By Dominic Jones | Published: April 24, 2007 | 
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Traffic to Thomson IR websites slumps
By Dominic Jones
IN WHAT may be an indication that U.S. IR websites are no longer able to attract and hold the interest of investors, traffic to IR websites hosted by Thomson Financial has slumped to all-time lows, according to the Alexa website information company.
Alexa, owned by Amazon.com, measures traffic only of people who have the Alexa toolbar installed on their computers and is not considered a complete measure of site traffic. However, it is nonetheless valid to observe general trends over time.
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| Traffic to Thomson’s IR websites hosted on the corporate-ir.net domain has slumped to all-time lows suggesting that current U.S. IR websites can no longer attract and retain investors. |
The graph above shows page views over the past three years for Thomson’s corporate-ir.net domain, which is the website address the company uses to host hundreds of public companies’ investor relations websites. It shows a steady decline, with page views reaching all-time lows in recent months.
The slump comes at the same time that U.S. stock market indexes have been on the upswing (see charts below) and as more people around the world are connected to the Internet. This suggests that investors may be giving up on using Thomson-hosted corporate IR websites as a source of information.
This is consistent with our view, based on in-depth benchmarking of 525 IR websites around the world, that average U.S. investor relations websites have fallen far behind global standards — and are now in danger of becoming irrelevant to the investment process.
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| The above chart shows Thomson’s corporate-ir.net page views for the past 12 months. Meanwhile, the S&P 500 has been on the upswing over the same period (see below). Intuitively, you would expect more traffic to IR websites when stocks are rising as more investors are attracted to the market. But that’s not happening. Have investors given up on U.S. companies’ IR websites? |
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Competition for attention
Corporate IR websites also are competing for attention with a wide range of new investment resources, not least of which are investment blog networks like Seeking Alpha, which provides free earnings call transcripts, and an improved Yahoo! Finance, which is facing growing competition from the year-old Google Finance and others.
The trend should concern IR departments because it means they could be losing the ability to communicate their companies’ stories directly to the market and also measure interest in their companies based on website traffic.
Companies must put in place the resources and expertise to manage their IR websites better, a task being made more complex with growing recognition of the web by regulators.
If you would like an independent assessment of your IR website and recommendations for how you can make it an attractive destination for investors, our IR Website Scorecards are an effective tool. Alternatively, our continuous benchmarking service gives you twice-yearly reviews of your site, access to members-only guidelines and an annual scorecard with tailored recommendations.
Update1: Not singling out Thomson. I’ve received a couple of emails from people who don’t understand the implications of this story. So, just for clarification, I’m not saying people are purposefully avoiding Thomson IR sites because of the URL or because they’re hosted by Thomson. They’re simply not visiting IR websites hosted by Thomson as much as they were before, and I’m suggesting that this is because the sites don’t offer investors a compelling reason to visit them. I’m using Thomson because it’s the biggest, because the domain is widely used, and because I think its Alexa results are probably reliable for the domain I used. You probably can take Thomson as a proxy for U.S. IR websites generally, but I couldn’t say that in the story because I have no way to verify it across every U.S. IR website. Hence, I refer only to Thomson in this story, but you can probably take it to mean the “average U.S. IR website” since Thomson claims to have 2,600 IR website clients. Also, don’t go running to Shareholder.com because that’s likely not going to help either. The solution is to start putting the proper resources and expertise in place to manage this Interweb thing properly. It’s a case of use it properly, or lose it.
Update 2: Same thing not happening elsewhere. For what it’s worth, several of our European clients report that their traffic is booming like never before. Anecdotally, that supports what I wrote two years ago in an IR Magazine article (see The Digital Divide). I said then that IR websites in the U.S. were falling behind while European large-caps — German, UK, and Nordic companies especially — were generally offering a much more compelling and credible web experience to investors. At the time, then-NIRI president Lou Thompson reportedly quoted me in a speech and was shot down by the audience of U.S. IROs for daring to suggest such a thing. But recently, other consultants have been saying the same thing. Ask yourself why we would make this stuff up? What on earth do we have to gain from potentially ostracizing the entire U.S. IR community? Please don’t shoot the messenger. The problem is not with us.
