Dow Jones Index Alternatives

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Over the past several months, intensifying these more recent weeks, the nation has been glued to the reports covering the global financial crisis.  Our company has received several requests for major index widgets.  So to follow-up on the “Economy at a Glance” post, I thought it would be appropriate to go over the various options for display of the major market indices.

The first index that pops into most people’s head is the Dow Jones Industrial Average (DJ).  This has been the primary index reported in the media for close to 100 years.  The paradox is that since the US changed from an industrial country to a technology and service based country, the DJ has been replaced by more representative benchmarks.

Further, many of our clients have been taken back by the licensing fees that DJ requests for display of their data.  This post is an attempt to offer a few alternatives to fee-based Dow Jones.  The following provides several options to reporting the DJ and some history behind each index.  I will cover the DJ last in this list.

 

Standard and Poor’s 500 more commonly known as the S&P

Let’s start with a direct quote from the Standard and Poor’s website.  “Widely regarded as the best single gauge of the U.S. equities market, this world-renowned index includes 500 leading companies in leading industries of the U.S. economy.”

The index is market capitalization weighted and covers about 75% of the US equity market.  With 500 companies represented the index is a more comprehensive representation of the market.  The Dow is only 30 major companies and uses a proprietary formula for weighting.

So what does Wall Street think of the S&P’s value?  The website goes on to say, “With more than US$ 1.53 trillion in indexed assets, the S&P U.S. indices have earned a reputation for being not only leading market indicators, but also investable portfolios designed for cost efficient replication or the creation of index-linked products.”

FinancialContent feels these are strong arguments to use the S&P 500 over the DJ.  The Economy at a Glance widget will use this index as a default.  We fee this is your best option when seeking an alternative.

 

The Russell 3000

Almost nobody in the business world or who has an investment portfolio has not escaped the term “diversify”.  Professionals say the more you diversify the less risk you take.  So maybe that is why the Russell 3000 is the most widely use index for benchmarking.  Russell is quoted, “Over the past 25 years, Russell's innovative methodology has helped their indexes become the benchmarks most used by institutional investors. Currently, institutional investment professionals responsible for over $4.4 trillion in assets use Russell indexes to guide their portfolios.”

Where the S&P covers 75% of the market the Russell 3000 represents approximately 98% of the U.S. market.  In their own words, “The Russell 3000 Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.”

Compared to the S&P, Wall Street benchmarks three times the amount of money using the Russell 3000.  This index should be given strong consideration.


The DJX from CBOE

Here is one option that is very much out-of-the-box.  In the options market there is a need for smaller units in pricing.  The CBOE has created a ticker that represents a 1/100th fraction of the DJ.  On a percentage basis this ticker tracks identical to the DJ.  Currently there is no means for reconstructing the full price based on this ticker but a derivative product could be possible.  In the mean time consider showing a percentage move on the DJ using the DJX.


Sector Indexes

In addition to the many options presented as alternatives to display of the Dow Jones Industrial Index, there are several specialized sector based indices to consider.  Nearly every region of the US is home to one or more sectors driving their local economy.  In the San Francisco area it is Technology and Finance, in Los Angeles it’s Media, in Boston it is Biotechnology.

Dow Jones, Russell, and Standard and Poor’s all have sector focused indexes that you can use to showcase your local markets effect on the national economy.  Consider the impact of showing a comparison chart with the broad-based Russell 300 against the Dow Jones sector for your region (Dow Jones does not require a fee for sector indexes).  Click on the hyperlinked names in this paragraph for direct access.

 

Dow Jones Industrial Index

For over 100 years the Dow Jones Industrial Index has been the most reported on index in the world.  The index has also been used to benchmark a few financial instruments.  In today’s market the tradition continues but not without some controversy.  Only in recent years has Dow Jones asserted their rights to collect a license fee.  What was once free and a great asset to the media and institutions now has value.  We all now have to decide if that value is in our budgets.

FinancialContent was one of the first partners to license the Dow Jones indices and we fully support their right to protect their intellectual property.  The following is an excerpt directly from the Dow Jones website; “Dow Jones sells a data service which includes the real-time and delayed values …… most notably, the Dow Jones Industrial Average (also known as, the "Dow", "Dow 30", "DJIA" and the "Industrials")…..

Dow Jones, as the sole and exclusive owner of all rights, including, without limitation, trademark, copyright, database and other proprietary rights, in and to its indexes, requires a license and payment of applicable fees with respect to display and redistribution of its real-time and delayed index values…….

Any unauthorized display, re-distribution or other commercial use of the real-time and delayed indexes constitutes misappropriation of Dow Jones’ proprietary rights in and to its stock indexes and infringement of the related trademarks.

