Study Looks at Investor Relations Web Sites

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What do potential investors really want from an investor relations Web page? To find the answer, Jakob Nielsen, a researcher from Fremont, CA-based Nielsen Norman group, conducted a research study to assess user response to information on corporate Web sites.

The study had 42 potential investors look at the Web sites of 20 companies, including Home Depot, Johnson & Johnson, Pacific Sunwear of California, Symantec, Starbucks, and UPS. The test group consisted of 28 individual investors and 14 professionals, including institutional investors, financial analysts, and financial journalists.

Nielsen asked the testers to find specific investor information on the company Web sites. The study results show that the testers were able to complete 70 percent of the assigned tasks. The professional testers fared better overall with a 75 percent success rate while individual investors were successful 67 percent of the time. Finding the high/low share price for an earlier quarter proved to be difficult for the testers, with 77 percent failing to find this basic information on the company Web site.

In the area of design, Nielsen noted that Web sites that featured simplified views of financial data on a single page had the greatest appeal to individual investors.

Nielsen points out four problems with most corporate Web sites:

  1. Most rely on unnecessarily complex charts, which tend to frighten novice investors. (Nielsen points out that most professional investors have their own analytical tools anyway, so high-end charts are counterproductive.)
  2. Many sites often don't provide a unified and simple overview of critical investor information on a single page.
  3. Many corporate web pages offer quarterly and annual reports only in PDF format, making them hard to browse online.
  4. Many sites use financial jargon that's likely to confuse novice investors.

The study concludes: "Investors, both individual and professional, want more than just the data that independent services can provide. They want the company's own story and investment vision. What they don't want is to wade through complex or irrelevant information. Balancing all this is the challenge for the Investor Relations user experience: You must provide both simplicity and vision, connect with investors without antagonizing them, and serve both professionals and people with little financial knowledge. To achieve this balance, your design must focus on users' needs."

The full 121-page report with 65 design guidelines for improving IR usability is available for download from the Nielsen Norman Group for $248.

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