Even as technology budgets shrink, IR teams are leveraging websites, videoconferences, surveillance and targeting tools to a greater extent, and report high satisfaction levels.
While the median spend remains $20,000-$49,999, the overall spend has decreased in the last two years, according to the IR Magazine Global IR Survey, conducted in Q3 2020. The survey gathered information from 249 participants.
More than a third (36 percent) report spending less than $20,000 on technology, compared with 28 percent in 2018, while 37 percent paid out $50,000 or more, compared with 43 percent two years ago. Median technology spends for both North American and Asian IR teams have fallen, with more than two thirds of Asian IR teams saying they spent less than $20,000 in the past year.
Companies large and small have seen cutbacks. Half of mega-cap IR companies (those with a market capitalization of $30 bn or more) spent less than $50,000 in the last year, compared with 38 percent two years ago. More than half of small-cap IR firms (those with a market capitalization of less than $1 bn) paid less than $20,000 for tech, as did more than three in 10 IR teams at large-cap companies ranging in size from $5 bn to $30 bn.
Tools of the trade
Websites, videoconferencing/virtual meeting tools and newswire services are the top three preferred tech tools for cash-strapped IROs – although European IR teams (83 percent) and Asian IR teams (85 percent) are more likely to use videoconferencing than their North American counterparts.
There has been a notable bump in the reliance on websites in the past two years, with 42 percent of global respondents overall increasing their use of websites, rising to 50 percent of Asian IROs. Almost six in 10 mega-cap IROs also did so.
While some respondents say regular website updates are a challenge, others like the egalitarian nature of a platform that offers a one-stop-shop for key messages and financials to all stakeholders in a timely manner.
‘More and more investors are using the website,’ notes one Canadian respondent at a small-cap company, speculating that investors are likely spending less time commuting and more time online.
As for videoconferences/virtual meetings, an overwhelming 97 percent of regular users saw the communication tools used more regularly in the past two years. And almost nine in 10 users are satisfied with the technology despite infrastructure and logistical challenges inherent in the work-from-home era.
Targeting investors
Tools for targeting and surveillance and for preparing filings and disclosures are being relied on more often, particularly in North America and at mega-cap companies.
The market for targeting tools has flourished in the past two years, with 43 percent of IROs saying they have increased usage. This is less noticeable in Europe, however, where only 31 percent of IROs have seen an increase.
Some IROs use the tools to prepare for roadshows or to engage more in direct targeting: ‘We use this to compare with broker meeting lists when going on the road,’ says one North American respondent at a small-cap company.
Some IROs are concerned, however, about the accuracy and flexibility of these tools, noting that targeting tools ‘can’t find the relevant people in the database’ and the ‘changing landscape and investor behavior make it tough for these tools to keep up’.
Overall, how satisfied are IROs? Nearly nine in 10 are pleased with videoconferencing/virtual meeting tools, and roughly three out of four are satisfied with websites and newswires. Social media tools have the lowest satisfaction ratings among IROs, but even so more than two thirds of users are either satisfied or very satisfied.
Full survey results can be read online by clicking here.
Caroline Byrne
Caroline Byrne is an Irish-Canadian journalist who started her career in London at the Associated Press and Bloomberg. Over the last decade, she has worked both as a freelancer and staff journalist for various organizations including Euromoney, The...
