Bulldog Reporter's IR Alert - Break Down the Walls: The Advantages of True IR and PR Integration - May 10, 2010
By Miri Segal, Chairwoman, MS-IR LLC; and Henry Feintuch, President, Feintuch Communications
Many investor and public relations practitioners are adept at "talking the talk" with respect to the integration of their company's/client's investor relations campaign with their public relations efforts. But a look at the organization charts of many public companies—or the agencies that serve them—and it becomes clear that they're not "walking the walk." Each exists in silos with programs developed and managed separately, losing the potential value of true integration.
That's particularly unfortunate in an era of interconnectivity heralded by the growth of the Internet, ubiquitous wireless connectivity, social networking and a voracious news appetite fueled by 24-hour news networks and the Web. Further, it's inconsistent with the way investors look at companies and consumers seek out their products. Neither relies strictly on one information modality to make their choices: Investors need to know the value of the products/technology that their investments produce, while consumers may also become shareholders in public companies.
Some proof points to consider:
1. Information is agnostic: Investors can no longer be considered just stock buyers. They are also consumers and business buyers—of technology, energy products and everything else a company sells—and probably great communicators when they buy something they like. But equally as important, they rely on the media as a primary source of information to help guide their purchase, whether it is a position in a company or the widget that a company produces.
A fund manager that purchases stocks on a daily basis is typically a power consumer of the media. He/she is influenced by broadcast interviews with company management, daily newspaper articles about new market trends, feature articles in their favorite consumer media outlets about new products and even by tweets and blog posts.
Integrated programming ensures that strategic investors and shareholders are privy to (and present at) launch events, allowing better understanding of the impact these events have on the company's shares, as well as have a better overall comparative view of the market. At the same time, consumers can benefit from understanding a company's material announcements so that they can be more informed in the marketplace, as many IR-focused announcements provide valuable information about a company's policies, pipeline, revenue breakdown, production timing and price structure.
2. Branding benefits IR: Establishing a strong or memorable brand identity through a comprehensive public relations and marketing campaign supports and increases a company's visibility in the capital markets.
A well-orchestrated campaign can help a company avoid the "never heard of these guys" response from prospective investors. At the same time, it can help attract more investors that are familiar with the company through search engine optimization, Facebook fan pages, special events, feature press coverage or blogging campaigns.
Leading brands like Apple, Google and RIM, which now enjoy strong brand recognition, succeeded in attracting investors in part by smart branding practices.
3. Keep messaging consistent: The approach public companies take to branding themselves should be consistent across all communication channels and regardless of target audiences.
If the Whole Foods brand reflects organic ingredients, health, freshness, a green planet, local producers and contributions to society; these brand attributes should be reflected in the dialogue with investors and consumers and should highlight the competitive advantages and strengths of the company versus the competition. If the message a company sends to the investment community is that it is looking for acquisitions as its growth strategy, the same message should be reflected broadly in its PR campaign—otherwise, a company will be sending confused signals that will impact its valuation.
4. Integration is key: The marketing of stock and the sale of a company's products and services are not that dissimilar. Wall Street and Main Street often converge in the world of public opinion, brand and impression.
Consider the ripple effect from interim production announcements or awards on a company's share price. It's certainly a factor to consider when preparing to raise capital, make an acquisition or plan for other strategic financial needs. Increased interest in a company is often spurred on by non-material announcements that are often considered PR filler. But they have been shown to trigger increased volume or share price based on investors' perceived impact that these announcements may have on factors they follow such as revenues, partnerships and profitability.
In summary, among the dangers of siloed communications is the mistaken notion that the investor audience doesn't care what the consumer audience receives and vice versa. But as we've indicated, to some degree, the investor is a consumer and every consumer is a potential investor. Having an integrated communications platform ensures that every investor call answers the questions that the general public would ask in the face of difficult issues, and each consumer communiqué undergoes the red-face test that an investor would put them through.
From a cost perspective, utilization of an agency that has both capabilities ensures that all communications activities undertaken for a company are consistent and unified and therefore cost-effective both in the short and long term.
It's time to take down the walls that divide us and begin marketing companies' stock and enhancing shareholder value with a more holistic attitude.
Miri Segal-Scharia, chairwoman, MS-IR, has 12 years of experience working with international companies, ranging from start-ups to publicly traded companies in a variety of industries with hundreds of millions of dollars in revenue.
Henry Feintuch, president, Feintuch Communications, is a senior communications practitioner and former broadcast journalist with nearly 30 years of experience providing counsel to organizations ranging from start-ups to Fortune 1000 companies.