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Business Wire Releases New White Paper: Is Your IR Site a Security Liability?

The modern IRO has many areas of responsibilities. At the top of that list should be the creation and maintenance of an investor relations site, a beneficial communications tool that makes it easy for analysts, shareholders and the media to find essential financial documents and material news.

A platform offering important financial news, requiring stringent security measures, might seem like cause for stress, but the good news for IR professionals is that Business Wire just released a new white paper outlining the best practices for internal workflow, technical compatibility, and security awareness and diligence. Is Your IR Site a Security Liability?, written by Ibrey Woodall, Business Wire’s senior vice president of web communications services,  offers guidance and tactical tips for ensuring that your branded IR site is safeguarded against situations that may compromise your efforts, such as the premature disclosure of earnings data.

Download Is Your IR Site a Security Liability? now and find out how to better protect yourself against unwanted investor relations disruptions.   

One of the most important elements of an IR site is the internal workflow that makes it function, identifying how an investor relations team can efficiently prepare, publish, and protect required content.

Workflow topics covered within the white paper include:

  • Assignment of site administrators
  • Password management
  • Recommended content for publication
  • How to best streamline workflow process

With this white paper, Ibrey aims to educate the reader and bring about a stronger understanding of the technical compatibility between all of the systems used to both announce and host your company’s financial information.

Finally, learn how to protect yourself against the very real threat of cyber security incidents. Ibrey points out what questions to ask your IR site vendor and how to look for a strong information security program supported by industry standard certifications.


About the author

As SVP Web Communications Services, Ibrey is responsible for Business Wire’s InvestorHQ IR site and NewsHQ online newsroom solutions. She holds a B.A. in Mass Communications and a Webmaster certification. Ibrey has been involved in strategy and launch of websites for 3M, Bank of America, Gannett, Office Depot, Procter & Gamble, ServiceMaster, Williams-Sonoma and many other publicly traded and private companies.

IR Professionals, Institutional Investors and their Opposite Views on Social Media

By Zach Wallens – Specialist, Global Disclosure & Financial Reporting Services

Investor relations professionals and institutional investors have long been in a catch-22 scenario regarding social media. Though each side was curious in using social channels to engage their counterpart, both exhibited hesitation, hoping the other party would kick off using it as a business medium. In NIRI’s 2016 Social Media for Investor Relations Survey, the majority of survey respondent Investor Relations (IR) professionals (72 percent) noted that they did not use social media for work functions, a two-percent decrease compared to NIRI’s 2013 study. When asked why they aren’t tweeting, blogging or posting on Facebook, IR professionals said it was primarily due to “lack of interest in the medium by the investment community.” And for those few IR teams that are using social media, very few were utilizing metrics to review the performance of their efforts.

So from an IR perspective, is social media dead? While the pulse is shallow, there are some signs of life.

There are certainly some IR teams that have become more comfortable using social media, for personal and professional functions. Social platforms allow them to interact with existing and prospective investors and analysts, control messaging, and increase traffic to companies’ corporate websites. It also serves as a tool for crisis communications, providing a real-time method for communicating with all their various audiences and stakeholders in the social media space.

According to BNY Mellon’s 2015 survey of global IR trends, 30 percent of public companies (54 percent of mega caps) use social media for IR purposes, up from just nine percent in 2010. Some forward-thinking companies are already engaging the investment community in the social realm.

Zillow Group Inc., an online real estate database business, is one example of a public enterprise using social media for IR purposes. In addition to distributing its earnings releases via the traditional medium – a wire service – the company uses live tweets and infographics to increase the overall awareness and reach of its news during earnings calls. Zillow has always been at the forefront of social media, so when the SEC announced new rules for disclosing material information via social means, the company took the leap. Zillow’s CEO, Spencer Rascoff, said in an email to The Street, "Zillow was an early adopter of social media, and for me personally, Twitter is a preferred method of communication. It made sense for us to expand our strategy to begin connecting even more with the investor community via Twitter, Facebook and our blog…”

Juniper Networks, with its multi-featured investor relations website and IR-focused Twitter account, is another example of a public company leveraging social media, in addition to traditional mediums, to publish material content. Juniper’s IR team regularly posts relevant messages on their Twitter feed, @Juniper_IR, including the announcement of their new IR website, links to webcast presentations and live updates of their earnings call.

