edelman financial communications visual storytelling research

EDELMAN FINANCIAL COMMUNICATIONS & CAPITAL MARKETS

New Proprietary Research from Edelman Financial Communications in partnership with Business Wire

MARCH 2016

Do Investors Like Visual Presentations of Financial Information?

EDELMAN


MethodologyObjectives

Conduct a survey among Wall Street professionals, individual investors and financial media professionals to understand:• How these audiences perceive earnings releases in terms of the current standard of function and design, and how they utilize these releases in

their daily operations • How these audiences view the new and emerging methods of presenting financial earnings (i.e. using more visuals to convey financial facts and

figures) and their opinions regarding the veracity and utility of these designs and content.

Methodology• Launched an online survey that tested traditional and visual earnings press releases to buy-side analysts/institutional investors, sell-side analysts

and retail investors• Conducted in-depth interviews over the phone with financial media professionals regarding their experiences with traditional and visual earnings

press releases

05/02/2023 © COPYRIGHT 2016 DANIEL J EDELMAN INC. 2

INTRODUCTION

*Wall Street professionals = institutional investors and sell-side analysts

WHO HOW MANY WHEN HOW

Investors, analysts, and financial media

Retail investors: 300Wall Street Professionals:

>20In-depth interviews: 4

January 21, 2016 – February 3, 2016 Online / Telephone Hybrid


05/02/2023 © COPYRIGHT 2016 DANIEL J EDELMAN INC. 3

• Earnings releases are considered to be an essential resource for investors, analysts and financial media alike, and having fast, easy-to-access data is vital

• The need for traditional financial data remains. While there is strong positive sentiment for visual storytelling among all audiences surveyed, participants emphasized that these visual elements should be included in addition to, and not a substitute for, traditional earnings data and detail.

• Both Wall Street professionals and retail investors say visually driven earnings releases are easier to read, make it easier to find relevant data and easier to understand (“at the drop of a hat”).

• Investors agree that getting fast, easy-to-understand information is essential to making good investment decisions

• Ninety-two percent of Wall Street professionals and retail investors surveyed believe the future of earnings releases will be more visual and will include qualitative content and creative storytelling;

• These investors also believe the early adoption of this style today by some companies is a step “in the right direction.”

• Wall Street professionals, retail investors and financial media value the inclusion of a CEO quote and other commentary in the release’s financial highlights section, and agree that presenting the information in a visual manner makes it more accessible for readers.

Key findings


Current & future state of earnings releases


05/02/2023 © COPYRIGHT 2016 DANIEL J EDELMAN INC.

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All participants believe presenting financial data in a more creative/visual manner is the future, and would like to see increased adoption of this reporting style

CURRENT AND FUTURE STATE

Q20. Do you think the future of showing financial data in a more visual, creative way is going in the right direction or off on the wrong track?Q21. Do you think the future of showing financial data in a more visual, creative way is something you would like to see more of or less of?

11% 89%

See less See more

8% 92%

Wrong track Right direction

Do you think the future of showing financial data in a more visual, creative way is

something you would like to see more of or less of?

Do you think the future of showing financial data in a more visual, creative way is going in the right direction, or off on

the wrong track?



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All participants agree that visual earnings releases portray a more forward-looking approach, are easier to read, and support transparency

CURRENT AND FUTURE STATE

Q20. Do you think the future of showing financial data in a more visual, creative way is going in the right direction or off on the wrong track?Q21. Do you think the future of showing financial data in a more visual, creative way is something you would like to see more of or less of?

16% 84%

Too long or easy to read?

Too long to read Easy to read

7% 93%

Stuck in the past or forward looking?

Stuck in the past Forward looking

20% 80%

Transparent or trying to hide some-thing?

Trying to hide earnings newsFully transparent

Perceptions of Visual Earnings Releases


Visual earnings releases vs. traditional methods



8

Testing visual financial earnings information and infographicsIn order to assess how Wall Street professionals, retail investors and the financial media view “visual” earnings releases, a “control” (i.e. traditional) earnings release was offered as a comparison to examples of “visual” earnings releases.

