Winning the Research Battle


Written by Blair Livingston, CEO of Street Contxt

The battle for research supremacy has historically been one-sided and the bulge bracket firms that pump out the most content typically find themselves at the top of the analyst rankings year-after-year. Quantity often prevails over quality and investors are left sorting through massive amounts of research to find actionable ideas.

As regulatory pressure continues to grow, firms are now being held accountable for the first time for content they produce and the value they provide. Once viewed as a profitable engine for the sell side, the research arm has become a loss leader for independent broker-dealers and banks that can no longer count on trading commissions to offset the high cost of production.

According to estimates from Street Contxt, which distributes research and analyzes readership, assuming each person only spends an hour producing each piece of content, it costs the average sell side firm approximately $1,700,000 per year to produce content.

As investors pay more attention to the cost of research, ultimately deciding its market worth, firms will need to become more data-driven in their approach to content distribution. This data will not only inform pricing, but will ultimately be essential to generating future returns.


By understanding where content is going, who is engaging with it, and what that readership says about overall client interest, institutions can begin to accurately value their own content and hold clients accountable for the resources they consume. The issue is that legacy platforms and common methods of distribution, like email,  do not provide the level of data needed in order to draw helpful insights into client behavior. New technology is making this analysis easier, as firms can now use centralized research platforms to automatically monitor client engagement with content as soon as it is sent. Content producers are able to receive real-time alerts about open rates, click-throughs, and forwards to better understand what is resonating with clients and who finds their information useful. In addition, they can also identify important changes in consumption, such as shifts in engagement, which can help firms identify potential at-risk clients and target their sales efforts more intelligently.


With better data, firms can A/B test and analyze such variables as format, headlines and timing to ensure their content stands out. For example, at Street Contxt, we have measured millions of interactions with research, desk commentary, and news updates delivered through our platform to over 220,000 individuals at more than 28,000 firms. The insights that were gleaned show that 63.5 percent of research sent via email is opened within the first hour of its being received, with 46 percent of readership happening within the first thirty minutes. After five hours, 80 percent of the people who will read the piece already have, and the average client will not open anything from 44 percent of the authors sending them research.

The most common time for clients to engage with content occurred between 7:00-8:00 AM, as 17.1 percent of notes sent at this time were opened within the first hour. This was followed by 1:00-2:00 PM (15.8%) and both 5:00-6:00 PM and 8:00-9:00 PM (each at 10%). Clients also were more apt to both open the email and click a link between 5:00-6:00 AM and 8:00-9:00 PM, showing that they have more time to digest notes early in the morning or late in the evening. Firms should think about using these times to connect with clients and to send them more in-depth pieces on the topics of interest.

It is also important to make sure that all distributed content is optimized for both desktop and mobile viewing in order to increase the chances of research being read. Our analysis found that during the workweek, 77 percent of emails are opened on a desktop, with the remaining 23 percent shared between mobile devices. As you can imagine, this trend flips on weekends, as 80 percent of content is consumed on mobile devices. This will be less of a concern as the buy side begins to adopt centralized research portals that eliminate the need to access content through multiple paywalls and logins, but it is still a concern for those institutions that continue to use legacy distribution systems.

Technological advances are allowing research providers to find efficiencies, discover actionable insights, and properly value its products and intellectual property. Regardless of MiFID II regulations or performance pressures from the buy side, the sell side has an opportunity right now to turn research into a competitive advantage.  In an environment where trading margins have been squeezed, the right insights will allow sell side firms to drive value through research so that it is once again a profitable business arm.



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