Dear Abby: Why do IROs shun social media?

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Dear Abby star on the Hollywood Walk of Fame

‘Dear Abby’ Star on the Hollywood Walk of Fame (Photo Credit: wikipedia.com)

Social media have been a part of our lives long before the advent of the Internet.  When our ancestors used ochre, hematite, charcoal and other materials to paint their triumphs and tragedies on cave walls and ceilings, they were engaging in social media.
 
When ancient Egyptians carved elaborate scenes on vases, amulets and pots, they were engaging in social media.
 
And when Pauline Phillips established her “Dear Abby” advice column in 1956, she was engaging in social media.
 
Media have always been social.  The difference today is that the Internet speeds up the dissemination of information, which is often repurposed and then dubbed “social” when it’s tweeted or published on a blog, YouTube or Facebook.   The challenge for professional communicators is harnessing the speed and power of the Internet to communicate effectively.
 
In the investor relations world, many professionals do not believe that today’s social media outlets establish effective lines of communication.  The proof:  84 percent of IROs do not use social media to communicate with their constituents, according to a Thomson Reuters survey due out this week.
 
I understand that IR folks, including myself, are more cautious about embracing social media because so many of the facts and figures we work with require adherence to strict disclosure procedures.   But that shouldn’t stop us from tapping into social media for other purposes, including the reinforcement of messaging and establishing dialogue with customers, shareholders and even employees.
 
As communications professionals, it serves in our best interest to understand how social media can be utilized to communicate more effectively with different audiences.  For example, London-based Derwent Capital runs a hedge fund that relies on Twitter for investment direction. StockTwits, which my colleague, Matt Sheldon, wrote about nearly six months ago, continues to garner more credibility in investor circles.
 
The bottom line is that human civilization has come a long way since relying on granite, clay and, yes, newsprint, to facilitate the flow of information.  Don’t you think it’s about time that IROs do the same?

 

— Evan Pondel, epondel@pondel.com
 
 

Transparency Matters

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“Think outside the box.”  “Stretch your imagination.”  “No idea is too big or too small.”  How many times have we heard those phrases when brainstorming solutions?  Everyone who practices our craft strives to be as creative as possible to generate the best results for our clients, but how many communications professionals fully understand the ramifications of their chosen strategy?  That’s why this story about a top-five public relations firm really piqued my interest.
 
I am not using this blog to place blame (plenty of media outlets have already done that), but rather to examine what happened and help others learn how to avoid what has become a rather public embarrassment for said PR firm.
 
On behalf of an unnamed client, who has since been identified as Facebook, Burson-Marsteller began a “whisper” campaign against Google to shed light on some of their privacy practices, presumably in the name of helping Facebook get out ahead of the competition.  While this practice might not seem extraordinary, the way the campaign was conducted, and the fact that it came from a highly respected firm, was a bit unorthodox.
 
The events:
 

  1. A Burson employee, former political columnist John Mercurio, offered to ghost write and place an op-ed column for former FTC researcher and blogger Christopher Soghoian, but would not provide the name of the client to Soghoian.
     
  2. Soghoian responded by posting Mercurio’s email pitch, along with his rejection, on the Internet. According to Forbes, Soghoian said, “I am quite capable of authoring my own anti-google stuff thank you.”
     
  3. USA Today devoted a story to the campaign about a week later, which included information about the pitch they received from Burson employee Jim Goldman, a former CNBC reporter.
     
  4. Former Internet analyst Henry Blodget, who now writes for Silicon Alley Insider, later proclaimed, “BUSTED: Former CNBC Tech Reporter Jim Goldman Caught Spreading Lies About Google For Unnamed PR Client.”
     
  5. Burson-Marsteller says that it shouldn’t have pitched negative Google stories on behalf of Facebook.

 
In their apology, Burson conceded that, “When talking to the media, we need to adhere to strict standards of transparency about clients, and this incident underscores the absolute importance of that principle.”
 
