Online annual reporting has come of age. No longer just a PDF-rendered version of the printed annual, online reports are gradually starting to harness the functionality and pizzazz of digital communication. But which companies are doing it best? Neil Gibbons found out:

Which online annual report is rated most highly in the industry? In this, the latest in our series of industry surveys, we’ve once again sought the views of those at the coalface: the digital communications consultancies and design agencies for whom online reporting is bread and butter. By questioning the practitioners rather than the audience, we’ve gauged the opinions of those who are truly immersed in corporate reporting. So here are the top 5 online annual reports, as chosen by those in the know.

= 1. Royal Dutch Shell

Two companies share the mantle of most highly regarded online annual reporter, with an equal number of votes. The first is global energy and petrochemical group Royal Dutch Shell, whose 2008 online annual was – for the third time – the work of Vienna-based online reporting specialist Nexxar, until recently known as GeBer.

Royal Dutch Shell’s online report has received plenty of plaudits already from commentators and competitors for its functionality and sophistication – including being named best online annual report by the Financial Times. But perhaps that’s down to its exotic Austrian origin: according to Nexxar’s CEO, Thomas Rosenmayr, online reporting in the UK isn’t as developed as in other countries.

“The basic tools are there,” he says. “But there’s not so much development at the high-quality end, with spreadsheets, interactive charts and other tools. With this report, everything that you can imagine is there, in Flash. It’s a very high-end offer. Royal Dutch Shell is a big company and can afford the most sophisticated features. And we wanted to include elements that you won’t find anywhere else. Our view is: what can we do to attract attention?”

There’s no shortage of attention-grabbing features. The online report includes a print manager, which allows the user to add certain pages to a shopping cart and create a printable PDF of the pages they want.
Or there’s a download manager, a standard feature of Nexxar online reports. With almost 200 tables in Royal Dutch Shell’s annual, users can download whichever tables they want into Excel. And a chart generator allows users to make 5-year or 10-year comparisons, which can be animated or, if the user selects particular years, turned into an image as bar or line charts.

“Our analysis tells us that this is used a lot, as people use it for their own calculations,” says Rosenmayr. He believes that we should expect to see much more of this. “Interactivity is everything,” he says. “The internet is all about the interaction between the sender and receiver of information. The Royal Dutch Shell report is a glimpse into the future.”

= 1. J Sainsbury

Jointly blazing a trail in online reports is J Sainsbury. Entitled ‘I’m not a printed report’, its review is centred around a simple joke: a slick, multimedia-packed report designed to look and feel like a paper-based publication. It even uses paper engineering – users lift virtual flaps, turn pages and pull tags to weave their way through the content. But these familiar visual cues belie the cutting-edge content. A video of CEO Justin King welcomes the user to the online illustrated review, introducing it as the company’s “annual report web site”. And there’s plenty more inside.

David Stocks is the founder of London-based agency SAS which has handled J Sainsbury’s corporate reporting for the last five years. He argues that bringing the key messages to life in this way helps to improve clarity. “The multimedia element is a way of making it much more accessible. As humans, we like
to be entertained,” he says. “Sainsbury is an absolutely fantastic client, always open to new ideas. We find
that tremendously invigorating.”

Unlike many of its peers, SAS believes in paring down, rather than beefing up, annual reporting. “We believe that, despite the increasing length of annual reports, investors are not finding it easier to  understand strategy or get meaningful information from them. There’s a lot more information, but is it
more helpful?” And that has been the guiding concern in J Sainsbury’s reporting this year. “We wanted the
annual report to contain all the information an investor would need for a full analysis of the company,” says Stocks. “But alongside that, we created a (non-regulated) illustrated review, to free it from the shackles of the reporting framework.”

It’s a striking review built around key messages of what J Sainsbury has done against the current stage of its strategy. As Stocks says: “J Sainsbury is brilliant about sticking to information around that strategy.”

3. Aviva

International financial services group Aviva has had plenty on its plate in the last 12 months. Yet not even a colossal rebranding project and a catastrophic worsening of the economic climate have hamstrung the company’s reporting efforts. The watchword, it seems, was  'evolution’.

“We have a proud record of award-winning work on Aviva’s annual reports so it was a case of building on last year rather than anything more dramatic,” says Cathal Smyth, strategic director of digital communications agency The Group, which produced Aviva’s online annual report. Smyth describes this year’s report as “vibrant and expansive in its design and confident in tone” despite ongoing problems in the markets.

“It looks and feels and behaves like a fully-fledged reporting web site rather than a print document moved online,” he says. “And that puts it near the front of how annual reporting has been developing over the past five or more years. We’re definitely moving from flat home pages with a lonesome link saying ‘Enter report’ to powerful sites in their own right.”

