By Dominic Jones | Published: October 16, 2006 | 
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The State of Podcasting in Investor Relations
By Dominic Jones (2 comments added)
AT THE recent 2nd Annual Podcast & Portable Media Expo in Ontario, California, three men stood up to talk about podcasting in investor relations.
Only problem was that almost no one came to hear them. According to Jason Lee Miller of news website WebProNews, the “presenters were nearly speaking to echoes in the conference room.”
Now to be fair to the three presenters — Wing Yu of StreetIQ, Ken Balog of VCall and Scott Whitney of PodWorx — an event like this is hardly a stomping ground for folks who are interested in investor relations.
But there is other evidence to suggest that IR departments are not rushing to get on the podcasting bandwagon. IR Web Report’s research finds that while there is growing use of podcasting, still only a minority of companies are doing so. And of those companies that have taken the plunge, most are not doing so effectively.
Most IR departments that offer podcasts today are simply repackaging their earnings calls and a few other events as MP3s. While getting earnings calls via a podcast feed may be convenient for some investors — especially those who can’t attend live calls — these typically hour-long events are not the most effective content for podcasts.
Average IR podcast downloaded 44 times
The boring nature of most IR podcasting today may explain the rather unimpressive statistics provided recently by Wilink for its Vcall service, which was the first IR webcast provider to offer a podcast option.
According to the figures, Vcall has produced 848 podcasted events so far this year. Together, these were downloaded over 37,500 times. That’s an average of just over 44 downloads per event.
Downloads are also down from the previous year, when the average podcast attracted just over 54 downloads.
Does this suggest that the novelty of podcasting has worn off? It may well be. Or it could just be that the audience for podcasted earnings calls is a limited one.
A trailblazer pauses
If there is a place in investor communications where podcasts can be more than a pedestrian parallel format, then perhaps IBM’s approach is a model for other IR departments to look to.
Often credited as being a pioneer in investor relations podcasting, IBM is one of the few companies that has used podcasting with a strategic communications objective rather than just as a parallel distribution channel.
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| IBM is one of the pioneers of custom IR podcasting. It’s publishing schedule has been interrupted as the company redesigns its IR website. |
Starting in August 2005, the company ran a series of interviews with company experts discussing future trends in particular industries. It called the series “IBM and the future of” and its primary objective was to educate investors and demonstrate the depth of expertise inside the company.
IBM’s podcasting series, which was also available in transcript form, had the happy side benefit of producing significant positive press for the company in the mainstream media as well as on a wide range of smaller websites and blogs.
That may help account for the fact that as of a couple weeks ago, IBM’s podcasts had been downloaded 186,000 times — a huge figure when compared with other companies’ podcasts.
Despite this apparent success, IBM has not produced a new podcast in the “Future of series” since April. If the podcasts were such a hit, why stop producing them?
According to Ben Edwards of IBM’s new media communications team, the company has “slowed” its IR podcasting because it is redesigning its entire IR website to support increased levels of publishing, including podcasting.
Waiting for the mainstream Web to catch up
My view on IBM’s investor relations podcasts is that the company got too far ahead of its investor audience too quickly. Like RSS feeds, subscribing to podcasts has remained something of a fringe activity on the Web.
And while 186,000 downloads may sound impressive, on a relative basis and compared to IBM’s other communications activities it may be quite modest.
Taking a break to wait for the Web to catch up might not be such a bad idea. And catch up is what most podcast and feed publishers are hoping will happen when Internet Explorer 7 arrives.
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| Internet Explorer 7 promises to make subscribing to feeds a mainstream activity. |
Microsoft’s new browser makes subscribing to feeds and podcasts much easier for mainstream Web users. If browser-based subscriptions become the standard way investors stay in touch with companies, then podcasting will likely be back bigger and better than ever.
Of course, IBM with its early experiences in custom podcasting will be well-positioned to capitalize on the interest from this larger audience of potential subscribers.
