ONE of the biggest benefits of using advisory releases rather than full-text ones is the potential for companies to attract more investors to their IR websites, where they can communicate more effectively and establish direct connections with their audiences.
Increased traffic and recognition for a company’s investor relations website also contributes towards a site becoming a “recognized channel” for the purposes of Reg FD, which is a valuable asset for any company in an age where more of their communications happen online.
The fact that advisory releases should drive more traffic to company websites compared to traditional full-text releases is obvious. The advisory release is nothing more than a notice and link to the company’s website. If someone is actually interested in the information, they’ll click through to the company’s site to get it.
Referrals from online media drive traffic, recognition of IR websites
But it’s not just visits that are important. Coverage by “readily available media” is another factor that the SEC lists in its 2008 website guidance as helping to make website postings public.
Of course, the very definition of what is “media” is much different today than it was 10 years ago when Reg FD was born, or even two years ago when the SEC issued its company website guidance.
Today’s changing financial media market includes hundreds thousands of new sources. Control over the printing presses has been liberated by technology so that blogs, vlogs and even microblogs all provide coverage of company news and can command meaningful audiences alone or as a group.
And unlike the Wall Street Journal, The Financial Times, Dow Jones, Bloomberg or Reuters, these sites don’t lock their content away behind pay walls. They’re free, and you can’t get more “readily available” than that.
Additionally, when these new media, and even some older ones, cover company news they often link to their source material. Those links tell you what sources the media outlets consider relevant. They are recognition links, and for IR departments that want their websites to be Reg FD compliant, they’re extremely valuable.
Which gets us to the point of this post.
Google before and after its advisory release
Prior to Google deciding to use an advisory release process in April, the company used a paid PR wire to distribute the full text of its earnings releases. Consequently, the online financial media had the option of linking to a copy of the release on websites like Yahoo! Finance or the PR wire service’s website rather than to the version on the company’s own IR website.
According to Yahoo! Site Explorer, which measures inlinks to web pages, in January when Google distributed the full text of its Q4 2009 earnings release via a PR wire, the version of the release on the company’s IR website attracted 736 inlinks.
That’s a high number and a sure sign of a well-recognized IR website, which is why I said back in April that Google’s IR website was more than ready to be its recognized channel of disclosure.
Sources that linked to the Q4 2009 release on Google’s IR website included the likes of the Wall Street Journal’s MarketBeat Blog, TechCrunch and lots of smaller sites like Rob Hof’s blog (read his bio).
Inlinks to Google's Q4 2009 earnings release on its website. The release was also ditributed in a full-text PR wire release.
Now let’s see what happened in April when Google switched to an advisory release. According to Site Explorer, the Q1 2010 earnings release on Google’s IR website attracted 1384 inlinks, an increase of 88% compared to the previous quarter when the company issued a full-text PR wire release.
This time sites linking to the release on Google’s site included the same sites as before but with notable additions like the New York Times and Barron’s TechTrader Daily, which had linked to the full-text PR wire release on Yahoo! Finance in the prior quarter.
Inlinks to the Q1 earnings release on Google's website, which was distributed via an advisory release, saw inlinks rise 88% over the prior quarter. Note that we not counting links to the release from Google's own domain.
What this demonstrates, quite simply, is the power of advisory releases to not only directly drive traffic to a company’s IR website from the advisory, but also to attract traffic and recognition from new and mainstream media websites.
All of those backlinks and visits give companies confidence to know that their websites are well positioned to be recognized channels of disclosure. And they represent a tremendous opportunity to connect with new and current investors on their own websites and associated channels.
Given that IR is all about building relationships with investors, communicating new information effectively, and complying with the law, advisory releases make a whole lot of sense.
Learn more about advisory releases and measuring the effectiveness of your IR website in The New Online Disclosure guidelines.
Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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