Apart from being chief executives of major corporations, what links Lloyds TSB's Eric Daniels, BP's John Browne and Vodafone's Arun Sarin? The answer is webcasting – according to Factiva research for PRWeek, all three personally streamed interviews for investors over the internet in 2005.
Webcasting provides a new communication channel through which PROs can disseminate a company's results. And with firms keen to promote transparency in their disclosure of financial information, webcasts satisfy investors' demand for rapid access to figures, via convenient channels.
These USPs mean webcasting has the attributes to make an impact upon the traditional channels of broadcasting and press releases for the release of financial information. So to what extent will webcasting change the way City workers digest their figures?
Demand for access
Business TV channels such as CNBC Europe and Bloomberg, alongside coverage of business news on less niche channels, have created greater broadcast demand for CEO interviews when a company's results are issued. When the demands of TV cannot be met, and because not all journalists can attend 'results day' press conferences, webcasting adds to a company's potential audience reach.
Currently, many financial webcasts consist of little more than presentation slides bound together with audio commentary – they rarely offer real-time footage. For example, BP's webcasts comprise a mixture of visual material and audio streaming and it stores the presentations permanently on its website. Press officer David Nicholas says investor and journalist pressure prompted it to add streamed content.
However, the real pioneers in this field, such as BAA, Lloyds TSB and Vodafone, cite vidcasts – video interview webcasts – as the most effective way to make the boss accessible online (see case studies below and overleaf).
Edelman director of financial comms Paul Lockstone believes it is important that CEOs, not just PR practitioners, realise the value of an assured performance when delivering financial results. 'Chief executives and communicators must now recognise the role of a financial communication event as a marketing opportunity. In the past it was just a financial process,' he explains.
According to Lockstone, technology-shy PROs should note that webcasts containing CEO interviews can be filmed under strict embargo several days before results are released. This makes them a desirable method of communication for a number of reasons. Not only do they fit in better with CEOs' diaries, but they allow the company to control the message in a way that is not possible with a live broadcast. They allow the CEO to, for example, highlight the company's strategic direction and management strength.
Keren Haynes, a founding director of Shout! Communications, was a broadcast journalist before moving into PR. As well as the BBC's Business and Economics Unit, she has also worked for ITN, Sky Business News and Reuters Business TV. She is enthusiastic about webcasting. 'It avoids the embarrassing howlers that a press
conference can create,' she explains. 'I remember ITN business and economics editor Mark Webster interviewing then British Gas chief executive Cedric Brown for a 'fat cat' story. After the interview, the news crew, Webster and Jon Snow got into a lift with Brown. Cowering and cornered, the CEO was torn into by the journalists.
The situation was totally out of British Gas's control. ITN, of course, thought it made great television and ran it on News At Ten.
'Had the journalists been in their own office with Brown at the other end of a webcast, such a situation would never have happened.'
Although Brown's uncomfortable lift ride was only embarrassing on an image level, such loss of control can be financially damaging. In 2001, for example, Vodafone's share price fell four per cent when then CEO Sir Christopher Gent told journalists that he would like to see the spin-off and eventual IPO of the company's Japanese subsidiary, J-Phone.
All about results
One advantage that webcasts have over TV is that CEOs are not expected to be 'larger than life' – often a source of worry for presentation trainers. 'The City is tired of celebrity CEOs,' says Weber Shandwick Square Mile managing director Ian Bailey. 'Success is much more about CEOs and FDs showing they have delivered shareholder value.'
The problem for webcasts, though, is that their reach is currently minuscule compared with television. Moreover, CEOs who are comfortable and competent in a TV studio can create a
positive image of a company, even when the figures they are defending are less than sparkling.
However, Bankside partner Simon Bloomfield points out that broadcast technology such as webcasting should not be underestimated, because it gives previously anonymous CEOs a public face.
'The demand for CEOs from broadcast media varies according to the size of the company, its sector and how interesting or topical the story is,' he says. 'If you are running a small widget manufacturer, it is unlikely that TV journalists will have you on the top of their list – but what is said in a webcast could be interesting to follow up.'
The beauty of webcasting is that as well as being publicly available (say, in the media section of a corporate website), certain 'releases' can be tightly controlled by offering them only to registered journalists or investors.
Dominic Redfern, client development director at Medialink – which last month hosted the first vidcast for Diageo (see below) – says controlled access is something all PROs should consider as it gives clients 'the ultimate power to decide who their preferred stakeholder groups are'.