 

Conclusion
Many of us are aware of the global impact Dow component companies like General Electric and Microsoft have but now a company like eBay or Salesforce can have immense impact on the economy too. We can all agree to respect Dow Jones property rights and the historical importance of the Dow 30.  However the world is changing and if you feel the need to find new means of representing the US economy, please consider the suggestions above.

We Need Your Feedback

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Our product development team has been working on creating several widgets that can be deployed as stand-alone content.  These widgets will be very cost effective or completely advertising supported.  The widgets can be setup to link to your Studio 5.0 deployment or if ad supported will link to our partner financial portal.  If licensed, placing your adverting in the widget is optional.  The design folks here have improved on the style, adding new icons and descriptions.  The widget shown is also our first to showcase the economy with data that the consumer is most interested in (and reported on).

 

Please send your feedback of this BETA WIDGET to Stephen@financialcontent.com as soon as possible.  Our goal is to launch this and other widgets in the next week.

widgetMockup.gif

Continuing on the topic of great tactics that will drive traffic, deep linking is one method that is easy to implement and has no additional financial impact to your organization. Deep linking is the practice of linking to other pages within your site that are "in context" to what the end-user is currently interested in. The FinancialContent solution platform has a schema that is created so that individual content items can be selected using URLs. Here are a few examples.

It’s not just about finance,it is the opportunity to provide a relevant link and drive an end-user to new pages. Deep linking cuts across all topics from Sports to Real Estate, to Health and more.

Example: Your Sports Editor writes an article about the new stadium of the local baseball team and mention that Oracle (ORCL) is a major underwriter for the project. It is probable that the end-user would want to know more about Oracle. When creating the content, the Editor can opt to hyperlink the word Oracle or add the ticker in the accepted format (ORCL). The target URL can be the company profile, current price, or news about the company. See how client Paidcontent links users reading their original content to the finance page of the site. Also note that the links are carried over in their RSS feeds published using FeedBurner. FeedBurner is a FinancialContent partner and has integrated an RSS tagging structure for stock tickers that is compatible for syndication on the FinancialContent Studio platform.

A look at a sample URL shows that each page type has a name such as “Page=QUOTE” and the ending of the URL has the company identifier in the form of a stock ticker “Ticker=ORCL”. The FinancialContent support team will work with you on learning the schema and implementing this strategy.

Providing clear and easy access to content is the key to users generating more page views per user session. So how does one accomplish this in regards to a FinancialContent solution? Here are two great examples of using navigation enhancements to bring users to the relevant content they seek.

Example: (1) Enhance the stock market index widget that you place on the home page or business splash page. In this CBS example (located two scrolls from the top) CBS did three distinct actions; they provided a dropdown list so users can jump to sections they feel users are most interested in, added a selection for their own top stories, and lastly links to the FinancialContent created custom index covering local companies.

Example: (2) Enhance the core navigation so users can gain access to the most popular features as the Houston Chronicle did. Note that Chron.com knows users like a personal portfolio so not only is there a link in the Navigation but also a custom built quick access on the page. When user interest dictates due to market events, quick access to the energy markets page is also added.

Providing a deep linking strategy shows users that there is more content worth exploring. It also shows the user that you want to make their online experience a hassle free one by anticipating their needs. If you did not already know, the average user of a FinancialContent solution generates 2.7 page views per user session. When that user becomes a committed regular user they generate over 5.8 pages or more per user session. So let’s get working on that bottom line number by generating more traffic with deep linking.

Monthly Poll - ROI

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Attention all business editors, here is your chance to make your online edition stand out!  Original content is very powerful and FinancialContent wants to be your partner in creating something your users will come back to on a regular basis.  Providing a local index allows you to showcase your local business market in a fresh way.
 
Imagine being able to report daily or weekly on how well YOUR index is doing.  Use the index to support reporting on your local economy.  Better yet, embed the index in related sections such as job classifieds so seekers can find out more about potential employers.  Track your index against the S&P, the ideas are endless.

 

Implementations range from a simple top 10 list to what SFGate.com has done by integrating their annual Bay Area Chron 200 content.  Other clients like The Hollywood Reporter have created a large index then divided it into several sub-indices.  Not sure what would work best for your website?  Soon FinancialContent will launch a series of state and sector focused indexes so if you’re in a Biotech hub just select that index and leave everything else to us.

 

Here is a short list of benefits to consider:

  • The index gives you something to report about on a regular basis
  • Your site becomes the single source to get this information
  • The index establishes your publication as the authority on businesses headquartered in your region
  • You can drive users from all news sections via deep links thus creating more page views
  • The index creates a new opportunity for ad revenue via a sponsorship

 

All indexes are created as market-cap weighted and are split adjusted.  FinancialContent assures that everything is up to date.  As an added bonus, FinancialContent adds the CEO of each company to our CEO Wealth Meter.  This is your opportunity to create valuable content for your audience and who knows, it could be allot of fun too.  Now give us a call!