Media is a fantastic tool to get your messages to a broad group of people, but remember that everything you say or write is “on the record.”  Should we continue to find creative ways to disseminate messages?  Of course.  Should we do so without transparency?  Absolutely not.  In most cases, taking the high road is indeed the best course of action.

 

— Laurie Berman, lberman@pondel.com
 
 

Is There a (Spin) Doctor in the House?

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When the Securities and Exchange Commission recently charged three former senior executives of IndyMac Bancorp with securities fraud for “misleading investors,” two fundamental questions immediately arose in investor relations and strategic public relations circles:  Did they have professional IR/PR counsel when communicating with investors?
 
Contrary to popular and misguided belief, the professional practice of investor and strategic public relations isn’t about painting rosy pictures, making things appear better than they really are, or coloring fact.  Rather, best-practice counsel condones transparency, clarity, and timely, factual representation of corporate news–good or bad.
 
The corporate executives at IndyMac are accused of making false and misleading disclosures about their company at a time when its financial condition was rapidly deteriorating.  Perhaps in time, we’ll learn if they were counseled by IR/PR pros or not.
 
As Lorin L. Reisner, deputy director of the SEC’s Division of Enforcement, said in a statement, “Truthful and accurate disclosure to investors is particularly critical during a time of crisis, and the federal securities laws do not become optional when the news is negative.”
 
We and our fellow professional communications brethren couldn’t agree more with Reisner.  These IndyMac Bancorp officers now need legal representation.
 
Ironically, communications counsel is crucial more than ever, since the fight will continue in the court of public opinion, as the executives look to prove their innocence and reestablish their careers.
 
To many outsiders, this could sound like a job for a (spin) doctor.  The truth is that IR and PR pros, many of whom– yours truly included–began their careers as journalists, abhor the notion of spin, including the word itself.    There is no cure-all medicine for managing a crisis.  Only solid thinking and communications skills will win the day; certainly not a job for a doctor of spin.

 

— Roger Pondel, rpondel@pondel.com
 
 

Review Internet Policy Before Losing Your Shirt

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Former U.S. Representative Christopher Lee

Former U.S. Representative Christopher Lee (via Gawker)

Thankfully for him, U.S. Representative Christopher Lee (pictured to the right via Gawker) had the good sense to resign within just a few hours of his shirtless photo/response earlier this week to a personal ad becoming the lead story in both gossip pages and major media outlets.  Lee may just have meant to send a simple, flirty email.  But he wound up being embarrassed and losing his job.  
 
What does this have to do with strategic public relations or investor relations, you may be asking?
 
The incident serves as another cautionary tale about  how easily personal information can find itself in unintended hands due to the power and immediacy of electronic media.  In our world, this incident and others should serve as reminders for companies to review their social networking and Internet posting policies.
 
In one recent lawsuit between the National Labor Relations Board (NLRB) and American Medical Response (AMR) of Connecticut, NLRB alleged that AMR illegally fired an employee for posting critical remarks about her boss on Facebook.  The NLRB said AMR’s Internet policy, which prohibited employees from, among other things, making disparaging comments when discussing the company or superiors, was overly broad and interfered with employees’ right to free speech.
 
AMR settled the case, agreeing to relax its rules.  But companies should review their policies to determine whether they interfere with employees’ protected first amendment rights, including the right to discuss wages, hours and working conditions with fellow employees or others.

 

— PondelWilkinson, investor@pondel.com
 
 

Adding value for clients when content is king

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Glancing at any traditional outlet online will show stories covered across multiple platforms using video, audio and yes, good old fashioned text.  While agencies are optimizing press releases to accommodate the new media landscape, knowing how to leverage video properly can be a challenge.
 
Simple is better.   A short flip video of a client providing unbiased expert commentary can be leveraged with a local newspaper or business outlet.  Offering advanced or exclusive access to the content can go a long way in securing coverage.  Knowledge of proper video handling is also important, although most video captured and shared is not created by professionals.
 
It’s OK if it doesn’t get picked up.  Video can be shared across an organization’s own social media including Facebook and YouTube, which can be found by a simple search using Google or Yahoo.  Local or corporate events also can be leveraged.  The content builds credibility and helps foster engagement with key target audiences.
 