VISUAL VS. TRADITIONAL

A series of releases and infographics were tested that represented two approaches to financial reporting: traditional vs visual storytelling. In this article Edelman has included aseries of representative images from publicly available information that is for illustrative purposes only; these items are not necessarily those used in Edelman’s research.

Illustrative Traditional Earnings Releases Illustrative Visual Earnings Releases



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In this age of information overload, visual earnings releases help usher investors into a new era of understanding data

Earnings release comparisonControl and visual releases are comparable in credibility and trustworthiness for providing the essential information…

However, when it comes to shareability, ease of reading, and representing innovation—visual earnings releases surpass traditional reporting methods.


This earnings release…% somewhat/strongly agree(Wall Street professionals and retail investors) Control Visual press

release (avg.)

Contains the information essential to managing my personal investment portfolio (retail only) 78% 80%

Contains information I would definitely share 68% 71%

Easy to read and find the information I need 61% 77%

Represents innovation in financial reporting 56% 75%

Contains the information essential to doing my job 95% 79%

Looks credible 91% 85%

Has information that is trustworthy 86% 84%

Q13/Q18. Please tell me the extent you agree or disagree with the following statements. This earnings release...Q14/Q19. Which parts of the release stand out to you the most?



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In terms of ease of reading and perceived innovation, visual earnings releases surpass traditional reporting methods

Easy to read and find the information I needTop 2 (strongly agree and somewhat agree)


Q13/Q18. Please tell me the extent you agree or disagree with the following statements. This earnings release...Q14/Q19. Which parts of the release stand out to you the most?

Represents innovation in financial reportingTop 2 (strongly agree and somewhat agree)

Traditional releases Visual releases

56%

75%

Traditional releases Visual releases

61%

77%

+16%

+19%



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Insight based on verbatim responses: Wall Street professionals and retail investors agree that traditional reporting methods can be cumbersome to read and digest


*For illustrative purposes only

“Small print that only a CPA

would love.”

“Hard to understand.

”

“It will take a while to digest all of the

information in it.”

“Too complicated and

long to just review quickly.”


Illustrative Traditional Earnings Releases



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Insight based on verbatim responses: Wall Street professionals and retail investors agree that visual earnings press releases are clearer, easer-to-read and find information


*For illustrative purposes only

“Very easy to read, well put together,

clearly shows different areas of

interest.”

“Finally… short and to the

point.”

“Stunning.”

“It is much easier to read and find what

you are looking for.”

“It is awesome in its brevity. The use of tables

and graphs is to the point.”


Illustrative Visual Earnings Releases



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WHAT MEDIA PROFESSIONALS

TOLD US

Media professionals agree that traditional formats are cumbersome and prefer a more graphically accessible alternative


“This is colorful. Easy to read and gives me a feeling of confidence.”

– Financial Media Professional

“I like how it's got the highlights right here. I kind of like how it's all condensed, it's got the graphics that

makes it easy to think about what's going on.”– Financial Media Professional

“Information could be presented better - graphs/charts....”


The most important thing [in an earnings press release] is that we can retrieve it quickly. It’s

always better if the numbers are put into one box very high up, near the top.


Illustrative Traditional Earnings Releases


Illustrative Visual Earnings Releases


How Earnings Releases Are Used



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Every day 2-3 times a week

Once a week

Once a month

Only when it's released

Never

4% 8% 8%15%

36%28%

Frequency of Earnings Release Use in Managing Personal Investment Portfolio

Retail Investors

Every day 2-3 times a week

Once a week

Once a month

Only when it's released

Never

50%

23%14%

5% 9%0%

Frequency of Earnings Release Use in Normal Course of Business

Wall Street professionals

Earnings releases are considered to be an essential resource for Wall Street professionals, retail investors and financial media alike, and having fast, easy-to-access data is vital

HOW EARNINGS RELEASES ARE USED

“We need to grab the key numbers very, very

quickly. It’s very helpful when companies have a table at the top, or any

kind of a little chart. Somewhere very high up that just gives us those

numbers, and we can just grab them. It’s also

important that they’re presented, that they’re

easy to read and that they don’t do things like flip the table or have the

wrong years.” – Financial Media Professional

Q1. How often do you use quarterly earnings press releases in your work?Q2. How often do you use quarterly earnings press releases as a part of managing your personal investment portfolio?