The word support can tend to conjure up feelings of frustration so FinancialContent has created system that is simple and very friendly; The goal is to have a linear flow of information and to resolve your inquiry in a timely manner.

Before we get into how and why you should contact support, here are a few items you should NOT contact our support staff for. Do not contact support for billing or contract questions, or to connect with a non-support employee of the company.  The support staff has limited tools in this respect; if you are unsure, please contact business development as they interface with all departments and will be glad to help out.

Now on to why you would contact support. Over the years we have seen that support inquiries group in a few categories. Here are the most common:

  • Technical maintenance of your solution such as making changes to your layout or changing the code used to integrate your navigation and branding.
  • Removing or creating content including building a new widget or making your layout wider.
  • Status of your print delivery or system issues like widgets not displaying correctly or updates to your XML feed
  • Data quality / errors such as pricing not updated or missing stock tickers. This last item is usually an issue with the primary data source and our team has systems in place to correct errors as quickly as possible.
  • Any technical related issue.

Now that we have covered Why, here is the How

  • Craft an email with as much detail as you can and send it to support@financialcontent.com. Let us know how timely the request is, provide error code, screenshots and anything else that could be helpful. On emailing our support department, an automated tracking number is generated and a confirmation email is sent
  • The manager of our support department assesses your situation as well as staff capabilities to address that specific request. If there is a need for additional information or there may be a delay, support will contact you.
  • If you are not contacted you should expect your request to be addressed in one business day.  You are always welcome to send follow-up emails to support asking for status.

To follow-up

  • Email support using your confirmation email with tracking number
  • Call support  at our main office
  • or lastly, contact me;Stephen Malaster your business development manager


Again, our goal is to keep the line of communication as direct as possible. 

One of the most widely used tactics for driving traffic these days is SEO, or Search Engine Optimization. Because of this, FinancialContent has started offering an SEO Package, which can help you extend your SEO efforts with your own pages into the pages we host for you as well.

As part of our SEO Package, our engineers will work with your development team to create keywords, titles, and other meta data. This meta data is contextually added to our pages, so that you can have different keywords for different pages & content. The particular keywords a search engine will see is based on criteria such as:

  • Content Type
  • Page Requested
  • Current Stock Quote
  • More...

We've found through our testing that adding specific keywords for a client can increase search engine traffic by 10-20 times, and is a very easy & inexpensive way to increase traffic.

To see our SEO Package in action, visit: http://finance.boston.com

I hope that you do plenty of your own research on SEO, so i'd like to also recommending the following resources:

Seomoz Guide to SEO

John Batelle Leading Blog

SUBMITexpress Meta Tag Analyzer

Search Engine Watch News tools and more

If you have any questions, please email: stephen@financialcontent.com

Monthly Poll - Content

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Does your organization produce RSS feeds? If so, you should consider syndicating them out across our network.

FinancialContent has built a network of more than 600 different sites, serving over 300M page views a month. By allowing us to distribute your RSS feed, you can generate more traffic & ad impressions for your site.
 
What type of RSS feed qualifies for syndication?  We currently support podcasts, blogs, and videocasts, as long as they have a business focus that is relevant to our audience. Your content will be distributed in context to consumers when they are requesting a stock quote or other financial item.

For the best results, you should try and add stock ticker tags to your RSS feed, which are described here:
http://rss.financialcontent.com

In addition to allowing you to syndicate across our network, these tags will be picked up by FeedBurner, and will increase your traffic from other sites.

Once you have done this, just email support@financialcontent.com with the URL of your feeds, and we will add them.

Driving Traffic – Benefits of URL Masking

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One of the most under-utilized featured we have is URL Masking. This feature has proven to be an exceptional way to:
- Drive search engine traffic
- Improve your ComScore and other metrics.
- Improve the look and feel of your pages

Generally, when using our platform, you are given a url which looks something like this:
http://studio-5.financialcontent.com/myname

With url masking, you can adjust this URL to match your domain name, to something like this:
http://finance.mydomain.com/myname

We generally see a doubling of search engine traffic from doing this. Google & Yahoo generally will weight your pages much higher, since they aren't sharing the same domain with many other sites. This also increase the amount of indexing they do, and will usually bump you up into the top 10 results for many financial queries.

On the metrics side, ComScore and others will usually show a jump in your metrics, which is difficult to predict - It will vary depending on the traffic to your finance section.

As far as the look & feel, when clients bookmark your site, or when bloggers link to your site, the links will point to your domain, which looks a lot better, and can also generate a small increase in inbound traffic.

We'll be talking more about this in the "Driving Traffic - SEO" article which should be published in the next few weeks, so check back. For more information on setting this up, just send an email to support@financialcontent.com, and we'll send you over all of the detailed tech information on this feature.