Online video is showing up everywhere. Facebook recently announced a deal to add Skype video chats to its service and Google rolled out its own “Google+” service with video features. Meanwhile, videos shot with smartphones and spread on YouTube have helped keep protests alive in the Middle East this spring and summer.
When it comes to the corporate world, online video has the potential to be a real game changer. Many observers believe video is poised to shake up the tradition-bound world of investor relations and corporate communications. Ready or not, CEOs, CFOs and other corporate executives may soon get a lot more face time with investors and the media than in the past.
The growth of video is taking many forms, all of which have applications for IR and corporate communications. Computer-to-computer video calling made popular by services such as Skype is becoming increasingly common. At the same time, the use of prerecorded corporate videos on Web sites is booming. Corporate events, such as annual shareholder meetings, investor days and investor conferences, are increasingly being captured on video and shared on Web sites.
Pioneers in Use of IR Videos
A small-but-growing number of investor relations and corporate communications officers already have embraced video to help tell their companies’ stories. One of the early pioneers was Dell, where investor relations officer Rob Williams and chief financial officer Brian Gladden address investors in a prerecorded quarterly video that follows each quarter’s earnings announcement. The videos appear on DellShares, the company’s innovative investor relations blog, and also on Dell’s own YouTube channel.
“Our job is to communicate information so investors can make informed decisions,” says Williams, vice president of investor relations at Dell. “Anyway you can find to get information out ‘one to many’ more efficiently is a good thing.”
Other companies across a variety of industries have followed Dell’s lead and now offer quarterly earnings videos, including Cisco Systems, InterContinental Hotels Group, Corning and Citigroup.
Not that video is going to replace news releases or annual reports, but video offers many advantages over these traditional IR and corporate communication tools. Video helps humanize corporate news. Watching a CEO or CFO explain the reasons for a bad quarter can produce more sympathy and support than from just reading about it in a news release. Video touches more of the audience’s senses, making the message not only more believable but also more memorable. This is why video has already become a standard part of the tool kit for responding to a corporate crisis. JetBlue Airways, Domino’s Pizza and other companies have used videos successfully during crisis situations.
For the most part, however, IROs and corporate communicators have a lot to learn in order to master the art of making an effective video. Many of the first-generation CEO or CFO prerecorded quarterly earnings videos are merely talking-head videos, a presentation style that went out of vogue on TV news a generation ago. To hold viewers’ attention and better tell their company stories, corporate executives and their IR handlers will need to learn more about video production techniques such as narration, B-roll and music.
One of the better examples of a quarterly earnings video is from InterContinental Hotels Group. Each quarter, Richard Solomons, the former CFO who was recently named CEO, is featured in the company’s video, which is available both on IHG’s Web site and on YouTube. While the text is traditional CFO earnings talk, the video includes appropriate background music and photos of the company’s hotels. IHG also produces an excellent video version of their annual report.
When considering video, corporate executives face the same issues that arise in preparing for TV appearances. Grooming, makeup and fashion must be considered, not just the message. For instance, certain colors of clothes project better on video. In live videos, CEOs and CFOs may need to be coached on the fine art of speaking in soundbites and gesturing, coaching tips traditionally used for TV news.
A highly effective corporate video can attract a large audience, telling the corporate story in a far more powerful way than with a news release or annual report. Earlier this year, Corning produced a video for an investor day event. Titled “A Day Made of Glass … Made Possible by Corning,” the video was later posted on YouTube and became an instant hit. To date, nearly 14 million people have viewed the video.
Video Calling’s Impact Is Huge
While prerecorded videos will no doubt play a growing role in corporate messaging, it is computer-to-computer video calling, such as Skype, that has the potential to dramatically change day-to-day practices for IROs and corporate communicators.
Widespread use of computer-to-computer video could reduce the need for IROs and senior executives to travel to meet with investors, making it a cost-effective alternative. It could also help companies located in remote locations get their stories out more effectively, including hosting virtual investor day presentations.
Imagine a world in which investors and analysts routinely choose video conversations over phone calls when speaking with a company’s IRO or senior executives. When given the choice, institutional investors will favor video calls because they give them a chance to read senior managers’ nonverbal cues—body language, gestures and emotions. For investors, it isn’t only what a CEO says but also how he or she says it. That will be far easier to assess when you can see one another face-to-face.
For IROs and senior executives, the stakes are high. In a 2003 case, the U.S. Securities and Exchange Commission ruled against Schering-Plough Corp. and its then CEO because of the negative “tone and demeanor” as well as language in a series of private meetings held with analysts and institutional investors in Boston. “Demeanor” could include all sorts of nonverbal cues that would be easier to detect in a video call than in an audio-only phone call.
Most personal computers, tablets and smartphones already come with webcams and microphones and can be used with services such as Skype, Google+ or Apple’s FaceTime to make video calls. In addition, specialized services catering to corporate video needs are emerging. One such provider is iMeet, which offers customers their own online meeting room in which they can video chat with up to 15 people at a time. Traditional audio-conferencing providers such as Webex and GoToMeeting also are expanding their video-conferencing capabilities.
“If you can’t meet with investors face-to-face, the next best thing is to meet them in video,” wrote Sean O’Brien, senior vice president for strategic planning and investor relations at Premiere Global Services (PGi), in a recent post on the company’s blog. PGi owns the iMeet service.
“Having an open iMeet room while discussing financial results—whether it’s on-the-fly or scheduled earnings calls—helps put a face with a stock ticker and greatly humanizes our company,” O’Brien wrote.
Online video, in all of its forms, seems certain to make a significant impact on the practice of investor relations and corporate communications.
Dave Hogan, APR, teaches public relations at Abilene Christian University and serves as director of investor relations and corporate communications for First Financial Bankshares, Inc. (Nasdaq: FFIN). Follow him on Twitter or view his profile on LinkedIn.