Restoring the Faith in Messaging

The announcement of Pope Benedict XVI’s resignation just before the start of Lent season comes as a shocking surprise to the world.  Depending on how “resignation” is defined and how the Holy See’s records are interpreted, as few as four and as many as 10 popes have renounced the Papacy.

ALTERNATIVE TEXT

Pope Benedictus XVI (Photo Credit: wikipedia.com)

 
The last pope that resigned was Pope Gregory XII in the early 1400s, and like his predecessors, Pope Benedict’s resignation is sprinkled with controversy. So, how does the Vatican respond to such unprecedented news?
 
The Vatican’s semi-official daily newspaper is L’Osservatore Romano, and so far it is gearing its coverage toward restoring readers’ faith in the Church by emphasizing that the Pope’s resignation is conquerable and recoverable.
 
The newspaper’s coverage hammers three central points: the Pope’s resignation is a difficult and regretful decision but made for the greater good; the Pope’s character is that of courage and humility to admit his
inability to stay in his position; and the Church will recover from all of this.
 
Rather than focusing on the fact that the Pope is leaving his position, L’Osservatore Romano draws
attention to the Pope’s character, calling him courageous and humble for being so honest.  And despite the social lashing the Catholic Church has received in the media, the Vatican’s messaging isn’t defensive, but supportive and positive.
 
Consistency is key in the Vatican’s messaging, particularly at a time when a lot of people are looking to the Holy See for a resolution and a way to restore order.  In fact, the messaging has been so consistent and effective that it is positioning the Pope’s resignation as an opportunity for change and a restoration of faith in the Church.
 
The Vatican’s approach serves as a good example that it is not enough to communicate what will be done to fix a situation, but rather it is how a message is communicated that determines whether the message can restore people’s faith.

 

Joanne Sibug, jsibug@pondel.com

Herbalife: Ackman vs. Icahn

 
As an investor relations professional, there is nothing more interesting going on now than the public drama surrounding the activist attack on Herbalife.  To remind you, Pershing Square Capital Management’s Bill Ackman conducted a highly public attack against Herbalife with a 300-plus page slide presentation, going short nearly a billion dollars. Management then countered with a three-hour long investor meeting to rebut and explain the company’s side of the story.
 
Meanwhile, activist investor Dan Loeb goes long, purchasing nearly 8% of the company.  And If the battle of activist titans could not get any more interesting, I recently listened to Carl Icahn and Bill Ackman bickering for nearly 30 minutes on CNBC, with Herabilife as a backdrop.
 
Perhaps the candid nature and public name calling took the reporter back a little, because he was reduced to a bystander, but Icahn never let on if he was long or short Herbalife – not that he would.

 

Matt Sheldon, msheldon@pondel.com

Social Media’s Global Growth

The stats on social media’s global growth are staggering.  A graphic recently posted in Mashable.com illustrates how the world consumes social media.  And boy does it!

Facebook Logo

 
We all know that Facebook now has one billion users in 127 countries and is the top social media destination.  It’s also interesting to learn how countries and regions outside the U.S. are adopting social media like Asia, which has grown to more than one billion Internet users in a little more than ten years.
 
Or that 800 million users visit YouTube each month with more than 70 percent of the site’s traffic coming from outside the U.S.  In fact, 700 of these videos are shared via Twitter every minute.  Moreover, LinkedIn increased its membership nearly by half in the last two years with Turkey, Brazil and Indonesia seeing the largest user growth.
 
All this data can seem very overwhelming.  Even though the growth of social media seems to be a no brainer when it comes to global marketing, many executives still fail to grasp the opportunity.  Let’s be clear: social media is not slowing down anytime soon.
 
Not all social media platforms may be relevant for every business organization.  There is no one size fits all solution for tackling this new media landscape.  However, given the global economy and the opportunities social media presents, these new platforms can help organizations engage with consumers, customers, and even investors, all over the world.  It’s like six degrees of separation on steroids. The proof is in the data.
 
So, the world is consuming social media.  Are you?