More media are using video in their daily coverage.  However, beware that not all content is good.  Make sure the video adds value not only to media but to current and prospective audiences as well.

 

— George Medici, gmedici@pondel.com
 
 

A Matter of Balance

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Fox News is No. 1.  Well, at least in ratings.  Rupert Murdoch’s news channel continues to lead all time slots among cable news stations followed by MSNBC and CNN, respectively.
 
Many news pundits see Fox as the Republican Party’s propaganda machine, just as MSNBC reports news and opinion from a liberal perspective.   This is not “new” news, however.  The 24-hour news cycle is filled with sensational punditry instead of hard facts.
 
What does Fox have that the other news networks don’t?  Roger Ailes for starters.   The Fox news chief made headlines this week when he called NPR executives “Nazis” during an interview with The Daily Beast.   Ailes ripped the network for firing news analyst Juan Williams after the seasoned conservative commentator made inflammatory remarks on Fox News about Muslims.
 
While Ailes later apologized to Jewish groups in a letter to the Anti-Defamation League, his comments made national headlines.  And it’s not just Fox News that’s generating press coverage for inflammatory content.   Fox Broadcasting Company, Fox News’ parent, aired an episode of “The Simpsons” Sunday that parodied the recent midterm elections.  The broadcast featured a Fox News interview segment favoring GOP candidate Krusty the Clown against a Democratic challenger.
 
Sunday’s episode also showed a Fox News helicopter with the tagline, “Not racist, But #1 With Racists.”  No doubt this is funny stuff.  That’s why “The Simpsons” has been on television for more than two decades.  Fox has taken such liberties before in poking fun at itself.  It remains unclear, however, whether this is a ploy to make news or just funny entertainment.
 
Either way, conflict and controversy are main drivers of news. That’s why Fox and MSNBC lead the cable ratings ahead of CNN with their opinion-based commentary.  The question is, should PR professionals continue to feed the beast?  Perhaps we should be spending more time cultivating substantive stories that encourage constructive discourse as opposed to sensational punditry.
 
Easier said than done.

 

— George Medici, gmedici@pondel.com

IR in ‘I AM’

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Last week, I attended a networking event hosted by Bank of America Merrill Lynch at the Paley Center for Media in Beverly Hills. The event included an exclusive screening of “I AM,” a documentary that recounts the story of filmmaker Tom Shadyac after a cycling accident left him with post-concussion syndrome. Though he recovered, he emerged a changed man.  Known for directing films such as, “Ace Venture: Pet Detective” and “The Nutty Professor,” Shadyac embarked on a journey to discover how he, as an individual, can improve his life, and what we, the audience, can do to make our lives better.


The film explored why today’s culture is so engulfed and obsessed with competition and separation, instead of community and cooperation. The film features interviews with well-known cultural figures such as Archbishop Desmond Tutu and the late historian Howard Zinn, as well as lesser-known scientists, poets and evolutionary biologists.

After watching “I AM,” it got me thinking about how Shadyac’s film can not only be applied to each of us on a personal level, but to the business realm as well.

The film is particularly relevant to our line of work because it reminds us how important it is to understand the communities we serve, particularly investor constituencies.   The more public companies and investors understand and communicate with each other, the more likely it will enhance long-term shareholder value.  And that’s something we can all appreciate in this environment.

— PondelWilkinson, investor@pondel.com

Be Prepared for Seismic Activity

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At home, our family has a plan for when the big one comes.  The emergency earthquake backpack is filled with the necessities:  We have extra water, our First Aid kit is complete and there is a hidden stash of cash.  We are debating whether to buy a small utility generator.
 
The very definition of a crisis means that it is not planned.  But that does not mean that we should not have a plan to guide us in the event of a crisis.
 
>A recent article in The New York Times devoted a lot of ink to reviewing how companies deal with a crisis, and used three timely examples to represent how NOT to handle things.  In the story, Goldman Sachs, Toyota and BP were all slayed for their missteps and PR luminaries espoused their opinions and advice.  While the merits of each approach could be debated for some time, my general takeaway is this:  Have a crisis plan in place.
 
