PR meets investor relations

David Doze is vice-president of Toronto-based Goodman Communications. It used to be pretty simple to draw a line between the roles of public relations and investor relations professionals. At one time, companies maintained separate PR and IR strategies and departments,...

David Doze is vice-president of Toronto-based Goodman Communications.

It used to be pretty simple to draw a line between the roles of public relations and investor relations professionals. At one time, companies maintained separate PR and IR strategies and departments, each operating with its own set of resources. Relationships with outside agencies were generally kept separate as well.

It made sense. While one group focused its attention on customers (both existing and potential), as well as the general public and the internal audience, the other focused on shareholders. And for some companies, this configuration still works. But for others – especially start-up firms in the technology sector – the world has changed radically.

With the growth of public markets, and a heightened expectation of access to company information (via media such as the Internet), the traditional view of what constitutes the customer and shareholder audiences has changed. Today, the customers and employees of many companies are also prospective shareholders. And, as such, they represent a critically important audience. After all, who understands better the value of a product or service than those who have direct knowledge of and involvement with that commodity?

Recently, The Globe and Mail ran a photograph that showed a group of employees seated in the cafeteria of an insurance company. Above them was an electronic message board posting the firm’s current stock price. When asked why the board had been installed, a spokesman said it was important for employees to understand the relationship between the work they do each day and the success of the company. His point: None of us is immune from such considerations.

Today, financial announcements and advisories are followed in the public arena to a degree never before seen. Recently, for example, our agency staged a Q3 conference call for client SureFire Commerce, a Montreal-based e-commerce solutions company. The call, organized primarily for analysts across North America, attracted significant participation. And nearly 40% of those who took part were individual shareholders (or potential shareholders) – what we would have once termed the ‘general public.’

This audience now follows the wire services and online financial sites very closely indeed. And they expect to have equal access to detailed investor information. Indeed, we may soon see legislation in the U.S. enforcing increased public access to such information.

Public companies no longer have any choice but to provide access to investor information on an equal basis. If you benefit from cash-rich public markets, then you also have to ensure that your PR/IR agency is ready to meet the challenge of wide public disclosure.

So what does this mean for public relations agencies today? Well, for a start, it means building a shared understanding between those who work in the PR and IR departments. And, in the long-term, it means tearing down the firewall between these practice areas. No longer can the two disciplines work in isolation. Instead, experience, expertise and resources must be shared internally to ensure that the client’s needs receive consideration from the broadest possible range of angles.

Consider how Goodman handles GT Group Telecom, a client in our technology and telecommunications practice, which is headed by my colleague Carolyn Luke.

We helped launch Group Telecom in October. Today, a little more than five months later, the company is listed on both the TSE and NASDAQ. And in that time, their PR and IR needs have grown tremendously. To meet those needs, and ensure that we can seamlessly deliver a consistent and effective strategy, Goodman has had to draw upon expertise across the agency. The end result of all this has been a fundamental change in the way we design and deploy account teams, and conduct our work internally.

Working for emerging technology clients such as SureFire Commerce and Group Telecom has also had an effect on our recruitment and hiring practices. Priority is given not only to those with superior communications skills and media experience, but to those who can read a balance sheet. And if they can read a balance sheet, we look to see if they also have the ability to step back and assess the bigger picture.

Obviously, PR and IR still have many separate and distinct functions. But the ability to blend these practices has become ever more essential to success in a world where your customer may also be your shareholder.

Also in this report:

* Dot-coms put best face forward: PR playing a larger role in communication strategies of online enterprises p.B2

* Branding dot-coms with PR poses challenges: Companies must resist impulse to move too quickly, or to shift positioning constantly p.B4

* High-tech PR expertise in short supply p.B6

* PR firms must show creativity in hiring p.B7

* Web impacting corporate reputation: Companies want to know what’s being said about them online – and by whom p.B8

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