Home > Uncategorized > Two options for public companies: pay to distribute press releases or pay for an investor relations website

Two options for public companies: pay to distribute press releases or pay for an investor relations website

I want to share another side of what public companies are facing with the new web disclosure guidance that the U.S. Securities and Exchange Commission (SEC) issued in 2008. With this announcement, finally companies won a battle with the SEC to allow them to recognize their websites as main point or disclosure.  Most of these companies (the ones that are not part of the S&P 500) do not have the cutting edge technology and connections to publish their press releases, not just to their own websites but also to other channels simultaneously. Posting a press release to a company’s website is a very straight forward process that even small companies could accomplish but the challenge emerges when they want  the same release published with news bureaus, media and financial sites (Yahoo Finance, Google Finance, etc) at the same time.

For companies that have this obstacle a service solution has been offered by big corporations such as Thomson Reuters and NASDAQ OMX Group, Inc.  These two companies have developed tools where companies can self-publish simultaneously their press releases to their own websites as well as to different channels that were unreachable before without a wire providers intervention.

Both Thomson Reuters and NASDAQ offer different products but the end goal is the same: help clients to use their own websites as a primary point of disclosure. But how does this work? If a company wants to fully use their website as main point of disclosure Thomson Reuters or NASDAQ should manage their investor relations sites (IR) and obviously this has a cost.

Thomson Reuters offers to its clients a product where they can utilizing an online intuitive publishing tool that allows them to create and upload releases at any time. Once they are ready they can simultaneously distribute their regulatory releases directly to their own IR website, as well as exchanges, required disclosure points, online applications , financial and media outlets. The tool creates a secure workflow process for handling material information and allows the company to control the timing of the distribution, eliminating the need to submit the release to a third party hours before it’s issued. It also provides the peace of mind, knowing that when they click ‘send’ the release will hit all required disclosure channels at the same time.

Thomson’s Reuters offering also integrates multimedia content and social media sharing to increase viral nature and visibility of companies’ messages. In addition, they offer real-time analytics that measure the impact of releases across institutional investment, monitor the sentiment in traditional and social media communities as well as identifies the most influential social media analysts in the company’s industry.

NASDAQ offers a service called “do-it-yourself” (DIY), I am not too familiar with their offering because it has not been widely advertised but basically they want to provide its IR website clients the option of distributing press releases themselves with a flat-rate pricing regardless of word count. Like Thomson Reuters tool, DIY works through a platform where user can publish press release to social media, online media outlets, traditional media, and regulatory portals.

Now the decision for companies is whether or not stay with the old model where they need wire providers to reach audiences, adding the expensive budget this implicates because wires charge per word so the simple act of issuing a release could cost over $1,000. The other option is paying to Thomson Reuters or NASDAQ for an IR website and be able to start self-publishing releases without additional cost.

From my perspective, for companies it would be much cheaper for them to pay for a website than pay for a single press release. This demonstrates an important point about the money saved using the website as primary point of disclosure. In average companies spend over $20,000 a year to distribute press releases and a basic IR website could cost around $10,000 so the money used for press releases dissemination could be reinvested back into the IR departments to grow investor relations outreach, attend more conferences, upgrade investor communications, have additional webcasts, etc.

Now we have to wait to see what other offerings appear in the market place and what companies will do: pay for a traditional wire service or pay for an investor relation website that includes the rights and tools for self-publishing press releases.

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