The role of social media is slowly changing, institutional investors say.

In April 2015, Greenwich Associates released a report titled Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process. The report questioned 256 corporate and public pension funds, insurance companies, endowments and foundations in the U.S., Europe and Asia (Portfolio size ranged from less than $250 million to more than $10 billion in assets).

The study revealed that contrary to popular opinion, institutional investors rely heavily on social media, alongside traditional media channels, when making investment decisions - nearly 80% of institutional investors use social media as part of their regular activities. Of respondents who leverage social channels for business, 30% reported that material gathered using social media had influenced their investment decisions. Additionally, 37% had informed their company’s decision-makers of information obtained on social media. This is huge news for IR teams who continue to adhere to the outdated idea that institutional investors have no interest or no usage of social for work purposes.

So which platforms are institutional investors using? At 52%, LinkedIn topped the list as the most used social platform with Facebook and Twitter closely behind. 

“These results show that social media is influencing decisions that can result in the allocations of billions of investment dollars around the world,” the study’s author Dan Connell, Head of Market Structure and Technology at Greenwich Associates, said 

in a statement.

“With approximately 40% of the institutions globally expecting to increase their use of social media in the coming year, we’re projecting a further, rapid increase of social media influence in institutional investment markets.”

The future of social media: Divergent views

It’s evident that investor relations professionals and institutional investors view social media from very different perspectives. IR teams see a medium that is generally not utilized by their constituents, with little overall value to their communication efforts. Alternatively, institutional investors are following online accounts and blogs of public companies at a growing rate, using social media to assist in shaping their investment decisions.

These opposing attitudes are the foremost impediment to widespread adoption, and to both sides achieving the quantifiable, bilateral benefits that social platforms can deliver. Gaining an advantage from social media, IR teams and investors should understand, is only attainable if both sides are committed to deriving value from these modern, online communication tools.

 

For IROs, this means abandoning their perception that institutional investment professionals have no interest in IR-specific social content. The Greenwich Associates study revealed that most institutional investors use these tools (infographic pictured left), yet IR teams, according to the NIRI survey, say sell and buy-side analysts rarely demonstrate interest in engaging via social media. These conflicting views confirm a disconnect in communication between the two, and fosters on both sides misconceptions regarding one another’s interest in social interaction.

The path to widespread adoption of social media among IR teams and institutional investors has been a long one, but it appears both have begun to grasp the truth: For public companies and investors to gain value from social platforms, each side must consider the necessities of the other.

Interested in learning more about how you can leverage social media to reach and activate your investor relations audiences? Read this free guide on the 12 Benefits and Risks of Social Media for Financial Disclosure.

 

Why Newswires? The Past, Present & Future of Trusted News

Newswires have a long tradition of fulfilling an industry need for the dissemination of market moving information to a wide range of news organizations and other stakeholders. Trends and technical advancements have influenced how news is both distributed and consumed.

The stability, credibility and widespread usage of newswire distribution networks are a primary reason why communications professionals view them as the backbone of the news dissemination process.

With over 50 years of industry leadership, Business Wire has established irrefutable trust from within the news market and has proven its thorough understanding of the needs of the digital age by creating a technologically sophisticated, patented distribution network. This trust and innovation have made Business Wire the launching pad for turning company news releases into credible breaking news.

TRUSTED SOURCE

The credibility and tradition of trust earned from journalists and other downstream consumers of Business Wire content enables companies of all sizes to confidently submit press releases for distribution across the wire. Within its 22 local newsrooms around the world, Business Wire employs experienced and knowledgeable editorial teams who review this content to confirm legitimacy and accuracy. This process of vetting news content is a key feature of Business Wire’s value proposition and results in the unquestioned reliance on our service by leading journalists and investors who act upon the breaking news we deliver.

Business Wire has spent over 50 years building symbiotic relationships with media, investors and consumers by regularly delivering factually reliable and timely corporate news content.

REACH

A comprehensive global distribution system and the hard-earned trust of media and investors results in Business Wire being able to provide broad reach and visibility to its members. In addition to direct distribution of releases to the news systems and mobile apps of publications large and small on a global scale, corporate announcements are disseminated across a platform in which all relevant potential audiences have access to the information. Pushed to media and investors, and SEO friendly on the web, virtually anyone can easily find Business Wire content and move on it, from reporter to consumer, from investor to blogger. Further, all information is distributed in full text, ensuring full disclosure of all the information an issuer wishes to convey. It is also simultaneously transmitted to all end users over a private, encrypted network that guarantees that it is visible and not trapped by spam filters.