Create the plan now.  Don’t wait.  Make it thorough and review it every six months for any necessary updates.  It’s not as daunting as it might seem, and it is one of the best investments a company can make.  Every company has employees, customers and shareholders that expect quick, decisive, informed and coordinated leadership in a crisis.  A ready-made plan provides a sound blueprint for action.
 
Let us know how we can help.  In the meantime, I’m off to Home Depot for that generator.  You just never know.

 

— PondelWilkison, investor@pondel.com
 
 

Hurd on the Street

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This past weekend, Hewlett Packard’s head honcho Mark Hurd abruptly resigned as CEO of the world’s largest technology firm, amid a firestorm of controversy involving actress-turned-marketing consultant Jodi Fisher. Surprisingly, it’s not Fisher’s 2007 sexual harassment case against Hurd that led to his ouster; it was filing faulty expense reports.
 
Following news of Hurd’s resignation, H-P’s stock has lost more than eight percent of its value. In his five plus years as CEO, Hurd restored H-P to profitability, more than doubling the stock, mostly due to his no-nonsense approach to business.
 
Hurd’s predecessor Carly Fiorina, now a candidate for the U.S. Senate, also was ousted by the company’s board.  Fiorina’s departure, however, was tied to poor performance, a long-standing issue while she was CEO, and primarily due to her inability to fully leverage the company’s acquisition of Compaq in 2002.
 
The trick now for H-P is to find a successor to Hurd, and the challenge is managing the transition with effective communications.   Could H-P’s recent stock drop have been mitigated with a better communications plan?  That’s debatable.  Hurd had a positive influence on the company’s performance.
 
Indeed, it’s hard for any organization to manage a crisis, and strategic public relations is essential in these matters, especially when a company has to communicate contentious news to its constituencies, i.e. investors, employees, and the general public.  Even a tactful tweet can go a long way, but it has to be smart and sincere. We’ll see how H-P investors react when the company reports on August 19.

 

— George Medici, gmedici@pondel.com
 
 

IR and PR Are Not Like Oil and Water

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BP’s future seems pretty bleak at the moment.  The stock hit another low this week as the company’s latest effort failed to stop the massive oil leak, which continues to spew millions of gallons of crude into the Gulf of Mexico, severely impacting the Louisiana coastline.
 
Making matters worse, BP boycotts are underway coupled with an onslaught of lawsuits and fines that undoubtedly will cost the company tens of billions of dollars.
 
Can BP ever recover? Some on the street say no and that the political, economic and environmental fallout from the disaster will be too tough to overcome.  Media pundits have even compared the crisis with the Arthur Anderson scandal of 2002, when the company surrendered its license because it was found guilty of criminal charges for its auditing of Enron.
 
No doubt BP will become a heavily studied case history among B-schools for years to come.  It’s important, however, to understand the dynamic between the company’s crisis communications efforts and its stock price, which dropped more than 30% since the April 20 explosion of drilling rig Deepwater Horizon, killing 11 workers.
 
No question the fact that they still can’t plug the hole is a key reason for the stock drop.  But by how much? Will the boycott hurt business?  Sure it will. Will that affect profits?  Of course.  Could a boycott be prevented?  Probably, but only if BP communicates more strongly and frequently about its repair efforts.  There has been some apprehension, at least on BP’s part, to get out in front of the problem and be more open in public statements.  This only invites public anger, which leads to a consumer backlash that can, in fact, result in a boycott.
 
BP will never get a handle on the crisis until the leak is stopped.  Only then can it begin to attempt to rebuild its brand among investor and consumer audiences.  In the interim, BP’s investor and public relations divisions need to work in unison, making sure key messages are tailored appropriately and communicated effectively (and regularly)  to each of its core audiences.  Understanding the needs of different target audiences creates a stronger overall messaging platform and allows for deeper dialogues between BP and its investors, as well as the media, which is paramount during a crisis.

 

— George Medici, gmedici@pondel.com