An Annual Report is arguably the most important document a company produces. It is scrutinised for the information it conveys, but also the way facts and messages are presented; the way a Report is designed says volumes about the brand and how the company projects and cares for it. Increasingly the way a Report is made available for stakeholders and distributed has taken on greater strategic importance. Digital technology and platforms have increased the number of options for distributing Annual Reports and many companies produce their Reports in digital format to utilise this technology.
The trend of digitising Annual Report production increases every year. Yet not all companies are convinced this is the best method, and many prefer to continue with print as their main medium of producing and distributing their Annual Report. Here we consider the advantages and disadvantages of producing your Annual Report in digital format.
The advantages of a digital Annual Report
There are several advantages in producing a digital version of your Annual Report.
Expand your reach
Annual Reports produced in digital format can make communication with stakeholders easier. PDFs can be sent by email to stakeholders and HTML versions can integrate into social media platforms, increasing the possibility of reaching a wider audience by stakeholders sharing the Report with others. Both versions can be made available on the company’s website making it easier for stakeholders to revisit the Reports. Previous years’ Reports are often housed on the website and can be accessed for reference.
Reduced cost of communication
The distribution cost of reaching a wider audience through a digital version is likely to be lower than by mailing a printed version of the Annual Report.
Navigation tools within PDF and HTML versions enable stakeholders to search and reach areas of interest within the Report easily and quickly by scrolling, zooming and clicking. An HTML Annual Report is basically a web page enabling information to be supplemented by digital functionality such as videos and animations to enhance understanding of financial data. This helps to engage with stakeholders and provide a more interesting, productive experience for them.
Many companies feel a digital version makes their brand appear more innovative and modern. Embracing digital technology helps to build a positive future-proof image which is important in many business sectors. Presenting information in a customer-centric way reinforces this image.
Search Engine Optimization
Search engines are a crucial tool in reaching new and existing audiences. A company’s SEO will be boosted by a digital version of the Annual Report, especially if key information is digitally enhanced.
Stakeholders are increasingly aware of companies ESG performance. Companies are responding by integrating sustainability into their corporate strategy and brand. Digital Annual Reports reduce the waste of overprinting and unread copies and the carbon footprint of traditional distribution and mailing.
Disadvantages of Digital Annual Reports
There are disadvantages in producing digital Annual Reports and some of the perceived advantages of digital over traditional production are not always as clear-cut as many believe.
A PDF version is usually produced from the print-ready artwork of the Annual Report, thereby following the same production and design process as the print version. Interactive functionality can then be added to the PDF if desired. HTML Reports are produced using different technology and platforms. The question for those responsible for producing the company’s Annual Report is, can a HTML version be produced to the same timeline, in parallel or in place of, the print/PDF version? There is little benefit if it can’t be.
We increasingly receive our news, information and thought pieces from online sources. This has changed our reading behaviour. Readers devote less time to reading online content, tending to scan online content rather than read every word. This has implications for conveying the complex financial data and corporate messaging found in Annual Reports to stakeholders; content that works in a printed document may not transfer to a digital format.
The steady move towards receiving our information from online platforms has been accompanied by a parallel erosion in trusting online sources. ‘Fake’ news and unverified information is increasing reader scepticism of online content. This is likely to impact more on marketing and advertising content but those responsible for producing the company Annual Report should be aware of the higher levels of trust retained in traditional media such as print (57%) than online media (36%)*.
Perceptions about the waste and environmental impact associated with printing and physical distribution of Annual Reports is well documented. However digital is not necessarily more environmentally friendly than print processes. Digital technology involves mining rare metals and creating toxic waste. Much of the power for digital devices and service centres comes from coal-fired power plants in Asia.
In an increasingly digital world many company websites, including Annual Report microsites, can look rather similar. The cost of differentiating a company’s digital Annual Report microsite may be far higher than a printed version that serves to differentiate the Report with compelling narrative, distinct design, imagery that reinforces the company’s brand, and a tactile, impactful experience for the reader.
There is an expectation that everyone is able to benefit equally from digital technology. This assumes that all stakeholders have robust internet connection and consistent and adequate connection speeds; that they have the appropriate hardware to fully enjoy the digital experience you have created for them; and have the need to access your Annual Report ‘on the go;’ and they have enough technical knowledge to do justice to the amount you have spent on digitising your Annual Report. The reality is different; not everyone in the UK and in other countries are equipped to properly appreciate a fully digital Annual Report, which may reduce the reach of a very important document.
Be clear about what you want to achieve
Digital Annual Reports have unique properties that enable them to be very effective communication tools, but there are drawbacks. To optimise their impact and value is it advisable to be clear about what you want a digital version to achieve and what your expectations are. This requires an objective analysis of whether the benefits of producing a digital version of your Annual Report are sufficiently greater than producing it in a traditional format; doing it because everyone else is doing it is an underwhelming strategic reason.
Think about your stakeholders and target audiences, how they wish to be communicated with, what is important to them, and the best way you can convey the messages you want them to receive. And of course, there is nothing to stop you from utilising both digital and traditional technology to fully engage with your stakeholders.
Perivan has a tremendous amount of experience in designing, producing and distributing Annual Reports in all formats. If you would like some advice or to have a no-obligation chat about how we can help, please visit our website to book a call or call us on 020 7562 2200.
*Edelman’s 2020 Trust Barometer UK Results