Business Wire has partnerships with 60 national and international news agencies facilitating reach to more than 89,000 media outlets in 162 countries. Industry professionals recognize our benefits as exemplified by the 92,000+ journalists who subscribe to our PressPass service, offering convenient and customized news feeds. We also offer more than 1,676 delivery options in more than 50 local languages that reach specified geographic markets and offer a choice of nearly 200 industry trade categories at no additional charge.

VISIBILITY

Every day companies spend significant dollars creating a broad array of content designed to establish credibility among, and deliver key messaging to, their constituencies. In each case, the success of these programs is tied directly to their visibility.

The more promotion content receives, the more likely it is that the target audience will see and act upon it. Rather than simply promoting the content via owned channels or social advertising and platforms, which can limit visibility, utilizing a newswire can enhance visibility, coverage and engagement and drive the traffic needed to make the program achieve its objectives.

With Business Wire distribution, news is disseminated across major global platforms including AP, AFP, Bloomberg, ThomsonReuters and Yahoo! Finance, with dual-platform posting to BusinessWire.com and EnhancedOnlineNews.com. Your press release also includes interactive hyperlinks and social sharing links to help drive engagement and content sharing, improving performance in search. The goal is to create the kind of visibility that will lead to user activity and engagement.

INNOVATION with BizWireTV

Business Wire created video programming aimed at showcasing not only the importance and impact press releases still hold, but the growing need for their use as a legitimate form of messaging in the wild-west age of internet platforms. Each news release that crosses our wire triggers activity across the web, views, shares, social engagement, mentions and more specifically, sentiment. This data serves as the solution to how Business Wire will revolutionize the industry. The video programming that serves as the solution, BizWireTV, takes the traditional press release and evolves how the message held within reaches audiences around the world. 

In partnership with Al Roker Entertainment, Business Wire’s BizWireTV spotlights stories on disruptive startups and technologies, entrepreneurs and funding announcements, hot business trends and companies to watch. A core component of the video programming is news-related data analysis powered by Business Wire’s NewsTrak reports and NUVI social media tracking. Business Wire has access to a lot of information. We know how often each release is read, how images and videos perform and how the social media universe is reacting to, commenting on and sharing news stories. Using that information as our guide, we turn rich stories and deep data that we have access to into video news show tailored for digital platforms. This data and social engagement metrics help identify trending stories. Video footage is then incorporated to help share stories in an innovative way.  The goal is to deliver it all with a true news spirit that leaves the viewer feeling smarter, better informed about upcoming economic or industry developments and ready to share it with others interested in staying informed.

With over 5,600,000 video views on BusinessWire.com, 1,400,000 views on Facebook and Twitter, 1,000,000 views of news releases announcing new episodes, and 26,000 social media mentions reaching over 25MM followers, BizWireTV has gone far and above all expectations of popularity.

SECURITY

Business Wire’s patented, simultaneous NX worldwide network ensures that news is distributed to every outlet at the same time and in a highly secure manner. In fact, security is Business Wire’s number one priority. As such, Business Wire is currently the only newswire service to have received the Service Organization Control [SOC] 2 Type II attestation engagement report, providing independent validation that the company’s internal security controls are in accordance with the American Institute of Certified Public Accountants’ applicable Trust Services Principles and Criteria.

LONGEVITY

One sure way to maintain visibility is to also ensure longevity.

The online archiving of news releases by newswires ensure that news can easily be discovered by interested parties by searching company names, ticker symbols or key phrases. Such archiving of information guarantees that news is visible and available for reference long after its initial release. Business Wire’s distribution includes full-text posting to thousands of websites and financial databases, such as Factiva and Lexis-Nexis, which archive news over a long period of time, increasing the discoverability of issuers’ news to researchers.

DISCLOSURE

As a result of Regulation Fair Disclosure, it is key for today’s public companies to simultaneously disseminate their market moving news to as wide of an audience as possible. It is important to allow analysts, reporters and interested consumers to find company news, and act upon it, as quickly as possible, with no unfair advantage given to any one party.

