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Why Companies & Investors Are Embracing Real Online Annual Reports

Will U.S. Companies Take a Cue from Their European Counterparts & Jump on This Rising Trend?

By Erwin Groenendal of Tangelo Software

Annual reports serve a vital function. Aside from fulfilling the SEC’s requirements with the Form 10-K, substantial annual reports are an opportunity to clearly communicate your company’s strategy, mission, and progress to shareholders, prospective investors, and the public at large.

Yet for decades, the annual report often fell short of its lofty goals. Dense, static, and relegated to the printed page, they primarily appealed only to the most interested shareholders and prospective investors.

Now that’s all changing. Since 2010, user-friendly online annual reports have been adopted across Western Europe and the international business community—but American companies are still lagging behind.

The Appeal of Online Annual Reports

While printed and PDF annual reports are a must-have, online annual reports open the door to a world of branding and investor relations opportunities. A well-designed online report is far more accessible, engaging, easy-to-read, and—most importantly—interactive.

As creative web designers push online annual reports further into the 21st century, new features—like interactive graphs, vivid videos, and intuitive navigation indexes—are making these formally stodgy corporate documents engrossing, gorgeous, and fun.

The State of Online Annual Reports in the States

Will U.S. investor relations professionals finally catch up to their European counterparts? And why has it taken so long?

Research recently released by the National Investor Relations Institute (NIRI) found that 67% of 2015 respondents produced printed and online annual reports—with an additional 5% exclusively producing online reports.

So, wait—what gives? Don’t those numbers indicate that the online revolution is already in full swing in the U.S.?

Not so fast. NIRI’s criteria for what qualifies as an online annual report is a bit lax, to say the least. The organization counts downloadable PDFs, PDF “flipbooks,” and surface-level online summaries.

In truth, those “flipbooks” only amount to PDFs—designed for the printed page—that are uploaded onto a browser-based reader. It’s a far cry from a web-first, online-optimized, interactive experience. They’re still dense, clunky, and difficult to parse.

American companies are missing a golden opportunity to present their facts and figures in much more helpful formats, like dynamic charts and downloadable Excel sheets. Online annual reports in Europe are real annual reports, reimagined for a digital context. It’s easy to see why the U.S. should catch up to the available technology.

Why the U.S. Lags Behind Europe

The U.S. essentially invented the investor relations industry and founding best practices—you’d expect American companies to be leading the latest trends, not following them. This seems to be an anomaly in need of explanation. We have a few theories.

First of all, American investor relations budgets are shrinking. The same NIRI report noted above found that budgets for annual reports are continuing to decline in 2015. 

Couple that with the common misconception that real online annual reports are extremely costly, and it’s understandable why many businesses would shy away from them.

Constructing a real online annual report can seem complex and onerous. In reality, there are clever and affordable ways to produce print-ready PDFs and immersive, interactive online annual reports in one streamlined process. (See the final section of this article for more details.)

Another compelling reason is that the U.S.’s Securities and Exchange Commission requires listed companies to publish Form 10-K reports. Since the 10-K’s dull and dreary structure that doesn’t lend itself well to investor engagement, U.S. companies may see an additional publication as an unnecessary burden.

Many produced fuller, more interesting “glossy” reports, but as printing budgets shrank, they couldn’t sustain the mailing costs for these extraneous pieces. Instead, enterprises often opt for unadorned 10-Ks or thin “wrappers” with a few pages of designed content to surround the stolid form. Today, only about 40% of U.S. companies produce separate glossy reports with a more engaging structure.

That’s why online annual reports make so much sense in the current moment. The online versions can drastically cut down on the costs of mailing physical reports. And for the 40% of businesses that produce glossy reports, creating an online experience couldn’t be easier with today’s tech tools.

Online reports have flourished abroad because they’re not chained to the stale, uninspired 10-K structure. Without the strictures of a cut-and-dry blueprint, companies in Germany, France, Switzerland, the Netherlands, Canada, Australia, and the United Arab Emirates naturally got more creative. Optimizing an already-interesting report for the online age just made sense.

What Online Annual Reports Can Do

  • Responsive design that makes it easy to explore your annual report on a smartphone or tablet. With more users now accessing the Internet on mobile devices than traditional desktops, making your report mobile-friendly is a no-brainer. You can’t expect a prospect to carry a dense annual report with them everywhere they go—but responsive web design means your publication is always in hand.
  • Interactive charts and graphs that let readers find insights firsthand. Static numbers can only be so exciting. Elegant graphs that respond to your touch and enable you to filter, sort, and explore wrap in readers and make them more emotionally invested.
  • Customized Excel and PDF downloads that let your audience dive deeper. Whether you’re letting number-crunchers download Excel files to investigate or casual prospects save their favorite portions of your report, these advanced features will keep readers more involved.
  • Engaging videos that provide a vivid multimedia experience. Videos can capture our short attention spans in ways that words cannot. Embedding videos into your report also gives a much richer view into your company’s look-and-feel, making your business more memorable and real.
  • Intuitive navigation that empowers readers to find what they want. Even with flawless design and production, not everyone is going to be spellbound by every single inch of your annual report. Similarly, many readers are easily overwhelmed by too much information. Online annual reports typically feature helpful navigations with concise summaries that let users drill down into what they’re most interested in.

And that’s just the tip of the iceberg. As companies, designers, and technology partners continue to innovate, you can be sure that even more impressive features will soon become standard fare for the online annual report.

How Tangelo Makes Online Annual Reports Quick, Easy, & Cost Effective

We mentioned earlier that many American companies might have hesitated at the thought of developing an online annual report, assuming it was overly expensive endeavor.

The reality is much rosier, and Tangelo, our enterprise software solution, is part of the reason why. We’re dedicated to helping companies save time, engage investors, and streamline the process of writing, managing, and publishing annual reports.

With Tangelo, companies can quickly create print-ready PDFs and online annual reports from a single source that’s securely hosted on the cloud. That means teams can collaborate in real-time and access the master document from anywhere, at anytime.

We’ve loaded the Tangelo platform with loads of handy features—like the ability to interface with Excel, syncing figures across your entire report with a click.

Of course, we love nothing more than collaborating with cutting-edge web designers to create captivating online annual reports that outshine their printer predecessors.

Online reports are anything but static. As new technology continues to make online experiences even more easy and affordable to produce, we expect American companies will soon overtake their international counterparts and once again lead the vanguard of modern investor relations.

Erwin Groenendal
Tangelo Software