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If you’re a small to mid-cap CEO and still having doubts about the power of online investor relations, then you need not look any further than this quote which came from 40 IROs who gathered at the TMX Broadcast Centre recently in Toronto for the fifth annual IR Magazine Canada Think Tank.

One of the day’s most popular discussions was about social media, with evidence starting to show that Twitter and blogs have taken hold as
primary sources of investment information for analysts and institutional investors. Think tank participants discussed how they’re using
social media technology for both internal and external audiences, and how they’re monitoring social networks for information about their
own company as well as their peers.

Yep, that is a light bulb going off in your head.  Analysts and Institutional Investors are primarily turning to the web for investment information.  Still want to ignore online investor relations?

This is officially the 50th post I have made under my Small-Cap CEO Lessons category, which now means you have 50 irrefutable reasons to conduct online investor relations.  In a nutshell, it is bigger, faster, more efficient, more cost effective, more effective and provides you with a far greater ROI than traditional investor relations.

Regards,
George

As some of you may have noticed, we love to take surveys because of the valuable data they provide.  Despite the fact we’re an online company, quite a number of our surveys are done offline (i.e. at conferences).  Why?  There’s no point in trying to figure out the impact of the web on small-cap investors if you’re only going to ask online people.

To this end, here is some incredibly valuable information that we discovered about small-cap investors over the last 12 months:

In 2008

• The web accounted for 74.3% of all research into new small-cap investments, up from 67% in 2007
• 73% of Investors Conduct the Majority of their Research (75%+) into New Stocks Online
• 48% of Investors Conduct All of their Research (95%+) into New Stocks Online
• 64% of Investors Use Discussion Forums For Information and/or Research, up 7% from 2007

In 2009

• The web accounted for 78.3% of all research into new small-cap investments, up from 74.3% in 2008
• 73% of Investors Conduct the Majority of their Research (75%+) into New Stocks Online, up from 73% in 2008
• 55% of Investors Conduct All of their Research (95%+) into New Stocks Online, up from 48% in 2008
• 54% of Investors Use Discussion Forums For Information and/or Research, down from 64% in 2008

Clearly, small-cap investors are overwhelmingly using the web to research new investments.  We didn’t get as far as asking why they rely on the web so heavily but one answer has to be the fact that major financial media don’t cover small-cap stocks extensively.  As such, small-cap investors are forced to resort to search engines, electronic shareholder forums and social networks to help them discover new small-cap stocks.

I hope you found this information to be helpful.  If you’re a small-cap CEO that isn’t conducting a significant online investor relations program, take this data to your board …. and then call me  Hey, couldn’t resist.  The data is just that good.

Regards,
George

If you’re the CEO / IRO of a small to mid-cap company and (erroneously) think that one good reason for not conducting online investor relations is the age of the target market – think again.  What you are looking at above are the demographics of investors that tune into AGORACOM Small-Cap TV via YouTube and it reveals the following.

• 80% of viewers range between 35-64.
• 40% of vieweres range between 45-54
• 22% of viewers range between 55-64
• 19% of viewers range between 35-44
• 21% of viewers are females (Is that my good looks or because they feel sorry for me?)

(The figures won’t add up to 100% because we are cross-referencing the same age groups, so look at each statistic independantly.)

OLDER INVESTORS ARE PROGRESSIVE – WATCHING YOUTUBE FOR FINANCIAL CONTENT

What is really striking about these stats is the fact we are not talking about visitors to general finance sites.  Afterall, we clearly know that investors of all ages (i.e. my semi-retired Greek immigrant father) utilize AGORACOM, Yahoo Finance, Globe Investor and other finance sites.

Rather, what is striking about these stats is they are telling me (and you) that older investors are using YouTube – the ultimate fun site for young people – to watch serious financial content.   As such, I can only conclude that older, more sophisticated investors are far more progressive when it comes to online research than most of us may have originally thought.

FEMALE INVESTORS ARE MORE ACTIVE ONLINE THAN OFFLINE

What I also find interesting is the fact that female investors make up 21% of the audience.  Now this is anecdotal but I know that female investors do not make up 21% of the audience at offline events such as AGM’s and conferences.  As such, though the data set is far too narrow at this point, it provides another great potential reason for taking your investor relations online.

CONCLUSION

The trend towards online investor relations is unstoppable.  With YouTube video demographics so heavily skewed towards older and more sophisticated investors, it no longer makes sense to continue ignoring online investor relations.  The potential bonus of being better able to reach female investors only further supports the argument.

If you don’t have an IR strategy that incorporates – at the very least – search engine targeting of new investors, electronic shareholder forums for current shareholders and online video to showcase your company beyond text – then it’s time to get one.  Otherwise, you’re only hurting your company and its shareholders.