Business Wire’s simultaneous disclosure network, included in every US geographic wire circuit distribution, simultaneously reaches all key disclosure media including the Associated Press, Bloomberg, Dow Jones, Reuters, Investor’s Business Daily, Moody’s Investors Service, Standard & Poor’s, The New York Times, The Wall Street Journal, as well as full-text posting to financial databases, such as Factiva and Lexis-Nexis.

A newswire is a trusted method to meet Regulation Fair Disclosure, which ensures all interested parties have access to your news and financial data at the same time. While the SEC has amended its guidance on disclosure to include social channels under certain circumstances, in reality, social channels were not designed or positioned to be disclosure vehicles. Twitter, Facebook and other services modify the visibility of all content to maximize their own advertising revenues. As such, the vast majority of public issuers utilize newswires to ensure broad and simultaneous reach to the investing public.

PUBLIC DEMAND

News consumption is at an all-time high and recent studies show that potential purchasers are spending more time online researching products and services before ever contacting the company directly. Using a newswire helps ensure that news is easily found in the research phase of the buying cycle. The existing interest from potential purchasers coupled with the high visibility provided by a newswire distribution, positions information to both be seen and acted upon in a timely and efficient manner. The news is available in full text as the issuer intended, providing an additional layer of certainty that the consumer has access to full, unfiltered information.

According to a media survey conducted by Business Wire in 2016, 53% of the responding journalists use a newswire service daily. Newswires are a vital utility in the news industry and as a result of Business Wire’s veracity and innovative practices, media professionals routinely rely upon our service.

Business Wire has spent over 5 decades deeply rooted in the news industry and recognizes that a new age has arrived. It is with optimism and enthusiasm that we embrace this new digital age and we look forward to building on our foundation of innovation in order to continue to provide the media, the investment community and the public with a comprehensive, transparent and irreplaceable mechanism for distributing vital corporate news.

 

What Are the Real Consequences of Fake Financial News?

The American Institute of Certified Public Accountants, or AICPA, released the results of a new survey revealing the startling impact that fake financial news is having on Americans' ability to make retirement, investment and healthcare decisions. Fake news is no longer a simple distraction or nuisance, it is a dangerous tool subverting investing habits and people are concerned. 

Learn more about the AICPA survey from the release issued on Business Wire.

There is a proven antibiotic to treat exposure to fake news, unfortunately it’s time consuming and involves vetting and verifying information. To the casual news consumer this solution treats the fake news epidemic successfully, turning it into nothing more than an inconvenience and at most temporary embarrassment in the form of a social media post. To the investing community that relies on quick transactions based on constantly changing trends, however, fake news is becoming a serious problem. 

While more than 63% of Americans say that the spread of fake news has made it more difficult to make critical financial decisions, the real red flag is that only 14% expect the fake financial news epidemic to subside and become less prevalent in the next few years. This pessimistic outlook is a reflection of today’s media landscape. However, tools do exist to ensure consumption of quality, factual news.

One consistent bright spot is the trusted news content provided by commercial newswires, which publish news directly from thoroughly vetted sources - brands, corporations and organizations whose announcements move the markets.

To further narrow the field, a long-tenured commercial newswire such as Business Wire has earned the hard-won trust of journalists and other downstream news consumers – credibility that took decades to establish and almost a foreign concept in today’s pop-up digital media environment. This proud tradition enables companies of all sizes to confidently submit press releases for distribution across the wire and allows those reporting on and consuming the end product to be equally confident in the veracity of the material being disseminated. 

A commercial newswire is a widely relied upon method used to meet Regulation FD, which ensures all interested parties have access to corporate news and financial data at the same time. While the SEC has amended its guidance on disclosure to include social channels under certain circumstances, in reality, social channels were not designed or positioned to be disclosure vehicles. Twitter, Facebook and other services modify the visibility of all content to maximize their own advertising revenues. Social media platforms are also plagued by fake news, making it more difficult to discern fact from fiction.  As such, the vast majority of public issuers utilize commercial newswires to ensure broad and simultaneous reach to the investing public.

While fake news is believed to be here for a while, the platforms that have spent decades developing trust from both newsmakers and news consumers continue to service the public with valid information. It’s easier to focus on where to look for real financial news when you know where it’s coming from. 

 

Business Wire and Workiva Partner to Reduce Risk and Streamline the Disclosure Process

 

By Matt Van Tassel, Manager, Global Disclosure Services

The age-old saying goes “time is money” and for publicly-traded companies, regulatory disclosure is the apex of time-consuming requirements, both in weight of importance and resulting impact on business decisions.

