By Steve Momorella, TEKGROUP

In today's digital era, IROs have a wide array of tools available to help them meet federal disclosure requirements and expand their reach to potential investors, analysts, bloggers and financial journalists. Announcing material financial information and earnings releases is now more cost-effective than ever thanks to a new and growing trend: the advisory release.

As public companies continue their cost cutting crusade, the advisory release is quickly becoming a new weapon that not only reduces expenses associated with meeting federal regulations, but also helps establish the corporate online newsroom or news site as the "one-stop-shop" to find critical information. Companies like Google, Expedia, Marathon Oil, SVB Financial Group, Steinway, Tellabs, REIS and Nokia are finding that by issuing an advisory release they can save tens of thousands of dollars per year. In fact, with their most recent earnings release, Nokia was able to save thousands of dollars by cutting their release announcement to 41 words.

The tactic is quite simple actually. Organizations craft a short message—the advisory release—containing a link directly to their corporate online newsroom, which then directs people to the full download of financial or earnings information. Instead of being charged by the wire for the full earnings release, which can be thousands of words, the advisory release instead links to the information on the organization's website. In Nokia's case, they were spending thousands per quarter to have the wire distribute their earnings release. This past July, they issued an advisory release and directed users to their online newsroom to download the various documents associated with the earnings announcement. And they aren't looking back.

"The advisory release is akin to the notice and access model of proxy material distribution and is likely to be found compliant by the SEC," says Driscoll Ugarte, business and securities lawyer for Edwards, Angell, Palmer & Dodge. Dominic Jones from adds that advisory releases are one of the "key tools in a new online disclosure model, in which companies use them to establish their websites as recognized channels of disclosure." This declaration of the online newsroom to be the official outlet for news distribution is one of the key requirements for the SEC Fair Disclosure regulation. 

And, the benefits extend well past cost cutting. By using the advisory release to direct people to an organization's website or online newsroom, the site becomes more attractive to search engines, more familiar to returning journalists, and drives more referrals and potential customers.  Furthermore, it offers site visitors the opportunity to see related information such as other news stories, videos, pictures, spreadsheets, PDFs or webcast links. With today's online newsroom and self-publishing technology, IROs are able to quickly upload critical financial documents to a reliable and trusted website that they maintain under their control. 

Obviously, this is not good news for the traditional wire services, which have been using the SEC requirements as a way to force organizations to spend tens of thousands of dollars per year with their financial disclosures. And, with the trend pointing to more and more companies using advisory releases and declaring their online newsrooms as the official site for news, the thinking is that companies in the future will no longer use the wires at all. One such company already doing this is Google. Last April, Google issued an advisory release saying that  it intends "to make future announcements regarding financial performance exclusively through its investor relations website." In addition to saving money on their announcements, they have also seen a huge spike in Web referral traffic to their site, obviously.

Additionally, organizations can issue direct email alerts to existing investors, analysts, the financial media and potential customers utilizing a similar approach. By allowing analysts to sign up for email alerts from the online newsroom or corporate website, organizations are able to build their own distribution lists. And, companies like Cision and VMS maintain constantly updated databases of analysts and financial journalists that can be tailored to include financial editors, reporters and analysts. By integrating these databases and media lists into the corporate online newsroom or investor news area, IROs can ensure that they are directly targeting a wide variety of financial media. By extending existing internal lists with some outside up-to-date resources, email alerts can be a powerful tool to help reach the financial media, analysts and investors. Also, with the advent of social media, IROs can quickly distribute a quick message on Twitter, Facebook, Digg and LinkedIn to even further extend their reach and meeting SEC Fair Disclosure guidelines.

As always with such sensitive financial and legal issues, my advice is to consult your legal team for more clarification and advice. At the very least, by managing your financial documents on your online newsroom and then issuing a brief advisory release over the wire, you can start to save money each year and begin establishing your corporate online newsroom as the official site for your company's news.

We have created a Twitter account to begin following and reporting on this issue, which can be found at and will work to keep this updated with the rapidly growing list of public companies using advisory releases to disclose financial information.

Steve Momorella is an owner, founder and director of sales and marketing for TEKGROUP, an award winning Internet software and services company that develops online newsrooms with social media integration and e-business software solutions.

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