Master Class: In an age of self-publishing, what role should newswire services play in IR?

Using corporate websites for posting corporate news is a great concept.

PANEL

Gregg Castano

President, Business Wire gregg.castano@businesswire.com

John Earnhardt

Director, corporate communications, Cisco jearnhar@cisco.com

Robert Ferris

Executive MD, RF|Binder, Robert.Ferris@rfbinder.com

Scott Mozarsky

EVP and chief commercial officer, PR Newswire scott.mozarsky@prnewswire.com

Amber Roberts

Director, Lane PR New York amber@lanepr.com

Using corporate websites for posting corporate news is a great concept. Unfortunately, the SEC's "interpretive guidance" on disclosure, in a Da Vinci Code-like allusion to certain conditions under which companies may use websites to satisfy disclosure, is itself being misinterpreted to mean companies can use their sites as the sole means of disclosure. 

This unintended consequence not only fails to meet the best practice smell test, it doesn't serve the very community such rules were intended to protect - shareholders.

"Self-publishing" should be one part of a multi-tiered communications strategy using all available means of outreach. Different people gather information differently, so why limit them to reliance on only one methodology?

 Conversely, posting to a single site requires people to know where and when to look or sign up for countless RSS feeds (which have an anemic adoption rate of 10% to 11%). And if you think posting news for "free" on your website is cheaper, compare the ongoing cost of managing security, traffic, and 24/7 continuity to the cost of distributing a release via newswire. Here are some tips for more visible earnings releases:

  • Incorporate links from your press releases to relevant content deep within your website.
  • Make downloadable mp3 files of all your conference calls available - and host it on your IR pages. 
  • Create an RSS feed or e-mail subscription option on your IR newsroom page. Syndicate your IR content with RSS or e-mail so those interested in your company will be automatically alerted when you have news.
  • Rework your press release content as blog posts. With a little reworking and perhaps some non-material details, you can reuse and repurpose the content.

Go ahead, self-publish. It's a good thing. Just don't be cowed into believing less is more.  With disclosure, the objective is exposure. 

 

Gregg Castano, president, Business Wire

Wire services definitely have value. For closely watched companies, they may not be as necessary today, but for the greatest of transparency and visibility, we use them for earnings releases and major news we want widely disseminated. 

There has been much talk about using the company blog or an IR website to disclose earnings reports, going back to Sun Microsystems in 2007. Then it was widely reported that as long as an 8K was filed at the same time with the SEC it was deemed to fulfill Regulation Fair Disclosure (Reg FD). We want the media and investors to receive our financial information in ways that help them do their jobs, so we will continue to use newswires to distribute our material news.

For investors, Yahoo Finance is a highly trafficked site that does not include company blog posts, but they do include newswires. Using all available measures to share material news is in our shareholders' best interests. We also use our company blogs and corporate Twitter handle to disseminate our earnings release. Our IR and corporate newsroom also has a lot of information that shareholders, media, analysts, and others regularly access that would never be distributed via a newswire. 

In this social media age, a corporate newsroom's goal is to produce information that readers engage in and want to share. We know there is valuable, interesting information on our corporate sites outside of the quarterly earnings release, but we also know those four releases are the most important of the year and should be treated as such.

John Earnhardt, director, corporate communications, Cisco

With its recent interpretive guidance, the SEC has apparently opened the door for companies to use website postings to satisfy full disclosure of material corporate financial events, in addition to regulatory filings.

Some forward-looking communicators have been quick to take advantage of the ambiguity in the SEC's guidance, in their zeal to get ahead of the curve and perhaps save a few bucks. They are shortsighted, I believe.

A well-constructed earnings press release, putting the performance numbers into perspective and broadly distributed through the media, is critical to IR strategy.

Full and fair disclosure has always been impossible to define precisely, but companies' efforts to adhere to the spirit of Securities Acts disclosure mandates has been more important and enduring to credibility and, ultimately, to the sustenance of fair valuation.

Eliminating the dissemination of a press release through the mass media should not be a gray area. Doing so encourages potentially damaging results.