The disclosure process requires material information be managed during an often complex and prolonged undertaking. Specifically, material information is often input into multiple platforms, thus introducing the potential for version control issues.  

Therefore, based on feedback from of our customers, Business Wire has decided to streamline the material information disclosure process by partnering with market-leader Workiva. Users of Workiva’s Wdesk platform will soon be able to securely submit earnings press releases and other financial disclosures directly to Business Wire via a secure file transfer process. This integration will improve efficiency in the disclosure process by eliminating the need to export your disclosure file from Wdesk before submitting to a newswire for distribution.  Wdesk users will be able to seamlessly locate their files in Business Wire’s order-entry system Business Wire Connect, enabling mutual customers to disseminate their messages to the capital markets quickly and securely all from one controlled environment.   

Why Workiva?

Business Wire sought out, and found in Workiva a brand that comprehensively understands the needs of publicly-traded companies. The Wdesk platform aids organizations in collecting, linking, reporting and analyzing business data, and now it feeds directly into Business Wire Connect, strengthening both companies’ ability to provide solutions to clients and partners. Our version of an ideal partnership lies in two brands, already industry leaders, coming together to create something never before available.

Workiva is easy to identify as a leading force, regularly ranking above all other available solutions for collaborative work management platforms. A recent case study conducted by Workiva showed that an Airline client using Wdesk completed their 10-K report three weeks earlier and their 10-Q report two weeks earlier than in previous quarters. That same client realized a 187% ROI and payback in less than three months. 

Customer Benefits

  • Reduced Risk: Wdesk will offer a secure connection to Business Wire’s Connect Portal
  • Time Savings: There will be no need to export and resave the file from Wdesk before submitting to Business Wire
  • There will be no charge for the integration to Wdesk customers

Business Wire’s Security

Business Wire is the only newswire in receipt of a SOC 2 attestation engagement report confirming its adherence to the AICPA’s security standards. The receipt of the SOC 2 report reinforces Business Wire’s continuing commitment to the most stringent security policies and procedures in the industry. Additionally, Business Wire is the only industry service provider with a proprietary, patented distribution platform for your important corporate news.

The new functionality will be available to customers in the first calendar quarter of 2017. 

 

 

 

 

 

 

 

 

 

 

Learn more about Workiva and Wdesk and the benefits of Business Wire’s new partnership. 

 

The ROI of News Releases: Business Wire Stands Above the Rest

By Gregg Castano, President, Business Wire

A news announcement’s value is only as effective as the measured impact it has on the intended audience. For publicly traded companies, the biggest impact is typically financial, to influence individuals in how they invest in and analyze the markets. University of Chicago doctoral candidate Eugene Soltes conducted a study in 2009 aiming to find a correlation between the dissemination of company issued news and beneficial fluctuations in capital markets. His research, including the analysis of 9.3 million articles, indicated that, “greater dissemination causally leads to lower spreads, increased share turnover, and lower idiosyncratic volatility.”

Identifying the best avenue for news issuance is a vital decision that can dictate the future of company communications. Business Wire has a vested interest in being the optimal avenue and made it a priority to define the unmatched benefits our services provide. With the help of News Quantified, we decided to put Eugene Soltes’ theory to the test by setting out to measure the impact of company issued news on financial markets by the top newswire services. The report was based on an assessment of key financial elements including bid-ask, volume, and volatility.

The execution of this study was intended to paint a definitive picture of how company announcements issued via a newswire, specifically Business Wire, affect market activity. The results were significant and they were consistent. The beneficial impact of a Business Wire issued news release on stock market activity is second to none.

The data for the report was compiled by a first-of-its kind research initiative conducted by News Quantified that leveraged a sample size of over 211,000 press releases issued between January 2014 and April 2015.The releases were for companies whose stocks trade on the NYSE and NASDAQ and were disseminated by Business Wire, PR Newswire, GlobeNewswire and MarketWired.

What were the results? Releases issued through Business Wire had a 4x bid-ask spread improvement over the combined average of the other tested newswires. This means that Business Wire issued news releases influenced easier conversion of stock to cash. Other metrics assessed showed similar results. Business Wire’s influence on trading volume showed to be 24% greater and volatility saw a 16% reduction when compared to the combined average of the other wires. For news releases issued through Business Wire the result was more stock being traded with more stable fluctuations in price change. All across the board the numbers show that investors are not only paying attention to, but also acting upon the news stemming from Business Wire’s patented distribution network.