The online annual taps into the need for straightforward communication, he argues. “It opens with a 4-step message panel on the home page which sets out Aviva’s take on the current situation; the company’s response; the outcome; and what the future might hold,” he says. “A parallel brand narrative runs through the report demonstrating how Aviva’s business is based on recognising the needs of its customers and understanding their perspectives. It’s lighter and brighter in tone, using people images and customer quotes, and sets up a nice counterpoint o the main report.”

The report’s look and feel is in tune with Aviva’s new identity as well as being a natural progression from last year’s report. Meanwhile functionality has been improved – The Group has overhauled the user tools this year and made them more intuitive. Smyth puts much of the report’s success down to the input from the client. “We’ve worked with Aviva for many years,” he says. “We’ve always had an excellent working relationship where we can bounce ideas off each other and end up with a fantastic result.”

Smyth agrees that online annual reporting is reaching maturity, and he looks forward to the industry’s response. “The interesting part for us is how agencies are trying to change to keep up with the trends,” he says. “We are seeing traditional print agencies team up with digital partners or try to buy in expertise themselves – but so far none of them has done a great job because they still think largely in print terms. The next three or four years are going to be very interesting.”

4. Legal & General

In fourth place is the report of UK financial services firm Legal & General. It’s the second online annual on our list to be produced by Vienna-based Nexxar. Its defining feature this year is video, a cue taken from the design of the printed report. “That had videos on the cover, which we thought would be perfect,” says Thomas Rosenmayr of Nexxar. “We suggested taking the videos online in a kind of Flash carousel.”

It was fortunate that Legal & General is such an enthusiastic communicator because this online video called for fresh input from senior management. Far from being a parroting of content that previously existed in written form, the videos are, says Rosenmayr, “specially taken from the board and go beyond what you’ll find in the printed report”. The videos have been designed to be suitable for all users, including those with narrow bandwidth. The look of the report fits snugly with the design of the printed annual, although this was partly a consequence of the process.

“Although it’s better for the online reporting agency to be involved from the start of the process, most companies think about the printed report first,” he says. “We get a draft of the design and operate under certain style restrictions. And we develop an idea of how best to present the report online. The medium is different so we had to find an equivalent.”

Functionality on the report is high and users can create a bespoke version of the report, tailored to their needs. “On the left-side of the front page is a small menu and readerscan use it to pick through the elements that are of most relevance to them,” says Rosenmayr. “We’ve had feedback from users, media and competitors and they all see this as a valuable feature.”

He sees Legal & General as one of several companies that, since the Companies Act, are grasping he potential of online reporting. “If you look at the market, a high percentage of agencies offer HTML, but a lot is just PDF or imagebased,” he says. “Since the Companies Act has stated that companies don’t have to produce printed annual reports, companies are free to choose the best way to communicate with their stakeholders.”

5. Premier Farnell

As a FTSE 250 company, Leeds-based distributor of electronic  components Premier Farnell is flying the flag for the little guy – it’s the only company in our top 5 not to feature in the FTSE 100. But it is no stranger to acclaim in online annual reporting, having seen its 2007 report garner several awards.

The agency behind the report, Radley Yeldar, sets great store by moving image – an ideology that is evident in the online annual.

“The report is multimedia rich, featuring a series of executive interviews and case studies about the business,” says Radley Yeldar’s head of online investor relations Barry Dunne. “Users wanted an ability to understand key messages as quickly and easily as possible, have the chance to see the whites of management’s eyes and get a greater understanding of what really makes senior management tick. The report demonstrates all these working together.”

That isn’t to suggest that online video came at the expense of the basics. The report includes best  practice features such as a notes facility, bookmarking and print manager and an interactive glossary.

“Our research found that users wanted notation and bookmarking solutions that are intuitive and easy to use,” says Dunne. “They wanted the option of saving their comments for future reference, or printing them out. Our solution made it possible to mark pages with bookmarks on the side of the screen, made it easy to add or remove comments and bookmarks – and to hide them.”

Because Radley Yeldar was also responsible for the printed report, the look and feel of the off- and online versions dovetail neatly. “The design concepts started together and worked in tandem through the project,” says Dunne. “There is a close correlation, but each focused on the design elements that work best for the medium.”

The project had great endorsement from the senior management, with CEO Harriet Green “very engaged” in the process and contributing significantly to the multimedia dimension. “They were definitely hands on and forward thinking in their approach,” says Dunne.

He believes that, with the online annual here to stay, companies will begin to build it in to their reporting architecture. “I think a lot more companies will invest in an online format which provides a platform for a number of years rather than rebuilding from scratch each year,” he says. “And more companies will start using video to communicate their investment proposition. After all, it’s what the online medium is good at, and a picture does tell a thousand words.”