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This quarter's financial highlights

Earnings per share trends and factors influencing bottom line

Capital allocation update

Financial tables

Segment information and trends

Management quotes and qualitative backdrop about performance

This quarter's operational highlights

Key strategic initiatives and accomplishments towards stated goals

Comparison to historical periodsForward-looking guidance and management's perspective on

future resultsUpdate on competitive environment

43%39%

38%36%

35%32%

30%29%

28%26%

22%

Essential Components of Financial Earnings ReleasesWall street professionals and retail investors

Financial highlights are the most sought after information in earnings releases; management highlights also considered highly important


Q3. Which parts of the earnings press release are the most important to your work?

“People definitely want to know how companies perform from quarter to quarter. I mean that’s one of the most important factors they take in making a decision about investing.” – Financial Media Professional

“I use them [earnings releases] to get the core information that we use when we do earnings stories. It’s the reference point for getting the numbers.” – Financial Media Professional

“If I were a total numbers person it would be wonderful. I'm not a total numbers person. I would prefer a much more narrative "total picture" perspective on the business.”– Retail Investor



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Wall Street professionals review earnings releases within minutes after publication, while retail investors review releases over a longer period of time


Q4. How do you access financial earnings press releases?Q5. How long after reading an earnings press release do you use or act on the information?

Company's website

Direct email

Financial News Sites

Financial data products (e.g., Bloomberg terminal, eTrade)

Social media

Other

40%

47%

35%

14%

5%

4%

64%

73%

45%

77%

5%

0%

How Earnings Releases are Accessed

Wall Street professionals Retail investors

Within minutes

Within the hour

By the end of the day

In the next couple of

days

By the end of the week

In the long term

4% 8%16% 19%

8%

45%36%

9%

23% 18%

0%

14%

How Long After Reading Earnings ReleaseInformation is Used

Retail investors Wall Street professionals



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Wall Street professionals and retail investors agree that getting fast, easy-to-understand earnings information is essential to making good investment decisionsAll Wall Street professionals surveyed said…


Q6. How important is getting fast, easy-to-understand earnings press releases to doing your job?Q7. How important is getting fast, easy-to-understand earnings press releases to managing your personal investment portfolio?Q8. How important are earnings press releases to doing your job?Q9. How important are earnings press releases to managing your personal investment portfolio?

Importance of earnings press releases for

managing personal in-vestment portfolios

Importance of getting fast, easy-to-understand earnings press releases to managing personal investment portfolios

26%

31%

46%

42%

Very important Somewhat important

Top 2(Very important, somewhat

important)

72%

73%

Importance of Earnings Press Releases Among Retail Investors

“[The visual earnings release] is much easier to read and find what you are looking for [than the control].”-Retail investor

Getting fast, easy-to-understand earnings press releases are essential

Sharing and discussing earnings press releases are essential


Recommendations for Companies that Implement Visual Earnings Press Releases


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Implementing visual earnings releases

© COPYRIGHT 2016 DANIEL J EDELMAN INC.

STRATEGIC RECOMMENDATIONS

Collaboration is key for successInvestor relations/financial reporting teams should work with corporate communications and marketing executives to evolve financial reporting in a way that will effectively incorporate brand image, style, strategy and business content and your overall corporate narrative.