An analysis of the difference between asking price and the price a buyer is willing to pay for a stock on the day company news is disseminated illustrates a direct cause and effect. How does a news release influence the liquidity of a stock? The same applies to measuring the amount of stock being traded in a given amount of time and the amount of uncertainty or risk regarding the size of changes in a stock’s value. These bid-ask spread, volume, and volatility figures, as well as the other metrics provided in the report, pinpoint the beneficial influence a Business Wire issued news release has on investor sentiment.

This data is significant because it exhibits a consistent pattern.  These findings are based on the foundation of a bridge between public relations and investor relations. When financial ROI is tied to company issued news, one distribution method stands above the rest. A news release issued through Business Wire will have the strongest impact on trading activity around your company stock.

News Quantified is an industry leading innovator in measuring news’ impact on stock market activity. Founded by Oliver Schmalholz, News Quantified utilizes a specially developed software system to monitor daily news releases and the trading behavior of specifically selected stocks. The extensive measurements provided facilitate a clear understanding of the type of investors being reached by company issued news and how their trading behavior is being influenced.

Business Wire has a long tradition of earning trust from both media and communications professionals.  A measure of that trust and the value we bring to our partners can been seen in the News Quantified analysis that identifies Business Wire’s superior market benefit on company issued news. This is a new benchmark of influence and we look forward to continuing to drive innovation in market-moving news dissemination for our customers.  For news results that matter most in the C-Suite, there is no more effective “wire” than Business Wire.

Learn how Business Wire’s Market Impact Report facilitates access to data attributing tangible ROI to communications management for US publicly traded companies listed on the NYSE, NASDAQ, OTC, and now for Canadian companies listed on the Toronto Stock Exchange (TSX) and TSX Venture Exchange.

The Media Blueprint is Out: Results from the Business Wire 2016 Media Survey

This week, Business Wire released the Media Blueprint, a collection of key findings from Business Wire’s annual media survey. The results of the survey shed light on how leading journalists and reporters view today’s communications, creating a blueprint for the journey news takes from source to audience.

Communicators have a vested interested in the current trends of how journalists seek out, identify, and publish news. This survey offers an in depth look at the branded news industry from the very perspective that Comm Pros need. It details everything from how journalists and reporters look for stories to how they prefer to be reached, from the best day of week and time to method (email, phone, etc).

The data was released to coincide with the start of the PRSA International Conference, where thousands of attendees will connect with more than 150 industry experts from all career levels, sectors, work environments and industries for three days of practical insight and networking.

A glimpse at the findings

In an interesting reversal from last year’s survey, this year 50% of respondents, the majority, perceive The New York Times “traditional” style of media as being the future of news media, while the BuzzFeed “interactive” model came in second. When analyzing the data further it was revealed that the BuzzFeed model does lead among the Generation X demographic, however, the emerging journalists in the Millennial age bracket lean towards Reddit.    

Respondents were asked questions on a wide range of topics including:

  • Integrating more interactive multimedia online
  • Press release elements most beneficial to reporters
  • The role of long form and short form news produced by platforms such as BuzzFeed and The New York Times
  • Reporters’ increased usage of video

Key questions were asked regarding journalist’s use of newswires. Journalists that use a newswire do so daily (54%) with nearly a quarter using one several times a day (24%).

Online Newsrooms

While pitching the media and issuing a news release constitutes outbound media relations, it is just as important to have an inbound resource, an online newsroom and investor site. Our questions to the media regarding their engagement with online newsrooms will help companies and organizations determine if their website is properly organized and fully utilized to meet the needs of journalists and reporters. Our findings relay the blueprint for constructing a newsroom that the media wants and expects.

One expectation is that over 50% of media surveyed want between a minimum of 1-5 years of historical press releases available within the online newsroom, while almost 30% want the organization's entire archive.

As technology continues to evolve and push the digital age further, the question of how journalists seek out the news they present for public consumption has never been more important. The industry’s redeveloping identity, traditional models of news delivery and encroaching new platforms create a wide variety of communications’ tools and outlets for brands to consider when issuing a news release.