There are a number of stark examples among well-known companies: website postings before the regulatory filing; news outlet Web scrapers who publish on material developments before companies issue their press release or advisory (or before the regulatory filing); and professional investors who access website postings and trade on this information before the rest of the world knows the information exists. These are serious enough, but the lack of transparency can be an even bigger valuation issue for the host of smaller, less-followed companies.

The system needs a safeguard. In addition to the appropriate regulatory filing and simultaneous or ensuing website posting of the information, issuers should also distribute a press release to the investment world through the mass media, newswires included.

Most public companies are not household names. They need the exposure that their websites alone cannot provide.

 

Robert Ferris, executive MD, RF|Binder

To "self-publish" or not to "self-publish," that is the question. But need it be asked?

Unlike Hamlet, who was contemplating the nature of being, the debate for IROs is quite basic - what means of communication allows you to reach all your constituents immediately, simultaneously, and ubiquitously, and which is time-tested, proven, and valued by all?

For the vast majority of institutional investors, retail analysts, the media, and individual stockholders, the answer is clear. Newswires offer the most reliable, efficient, and direct means of communicating material information and should continue to be the backbone of every public company's IR program.

Self-publishing to one's corporate website, a notion that recently gained visibility following a mishap with Microsoft, has been touted by some as a potential counterpoint to newswires. However, when examined more closely and from the investing public's perspective, the holes in the argument become quite evident.

Relying on the notion that certain corporate websites may be perceived as a common meeting point is not in the public interest. Self-publishing creates an unlevel playing field by emphasizing an investor's ability to access information on his or her own rather than have it delivered directly. This tilts the balance of power to those with the most resources - institutional investors - and away from those less connected - individual stockholders.

Let's remember: disclosure is about enhancing access, not limiting it. It's about ubiquity, not selectivity. It's about providing a common ground between the individual and the institutional investor, not exacerbating it.

This is the value that newswires continue to provide to the investing public. New technologies may be intriguing, but the bottom line is what works best. The answer is newswires.

 

Scott Mozarsky, EVP and chief commercial officer, PR Newswire

In August 2008, the SEC revised Reg FD to allow the use of the Web to inform the public of earnings and other material disclosures. Companies now have the option of using RSS feeds, e-mail alerts, and website postings, in addition to, or instead of, newswire releases to disseminate financial information. 

Using a newswire service for material disclosures can come with a heavy price due to the amount of information that typically must be included in earnings releases and other disclosures. In an age of self-publishing, that time and money might be better spent elsewhere.

However, before any company considers switching to an online-only distribution platform, it first needs to ask a few questions and follow some simple guidelines:

  • Survey your audience. How would investors and other relevant constituencies prefer to get their news? Is your website a recognized channel for timely and material information? What steps must you take to get your website to be such a channel? Truly understand your audience before you make a change. 
  • Stick to key IR principles: transparency and responsiveness. Whatever vehicles you choose for news distribution, they must allow you to be as transparent as possible and not compromise your responsiveness to inquiries.
  • Communicate and communicate again your new distribution method and explain the value to your constituencies. Then communicate it some more, just to cover your bases.
  • Consistency is key. If you choose Web- only for your distribution and eliminate a wire service for material announcements, be consistent. In order to secure investment community buy-in and drive real change in behavior, the company must be consistent with the methods it ultimately chooses. Inconsistency can lead to questioned credibility.

In this Internet-friendly world where blogs, RSS feeds, and social media are common news sources, wire services may not be necessary for companies with an investment community that's on board. But each company must determine the best way or combination of ways to ensure fair disclosure that is in the realistic best interest of all its relevant audiences.

 

Amber Roberts, director, Lane PR NY The Takeaway

  • Self-publishing must be part of a multi-tiered comms plan that uses all available outreach means
  • Newswires provide a common ground between the individual and the institutional investor
  • Companies must be consistent with the methods they choose to disseminate information. Any such inconsistency can lead to questions about credibility

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