PondelWilkinson Takes Home Three Awards

Awards

 

 

 

 

 

 

 

 

PondelWilkinson received three awards last week at the Public Relations Society of America, Los Angeles Chapter’s PRISM awards.  The awards recognize outstanding programs and materials created by public relations professionals.

The firm won three awards for the following categories:  Media Relations; Editorials and Op-Ed Columns; and Annual Reports. Pictured above is George Medici and Evan Pondel.

Trump’s Effect on IR

There has been a heap of stories written about President-elect Donald J. Trump’s effect on trade relations and health care, but nary a peep about how his presidency is going to affect our world, meaning investor relations.

Granted, it would be unusual for media to report on how our country’s new chief executive officer will influence investor relations because, um, IR isn’t necessarily something bandied about in the Oval Office.

But consider this: The American people are like investors, and how you treat them in good times and bad will affect the valuation of the country. And depending on how Trump executes his policies, many publicly traded companies and their investors will have to adapt to changing market conditions.

Following is a prognosticator of sorts on how Trump will affect the world of investor relations from an industry perspective. The analysis is based on discussions with the Street and analyst notes.

  • Consumer – Investor relations executives in this sector may experience an increase in inbound calls based on exposure to manufacturing overseas, particularly in China. Trade issues may thwart valuations and likely raise a lot of questions if a company has manufacturing exposure in foreign countries.
  • Construction – Generally, investors should have optimism regarding this sector’s near-term future.  At the same time, more dollars flowing to infrastructure could prompt greater scrutiny of infrastructure companies that aren’t performing.
  • Renewables – This sector has received bipartisan support in recent years, and there is no reason to expect otherwise during the next presidential term. The biggest conundrum for IROs in this space is selling the value proposition of renewable technologies and how soon they can be realized under the incoming administration.
  • Healthcare – With a lot of questions surrounding the future of the Affordable Care Act, many investors and investor relations professionals are likely unsure of where certain business models will stand under the new administration.
  • Technology/media – Hard to say what challenges may surface in this sector. Social media companies may come under fire for alleged fake news practices, as well as influencing the presidential outcome, which could certainly keep IR pros on their toes.
  • Banking – Investors are expecting interest rates to rise, which could bode well for the bottom line in this sector. Loosening up on regulations could also help move more financial services stocks into the black. IR executives will likely have to speak to how banks will enhance their net interest margins once the new administration is in full swing.
  • Aerospace/Defense – With a lot of suppliers in foreign countries, there could be a backlash with respect to manufacturing costs. Even though a Republican administration generally bodes well for this sector, optimism may soon fade if trade relations continue to slide.

– Evan Pondel, epondel@pondel.com

Will the Real News Story Please Stand Up?

There has been a lot written today about Google’s new policy that prohibits fake news sites to use its ad software to promote stories. Facebook soon followed suit and said it would not “integrate or display ads in apps or sites containing content that is illegal, misleading or deceptive, which includes fake news.”

Fake news has been popular for some time. The Onion, for example, claims it is “the world’s leading news publication, offering highly acclaimed, universally revered coverage of breaking national, international, and local news events.  Rising from its humble beginnings as a print newspaper in 1765, The Onion now enjoys a daily readership of 4.3 trillion and has grown into the single most powerful and influential organization in human history.”  Obviously satirical.

The New Yorker’s Borowitz Report is described as “The news, reshuffled.”  With recent headlines such as “Queen Offers to Restore British Rule Over United States” and “Trump Confirms That He Just Googled Obamacare,” it’s fairly easy to determine that Borowitz is using humor to talk about current issues.

Internet site, Sports Pickle, asserts that “Now more than ever, America needs some honesty in #journalism.”  Clever article titles including “If Tim Tebow can heal the sick, why is he selfishly spending his time playing sports?” and “Derrick Rose sent to neurologist after saying Knicks are Super Bowl favorites” are meant to make people laugh.

