Managers in private and public companies often underestimate the press’ influence on investors. Lately, I am seeing companies set up communication departments without truly mapping investor relations into their strategy. In some cases, a company’s CFO hires a separate investor relations firm without involving communication department leadership. This is a major mistake, because the communications department connects with the press daily. When reporters have two different, disconnected relationships with a company, it’s easy for messaging and opportunities for leveraging paired media relationships to be lost or poorly executed.
Though many companies have had investor relations, marketing and communications in silos, the strongest companies today have these groups working closely together to develop a narrative to support the company growth strategy.
For example, an experienced investor relations team knows it can be challenging for small and mid-cap companies to get financial analysts to cover them. However, getting press coverage can be easier. This is super important to note for public companies in this size range. Also, it can be cheaper to secure press coverage than it can be to get analyst coverage. The challenge is that too many financial managers and CFOs aren’t partnering with their CMO or head of communications and aren’t considering the value that press coverage management could have in advancing the company’s investor relations strategy.
For private companies looking to woo investors, a solid press relations strategy that results in consistent coverage in top industry publications is key. Such a strategy can demonstrate momentum, provide credibility and draw the attention of investors to their vision.
The competition for funding is fierce at every stage, even within the Private Equity and Venture Capital spaces. It’s key to realize that PR isn’t just press releases and interviews. Developing an integrated PR and marketing strategy means knowing your target audience and finding smart ways to get in front of them with speaking engagements, podcasts, compelling customer case studies and byline articles in key trade publications as well as compelling content through owned channels. Showcasing the company culture and leadership scaled smartly is equally important to investors, which means making sure the leadership and evolving company culture are things you’re proud to showcase through employee communications and external sponsorships and awards.
Most companies don’t consider that investors, the SEC and analysts look to the press for a lot of their information on the companies they are following. A company with a tightly connected team that is consistent in messaging is much more equipped and nimble in managing any potential crises that pop up for public scrutiny. Once a company starts to establish a strong brand in the public eye, it’s essential to be diligent in evaluating blind spots and getting to issues before they blow up. A red flag in the press and any major inconsistencies can lead to company accounting audits, negative analyst rankings for the company and publicly expressed frustration or a withdrawal of interest from investors. Today’s business and financial reporters are incredibly sophisticated and will seek out information when financial reporting feels off, investors begin to complain or management isn’t answering reasonable questions about growth and how funds are being used. Media relations management is essential in avoiding these types of pitfalls, and the communications department should be working directly with the CFO and any outside agencies to ensure everyone is on the same page. In some companies, the CFO handles investor relations separate from media relations, and that’s where issues can emerge.
These two groups must be linked and collaborative so that messaging in the press is indeed communicating what investors need to know!
For companies just starting out, the objective is to get noticed and gradually establish a rapport with the media, learning what each journalist is most interested in and then finding ways to connect on these topics when it makes sense for the company’s reputation. Reporters want to know they have experts to call upon, not product managers shilling products. Ensuring you have the right mix of spokespeople is essential. Great company press mentions in larger articles happen when an emerging company has experts who can add value to the discussion. This is why establishing what you want to be known for is essential, followed by having expert spokespeople in place to connect with reporters. Cultivating these press relationships early on and consistently essentially helps your company connect with investors, analysts and potential partners by educating them on why they should be interested in your company.
The challenge I see every day is companies wanting press coverage and chasing press releases vs. having a strong media relations strategy. In addition, with the economy tightening right now and elections on the horizon, there’s a natural tendency for companies to panic and push for press coverage when they don’t have any breaking news. That means they aren’t recognizing that reporters are focused on their own agendas and topics. The key is to connect with something valuable on the topics that interest reporters. A company that hasn’t had any funding news and is still attempting to get press must realize it need the runway to secure that press as its PR team establishes introductions and familiarizes reporters with the company and its agenda. The press won’t pour in overnight, so establishing the budget and a 12-month runway for proactive pitching, press releases, byline articles, expert commentary, online content development and more matters.
The downside of not having a strong media relations strategy is that you see companies pumping out mediocre press releases instead of well-thought-out, meaty news. The fastest way to lose credibility is to act desperate in your media relations efforts and to abuse tools such as press releases that are valuable until they aren’t.
As you’re looking at 2023, it’s time to do the homework for your company. Stepping out of the bubble of day-to-day work and having your agency develop a media landscape document is a wise step. Add financial analysts and industry analysts to see what they are saying in your space as well as the trends they are watching. You want to see how your competition is playing in the press, what reporters in trade, tech and business press are truly focused on, and the themes in the press you may want to dive into and lead. You also need to be aware of what themes aren’t getting traction so you can determine if you want to deliver data and research that would raise these topics’ relevance to reporters.
The press isn’t your only channel for reaching investors, but it’s one that will give you some cover and evolve as your company grows. A good and trusted relationship with the press also helps companies weather storms. A company going through an oil spill, a product recall or an executive departure without a strong relationship with the press doesn’t tend to fare as well. Food for thought!
CEOs can avoid a siloed company structure by hiring people who understand the value in integrated corporate communications, marketing and investor relations. Such integration establishes a consistent flow of information; company narrative; and media relations and marketing strategies that support the company’s growth. It also delivers a consistent voice to all stakeholders – one unified unit that builds confidence internally and externally.
