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2/25/2002
Securities Data Publishing - Investor Relations Business
As Targeting Arena Grows, So Does Functionality
By Editorial Staff
The shareholder targeting industry has seen a lot of changes over the last few years… a slew of entrants from related fields has given IROs greater choice of vendors than ever before.
At their most basic, targeting services are massive databases of ownership information about institutional investors, and their contact details. The targeting element is a search function that allows the user to boil down a list of most likely investors by investment style, sector, peer group or location.
But as the IR market demanded a higher level of functionality, targeting firms began adding new, often innovative features to help IROs get their job done more effectively, and equally importantly, to monitor the outcome of their efforts.
Until fairly recently, targeting firms Bigdough.com Inc. and …TFCG, comprised the lion's share of the market…
Below, in alphabetical order, is a breakdown of what's on offer.
BigDough.com
Institutional investor database Bigdough recently launched a contact management software application to make it easier for IROs to track the impact of their meetings.
"It's a pre-build system enabling clients to log how the meeting went and log if they became a shareholder. They also record how many shares were bought, how many complained the float was too small, and so on. If targeting one group of shareholders was more successful, the IRO can customize efforts there," Bigdough Director of IR Services Paul Marcus said.
The product, called Shareholder Relationship Management, in turn helps IROs justify their role within companies, although it creates an accountability that some IROs may not be comfortable with, he said.
"If there's one frustration for IROs, it's that they can't analyze the success of their efforts-but they absolutely can if they measure contact with their target market. If they target 150 institutions, they can instantly measure how many attended conference calls, what their attitudes were, whether they invested and why. It just takes a little initiative, which we've taken on behalf of IROs," Marcus said.
Most of the information in Bigdough's database is from personal interviews with buy siders, with ownership data coming from 13-F quarterly filings.
"We ask anything and everything-from investment styles to which college he or she attended-as much as they're willing to give. Some end up with just a sentence, but others have a paragraph," Marcus said.
The firm's reasoning is that any additional information helps IROs break the ice in a meeting, as well as providing deeper clues about what to expect from the conversation before it happens.
Bigdough's existing 750-strong customer base gets the upgrade for free as part of their existing contracts, but new clients can expect to pay more. The cost depends on the amount of functionality-the basic service costs around $17,000 per year, but on average, clients pay around $25,000, Marcus said.
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