favorite video is IDEO’s, Redesign Of The Shopping Cart, where innovation meets business application.