New usability study reveals IR websites score really low

Jakob Nielsen has been writing about web usability since time immemorial (or at least, 1996).  I frequently recommend anyone thinking about writing for the Web, sending marketing emails or designing websites to sign up for his weekly alertbox at (For another oldie, yet goodie, I typically include a suggestion to check out Philip and Alex’s Guide to Web Publishing, as well).

Nielsen’s Nielsen Norman Group conducts usability reviews and puts on conferences for a variety of different fields.  So, it’s when Nielsen comments on Investor Relation websites, I take note.  You should, too.

In a post today, entitled Investor Relations (IR) on Corporate Websites, Nielsen reveals the results of usability studies his firm conducted on 52 different company websites (there are some very recognizable names in this list).

For the study, Nielsen looked at 4 types of users (3 professional, 1 non-professional):

  1. institutional investors
  2. financial analysts
  3. journalists
  4. individual investors

The Usablility Guru’s takeaways for most IR websites?

  • professionals don’t rely on a company’s own website for financials: As a professional investor, I rarely surf to a corporate website to retrieve data.  That I get from Bloomberg, Reuters, CapIQ or even, Yahoo Finance.  I do use corporate websites to access company presentations (see next point) or for small caps with little other information accessible publicly.
  • professionals do like company spin in as much as it weaves an investment story or thesis: Most financial data is easily available through other aggregated sources which allow investors to run quick calculations or valuation analysis.  Instead, professional investors use corporate IR sites to get a gut-check on the company, browse recent presentation.  Here, institutional investors are looking for context, not data.
  • individuals actually read very little text on IR websites: Using eyeball tracking studies, Nielsen concluded that individual investors don’t actually read all that much online.  This jives with Nielsen’s thesis that web users in general have different consumption habits when it comes to information.
  • PDFs may be an easy way to post content but stink because they were developed for print: PDFs allow corporations to easily post financial communications to the web but because they were developed for print, the format requires readers to flip through the document aimlessly.  People don’t read this way online.
  • webcasts gaining popularity but suffer from being too long and a lack of descriptive information regarding their contents: More and more companies are using a video format to post financial communication but according to Nielsen, “[users] like shorter videos to get a sense of who the executives are through facial expressions, tone of voice, body language, and so on.”
  • PowerPoint still works!: Although developed as an offline presentation method, users are still receptive to downloading and reading PowerPoint presentations versus watching video.  As one user said, “This video is 28 minutes long. I spent only 5 minutes to go through [the slides]. If possible, do a separate online presentation. Make the online version easier to understand — shorter.

Given the findings, I’d like to enumerate 10 suggestions (including some of  Nielsen’s own) to make IR activity more successful (providing the right information in the right format, useful to investors):

  1. PDF doesn’t work for financial communication.  Use a more flexible, web based presentation technology like SlideShare.
  2. Design IR websites with both institutional and individual investors in mind. They have different needs.  Accommodate both.
  3. Free your content.  Take video, PDFs, and PowerPoint presentations and upload them to YouTube, Scribd, and SlideShare.  These formats overlay real web usability to make these formats more accessible to investors.  YouTube even has basic annotation functions to bookmark important sections of video to enable users to skip around.
  4. Since users don’t read online, IR websites can improve usability by making it easier for users to find things.  Chop up text.  Use bold and italics judiciously.
  5. Weave an investment thesis.  Don’t think that investors can do this on their own.  Write the web copy to help promote the story behind your stock.
  6. Stock charts are helpful, but they need to be simple to use and easy to understand.  Consider using an embedable, annotated chart like these.
  7. Get CEOs out from the corporate boardroom and conducting interviews in public.  Investors really use these as an input in their investment decisions.
  8. Tap the blogosphere by making your company’s information easy to find and easy to share.
  9. Consider getting a video editor to chop up presentations into 3 minute chunks.
  10. When you post video, make sure that there is a clear description of what the user should expect to see by watching it.  Time is precious and you must convince browsers that watching your videos is worth their time.

Additional Resources


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