For many corporate communicators, the end of summer signals a return to the six- to nine-month grind that will lead to the perfect annual report. The stakes are higher these
days, as the annual report has evolved from a basic I/R tool to become a critical brand expression that targets multiple stakeholder groups. In whose hands are you entrusting
this most sacred document? PR NEWS consulted with the experts to offer some shopping tips for those who are in the market for new talent:
Check out awards programs. Or better yet, judge them. Michael Nissen, manager of I/R and financial communications for Abbott Laboratories in Abbott Park, Ill., has
served as a judge for Mercomm's International ARC (Annual Report Competition) awards for several years. In this role, he reviews more than 2,000 reports each year. "It helps to
view the work at annual report shows because you can evaluate it on your own in a low-pressure situation," he says. "I look for designs that really fit the companies they
represent - as opposed to a 'house design' that the design firm only modifies for different clients." Competitions staged by Black Book, HOW Magazine,
Communication Arts magazine and paper companies such as Potlatch and Mead also are good talent resources. Most competitions publish books or special issues that showcase
award winners.
Scrutinize awards programs. While competitions can be helpful in corralling work into a central viewing location, keep in mind the judging criteria may or may not be in
sync with your interests as a client. Aesthetics sometimes outshine ROI in competitions that are judged by other creatives. "You may get the applause of all the people wearing
black turtlenecks and smoking European cigarettes, but the real question is, did the design do an excellent job of bringing the company position to life?" says Andrew Zolli, chief
marketing officer for the branding firm Siegelgale. "Look not just for creative excellence, but rather creative excellence in pursuit of a brand."
Know your needs. Don't expect design to solve messaging problems that you haven't resolved. There are a few design gurus who specialize in strategy, but most designers
focus on execution - as in the translation of key messages into a visual vocabulary that represents your brand. "Some publicly held companies already have a firm idea of what
they want to accomplish, so this level of service is all they need," says Stephen Turner, CEO of Turner & Associates San Francisco, an I/R and branding design consultancy.
"If you're facing a hostile or rapidly changing marketplace, and you're not quite sure what you want to accomplish, you may need a different kind of service - someone who can
facilitate dialog at the board and CEO level to move from nebulous concepts toward strategy."
Check references. Once you've narrowed your search down to a short list, ask each agency not only about successful annual reports they've created, but also about
accounts that flew the coop. "A good firm will be willing to put you in touch with clients they've lost," says Todd Peterson, director of business development for Sutton Javelin
Communications, a Toronto-based agency. "This isn't just about the agency's ability to strategize, it's also about its ability to execute on tight deadlines." Former clients will
usually offer valuable skinny on prospects.
Expect a time commitment. Will your project get the care and feeding it deserves? "As a rule, I don't want a design firm that has more than 2.5 annual reports per
designer per year in the firm," Nissen says. "If they have more books than that, they're overcommitted. It takes time and resources for full strategy development."
Don't rule out your PR firm. Many corporations outsource their annual reports directly to design houses - thereby eliminating their PR agencies as "middlemen," and
avoiding a price mark-up in situations where the agency would farm out the work anyway. But if your PR agency is managing a larger branding strategy for your company, annexing
your annual report can be a mistake. "It's not uncommon to see a beautiful, precious annual report that's been crafted and pored over and loved to death, but really has no
feeling for the rest of the corporation," says Kenneth Cooke, chief creative officer at Siegelgale. "This causes more confusion than clarity." Decentralize your communications
efforts and you may cannibalize your brand consistency.
Look for production expertise. A flawed production process will bust your budget, and, at worst, will lead to a substandard product. "Look for [an agency] that
understands how printing works and will review film and conduct press checks," says Peterson. "It sounds like a small detail, but even in the bindery, if you end up with a report
where the pages are loose and falling out, that ends up saying a lot about your company." A solid price quote from an agency should be specific - including line items for
notorious price "variables" such as photography, paper, printing, and film, as well as administrative charges for copyediting, proofreading and corrections. If possible,
negotiate a flat fee up front to cover the cost of last-minute corrections (which will inevitably surface). Otherwise, you may get nickel-and-dimed to death with surcharges.
Keep your "e" in one place. Select a firm that can produce both print and electronic versions of your annual report. If your budget is tight and you can't afford a
full-blown HTML report online, take note that a good design firm won't charge extra to post a simple PDF file (a scanned image of your print report) on your Web site. The cost
will be included in the price of your print report.
(Cooke, 212/707-4000; Nissen, 847/937-6100; Peterson, 416/502-8607; Turner, 415/344-0990; Zolli, 212/707-4000)
A Complete Package
Annual report planning is a tedious process. Ted Leonhardt, president of the Seattle-based branding firm The Leonhardt Group (323/259-9222), offers a checklist of annual
report vitals:
- An attention-getting cover.
- A compelling theme.
- A clear description of your company's business.
- Long-term strategies and goals.
- Information about your products, markets, future developments and the industry (both problems and opportunities).
- A comparison of past results against the objectives, plus plans for overcoming poor performance.
- Attention to issues affecting shareholders.
- CEO and/or chairman letter projecting management style or vision. Include a head shot.
- An honest, forthright style, with bad news up front, along with good news.
- Compelling graphics and design, with clear, readable, well-organized information.
- Externally oriented, attractive photographs or illustrations.
- A readable copy style, and copy organizers such as heads and captions to facilitate scanning.
- Graphs with captions, designed to increase disclosure.
- A matrix or diagram to explain a complex organization, its products or markets (where appropriate).
- For technical companies, a glossary of terms.
- Biographical data on directors and officers.
- An expression of your company's corporate responsibility, such as the use of recycled paper, or strategic philanthropic initiatives.
- A tone that includes international audiences.
- Financial highlights in the front of the book, including a full range of data with a "percent change" column.
- At least six years of data (more than the SEC-required five).
- An MD&A which complies with the letter and spirit of the latest SEC rulings on disclosure.
- Segment information: sales and earnings breakdown by products, divisions or geographical areas.
- Clear and explicit footnotes.
- A letter confirming management's responsibility for the financial statements, positioned beside the auditor's letter.
- Financials printed with sufficient contrast for photocopy and fax readability.
- A possible fact book (sister piece) including greater detail about company operations in the context of the industry and overall economy.
What are investors' most common pet peeves about annual reports? Which companies are producing cutting-edge work both online and in print? Watch for a discussion of the
latest trends in annual report strategy in the Sept. 18 issue of PR NEWS.