Download the free 2016 Business Wire Media Survey

The report and analysis are from a Business Wire survey of more than 600 members of the media from more than 40 countries - our largest study yet.

 

 

 

 

WHAT ARE THEY SAYING? Journalists and Investors Get Candid about Your Earnings’ Release

By Vilan Trub, Marketing

It hasn’t been a secret for some time that reporters are more interested in simpler, easier-to-follow earnings’ releases. We’ve covered the subject before, even bringing attention to a “Squawk on the Street” segment where commentators David Faber and Jim Cramer took several issuers to task for their “newfangled” press releases.

Read - Financial Journalists: “Where’s the News Release?”

Several months passed and it’s the same old story again. New articles have been appearing by Ciara Linnane, a longtime critic of confusing disclosure methods, and they plead with those that continue the practice to include a standard press release. By forcing interested parties to have to find the financial data they’re looking for, stress is created by delaying a process that needs to occur in real-time. Peter Cardillo, chief market economist at the retail brokerage First Standard Financial, gave his take on the consequences of the added time it takes to get the information he needs: “by that time, if it’s good news the stock is already up, and if it’s bad news the stock is already down.”

Read - How companies are making earnings more stressful for investors

It’s important to revisit the discussion and reiterate the importance of a traditional earnings statement. Although new technology creates opportunities for issuers to communicate their message using multimedia and other tools, assets that are welcomed by journalists and investors, these practices should be applied only in addition to a standard release, not instead of one. Think traditional + visual, not traditional vs. visual.   

It wasn’t all doom and gloom however, as among the articles was a positive sign as Kohl’s was praised for providing reporters and investors with a “straightforward” release. Referring to the release, Linnane writes, “coming in an earnings season in which companies continued to irk reporters and investors alike with releases that concealed important numbers like revenue and included hard-to-follow non-GAAP metrics, Kohl’s release was a delight.”

Read - Kohl’s deserves praise for a clean, easy-to-follow earnings release

 

 

 

Study Confirms English-Language Newswires Provide Capital Market Benefits to Euro Firms

By Zach Wallens – Specialist, Global Disclosure & Financial Reporting Services

 

For United States-based public companies, it’s long been a necessity to leverage a newswire service for disseminating material announcements. After all, Business Wire has distributed such information to the financial community for more than 50 years, helping clients meet disclosure requirements and realize capital market benefits.

Publicly-traded European companies, however, are more recent converts to using newswire services to publish market-moving press releases, such as earnings announcements. Like their American counterparts, European businesses that use newswire services experience benefits beyond their company’s compliance with regulatory guidelines, according to a new study conducted by Romain Boulland, François Degeorge and Edith Ginglinger and published in the Review of Finance.

Use of an English-language wire service, the report found, provides European firms with increased investor attention to earnings news, as well as other advantages, compared with when they distributed their news in a continental European language and through alternative dissemination methods. Among other highlights, the research reveals that European companies, after they adopt English-language wire services:

  • Experience smaller 60-day, post-earnings announcement stock price drift. The metric gauges how a company’s stock price reacts to its earnings announcement, from two days to 60 days following news dissemination. This outcome is significant, the study explained, because previous research established that smaller post-earnings drift is an indication of more investor attention.
  • See an increase in abnormal trading volume around the distribution of earnings releases.
  • Achieve stronger initial reaction to earnings surprises (when a company reports profits above or below analysts’ forecasts). Wire service adoption “speeds up the incorporation of a firm’s earnings news into its stock price.”
  • Receive an upturn, on average by 33% to 41%, in the number of articles about the company on Reuters or Dow Jones.
  • Attain a boost in the number of analysts covering the firm.

The research also determines that changes to the European regulatory environment – mainly the implementation in 2007 of the European Union Transparency Obligations Directive – facilitated the majority of the surveyed companies to adopt newswire distribution. Though the EU-wide framework refrains from requiring English-language distribution of company announcements, it does allow firms that are traded in multiple European markets to publish regulatory news in “a language customary in the sphere of international finance.” Left to their own discretion, most EU-based organizations discerned the directive’s wording to mean they could then distribute announcements in English, in addition to a language accepted by the regulatory authority of their home state.