Think through your strategy and avoid poor execution
Assuming that subscribing to feeds will become a mainstream activity in the near future, IR departments should be working to develop clear strategies for how, why and when they will use podcasting.
They should also be paying close attention to the quality and execution of their podcasting efforts. Poor execution, which is likely to turn people off and potentially compromise your department’s credibility, is alarmingly widespread with IR podcasting today.
In our reviews, we see many examples where companies and their vendors are obviously clueless about podcasting. For example, some label MP3 files as podcasts even when there is no RSS feed associated with their files. For the record, a podcast is an MP3 file that the user receives via an RSS feed. An MP3 file without a RSS feed is just an MP3 file.
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| GE has an ambitious video and audio podcasting program, but execution issues undermine its effectiveness. |
Lack of timeliness is a major issue. Too often there is a big delay between when an event or earnings call takes place and when the MP3 file is added to an RSS feed. Long delays lessen the value of podcasts of events such as earnings calls.
As I write this, General Electric, which has one of the best corporate podcasting and vidcast programs, still hasn’t made its Q3 earnings call available as a podcast. The call was on Friday at 8:30 am. It is now 1:30 pm on Monday and it’s still not available. It should have been posted within an hour or so of the call ending.
GE is not alone, though. Our reviews show that many companies have delays of several days between an actual event and when they provide an MP3 via a feed.
The bottom line when it comes to podcasting and other new media publishing techniques is that they require fairly heavy engagement by the IR department. The traditional approach to online IR publishing, which is to fob off everything to an outside vendor and forget about it, won’t work except for the most mundane activities, such are repurposing conference calls.
IR departments have to do the thinking and they have to manage the experiences of users to ensure that nothing happens which can undermine their credibility.
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October 18th, 2006 at 6:54 am
I’m glad someone has posted an honest article about podcasts. It seems the whole world is talking about them, but few are actually using them to their advantage. At our company, we offer an MP3 download option to accompany any webcasts that we produce for our clients. The take up of this option has been slow. We suspected this, as there are some barriers to podcasting which need to be stated right from the start:
Technically, the user must have the means to subscribe to a podcast - be it iTunes, or another podcast receiver. This is unlikely in a corporate environment. Even MP3s prove difficult to play through lack of an accessible headphone socket or speakers!
Mentally, the user must actually want to listen to the podcast! iPods or any other generic MP3 player (let’s not be too Apple-centric) are not a business accessory. They are associated with leisure time. The last thing I want to do is listen to an earnings call on my way home from work, when I could be listening to my latest album purchase.
I can get all the information I need by reading through a transcript, picking out the information that is relevant to me, whilst at the same time listening to music on my iPod!
I suspect that these views are shared by most of the investment community, or at least those who own and now how to operate an iPod! Please, correct me if I’m wrong.
October 18th, 2006 at 11:59 am
Jonathan,
Similar sentiments to yours were expressed by an analyst in recent article:
Just ask Ivan Feinseth, who as a Matrix USA analyst listens to conference calls and reads annual reports for several dozen companies. He says it makes sense to be able to store conference calls on his MP3 player. But he wonders if his hour-long commute into and out of New York is the best venue.
“Things of a technical nature you tend to want to listen to in an active mode,” he said. “So that lends itself to being at your desk and being in a business environment. I don’t think it’s something you’re going to listen to casually. It wouldn’t be relaxing.”
Listening to long, archived earnings calls on an MP3 device doesn’t seem to be a likely scenario, as you say.
However, I do see podcasting as useful or convenient when they’re received via an aggregator that has a built-in player. Bloglines has done this quite well.
This is more a convenience for a private shareholder who wants to know what’s happening at a company, but who doesn’t feel the need to get every bit of information in real or near-real time. Instead of having to visit the company’s website regularly to check for updates, the audio comes to them and they can play it back without having to use a plug in.
Still, this is more evolutionary than revolutionary. And it’s not something companies should be paying a lot of money for. Indeed, I think the provision of an MP3 to the company to use as it sees fit should be a standard part of any webcasting service.