But I digress. The recent decisions from Google and Facebook have nothing to do with shutting down satire, but everything to do with shutting down deception. Reuters noted that the measures were taken to prevent “purveyors of phony content” to make money through clicks and advertising.   While this is a good start, fake news is still appearing in search results and news feeds.  NBC News reported that according to the Pew Research Center, 62% of Americans get some news from social media.

An embellished story on Twitter about a man trying to buy a McDonald’s milkshake at 1 a.m. turned into international news according to The Guardian, which believes that the “phenomenon is largely a product of the increasing pressure in newsrooms that have had their resources slashed, then been recalibrated to care more about traffic figures.”   Given the power of social media and the ability to share news, real or fake, with millions of people in a nanosecond, how can we be sure what we’re reading is valid, allowing us to form our own opinions versus being fed them?  I’m not sure there’s a good answer, but a start is to consider the source and the content.  Snopes also does a decent job of debunking fake news.

For those of us who communicate for a living, the idea of fake news (and again not the satirical kind) is distasteful, especially given how it can move markets, destroy a company’s reputation or cause divisiveness among friends, family and colleagues.  In one such instance, a client of ours saw its stock price lose 10 percent on a fake news tweet about the company’s headquarters being raided by the FBI.

I commend Google and Facebook for taking a stand, but let’s hope that this is just the beginning.

– Laurie Berman, lberman@pondel.com

Keeping Clients Happy

We’re in a competitive business. Not only do corporate communications and investor relations professionals have to overcome the challenges associated with building awareness for our clients, whether it’s on Main Street or Wall Street, but it’s also about keeping clients happy.

It’s never about drinking the proverbial Kool Aid. That’s just bad, and advisors should never be “yes” people; and saying no to clients at times is good, but only if tangible options are presented.

Happy-face-clip-art-smiley-face-clipart-3-clipartcowWith IPOs at historic lows, and today’s dynamics in corporate spending, sustaining or adding new business becomes an even greater challenge.

At the end of the day, it’s all about adding value. Consider these simple hints:

Know thy client. It’s essential to learn everything, from the product or service they offer, to their internal structure and competitive landscape.

Stay ahead of the game. Finding the “next big thing” or even something smaller that will impact a client’s organization before they do helps position outside agencies as insiders, a mainstay for maintaining long-standing relationships.

It’s OK to say no. Clients pay for strategic counsel. It would be a disservice if, as advisors, we only followed blindly without asking the question, “What if?” Make sure the counter argument is sound and solution-based.

Think outside the box. Although cliché and maybe risky, reaching key audiences, including customers, investors, employees and others in today’s cluttered media landscape takes bold new ideas that generate traction and results.

Demonstrate value. This has been one of the most fundamental challenges for PR and IR firms. We don’t “make” anything per se, but we do offer products and services designed to build awareness and loyalty among a client’s key audiences. Educating clients on message impact beyond earned media or stock price is paramount.

We’re in a tough and difficult business. Consider the fact that being a public relations executive is one of the top stressful jobs of 2016, according to Careercast.com.

Be that as it may, we continue to do the work which at times can seem to be a thankless vocation. The new and ever-changing paradigm shift in corporate communications and investor relations only adds to the list of client challenges. Nevertheless, staying informed and thinking like an insider will ultimately help generate real results and keep clients happy.

– George Medici, gmedici@pondel.com

 

 

Girl Power

Sequoia Capital made news this week when they hired the firm’s first female investment partner in the United States.  This appears to be a 360 degree turn from last year, when, according to The New York Times, Sequoia’s Chairman said the firm did not have female investors in the United States because it did not want to lower its standards.

Women are rare in the highly competitive and cutthroat field of venture capital. According to The Times, research from Babson College showed the percentage of female venture capitalists at 6 percent, down four percentage points from 1999, at the height of the dot-com craze.  The CrunchBase Women in Venture report found that of 100 venture firms studied, 7 percent of the partners at those firms were women, and that 38 percent of the top 100 firms have at least one female partner.  In February, Bloomberg columnist Barry Ritholtz sought to answer the question: Why aren’t there more women in finance?  A possible answer is that “it may be a legacy of what has not only been a male dominated society, but it probably also reflects an industry that is particularly resistant to change,” or that “there are simply not a lot of women in senior positions in all of business, and finance to a great extent mirrors that reality.”