Regards,
George

CEO's Clam Up When It Comes To The Web

You’re the CEO or IRO of a public company.  You can’t stop talking to shareholders at conferences, on conference calls, and other personal settings.  You’re willing to expend tremendous amounts of energy to speak with shareholders one-on-one …. and then repeat those conversations over and over again as you march through your shareholder list but you’re afraid to go the last mile and utilize the efficiencies of the web.

Does that make any sense to anybody?

WHY ARE YOU AFRAID?

It makes absolutely no sense to me.  It’s not as if you don’t have the confidence or charisma, you’re already speaking and sharing with shareholders on so many levels. But that all comes to a screeching halt when presented with an opportunity to continue that conversation online.

Even clients of AGORACOM limit most of their interaction to answering questions online (which is very powerful).  The remainder of the interaction comes from webcast interviews in which most CEO’s freely discuss the company knowing the presentation will be posted for all to watch. My goal is to now get client CEO’s fully engaged online.

Investors love this limited interaction.  They love it because only you can provide them with the confidence and education they need to see and believe in your company’s long-term future.  They want more – but CEO’s suddenly clam up when it comes to communicating with a community of shareholders via the keyboard, even though they clearly have no issue with responding to individual e-mail.

Why are you afraid?

THE MYTHS AND THE MYTH BUSTERS

I believe the majority of online IR fear is based on 4 myths that are not only untrue but crippling your ability to take your company to the next step.  I’ve listed the myths and the myth busters for you below.  As the Founder of AGORACOM, a 2nd generation online investor relations community with raging traffic, you can take these to heart.

MYTH:  Too many online investors are crazy, loose cannons.

This is a myth that began with the unmonitored discussion forums of sites like Yahoo Finance and Raging Bull.  I don’t blame CEO’s for using this original data set to come to their conclusions – but the time has come to see those sites for what they were – ad flipping machines that cared about generating cash from page views at all costs.  Spam, profanity and other non-sense proliferated because it generated cash.  Nobody cared about investors or quality at the beginning of the decade.

The truth of the matter is that online investors are not only real people, they are better investors than the average guy on the street.  Why? They’ve chosen to take control of their finances; they conduct their own online research, they ask great questions and they collaborate with fellow investors far better than any offline investors.

As such, if you reach out, communicate and collaborate with online investors, your efforts will be well served.

MYTH:  Any public criticism will hurt me, so I don’t want to encourage it by providing a public venue.

Newsflash ….. newsflash ….. your weaknesses exist in the minds of shareholders whether you provide a venue or not.  This isn’t a case of “when a tree falls in the forest, does anybody hear”.  Public Stock discussion forums, Twitter and plenty of other mediums exist that allow your investors and potential investors to discuss any weaknesses you might have.

By not dealing with them publicly, you simply allow them to perpetuate.  Worse still, by not engaging in the conversation, you allow other people to control your message.

The good news is that all public companies have weaknesses.  Investors expect them and unless they are material flaws, dealing with those weaknesses and your plans to overcome them will actually give you more credibility, leading to greater shareholder loyalty for years to come.

MYTH:  I’m not allowed to communicate over the web

Wrong. Full stop.  AGORACOM has provided electronic shareholder forums to more than 250 public companies as part of our online investor relations services for years.  Your only obligations are to publicly disclose a shareholder community and give all shareholders equal access to it.

MYTH:  I am exposing myself to increased liability

Again.  Wrong.  Full stop.  The medium doesn’t change a thing.  You don’t have any more liability on the web than you do in phone conversations, e-mail exchanges, TV interviews and your booth at an investor conference.  As long as you follow the rules of disclosure, you’re fine in any setting.

CONCLUSION – THE OPPORTUNITY

Now that I’ve dealt with these myths, I want to impress upon you the massive opportunity presented by online investor relations and communications.  Quite simply, there is no faster, more cost-efficient way to accomplish the two most important goals of any investor relations program:

1.  Target and reach new relevant investors. Simple but effective tools such as search engines and online video can not be beat when it comes to attracting new potential investors to your story.  They work 24 hours per day, 7 days a week, 365 days per year.  They reach investors around the planet and they tell your story perfectly every time.

2.  Communicate, Collaborate and Convert. Once you attract new investors, an online community (customized discussion forum, blog, Twitter ,etc.) gives you the ability to share information with everybody, everywhere, any time.  More than just text, you can provide your audience with photos of your new products, videos of your drills turning and audio messages to address important developments.  All of this leads to faster communication and conversion.

I hope this post has been a real eye-opener for you.  Don’t worry about lack of technical knowledge, a good IR firm can do all this for you.  I know the benefits of online investor relations because of I’ve watched endless companies reach their full market potential by utilizing it.  I hope this inspires you to do the same.