 

George Medici, gmedici@pondel.com
 
 

PondelWilkinson Wins Two PRism Awards

PRism Awards

 
PondelWilkinson received two PRism awards this week at the 48th Annual Public Relations Society of America – Los Angeles chapter awards show.  The awards recognize reputation/brand management in investor relations for Market Leader, Inc. (Nasdaq: LEDR), a provider of online technology and marketing solutions for real estate professionals, and digital PR tactics/webcasts for Physician Therapeutics, a division of Targeted Medical Pharma, Inc., which is a specialty pharmaceutical company that develops and sells prescription medical foods for the treatment of chronic disease.
 
 

AP’s Right ‘Frame’ of Mind

Associated Press Logo

The Associated Press

Soon, reporters at the Associated Press will be equipped with smart phones enabling them to simultaneously report news across all social media platforms, according to insiders at the global wire service.
 
AP reporters, trained to write, will be able and directed to capture video, take wire-worthy photos, tweet live from a news event, and of course, “phone in” stories as appropriate. Incorporating video alongside online news is not exactly brand new, although wire service reporters trained on how to shoot video is something of a paradigm shift in the media reporting business.
 
AP’s move is indicative of the changing media landscape and how some news outlets are responding to today’s highly competitive, multi-media news cycle.  Although wire services have remained relatively unscathed in this new media environment, mostly because of their ability to produce and distribute 24-hour news coverage, editorial staffs still have been cut, and long gone are the days of simply filing news for the next day’s newspaper.
 
What’s interesting is the growing use of video in online news coverage, not to mention how traditional journalists are embracing this medium.  Ironically, a recent survey by PR Newswire found that 75 percent of journalists want to use video when gathering news.  This is a sharp contrast compared to only 43 percent of communications professionals who say video is important to journalists.
 
Video is new again. This is primarily due to the Internet and inexpensive technologies that enable people to shoot, edit and post good quality content.  More than 40 billion videos are viewed in the U.S. each month, says Jonathan Taplin, clinical professor at USC’s Annerberg School for Communication.  There’s also great value, too.  Videos can be shared with key audiences and picked up by online media, but most importantly, the content creates a deeper bond with viewers.  That’s why movies will never go out of out of business.
 
The lesson here is that video dramatically has changed the media landscape.  Remote multi-media reporters with real journalism experience will be the new modern day correspondents of the 21st century. While this sounds like a futuristic science fiction movie plot, the reality is that it’s happening now, not tomorrow or in the near future.

 

George Medici, gmedici@pondel.com
 
 

Bankruptcy’s Impact on Brand Perception

Largest Bankruptcies

20 largest bankruptcies of 2012 (Source: Good.is)

San Bernadino this week became the third California city in the last month to seek bankruptcy protection because it could not close a $45.8M budget gap.  Similarly, Stockton and the small resort town of Mammoth Lakes both sought financial protection due to large budget deficits.
 
Lack of funds is the primary reason for the filings.  Basically, these municipalities are spending
more money than they actually earn from taxes, fees and other revenue.
 
According to the Administrative Office of the U.S. Courts, bankruptcies in the U.S. have more than doubled from 2007 to 2011, topping its highest point ever at 1,571,183 filings for the year ending March 31, 2011, although 2012 saw a 13 percent drop over last year.
 
The soured economy certainly impacted the rise in bankruptcies.  While the ability to secure credit may be hampered, and for cities like San Bernardino, bond ratings may be downgraded, the question remains: Does bankruptcy have the same negative brand impact it did a decade ago even in today’s soured economy?
 
Take General Motors for example. The company filed for bankruptcy protection on June 1, 2009, the fourth largest in the nation’s history.  The brand initially took a big hit in the media and financial markets.
 
GM however quickly emerged from bankruptcy only 40 days later with the help of the U.S. Treasury and recently announced June 2012 sales of 248,750 vehicles in the U.S. alone, the company’s highest since September 2008.
 