One would think then that there is a perception that women are not as accomplished as men. According to Ritholtz, several studies (Fordham University and the CFA Institute) have found that women in the actively-managed fund industry tend to outperform their male peers.  If true, why are the numbers still so lopsided?

Perhaps the tide is turning for women in business, however. The Los Angeles Times noted that among the largest U.S. companies, women now fill 20 percent of board seats, up from 15 percent in 2005.  In fact, women have made strides recently in other male-dominated professions.  There are now female referees and coaches in the NFL, female play-by-play announcers for major league baseball and female heads of state.  Great news, for sure, but how is that playing out in corporate America?

A 2012 case against Kleiner Perkins Caufield & Byers showed that women and men don’t always play nicely in the sandbox. That case saw a female partner, Ellen Pao, sue the firm for gender discrimination.  She lost the suit in 2015, but during a press conference Pao was quoted as saying, “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”  Pao recently launched Project Include to assist startups and HR departments with recruiting, hiring and retaining a diverse workforce according to Wired.  Project Include also works with venture capital firms whose business is to help startups develop.

There is a lot of work to be done, but it’s my opinion that embracing diversity in the boardroom, on Wall Street and in business can only help improve the variety of opinions, talents and expertise necessary for us to thrive.

– Laurie Berman, lberman@pondel.com

On the IR Front…What’s a Penny Here and There, Anyway?

While a penny can be a pretty big deal as far as earnings per share performance goes, when it comes to trading stocks, the National Market System (NMS) thinks and hopes the lowly cent, actually five cents, can potentially make a really big difference when trading stocks.

Starting by the end of this month, as a way to increase the attractiveness of trading and research in smaller cap stocks and to make going public more attractive, the NMS will implement its “Tick Size Pilot Program,” effectively widening the minimum quoting and trading increment by raising the tick size to a nickel from a penny.

By definition, a “tick” is a measure of the minimum upward or downward movement in the price of a security. If a stock has a tick value of one cent, each tick, or price movement is in one-cent increments per trade. As part of the test, each tick will be equal to five cents per trade.

As a by-product of the 2012 Jobs Act, the program is set to last for two years, following which a determination will be made if increasing the tick size increment will improve the liquidity, trading and market quality of stocks with market capitalizations of $3 billion or less; average daily trading volume of one million shares or less; and volume-weighted average price of at least $2.00 for each trading day. The test will be implemented on 1,200 stocks.

The NMS is the national system for trading equities in the United States, and includes all the facilities and entities which are used by broker-dealers to fulfill trade orders for securities, principally including the New York Stock exchange and Nasdaq.

While it is difficult to foresee what the impact of the test will be, the hope is that will allow for a bigger list of stocks that are accessible to quality institutional investors.

Roger Pondel, rpondel@pondel.com

Let Your Voice Be Heard

With little fanfare or media coverage, the U.S. Securities and Exchange Commission last week said that for the next 60 days it is seeking public comment on disclosure requirements relating to a host of management, security holders and corporate governance matters.

SEC Chair Mary Jo White is leading a charge to address outdated and redundant disclosure requirements for the benefit of the nearly half of all Americans, who in some form, own stock in publicly traded companies—from direct ownership of individual securities, to ownership through 401-K and pension plans, IRAs, mutual funds and ETFs.

As part of the SEC’s “Disclosure Effectiveness Initiative”, the Commission wants to be certain that information disclosed by public companies and relied upon by investors to buy, sell, or hold, is as clear, accurate and comprehensible as possible, conveyed in a manner that is timely, and delivered making best use of today’s technology.

Amendments being considered address outdated and redundant disclosure requirements, and providing investors with what they need to make informed decisions.

Granted, for most Americans, revamping public company disclosure practices may not be one of the most important issues facing the world today. But if you are reading this blogpost, you likely are reasonably close to the heart of this matter, so let your voice be heard. You have until the end of October to do so.