So given the breadth of quantifiable wire service benefits revealed in this study, how can European companies use this information to distribute their earnings releases in alignment with best practices? First and foremost, it’s essential that these firms disseminate their announcements via a newswire service, as the uniform formatting and distribution reach generally results in greater, and faster, investor attention. For the few European businesses that aren’t already benefiting from this strategy, now is the time to switch. In fact, the study found that as of 2010, 80% of European firms used newswire services.

Dassault Systèmes, based in France and traded on the Euronext Paris exchange, provides a strong example of the above practices. The company distributes its earnings press releases, in English and French, through Business Wire’s France Disclosure service, which sends both languages to the AMF (France’s regulatory body), Euronext, financial media, websites and databases. Dassault additionally disseminates the English version of its earnings press release via our New York Metro circuit, increasing visibility to the U.S. market and investment community.

In addition to selecting an English-language newswire distribution, European companies can also maximize interest among investors and media by implementing other best practices, such as using multimedia and hyperlinks. Business Wire recently published a white paper titled, “Best Practices for Enhancing Earnings Releases,” and in March Business Wire and Edelman announced the results of a survey proving that, as an addition to traditional earnings statements, visual and creative features are becoming a critical component of these announcements. These services and resources constitute just some of the ways in which we support our clients, via distribution channels and other proprietary products, as they grow brand awareness and remain regulatory compliant.

Financial Journalists: “Where’s the News Release?”

By Neil Hershberg, Senior Vice President, Global Media

 

Frustrated financial journalists are finally speaking out: there is no substitute for a full-text earnings press release. Their irritation at the latest issuer iterations in releasing their results has boiled over on-air, and online. Clearly, the reliable – and resilient -- press release has many staunch supporters in the investment community. With another earnings season drawing to a close, MarketWatch reporters Ciara Linnane, Tomi Kilgore and Francine McKenna explained how earnings reports are often failing to provide investors with the critical information they need in an easy-to-access format.

Nearly a year earlier, Linnane and Kilgore tackled the infuriating tactics common to many earnings announcements. In revisiting the disclosure practices of listed companies, they found that the situation is worse today.

The authors are exasperated by companies that fail to issue press releases, and cite notice-and-access style releases as a particular “pain point.”

“The growing number of companies that no longer put their earnings into a tidy news release, instead distributing a link to their website, which links to a ‘shareholder letter’ that is often a confusion of tables and charts,” the authors write in their most recent report.  

The authors also challenged issuers re their release retrenchment in their initial report, noting that reporters are exhausted from all the contortions they need to go through to access key corporate information.

“A growing number of companies have stopped publishing results in press releases that run on news feeds, forcing reporters to click through multiple links to find the data they need,” the authors lamented. “For a reporter trying to get important news to the public as quickly as possible, this method not only added extra steps but forced him or her to contend with a website that slowed significantly as multitudes of people clicked the links at the same time. So why not release the news both ways, so the public can get the news quickly and/or visually.”

CNBC also weighed in on the recent troubling trends in investor relations.

“Squawk on the Street” commentators David Faber and Jim Cramer took several issuers to task for their “newfangled” press releases. They called these earnings experiments “indecipherable,” and  that they were designed not to be read.  They implored issuers to distribute their news via “an old-fashioned press release.”

Business Wire welcomes the recognition by these leading journalists spotlighting the important role of press releases in our financial markets. Business Wire plays a vital role in delivering earnings and other material news announcements to market participants via its patented news delivery platform, “NX.” In addition to our synchronized delivery, we always include ticker symbols, proper headlines and attribution, tables, and contact information to promote ease-of-use. We properly format and meta-tag releases to expedite their processing by the world’s leading information platforms.

Clearly, there are many exciting and innovative opportunities for investor relations professionals to use new tools to communicate their message.

Business Wire and Edelman Financial Communications & Capital Markets recently announced the results of a new study that supports the use of visual storytelling in earnings reporting.

Among the key finds of the study:

1) The earnings release is considered to be an essential resource for all audiences and provides fast, easy-to-access data.

2) There is still absolutely a need for traditional financial data to accompany the visual elements of an earnings release; it must be clear that these earnings infographics are in addition to, and not a substitute for, traditional earnings statements. In fact, this multimedia tool is most effective when used in addition to traditional releases, focused on quantitative data.

Visual and creative storytelling will most certainly play a larger role in future earnings releases. For now, the Street has spoken: full-text earnings releases remain the backbone of “best practices” investor relations.

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