JUST over 70% of the people who participated in this week’s poll guessed correctly when choosing the word I would use to describe the practice of making investors register to access RSS feeds on corporate websites.
This is something I’ve been meaning to write about for the past two years but never got around to. We’ve been telling clients privately that it is a dumb practice, and most of them have either never required registration or they have removed RSS registration after hearing why it’s a bad idea.
Interestingly, the company I just happened to use as an example for the poll, Southern Company, decided to remove the registration requirement from its feeds after the post on Tuesday. Good for them.
But here’s what you might not know: Southern Company is by no means alone. Many other companies require investors to register to access RSS feeds on their sites. You can see a quick sampling of them at the end of this post.
All of these companies have one thing in common — they all are using the IR website product of NASDAQ OMX Group’s Shareholder.com.
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| After our earlier post this week, Southern Company removed the registration requirement for its investor RSS feeds. |
Registration used to compile intelligence on analysts
Making people register to access RSS feeds for investor relations information has been the default setting for Shareholder.com’s website product ever since the firm introduced feeds to its clients’ sites.
I forget precisely when they introduced feeds, but it wasn’t long after the Sept. 2004 launch of their Pinpoint Intelligence product, which listed “mining shareholder communication activity” from IR websites as one of its most important benefits.
I’ve written a lot about the Pinpoint Intelligence suite in the past. It’s the product I call the “spy suite” because it has extraordinarily invasive web tracking features. Companies can compile detailed dossiers on the web activity of individual analysts and investors who use their sites.
I’m bringing this up again because the registration screens for RSS feeds and other content on these Shareholder.com sites are integral to Pinpoint Intelligence working effectively. If visitors do not give companies their names, then the information Shareholder.com collects is anonymous. It cannot be used to create useful dossiers for the company on those particular users.
So that’s why Southern Company and scores of others have those registration screens.
Breaking web design fundamentals drives investors elsewhere
A problem crops up when you put barriers like unnecessary registration forms in the way of people using your site. Many will just avoid using the content or they’ll go elsewhere for it.
That’s what has happened here. Shareholder.com designed its IR website product for the wrong audience. They designed it to be attractive to investor relations departments, not those departments’ clients — the analysts and investors who are supposed to use the websites.
Designing for someone other than the end-user is bad web design. Websites must work for the end-user or they will fail to be effective for the company. Sites that aren’t useful and easy-to-use simply won’t be utilized as often as better sites. Being human, analysts and investors will follow a path of least resistance to get their information.
Consequently, the registration pages that Shareholder.com uses to capture names have had the predictable effect of discouraging investors from using companies’ RSS feeds, which are important tools for companies to stay in touch with their investors and analysts.
Public RSS subscriber numbers prove the point
As Ryan Lejbak said in a comment here this week, faced with a registration screen “absolutely no one will sign up” for the RSS feeds.
He’s actually not far wrong. We know something about how much Southern Company’s feeds are being used because some web-based RSS readers, such as Google Reader and Bloglines, show how many of their users have subscribed to particular feeds. It’s public information.
As you can see from the screenshot below, Southern Company’s financial news and SEC filings feeds have only one subscriber each at Bloglines, which is one of the biggest online RSS readers. I couldn’t find the feeds listed at Google, suggesting that no one there is subscribed.
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| Search results from Bloglines show only one subscriber each for these two Southern Company feeds hosted by Shareholder.com. |
However, I did see more subscribers for feeds from other sites that carry news about Southern Company. Investors are subscribing to feeds at Yahoo! Finance, for example, where there is no registration requirement.
The numbers are not huge, but then that might be saying more about Southern Company than investors’ use of RSS. You need to see that in context of the fact that a website like TheStreet.com has 508,000 RSS subscribers using Google Reader, so there are investors out there who know what an RSS feed is.
Another important thing to notice about the above screenshot is that the feeds are public. Investors and analysts don’t need to go to a company’s website to register for access to the feeds. Once one person subscribes to a feed in a web reader like Bloglines or Google Reader, that RSS feed is public and anyone can subscribe to it unless it uses some kind of authentication, which is inappropriate for public websites. That means Shareholder.com’s registration pages aren’t effective anyway.
What were they thinking? They weren’t.
The irony is that a product meant to give IR departments unprecedented intelligence on investors’ and analysts’ website activity has ended up chasing away investors to other services. Consequently, companies are probably left with even less information than they would have had if they’d just stopped to ask questions.
And IR departments were paying between $12,000 and $24,000 per year for the privilege when the product first launched in 2004. It might be more or less now, but whatever it is, it’s too much.
Not only that, companies also exposed themselves to potential reputation risk by using the Pinpoint Intelligence product suite. Privacy is a big issue for web users generally, but especially for investors and analysts who don’t want people looking over their shoulders to see what they’re looking at.
It’s no coincidence that the SEC made shareholder anonymity a key provision of the E-proxy rules, effectively making Pinpoint Intelligence a compliance problem for companies. That has driven up costs for companies that have sought alternative hosting space on sites that don’t pry into investors’ private website activity.
I know this seems like a long post to write about registration pages for IR websites, but that’s the story behind the now-gone RSS registration page at Southern Company and the ones that remain on the IR websites of dozens of companies, including those captured below.
There are a number of stories like this that I sit on for years and never write about publicly. This is a mild one. Wait until I tell you the story about Thomson Financial and the ….
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Dominic Jones (bio) created IR Web Report in 2001. He is a consultant to leading public companies and investor relations service providers worldwide. You can contact him via the contacts page.
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