Think holisticallyOrganizations should think holistically about the earnings release process. It is not only about reporting quarterly financials, it is also about using the quarterly reporting cycle as a chance to tell your financial story to various stakeholders important to your organization such as customers, employees, and investors. What type of documents can you create to evolve your financial reporting and provide an opportunity to talk about the future of your company?

The world is getting smallerMany companies are starting to realize that the line is blurring between internal and external communications, where “peer-to-peer” communication is the primary way individuals gather information. Try thinking of your earnings release as a touch point on the health of your organization.

Know your industry/ peer reporting trends and contentBe in tune with your peers and your industry to make sure that your reporting is done in a way that can help you tell a differentiated story while at the same time make your company easily comparable to your peers. Developing a visual release requires identifying the most salient information that is relevant for your audience. Don’t make Wall Street or the media’s job any harder than it is already.



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Implementing visual earnings releases STRATEGIC RECOMMENDATIONS

K-I-S: Keep it simpleRemember that everyone reading your earnings release is in a hurry and multi-tasking. Make sure that your visual earnings releases are accessible and easily understood.

Think about social/digital applicationsVisually-oriented financial storytelling is a perfect fit for digital communications. Social media has played a key role in transforming the way corporations and organizations worldwide convey and display information. Many newswires today publish earnings data directly onto social channels.

Don’t be too cuteBe sure to include credible and forward-looking quotes from your management team. Make sure to leverage visual elements where possible while simultaneously ensuring that you aren’t compromising any salient data – put the numbers first and highlight key facts and figures.



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Contact EdelmanOUR TEAM

Deb Wasser

Executive Vice President, Financial Communications, Edelman+1 212.704.4588; [email protected]

Ted McHugh

Vice President, Financial Communications, Edelman+1 212.819-4875; [email protected]

About Edelman Financial Communications & Capital MarketsEdelman Financial Communications & Capital Markets is a boutique strategic consultancy with the reach and resources of the world’s largest public relations firm. We advise public and private companies on strategic and capital markets communications to help position them effectively with the financial community during transformative events as well as during normal-course business. Clients choose to work with us because of our specialized and experienced financial communications team, our ability to provide the full range of Edelman’s services (such as digital and social media, public affairs and employee engagement) and our ability to access Edelman’s global network of 65 offices around the world.

Jeff Zilka

Executive Vice President, Financial Communications, Edelman+1 312.240.3389; [email protected]



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Contact Business WireOUR TEAM

Michael Becker

Executive Vice President, International Business Strategy+1 212.752.9600; [email protected]

About Business WireBusiness Wire, a Berkshire Hathaway company, is the global leader in press release distribution and regulatory disclosure. Investor relations, public relations, public policy and marketing professionals rely on Business Wire to accurately distribute market-moving news and multimedia, host online newsrooms and IR websites, build content marketing platforms, generate social engagements and provide audience analysis that improves interaction with specified target markets. Founded in 1961, Business Wire is a trusted source for news organizations, journalists, investment professionals and regulatory authorities, delivering news directly into editorial systems and leading online news sources via its multi-patented simultaneous NX Network. Business Wire has 32 offices worldwide to securely meet the varying needs of communications professionals and news consumers. In 2015, Business Wire teamed up with Al Roker Entertainment to create BizWireTV, a bi-weekly Web news show.


Appendix



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DemographicsMETHODOLOGY

Gender

Male 58%

Female 42%

Age

18-24 0%

25-34 12%

35-44 18%

45-54 20%

55-64 25%

65+ 24%

Education

Less than high school 0%

High school graduate 3%

Vocational/technical graduate

3%

Some college 12%

College graduate 35%

Some graduate education 9%

Postgraduate degree 38%

Ethnicity

White 84%

African or African/descent

2%

Hispanic or Latino 2%

Asian 10%

Other 2%

Years of Experience in Field(Wall Street professionals)

0-3 5%

4-7 18%

8-10 9%

11-15 27%

16-20 27%

20+ 14%


Thank you.

EDELMAN

edelman financial communications visual storytelling research

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