Why Investor Relations Officers are Hesitant about Publicity
Corporate investor relations officers (IROs) spend much of their time in conversations with very smart analysts and investors probing for insights that will help them decide whether to buy, sell or hold the company’s stock. To most public relations and communications professionals, that sounds intense. But you know what is more nerve-wracking for many IROs? Media relations.
That was apparent from the audience questions at a well-attended breakout session about media relations at the recent National Investor Relations Institute (NIRI) Annual Conference. Undoubtedly, many of the questions came from relative newcomers, the majority of whom now have a financial rather than communications background. But even among veteran IROs, uncertainty about media relations is common. Here are answers to some frequently asked questions from IROs about media relations, based on the NIRI session.
Why should I care about media relations?
Media coverage can be an amplifier for your investor messages and your business offering. A story or mention in the Wall Street Journal or on CNBC, for example, can help you reach investors that your core efforts aren’t reaching, or be a reminder to those who are familiar with your company but have not invested. Public companies are going to attract media attention whether they want it or not, so you should take charge of the process. Cultivating relationships with reporters when the news is good can pay dividends should a more complicated or negative event arise. Even in routine coverage, reporters who have been educated about your company are less likely to make mistakes.
Isn’t it risky?
Just as when you and your CEO talk with investors, there is a risk-reward tradeoff. In media relations, there are steps you can take to minimize the risk. Some media opportunities may not be worth the investment of a lot of time. Others definitely will be worth your while.
What about local media?
Don’t be too quick to dismiss the value of local media coverage. Companies tend to have an investor base, analyst following, customers, suppliers and, of course, employees in their hometown, so stories (like this one) can have a positive effect. Plus, with social media and search engines, local stories are readily discoverable by a much broader audience. Furthermore, local stories can sometimes help pave the way to national media coverage by uncovering story angles you hadn’t considered or serving as validation of an idea for a story by a national reporter.
With all the online financial media out there today, is it easier to get coverage than it used to be?
No question, the business media landscape has definitely shifted. While there is far more financial media coverage than ever before, much of it is not amenable to media relations. Financial news sites like Yahoo Finance, MarketWatch and Business Insider are primarily news aggregators; they produce a limited amount of original content. Motley Fool and Seeking Alpha are popular investor sites, but their writers don’t conduct interviews with companies and generally don’t want to be pitched. Meanwhile, traditional business media still represent the highest-quality opportunities, but with declining advertising and subscription revenues squeezing their resources, and with more companies than ever seeking coverage, the bar is high.
Don’t reporters tend to have an anti-business bias?
There may have been some truth to that in days gone by, but it is pretty much an urban myth today, particularly among business reporters. What is sometimes perceived as anti-business bias is more likely misunderstanding, ignorance or just good reporting on a company’s bad news. Effective media relations can be a good counterweight to all of these.
Why won’t reporters let me review their story before it is published?
Just as with sell-side analysts, that is how media preserve their independence. Wouldn’t you put less credence in a story if you knew it had been pre-approved by the subject? However, that said, most reporters will agree to review their notes with you after an interview to check facts and quotations. They don’t like errors, either.
Should we hold off pursuing publicity until our stock price improves?
Assuming management has disclosed that it expects improved results and assuming some of your analysts and investors believe the company deserves a higher valuation, no, do not hold off. Now is the time. Financial media outlets like Barron’s and the CNBC’s “Mad Money with Jim Cramer” are all about making good stock recommendations. Once your stock price has run up, they will probably not be interested.
Okay, I see the potential, but media relations still seems risky. How do I reduce the risk?
Talk with your corporate communications counterpart inside the company or with an outside consulting firm that has experience in both investor relations and media relations. They can help shape a strategy and develop a plan to get coverage and minimize the risk.