Abchurch Communications CEO Julian Bosdet argues that a crowded and increasingly international corporate environment has made webcasts attractive. 'The squeeze on financial print space has resulted in even the largest companies broadening their outreach for all but the most dire of results,' he says. 'This is only heightened on the AIM, where more than 1,600 companies are fighting to be heard.
'The success of AIM has increased the interest in the market from abroad. Shareholders who reside some distance from a company's HQ are unlikely to be able to attend AGMs, and may have difficulty in quickly obtaining hard copies of results. The internet offers a straightforward solution to this dilemma.'
Time is money
Bankside's Bloomfield says decision makers often lack the time to watch breakfast or lunchtime news bulletins. So for CEOs, TV opportunities are preferable rather than necessary. He also suggests that a TV interview should not take priority over meetings with investors, analysts or business journalists. Pre-recorded webcasts, by contrast, do not pose the same scheduling problems as TV.
A close relation of webcasting is podcasting – the delivery of audio or video, such as a CEO's speech, to portable devices. With mp3 players becoming ever more popular, the podcasting of financial results is being used by corporations such as Hewlett-Packard and Microsoft.
While client companies may prefer to distribute podcasts from their own corporate websites, there is growing demand for access to podcast content from the online channels of mainstream media. The Daily Telegraph's website, for instance, has to date hosted three podcasts of CEOs being interviewed by the paper's reporters.
'The difference between our podcasts and, say, a radio interview is that a CEO might get two minutes on radio to justify results but five minutes with us,' says The Daily Telegraph podcast editor Guy Ruddle. 'I also think that embracing new media helps CEOs look up to date. And we're happy to let the company have a copy [of the podcast] to put on its website.'
For the release of its interim results in January, Dixons Stores Group conducted its first podcast interview with The Daily Telegraph. The company was delighted with the experience and has subsequently pledged to deliver more information via alternative channels.
DSG director of media relations Hamish Thompson says it helps that CEO John Clare is articulate and well respected in his field. Because DSG's high-street presence makes it an often-used barometer of the state of the retail sector, broadcasters regularly come knocking for an interview. Podcasts, Thompson says, have therefore been a godsend.
He agrees that they solve problems of scheduling: 'There can be so much to deal with some days that TV is not an option. New technology, on the other hand, is incredibly simple to use. You can get a podcast up and running with a fast turnaround.'
Centrica, owner of the aforementioned British Gas, made its 2005 results accessible both by webcast and as a downloadable mp3 file.
The company has apparently learned the lessons of CEO Brown's communications farrago.
Its PROs may also consider the enhanced communication options offered by mobile phones, especially as 3G video messaging increases its penetration – around 4.5 million people in the UK currently have multimedia mobile handsets.
ITN, meanwhile, says it is in talks with a number of big corporations that are searching for innovative ways of communicating with staff and external audiences. ITN Multimedia managing director Nicholas Wheeler is convinced there will be a heightening of demand for financial stories by mobile. 'It is an easily defined genre of news aimed at a group of people who by their nature are busy and on the move,' he says. 'Being able to keep people up to date with business-changing information is a crucial role for the mobile communication route. As 3G handsets become more prevalent we definitely expect this area of our news and information business to grow.'
As with all new comms channels, however, telephony should be approached with care. Golin Harris joint managing director Jonathan Hughes says: 'The ability to opt in to a text-alert service may prove a useful reminder for the smaller investor. However, the main financial communities will already be alerted to the results as soon as they hit the newswires, so bombarding them with additional text messages would be overkill.'
The swift advancement of communications technology has prompted traditional broadcasters to reproduce their content online. The good news for PROs is that this multiplies the chances of reaching an audience with a short piece to camera or a soundbite into a microphone.
'The benefit of using a digital video format is that you can repurpose it easily,' says Weber Shandwick director of web relations James Warren. 'You may see the more forward-thinking PR companies building video and audio studios so they can produce content and make it available on lots of different platforms.'
Abchurch's Bosdet adds: 'Pure online channels have become increasingly valid as a means of communicating a company's investment story. Newsfeeds, aggregators and even blogs all have a purpose in relaying to as broad an audience as possible why it could be worth investing in a company.'
But the fundamentals of getting results noticed by the wider media
remain unchanged. 'There is still a [media] need for ever more innovative and interesting news,' says Bosdet. 'The old hack adage of "if it bleeds, it leads" remains key to shifting editions, generating click-through online or increasing an audience for the broadcasters.
'In a market of fragmenting channels – and without a correspondent rise in advertising spend – that demand for scoops and the sensational has increased further,' he adds. 'For PR practitioners, this media demand must be balanced with the needs of the client to deliver professional and occasionally dry subject matter such as facts and figures. It's a fine line, but one that can be navigated with the correct training and proper comms advice.'