Roger Pondel, rpondel@pondel.com

Read This Before Posting

I was listening to Marc Maron’s WTF podcast the other day when he equated the word “content” to corporate detritus that clogs up the Internet and bombards people with useless information. I don’t think you can make a blanket statement and say that anything deemed “content” is rubbish, but I do agree that there is a glut of content on the Internet that lacks substance.  It is also becoming increasingly difficult to distinguish “sponsored content” from content that is published without strings attached.

For example, a story that runs on WSJ.com about the virtues of an organic diet could be defined as content, although a journalist most likely synthesized the information to present an objective sequence of thoughts about this particular subject. Juxtapose a WSJ.com story with a sponsored blog post on the Huffington Post about the merits of an organic diet, and the word “content” takes on new meaning.

But is there truly a difference between paid content and content that isn’t sponsored?

The unsponsored content found in mainstream media and trade publications has often been influenced by the very advertisers (or sponsors) and subscribers that pay for the content to be produced in the first place.  And yet, I have to agree with Maron that the word “content” is beginning to smack of something manufactured, manipulated, and ultimately, unworthy of a read.

At PondelWilkinson, we are often in a position to create content, whether it is writing a press release, posting an image on a blog, or publishing a tweet. We strive to ensure that the content we create is substantive; to do that, we think obsessively about every single detail, including word choice, the audience, and the best way to deliver the content.

To help encourage the publishing of quality content, following is a list of items to consider before hitting “post.”

  • Know your audience. The best way to ensure your content is connecting with its intended audience is to know who you are targeting.
  • Write with intention. Writing a blog post with a goal in mind, a thesis to prove, a point of view to express will help ensure the content resonates with readers.
  • Pay attention to detail. Word choice, grammar and focus matter when asking someone to read something, even if it is 140 characters or less.
  • Provoke interest. Let’s face it, anyone can write or publish something on the web. Ask yourself if what you are writing is provocative or original.
  • Review analytics. Almost anything published online leaves a footprint. Understanding what analytics matter and whether you are hitting the right target audience will help you know if your content is worthwhile.

– Evan Pondel, epondel@pondel.com

Nudge, Nudge…Wink, Wink

Once upon a time I was an idealistic investor relations professional who assumed that when Reg FD (Regulation Fair Disclosure) was enacted in 2000, all public companies would follow the SEC’s initiative to the letter of the law.  No speaking to one before speaking to all, at least where material, previously undisclosed information was involved.

Did Reg FD have the impact the SEC was hoping for – a more level playing field? In 2001, CFO magazine quoted Boris Feldman, a securities attorney at Wilson Sonsini Goodrich & Rosati as saying, “Is the market better informed?  Of course not.  There’s more transparency, but less meaningful information.”  The article went on to say that in that year’s fourth quarter there were nearly 800 pre-announcements because “analysts are less likely to be told on the QT to shade their estimates.”  The Pepperdine Law Review in 2002 surmised that “the only thing that has changed is the amount of securities regulation operating on American markets.  The investors are no better off; the analysts are no worse off; the lawyers are the only ones who may have benefited.”

Although I could not find many examples of how Reg FD has benefited corporate disclosure or the investment community at large, there are many examples of the SEC’s enforcement of the rule. To name a few, in 2007 the SEC contended that Office Depot’s then CEO and CFO selectively disclosed to analysts and investors that the company would not meet analysts’ earnings estimates.  Office Depot paid a $1 million fine to settle the allegations.  In 2013, the SEC charged the former head of investor relations for an Arizona-based company for giving certain analysts and investors a heads up about an upcoming major development.  He paid a $50,000 fine.  Last year Bloomberg reported that since Reg FD’s beginnings, the SEC has brought 14 enforcement actions.

