How Digital Visibility Is Driving Small to Mid-Cap Investment
Being seen is crucial for small to mid-cap investment and more companies are now using digital marketing to increase market visibility.
With strong volatility expected in the market to continue into 2020 more investors are researching lesser known companies and are also eyeing smaller stocks in areas such as biotechs, technology, property, medical cannabis and the perennial favourite gold stocks before they make important investment decisions.
With social media and mobile device usage at record highs and growing, publicly listed companies catering to the digital palate are being rewarded.
Millenials Fastest Growing Investor Sector
Recent research from the Australian Millennial Report indicates that tech-savvy 19-to-36-year-olds are thinking more seriously about how to create wealth. While owning a property may be years away or not on their agenda, millennials are seeking alternative ways to move beyond a traditional savings account or term deposit that pays next to no interest, and invest in relatively “safe” investments like Exchange-traded funds (ETFs).
The younger investors are looking to ETF’s to boost their savings and to start building their wealth. The rise of online investment advisers such as robo-advice sites such as absolute, making investing easier and cheaper, and increased public awareness of the ETF category generally.
The Deloitte 2019 Millennial Survey cited climate change and environmental protection as the top concerns of all millennials on a global scale, followed closely by income inequality and disparity of wealth. The opportunity then lies in reaching this group and ensuring you meet their expectations for investment.
Millennials also like simple investments which they tend to research online and speak with friends and family. Not surprisingly, based on their daily content consumption habits, social media makes an important contribution to their decision making.
Increasingly Millennials are looking at a wide level of factors in investigating companies that includes the sustainability practices of the organisations and how “green” they see the company i.e. its corporate practices and reputation.
Social media marketing strategies cannot be ignored when looking to attract millennial in investment decisions. This group is three items more likely than any other group to use social media for researching, discussing and selecting investment opportunities it is imperative to have a social media strategy for any company wanting to attract investors.
Small Cap Stocks
Small caps are increasingly embracing the digital side of communication as shown by some of the examples below. The returns on small caps are often more volatile than large caps and compared to the broader market’s. The laggards recently have been the “top 20” stocks, dominated by the banks, Telstra and the major retailers, which are really struggling to grow and increasingly labelled as “growthless”.
For many investors the weaker Aussie dollar and the growth shown by stocks outside the Top ASX, means they are on the look out for real growth opportunities. Arguably, this is the end of the stock market that investors will be looking to in order to find the growth they want to see. This represents an opportunity for smaller/mid caps investment stories to be heard.
Source: S&P Dow Jones Indices
Social media communication is increasing among small-cap companies such as Australia-based explorer Iron Road (ASX:IRD), which used social networking to talk to investors about its A$4.5 billion iron ore project in South Australia. It has even reached out to China, a key market for iron ore, through the country’s local social media platform Sina Weibo.
Accurate and timely information is crucial for managing company reputation and both consumer and investor confidence. Many investors are now conducting their due diligence online, which is why regularly updated web content needs to be the foundation of every IR and corporate communications plan.
But it’s probably not the first place stakeholders will land. Regardless of how many communications platforms a company uses, they can all feed into and link back to the corporate website, bringing greater control and uniformity to company and IR messaging.
Social media remains the fastest way to communicate with, and influence investors. Twitter, which is often described as the first draft of modern history, is one platform with repeated examples of simple posts prompting significant stock market shifts.
Cellmid’s Strong Consumer Offering
The ASX-listed life sciences company Cellmid has grown from a pure biotech to offering a consumer haircare product- its Evolis range of hair-loss inhibitor products that is fuelling revenue growth for the listed company.
Small- and mid-cap healthcare companies are attractive targets for retail investors. Many healthcare companies operate within “emotional” or “tech” sectors like chronic diseases, robotics, and digital health, which are often profiled in the media. Also many small- and mid-cap companies have share prices that are low enough to offer a perceived upside as they work towards gaining traction with their research.
The Cellmid website is geared toward investors with the day’s share price displayed prominently on the homepage, and a dedicated Shareholder Information section containing important company data including interactive annual reports.
These can then be more easily shared by engaged digital investors on social media (the preferred referral network for millennials) thus recommending and sharing the Cellmid investment story with peers. It allows the company to keep track of its investor interest and understand what information they are looking for thus better crafting their key investment messages to their stakeholders. In the lead up to EOFY it can be very easy for many listed companies to forget the positive impact a well presented, visually appealing and interactive Annual Report can offer in engaging new investors.
Cellmid’s interactive Annual Report and corporate website.
The shareholder information section also charts Cellmid’s (ASX:CDY) share price movement, ASX announcements, public disclosure policy, share registry information and analyst coverage. With many communication touch points available, Cellmid has made it easy for current and potential shareholders to make an informed investment decision.
With a solid digital marketing strategy in place like Cellmid, the next step for companies is to reach out to their target audience, and engage and retain them with new and up-to-date information on company news, product releases and sharemarket results. Some innovative companies are finding new ways to do this in the digital space, such as CEO videos and even CEOs on social media.
MGC Pharmaceuticals (ASX: MXC) is an Australian medical and cosmetic cannabis company on the cutting edge of medicinal marijuana production. With more than 40 years experience in the field, MGC understands the importance of divulging information to its shareholders, and it’s using the digital space to tell its story.
In May 2017, the MGC Pharma signed sales agreements with companies in Europe for its anti-ageing skincare product line MGC Derma. To support this, the company launched a social media campaign to build brand awareness and generate support. While this is a great start for maximising their visibility there is still opportunity to further build a cohesive branding strategy delivering greater results.
As a medical cannabis company, MGC Pharma has many competitors in this space globally vying for investor attention. One way to really implement a total cut-through strategy was to invest in a new best practice, mobile responsive website that maximises its ability to rank highly in Google searches. With a growing number of millennials looking to invest in shares, the need to be easily found online is even more critical today. Adding a link to fresh content such as blogs as well as increasing relevant back links to the website, built over time, can all serve to enhance the companies ability to be found and included by investors as a potential investment choice.
MGC Pharma’s corporate website with dedicated Investor Centre
The dedicated Investor Centre on their website features real time share price, charting, financial reports, corporate governance and ASX announcements. The MGC Pharma website allows investors to request an investor presentation which details its core strategy, introduces its leadership team, talks about its business strategy in Australia, the types of pharmaceutical products and production facilities it offers, and the Australian market scenario. All this is achieved through a highly immersive, interactive experience with creative WHO, WHAT, WHERE and WHY navigation headings to guide the investor through the sites content.
Digital communication is also preferred by socially conscious investors, and helps companies target those shareholders who look for stocks putting ethics before earnings. Cutting down on paper, printing and postage costs for mail-outs also offers obvious cost-saving and time-saving benefits. Woodside Energy like many ASX companies both large and small, have for many years embraced the need to be more sustainable across many areas of their business. They consistently use the Green Reports initiative that enables them to offset their carbon footprint.
Raising Your Profile
As with many other communication disciplines, there is no one-size-fits-all approach to investor relations and no one single digital platform is ever guaranteed to garner results on its own.
LinkedIn, Facebook, Twitter, EDM, videos, webcasts, blogs, SEO, interactive reporting and of course websites all form part of the multi-faceted approach leading small and mid-cap companies to greater digital visibility and the ability to capture investor interest. It is only through a strategically developed and well executed “stock marketing” strategy underpinned by actionable analytics, that can deliver these type of results.