For busy investors deluged with information, webcasting could provide the convenient, bespoke access they need. And for companies putting their results in the shop window, new comms channels can give them control of the message and enable them to explain figures in the best possible light.
Evolution in financial webcasting
Between Q4 of 2004 and Q1 of 2005, BP upgraded its financial statement webcast from just a summary of slides to include an audio recording of CEO John Browne. So far the webcast does not include moving video footage, although BP says it is monitoring usage, and could improve interactivity in the future.
Lloyds TSB has a sophisticated approach to the announcement of financial results, having both static slides and video commentary on its webcasts. The spotlight is not just restricted to CEO Eric Daniels – financial director Helen Weir has also participated in casts. The most recent webcast was presented in February to analysts and investors.
Vodafone's casts are made available directly through the media centre on its website (as opposed to the restricted investor relations areas of Lloyds TSB and BP's sites). They offer journalists a choice, from a full webcast to a mere Excel spreadsheet. Its last two preliminary results and previous interim results were made available as a webcast.
Case study: British Airports Authority
In the eyes of the British Airports Authority, press releases or website presentations are no longer adequate as PR tools. In the past 12 months, BAA has made the internet a core component of its communications programme.
The number of webcasts on www.baa.com has doubled over the year. Not only does it webcast its interim and annual results, but also puts out CEO interviews, events – such as analyst days out – and news items on developments such as major acquisitions.
'Webcasting gives BAA the ability to communicate to its stakeholders in a timely, transparent manner, and allows its audience to see the CEO in person,' says BAA interactive development manager Stephen Glenfield. 'Video enables us to present a more personal approach and appropriate tone.'
BAA works with corporate TV specialist World Television to make the webcasting of financial results a simple process. 'Filming is usually done a couple of days before the announcement – under strict embargo because we sign a non-disclosure agreement,' says World Television sales manager Tom Roebuck. 'The process has to be slick because we usually don't get longer than an hour with a CEO. Often we take editing equipment on-site so we can get rough edits signed off on the same day – we know how busy senior people are, especially in the run-up to results announcements.'
Webcasting is one of several media channels used by BAA to communicate to its stakeholders. People want information at their fingertips, and in a format that suits them, so BAA is looking at RSS feeds, blogs and podcasting.
This month it will produce its first podcast. These monthly broadcasts will give a round-up of news and events at BAA, and discuss topics such as smoking at airports, emissions trading and airport expansion.
'Webcasting and television interviews are core to BAA's comms programme, both for our results announcements – when CEO Mike Clasper is normally conducting interviews from early in the morning – and events such as investor days out,' says head of investor relations Sarah Hunter.
'The ability to get the right message across to all our investors, both institutional and retail, in a clear and accessible way is vital,' she adds. 'To capture the attention of international investors on a global scale you need high-quality, real-time communications.'
Case study: Diageo
Drinks group Diageo made its first foray into vidcasting and podcasting in February when it released its interim results as
a downloadable file, in both video and audio formats.
The company is currently testing a website set up for journalists to access corporate information. Medialink client services director Dominic Redfern, whose company designed the site, says uptake is being analysed. 'At the moment this is a permission-led initiative, so the link to the site was only sent to registered journalists and chosen stakeholder groups. We can't reveal numbers yet but the PR team at Diageo sees this as an extension of the financial "results day".
Vidcasts on the site are filmed versions of press conferences, available the same day worldwide.'
According to Redfern, the advantage of this 'push' approach to journalists is that Diageo PROs are able to open a dialogue with specific journalists. 'They can email a journalist saying: "We notice you downloaded this vidcast, do you want the next one we send out?"'
CEOs and webcasting
On behalf of PRWeek, information provider Factiva analysed the media output of the 20 CEOs most often quoted in the UK. The results showed how they use webcasts and other forms of communication when announcing company results or giving strategic updates to the public:
* Eleven of the UK's most-quoted CEOs used webcasts to broadcast their annual results. These include the heads of BP, British American Tobacco, Unilever, Barclays, GlaxoSmithKline, Rio Tinto and British Gas.
* Vodafone CEO Arun Sarin was found to be the most prolific webcaster with four separate webcasts in 2005.
BP chief executive John Browne delivered two webcasts, while all the others produced just the one.
* Teleconferences are often used in conjunction with webcasts. Barclays, Shell, Vodafone and Rio Tinto all supplement webcasts with a teleconference.