Today, the practice of meeting one-on-one with investors appears as robust as ever. In addition to non-deal roadshows, companies routinely present at broker-sponsored conferences with individual meetings sprinkled throughout the day, while one-on-one phone conversations between companies and their investors happen multiple times a day, every day.  What’s being said during these conversations?  According to a new article in the Wall Street Journal, Barry Diller, chairman of Expedia and IAC/InterActiveCorp, “analysts and investor-relations executives work together to keep estimates low.  ‘It is a rigged race,’ he says.”  The supposition is that companies send signals to analysts to ensure the companies meet or beat quarterly Wall Street expectations.  An analysis by the paper found that after the end of a quarter, earnings estimates often decline steadily.  The Journal looked at daily changes in analysts’ estimates at S&P 500 companies since the start of 2013 and compared them with what the companies actually reported for each period.  In nearly 2,000 instances, companies “would have missed the average earnings estimate if analysts hadn’t changed their numbers in the 40 trading days before the company’s quarterly earnings report.”

To avoid the potential of selectively disclosing material information, in this case where revenues and EPS will land in any given quarter, many companies have adopted stricter quiet periods and formalized processes related to analyst and investor communication. The idealist in me wants to believe that more companies than not adhere to the rules and don’t give some an unfair advantage over others.  However, while I in no way condone running afoul of securities law, the hardened realist in me thinks there will always likely be some nudge, nudge…wink, wink.

– Laurie Berman, lberman@pondel.com

Turning the Tables: An Intern’s Perspective

PondelWilkinson is very lucky to have a fantastic intern on staff. Her name is Yukari, and she recently earned a master’s degree in strategic public relations from USC. Among many other duties, Yukari has been helping enhance PW’s social media presence, and as a result, our Facebook and Twitter pages are now chock full of great content. Since Yukari frequently asks the members of our staff questions to help drive our social media content, I thought I’d turn the tables on her to find out how she feels about working in the real world of strategic communications after finishing her schooling. Below is our interview.

Q: Why did you decide to study communications?

Yukari Nishi during  Career Day at the University of Southern California.

Yukari Nishi during Career Day at the University of Southern California.

A: I started my undergraduate career as a vocal performance major at Berklee College of Music. Then I had the opportunity to study in Tokyo, and that’s where I decided to transfer my major to communications. I’ve always wanted to do something creative, and after I took a PR class, I realized that it would be a good career to pursue. After I completed my studies in Tokyo, I transferred to Rutgers University and got my communications degree. This past May, I got my master’s in strategic public relations from USC.

Q: Do you think your education prepared you for the real world?

A: I definitely think that the program at USC prepared me for the real world. The professors that I learned from have both in-house and agency backgrounds, and the experiences they shared were really interesting and helpful. I wish I’d found PR earlier in my undergraduate career, but I probably wouldn’t be here today if I didn’t take the time to figure out what I really wanted to do.

Q: What qualities do you think are important to succeed in this field?

A: Networking skills are a must in this field. I also think the ability to adapt is really important. Especially at an agency, you have the opportunity to work with all types of professionals in many different fields, and it’s important to know how to deal with, understand and embrace those differences.

Q: Has anything surprised you about the field since you started working here?

A: Not necessarily a surprise, but more of a confirmation. I’ve heard from many professionals and professors that in an agency, no two days are the same.  Working at PondelWilkinson definitely confirmed that, and I’ve enjoyed learning different things every day. I come to the office wondering what type of projects I’ll get to work on that day.

Q: What are some of the more interesting things you’ve worked on since joining us?

A: I really enjoy creating graphics for different events, survey results and giveaways because it allows me to bring out my creative side. It’s important to be able to tell a story using graphics. I also like drafting news releases because during the process I get to learn more about the client and the client’s impact on its industry.

Q: What has been the hardest adjustment?

A: Pitching reporters is not easy. Speaking with journalists was pretty challenging at first, but now I’m getting a feel for how to approach them and better understand what kinds of things they need from me to make a decision on whether to cover our clients. Their time is valuable and you need to get their attention in a very short time frame.

Q: What advice would you give someone wanting to get into the communications field?

A: I would say that working on your writing skills is really important. A lot of writing comes with the job, and you can never get enough practice.  I also think it’s important to keep in touch with the connections you make, because it’s a small world and you never know how those connections might help you in the future.

We’d love to hear from you in the comments below if you have any other great tips to share for those just starting out.

– Laurie Berman, lberman@pondel.com