Friday, November 4, 2011

Investor Relations – Opportunities For Micro And Mid Cap Companies Using Internet

by Toni Vallen

Getting publicity and attention have always been the challenge for micro and mid cap companies. The most common ways have been through arranged investor presentations and through the press. For the larger companies in this segment some analyst coverage has also been available.

The Internet has opened up a whole range of new possibilities for marketing the company to investors. Much of this is not utilized by the companies and their investor relations advisors. The most common way has been to add pages to the company’s website particularly related to financial, corporate governance and share price information. Even when it comes to using the company’s website, the opportunity has been around for years, there is still a large potential for improvement and benefits in communication with the investor community.

Apart from the most obvious, such as making sure the basics, such as financial reports, shareholder structure, share price developments, board and management info, are available, there is more information that can be made easily available for investors. Examples include financial ratios that are easily imported into an excel sheet. Others are: relevant company documents (non-confidential info) and links to all historic company documents that are filed. Although this info can be found elsewhere, it is about simplifying the investor access to the information and making their evaluations of the company easier.

Moving from a more passive IR, by using the company’s website, to a more active IR, the Internet offers a range of tools that are used today in Internet marketing. Investor Relations can be lifted to a whole new level by using modern Internet marketing tools. These tools include more traditional methods such as email campaigns and webcasts/webinars, but also using social media, internet advertisements and Search Engine Optimisation techniques to increase attention on the company.

Creating buzz about a company through social media platforms such as Facebook and Twitter opens up a potential for active online communication with potential and present investors. To be able to use these media channels effectively, one must add on monitoring capability to be able to survey and respond efficiently to the discussions about the company on these platforms.

Another important area of investor relations on the Internet is to make sure that information on the company is ranked high up on the search engine results when a potential investor is searching the Internet. Of great importance is that information published about the company on the Internet displays relevant keywords related to the company’s business.  In this way, for someone who searches for smaller growth companies in a specific industry, the company in question would be displayed among the top search results. 

As in the real world, where it is important that the company is seen in the press, it is important that on the internet, the company is seen on a number of websites. The company needs to do press releases that also appear on newspapers web editions as well as on specialised investor and industry information websites. These articles need to be optimised with respect to key words so that the search engines rank the articles high up on the search pages.

To be able to maximize the possibilities offered by the Internet, and to maximize the effect of IR for small companies, an IR company has to draw on expertise from a whole range of areas.  An IR company that can do that effectively can offer unique possibilities for small companies in getting attention from a wide investor audience in capital raising as well as in ensuring that the share price reflects available information about the company. 

Toni Vallen                                                                                                                

The author, Toni Vallen is managing director and owner of the Investor relations company Seton Services where she has advised micro and small cap companies on investor relations for more than 20 years.

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