General Motors today is a company with a new, reinvigorated brand identity.  Yes, new vehicles, increased revenues and good earnings help.  It’s sometimes hard to remember that only a couple of years ago the company was on the brink of financial disaster.
 
The key to success is effectively managing communications during the bankruptcy process.  At the time of the Detroit automaker’s bankruptcy filing, GM’s CEO Fritz Henderson promised that the fallen corporate giant will be reformed and that “business as usual is over.”
 
The strategy seemed to work. Making sure all audiences are informed of a company’s reorganization plan is essential for success. Bankruptcy is not permanent, but a tool to help protect companies and individuals from creditors while a restructuring is put into action.
 
So, the answer might be that bankruptcy does not have the same negative connotation it once had given today’s uncertain marketplace.  Done right, the results can be positive and even generate new investment opportunities.  Done wrong, the repercussions can be disastrous.
 
All eyes now are on Scranton, Pennsylvania.  The cash-strapped city last week cut the pay of its municipal workers to $7.25 an hour and might be the next local government to declare bankruptcy.

 

George Medici, gmedici@pondel.com
 
 

Sunday Mornings May Never Be the Same

My favorite part of Sunday morning is relaxing over a cup of coffee while leisurely reading both the New York Times and Los Angeles Times–every section–without that harried feeling of having to skip and skim stories like I do the rest of the week, or use the speed reading techniques I learned from my 11th grade English teacher, Mr. Coughlin.

The Times-Picayne (Photo Source: wikipedia.com)

 
I even savor the smell of the newsprint, which combined with the coffee aroma, exudes a state of calm. But I am worried that the Sunday papers may not be around too much longer. And while the thought of sipping coffee with an iPad doesn’t exactly thrill me, I am reluctantly bracing for the future. Of course, it’s all about technology, which is changing our lives–granted, mostly for the better–and changing the media landscape at breakneck speed.
 
Within the last couple of weeks alone, The Times-Picayune in New Orleans told the world it will be cutting back its print editions to three days a week.  That same day, three other newspapers followed suit.  Like a tsunami, a few days later, a Canadian newspaper chain, Postmedia, announced that its three newspapers will be eliminating their Sunday editions.
 
These were not the first such actions, of course, but the pace of such change seems to be picking up speed.  The shift to online news certainly makes sense from an economic point of view. It’s just that it makes me sad and I would think that there are others like me that feel the same way.
 
But it’s not just about relaxing with the paper on Sunday mornings. It’s quality of content, as well as
quantity, with lost columns and generally fewer investigative pieces and features.  And add to that, perhaps saddest of all, is lost jobs.  When the change takes place at The Times-Picayune, expectations are that about a third of the journalists will be cut.
 
I’d like to think that in the biggest U.S. cities we’ll always have our Sunday papers.  But I guess
there’s a good chance that we will not. So as my psychotherapist wife repeatedly tells me, enjoy the moment. Sunday mornings may never be the same.

 

Roger Pondel, rpondel@pondel.com
 
 

The Swinging Pendulum

 
There was a time when most investor relations professionals had either financial journalism or public relations backgrounds and applied their specialty communications skills to publicly traded companies.
 
Then there was a wave of IR executives entering the field with finance, investment banking and analyst backgrounds. What such backgrounds may have lacked in writing and mass communications skills typically were offset by technical financial acumen.
 
Now, yet another new surge of IR professionals is surfacing as Roger Pondel reports in a recent bylined article for NIRI’s IR Update titled, “The Road to the C-Suite.” Pondel also points out in the embedded video that these new IR folks not only have the financial chops, but are equipped with the necessary DNA to understand the more complex world of today’s media.
 
While today’s new-wave pros typically are on career tracks in IR, those who entered the field from financial roles may well be headed back to their roots. But no worries, in many cases, they are traversing the path to becoming CFO.

 

George Medici, gmedici@pondel.com
 
 

Resisting Temptation to “Like This”

No hoods

No Hoodies (source)

As I mulled this post while prying my seven-year-old out of bed this morning, I also wrestled with all of the brouhaha surrounding the pending Facebook IPO.  Something just did not sit right.  Then it hit me.  I have seen this show before.
 