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April 26th, 2007 at 2:19 pm
While I’m not in the habit of sticking up for the competition, technically there could be a number of reasons for such a ’slump’.
Perhaps Thomson have a new server? Perhaps they are integrating tools in a different manner which uses the clients URL address and not their own? To look at the year graph and determine that US investors are not looking at the sites as much as they used to is a big jump in my head and not one which I readily subscribe to.
I await the shooting down in flames from both yourselves and my colleagues!
April 26th, 2007 at 5:27 pm
Hi Pete,
We’re open to an explanation. Before we posted this, we looked for possible technical explanations. And we were careful to explain the shortcomings in the Alexa data. See the second paragraph.
There have been some changes, but they don’t explain away the steady decline (and it is very much that) at the same time that stocks are trending upwards. There’s something very significant happening there.
We also looked at other U.S. vendors and saw the same thing happening. Shareholder.com, for example, shows the same decline. However, because it’s much smaller than Thomson, we didn’t feel comfortable using its Alexa numbers. According to Alexa, their figures for Thomson should be very reliable due to its rank. Interestingly, we don’t see the same thing from European vendors. Investis, for example, has been very steady, but then they offer an exceptional product for a large-scale vendor. Our research consistently finds that their sites are superior to those offered by any of their big competitors.
The decline in the use of U.S. IR sites isn’t entirely new. It’s not just a one-year thing. A while ago, NIRI reported findings from a member survey that showed a big decline in average webcast attendance. At the time, we explained that away as a consequence of fewer retail investors due to market conditions. But looking back, it may have been an early signal that people just weren’t being engaged by what was being served up to them.
We’re not prone to jumping to conclusions, but from what we know of the truly awful state of online IR in the U.S. and the Alexa trends, I doubt very much that you can explain it away on some technical grounds.
If Thomson knew differently, I’m sure they would have been quick to provide some info. But they either don’t have the facts or the facts they have are the same we have. But as I said, we’re open to explanations and will gladly publish them here.
April 27th, 2007 at 10:44 am
I personally have never seen anyone using the Alexa toolbar. Has anyone else? It may just be that Alexa is bigger in the US than it is here in the UK, but I personally am very reluctant to rely on their statistics. The Alexa trends in usage for our own site do not correlate to our own reliable WebTrends reports.
What would help to prove the argument that traffic to IR sites is slumping is some stats from a large independent provider who crunch data from a large proportion of all internet traffic - the only company that springs to mind is Hitwise, and getting access to their online web statistics package is budget-busting to say the least.
If anyone from Hitwise reads this blog, then now is your chance to showcase your stats and perhaps justify the price tag!
April 27th, 2007 at 5:36 pm
Hi Jonathan,
Everyone in the business knows the limitations of the Alexa data. However, and I’ve said this before, what’s important are the trends over time and the fact that corporate-ir.net has a high rank. The higher the rank, the more reliable the data.
So in Hemscott’s case, its relatively low rank means the data is less reliable. Same goes for Shareholder.com or Investis.
There is only one source that can dispute the numbers and that’s the owner of corporate-ir.net — Thomson. And they’re not saying anything…
May 3rd, 2007 at 7:02 am
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May 9th, 2007 at 10:32 pm
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June 25th, 2007 at 9:37 am
Hi Dominic, as there are more websites being added on a regular basis to the leading UK providers’ platforms, it is it really fair to conclude that ’steady’ statistics does not related to a similar, if not less dramatic, decline in Europe? Another factor to consider could be the move to online for annual reports and other statutory shareholder communications. Is the playing feild really that level accross the pond?
James
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