Regards,
George

UPDATE: Dominic Jones of IR Web Report, the world’s leading independent investor relations website consultants whose clients include global industry leaders, has picked up on this story and added some eye-opening commentary.  When Dominic speaks, we listen and so should you. He agrees with my thoughts on online investor relations – but he also thinks IRO’s and CEO’s may have nefarious reasons for not shifting their investor relations to the web.  Unless you are a large fund manager, you should be alarmed.

I’ve provided a couple of his quotes below but be sure to read his full post here and our subsequent conversation here:

• “What’s keeping investor relations officers and CEO’s off the web? Selective disclosure, that’s what.”

• “If pro investors value 1-on-1s with execs more than all info sources, what are execs telling them in private?”
  

AGORACOM was once again a proud sponsor of the Reverse Merger Conference held this year at the Mandalay Bay Resort & Casino in Las Vegas, June 11 & 12. I presented the Web / Online Investor Relations Speaker Workshop called, ““Using Web 2.0 To Conduct Investor Relations and Gather Intelligence through Blogs, Twitter, iGoogle and RSS Feeds…But What Are They?”

The workshop was the initial step in teaching bankers, fund managers and public companies about the advantages of  incorporating social media into their intelligence gathering to cut through clutter, get the information they need and connect with the smartest people on the planet.

Despite the fact it was the last presentation before lunch, the room was pretty full and – more importantly – alive with audience participation.  In order to avoid the “he’s the internet guy and I could never do what he does” syndrome,  I brought industry stalwart and early Web 2.0 adopter David Feldman of the Reverse Merger & SPAC Blog.  David discussed his overwhelmingly positive blogging experience, which opened up the floor to some great questions from the audience.

I am happy to announce the presentation (audio and power point slides) has now been webcast for everyone to listen to and benefit from.  If you couldn’t make it to Las Vegas, or were at the Conference but need a refresher, here it is.  For your convenience, I have broken it down into 2 parts:

• My presentation
• The Q&A with David Feldman

You can watch the presentations below and then ask any questions by posting them to the comments section.  I hope you find the presentation and Q&A as valuable as the audience members at the Reverse Mergers Conference.

As promised, I will follow this up with 5-minute presentations on how to use Twitter, iGoogle and Blogging.  Look for them to begin in a few days.

PART 1 – MY PRESENTATION

PART 2 – THE Q&A WITH DAVID FELDMAN

PREVIOUS KEYNOTE PRESENTATIONS

If you enjoyed these presentations and want to watch other keynote presentations I have made at DealFlow Media Conferences in the past 3 years, please have a look at the following:

PIPEs Conference 2008 – Best IR Practices During Market Turmoil

PIPEs Conference 2007 – How To Use The Web To Find New Investors And Turn Them Into An IR Machine

PIPEs Conference 2006 – E-Mail Is Dead. How To Conduct Great IR In A Web 2.0 World

Regards,
George

You can see our horizontal content brick as you scroll down the page.

I’ve also included an image of it below:

GlobeInvestor Commodities

Stay tuned!  Our content partnership with GlobeInvestor will be expanding even further and you can expect to see a few more changes in the next 30 days.  In fact, that’s where I am today!

We’ll update you as they go live.

SIGNIFICANCE TO THE SMALL-CAP INDUSTRY

As mentioned previously, this development is significant to both our clients and the small-cap industry in general.

Why?

GlobeInvestor.com and ReportOnBusiness.com are the online business and investing arm of the Globe & Mail, Canada’s national newspaper.  This is the Wall Street Journal of Canada.

It is where all investors, both retail and institutional, go to find investment ideas. How many investors? 3rd party traffic services say the number is approximately 950,000 unique visitors per month, though we’ve heard the number is bigger.

Add this all up and you have the small-cap industry coming out of the shadows and into the mainstream. The web now provides quality small-caps and mid-caps with a chance to finally be judged on meritocracy, while pushing scam stocks further into oblivion. This represents a major shift in market efficiency, which was once significantly out of balance by choosing to simply ignore all emerging companies.

Good news for investors. Good news for quality companies. Good news for content providers such as GlobeInvestor.com. Win-Win-Win.

Regards,
George

• Communicate Fast – Don’t rely on press releases. Start blogging, tweeting, etc.
• React Fast – Listen to your investors today. This minute. Not at your AGM.
• Respond Fast – Once you’ve listened, respond and engage.
• Adopt Web 2.0 Fast – You can’t do all this via phone and e-mail. Think 1:Many, not 1:1.
• Adopt Mobile Fast – No point in delaying the inevitable.

Regards,
George

More than just lip service, I posted a story on April 13th titled Mobile Internet trading and Research Skyrockets 188%.