Facebook’s global adulation is understandable, and well earned.  One in eight people on the
planet use it.  That’s an unfathomable audience that is now interconnected. But as the reports during the IPO process reach their crescendo, two large questions loom:  1) Does Facebook’s advertising really work; and 2) Should the company be valued at $100 billion?
 
Don’t get me wrong, I want to see the company succeed, badly.  I am dying for some good news.  But the more our collective anticipation builds, the more I worry.  Is there a clear rationale for this target valuation or is it hubris?  Are we more enamored of simply breaking an IPO record, or are investors using sane judgment?  And should California really be thinking it can potentially narrow its budget deficit with increased taxes from the many new resident millionaires that will materialize from this transaction?  I get the feeling we are putting too much value on this event, and we might be in for some disappointment.
 
As my son and I had our breakfast, an opinion piece in today’s Wall Street Journal titled “Jenkins:
The Zuckerberg Challenge
” sustained my anxiety.  The author too postulated that apart from enviable 2011 ad sale revenues totaling $3.2 billion, a chasm exists between this and Facebook’s estimated target valuation.  He also provides heaps of praise for the seemingly endless possibilities that lay before the company, which I can’t deny.
 
But as a newly public company, Facebook’s iconic leader Mark Zuckerberg will need to be more transparent with the company’s operations and growth strategies than ever before.  Demonstrating that its ad engine provides real value to its customers and a putting a keen focus on generating profits will be paramount. He now has to answer to many more people that own his baby, and should the stock price fall below the IPO level, the barbarians surely will arrive at the gate.  Which makes me wonder why the company is aiming for such an immediate high valuation in the first place.  “Under promise and over deliver” has been a mantra that has served many CEOs well.
 
As I make my final inspection of my son’s school clothes it also occurs to me that Mr. Zuckerberg might want to leave his signature hoodie at home and don a suit now and then. Growing up is hard, but if you want a $100 billion valuation, you need to play the part.

 

— PondelWilkinson, investor@pondel.com
 
 

Presidential Celebrity Appeal

President Obama and George Clooney

President Barack Obama discusses the situation in Sudan with actor George Clooney during a meeting outside the Oval Office, Oct. 12, 2010. (Photo credit: wikipedia.com)

Yesterday, President Barack Obama flew to Los Angeles to attend a fundraising dinner hosted by actor George Clooney.  The $40,000-a-plate soiree is expected to bring in $15 million for the president’s reelection campaign.
 
While that’s a nice chunk of change, it really is a drop in the bucket to anyone either running for president or trying to get reelected.  The media buzz, however, can be worth a lot more–or not.
 
The Oval Office has had a long love affair with Hollywood, starting back before the famed 1938 meeting between First Lady Eleanor Roosevelt and 10-year-old actress Shirley Temple.  Celebrities and presidents always got along nicely, as long as they shared the same
politics.
 
Americans love movies and the star actors that shine in them. A litany of entertainment-based TV shows and magazines demonstrate a huge market opportunity for the celebrity segment, which means lots of potential voters like to watch or read news about their favorite actors.
 
No doubt there is a risk-reward factor by aligning with a celebrity, especially if
you’re the president.  Fortunately for Mr. Obama, George Clooney scores high in the DBI Index, a ranking that measures the ability to influence brand affinity and consumer purchase intent.  Basically this means Clooney is an admired, trusted source.
 
The reality is that an alliance with Clooney probably won’t get President Obama more votes this November.  The American public hopefully will vote on a presidential candidate’s political platform, rather than solely by the company he or she keeps, although George Clooney seems to be a pretty
cool guy nonetheless.
 
What Thursday’s fundraiser will do, however, is give the president more cache and a broader reach to voters who may not necessarily tune in every Sunday morning to get the latest scoop in Washington, DC.
 
Just like in the corporate world during proxy season, in politics, votes are the highest currency, too.

 

— George Medici, gmedici@pondel.com