IT SEEMS that hardly a month goes by these days where investor relations and corporate communications professionals aren’t being introduced to some new technology, service or acronym. There’s XBRL (eXtensible Business Reporting Language), RSS (Really Simple Syndication) and more recently RT (Re-Tweet).
Now there’s a new one for IR pros to get their heads around – API, a set of technologies that are expected to become fundamental to fair disclosure because they promise to give investors fairer, faster and more customized access to a wide range of corporate disclosure information.
One IR service provider that has put API technology at the core of its products is Q4 Web Systems, a provider of corporate and investor relations website software that has been a pioneer in bridging the technology divide between the traditional company website and new real-time social media services.
Yesterday, Q4 announced that its clients’ websites would now have the capability to distribute messages directly – via API, of course – to the new StockTwits IR service, which provides real-time distribution to a financial audience of around 60 million through partners like Reuters and Yahoo! Finance . The video below provides a demo of this new functionality in Q4’s website publishing software.
To help our readers understand what APIs are all about and what they mean for the investor relations profession, I emailed five questions to Q4’s CEO Darrell Heaps, and he sent me these answers:
1. What does API stand for?
API stands for “application programming interface”, which basically allows two different pieces of software to speak to one another through a common interface. APIs are how the modern web is connected and are an essential aspect of how much of web functions everyday. When you sign into a website using Facebook Connect or with Twitter, you’re using their API to do so.
2. How do APIs differ from RSS feeds and PR wire feeds?
It is possible to use RSS feeds to update social networks like Twitter. Using a service like www.Twitterfeed.com you can pretty easily connect an RSS feed to update a Twitter account. When we first started updating social networks from Q4, we used RSS feeds. We encountered a number of problems and quickly moved to an API based approach. There are many problems with using RSS feeds:
1. Typically, companies configure RSS as a polling technology. That means a service like TwitterFeed checks a specific RSS feed every 15 minutes looking for new content, and when it appears it auto-posts to Twitter. The problem with this is that it’s not real-time. Posting this way to Facebook is even worse as it takes up to 1 hour to display. Pubsubhubbub and other options exist today to make this a push model where polling delays are eliminated by pushing the information out to individuals or other systems like TwitterFeed in near real-time, but in general using an API to push content to the social network is instant, reliable and is much more flexible.
2. Another problem using RSS feeds to update social media accounts is that there are fewer ways to control what the update looks like. Using an API connection inside Q4 allows us to use templates for automated updates (like press releases). It also allows custom messages for anything being published and free form ad-hoc updates to share things such as tweets during an earnings call or anything else that’s important.
3. Lastly, it is not possible to publish to the StockTwits network through RSS. Using an API connection with StockTwits gives Q4 a real-time distribution method into the financial social web. When content such as a press release is posted to a Q4 powered investor website the content is instantly published to stocktwits.com, 500k+ investors and major media portals such as Yahoo! Finance, Reuters, Bloomberg CNN Money and Bing. This is all in addition to Twitter, Facebook and the companies dedicated email subscribers giving that content instantaneous reach across today’s financial web.
We believe it’s clear that the combined reach of a website posting along with Twitter, Facebook and StockTwits distribution as well as email alerts now rivals the reach of PR wires and is actually faster to distribute evenly across the web. PR wires rely on multiple hops for placing a company’s press release on specific websites and can have delays of up to 7 minutes.
An API connection into today’s social web (including StockTwits) is the most efficient way to spread corporate news to the market. Quite simply the old model of wire distribution (based on the days of telegraph) cannot compete with the immediacy, reach and impact of posting the same content to a corporate website and instantly updating the entire financial social web.
3. What types of APIs does Q4′s software integrate with?
We see the social web having two main components: 1) Social Networks such as Facebook, Twitter, LinkedIn and StockTwits & 2) Social Media such as YouTube, Vimeo, Slideshare and Flickr. Social networks are about people connecting and sharing. Social media is where a media asset is published.
Q4 is currently integrated with the Facebook, Twitter, StockTwits and bit.ly (for short URLs) APIs. We use these for publishing 140 character updates (with auto URL shortening and #/$ hashtags) to the financial social web.
We also integrate with social media APIs from YouTube, Vimeo, Slideshare and Flickr where we synchronize our client websites with the videos, presentations and photos hosted on those sites.
The Q4 platform combines the publishing and aggregating of all social assets into the process of updating and managing a corporate website. As changes are made they are instantly pushed to the financial social web while also being integrated back into the corporate website.
(Below is a video demo of how Q4’s API integration works from an IR website manager’s perspective)
4. Do you think API dissemination will replace feed-based distribution?
Absolutely. When it comes to using RSS feeds, it’s simply not good enough. Although there are some IR websites using this method, I don’t think there are many companies actually using it. Once you start using RSS feeds to publish to social networks it becomes obvious very quickly how poor of a system it is.
In regards to PR wires. No one can deny the impact of social networks on spreading news around the world in an instant. How information moves around the world has been completely transformed over the last 2 years. We are now seeing rapid adoption of these channels by investors in North America – and to remain competitive, companies must package and deliver information to them in this new way. Connecting the corporate website to social networks via an API to publish updates in real-time achieves this.
In terms of adoption, I think many companies will continue to run traditional press releases over the wire (just as they are still printing annual reports) for years to come. I think this is less about being effective and more about a ‘CYA’ perspective.
I think we are close to seeing irrefutable evidence of the effectiveness of the social web and that the web is now the primary channel for financial information. When this happens IR departments will equate using PR wires to distribute corporate information to mailing CDs to customers with iPods. And that’s when we’ll see a big transition.
5. In the future, what other ways do you see IR departments using APIs?
The opportunity to integrate web-based system relies on service providers to open up their systems and extend their value. I see opportunities with proxy systems, traditional information systems like Bloomberg and new services like direct stock purchasing. But who knows where the web is headed, for now I think we’re in an exciting time for innovation in financial media and investor relations, and that makes me very happy.
If you have any other questions, please post them in the comments below. Also note that I will be on a panel via video conference to discuss this and other related topics during a lunch-and-learn being hosted by Q4 next Tuesday at the NIRI annual conference if you want to ask question there.
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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