Today, I provide you with further evidence.  According to eMarketer, the number of people surfing the web from their mobiles is going to skyrocket.  The graph to the left shows us that 59.5 million Americans were mobile surfing at the end of 2008, 73.7 million will be mobile surfing by the end of 2009 and 134.3 million will be doing so by the end of 2013.  We don’t have numbers for Canada but I think it is safe to use the same percentages.  Europe and Asia on the other hand are probably substantially higher due to mobile penetration and dependence in those regions.

UPDATE: Phil Barrett, vice-president of digital and mobile at B Street, noted that mobile devices have a 72% penetration rate in Canada and about four million Canadians are accessing the mobile web through their mobile device. (marketingmag.ca)

CONCLUSION

A mobile investor relations strategy is a must.  Having a website accessible via mobile phones is not enough.  Sending out IR communications via e-mail is not enough.  Why?  You aren’t reaching anybody new, you’re simply preaching to the converted.

You have to find a way to publish information into the web stream (if you don’t know what this means, stay tuned for webcasts of my presentations at the Cambridge and Reverse Merger Conferences).  Getting your information into the stream makes your IR communications more easily accessible to mobile investors.  There are a number of ways to accomplish it.  If you are an AGORACOM client, you will have a free mobile strategy by September.  If you are not an AGORACOM client, then your options are as follows:

1. Build an application for iPhone and Blackberry that targets small-cap investors and your industry. A lot of expense for just one company’s IR stream.
2. Start blogging.  Blogs are search engine friendly and allow you to tag your information for targeting mobile investors (and all investors) that are specifically interested in your industry.  Blogs also allow you to distribute your content via RSS Feeds.
3. Start Twittering.  Twitter is extremely search engine friendly, including its own search engine that mobile investors (and all investors) are using to discover investments related to their specific fields of interest.

Admittedly, these are not easy things to accomplish for 95% of  small-cap companies.  You can bring in a local consultant – but make sure they understand both your business and the stock market.  Most tech geeks don’t understand both and could end up creating something that does not fit your goals.

On the other hand, you can contact us and have a turnkey online and mobile investor relations strategy created for you.

Regards,
George

If it’s empirical evidence that you are after (like there isn’t enough already), then you’ll be very interested to read the following quote from JP Morgan in reference to Comscore’s May search engine report:

“Total US core search volume increased 32.9% Y/Y in May. The total growth in the first two months of 2Q accelerated to 36.1% Y/Y.”

Translation?  People are using search more and more everyday.  Investors are people.  As a CEO, I guarantee you are using search engines to find information everyday.  If so, getting you to incorporate search engine marketing into your investor relations should not be difficult. Why? If you use search engines to find information, then simply start using search engines to be found.

Regards,
George

AGORACOM was once again a proud sponsor of the Reverse Merger Conference held this year at the Mandalay Bay Resort & Casino in Las Vegas, June 11 & 12.  I didn’t have time to blog from the conference but I did manage to post some useful information via Twitter that you can see here.

Perhaps the most important tweet was my very first one where I stated as follows:

It signaled to me that Web 2.0 had finally begun its penetration into the world of Reverse Mergers and small-cap investment banking.  It was also quite timely given the fact I was presenting the Web / Online Investor Relations Speaker Workshop called, ““SEC Greenlights Blogs, Twitter and RSS Feeds For Investor Relations…But What Are They?”

The workshop was the initial step in teaching bankers, fund managers and public companies about the advantages of  incorporating social media into their intelligence gathering to cut through clutter, get the information they need and connect with the smartest people on the planet.

Despite the fact it was the last presentation before lunch, the room was pretty full and – more importantly – alive with audience participation.  In order to avoid the “he’s the internet guy and I could never do what he does” syndrome,  I brought industry stalwart and early Web 2.0 adopter David Feldman of the Reverse Merger & SPAC Blog.  David discussed his overwhelmingly positive blogging experience, which opened up the floor to some great questions from the audience.

It was so well received that I am going to publish a webcast of the keynote and re-broadcast it here as soon as the good people from DealFlow Media send over the audio files.  In addition, I am also going to produce a series of short videos on iGoogle, Twitter, Blogs and RSS Feeds.

THE CONFERENCE

Overall it was an excellent conference despite the fact attendance was down due to market conditions.  Personally I didn’t mind it because it served to eliminate the weak players in the space and gave everyone in attendance more time to network with the best of the best.  Naturally, I’d prefer a bigger, more robust audience as a result of a healthy marketplace but the occasional quality over quantity dynamic does not hurt.

Look for those videos to begin in the next 10 days or so.  In the meantime, for those of you that have not seen my previous keynotes at DealFlow Media events over the past 3 years, you can watch my previous presentations using the following links:

PIPEs Conference 2006 – E-Mail Is Dead. How To Conduct Great IR In A Web 2.0 World

PIPEs Conference 2007 – How To Use The Web To Find New Investors And Turn Them Into An IR Machine

PIPEs Conference 2008 – Best IR Practices During Market Turmoil

Regards,
George