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Brands Should Be Connecting with Moms on Blogs

There has been study after study showing that women, particularly mothers, are active on the social web and make purchase decisions based on the information they find online. That information can come from online acquaintances, strangers, or brands, and while most brands are trying to leverage the hot sites like Pinterest and Facebook to connect with the lucrative mom audience, they’re forgetting about the power of connecting with the consumer audience through blogs.

Five years ago, blogs were the it way for brands to connect with consumers on the social web. Today, brands are too often leaving blogs out of their social media and content marketing plans. That’s a big mistake, and research from BlogHer confirms it. According to an August 2102 study by BlogHer, more U.S. mom internet users trust blogs as a source for parenting advice, including advice related to products and services, than any other form of social media.

Here is the breakdown of the percentage of U.S. mom internet users who trust various social media content for parenting advice from the BlogHer study:

  1. Blogs = 67%
  2. Facebook = 64%
  3. YouTube = 36%
  4. Pinterest = 31%
  5. Twitter = 28%
  6. Instagram = 22%
  7. Tumblr = 16%

Even more interesting is how U.S. mom internet users act after reading advice and information about parenting on blogs. Approximately half purchase products based on what they read on blogs. Here are the specific results from the BlogHer study that show actions taken by U.S. mom internet users after reading a recommendation on a mom blog:

  • Read a book = 63%
  • Purchased food product = 56%
  • Watched a TV show = 54%
  • Purchased baby product = 48%
  • Purchased toy = 45%
  • Forwarded post to a friend = 44%

When it comes to accessing those blogs, 99% of U.S. mom internet users have a laptop or desktop computer. 83% have a smartphone, and 56% have a tablet device. That means moms are accessing blog content from a variety of places and at all times of the day and night.

Brands that work with mom blogs to create meaningful content and develop their own branded blogs and mobile content are the ones that will succeed in the future. There is no arguing the fact that moms turn to the internet, particularly mom blogs, for trusted advice, product recommendations, and support. It’s a perfect opportunity for brands to build relationships with that lucrative audience.

Image: agastecheq

Corporate Governance Essentials

Corporate Governance is in the news–again. Despite recent laws such as Dodd-Frank in the US, Corporate Governance continues to be a problem. Recent events such as the bankruptcy of MF Global, the $5.8 billion trading loss at JP Morgan and the trial of Rajat Gupta all indicate that good Corporate Governance is still wanting. An article  in The European Financial Review states–

The systemic failure of corporate governance is particularly associated with the Anglo-American corporate governance model that has enabled, permitted or tolerated excess power and wealth at the hands of CEOs and cultivated a ‘greed-is-good’ culture in banks.

Then there is an excellent article Corporate Apocalypse that traces the foundations of the recent Economic Crisis back to the 1950s — and states

The financial crisis is both a failure of the invisible hand of market and a failure of the visible hand of management

Seems that it may be time to revisit the fundamentals of what is Corporate Governance.

This post will be the first of a series that will look at the fundamentals of Corporate Governance and posit examples of best practices.  Let’s look at the purpose of Corporate Governance. It starts with stakeholders.

Key to the success of a business are the returns for the owners: the shareholders. However, business is increasingly becoming aware that its goal must be balanced with the interests of other stakeholders.

A company has a number of stakeholder groups. Primary groups include –

  • Owners and shareholders (public companies)
  • Employees
  • Customers
  • Communities
  • Government

There are other subgroup stakeholders as indicated in this visual:

Source: Carol Buchholtx, Business and Society

Anglo American, a large resources company, provides a good example of a corporate statement on managing the interests of stakeholders in a balanced manner.

Our responsibilities to our stakeholders

Our primary responsibility is to our investors. We seek to maximize shareholder value over time. We believe that this is best achieved through an intelligent regard for the interests of other stakeholders, including our employees, the communities affected by our operations, our customers, and business partners. A reputation for integrity and responsible behaviour underpins our commercial performance, gained by motivating employees and building trust and goodwill.

Corporate Governance is the combination of procedures, polices, systems, laws and regulations through which a company is organized and controlled. In doing so, it guides the relationships between internal and external stakeholders. Much has been written about shareholder vs. stakeholder Corporate Governance models. These are typically defined as–

Corporate Governance Model

Geography

Key Items

Anglo-SaxonUnited States, United Kingdom, Canada and Australia
  • Shareowner Focus
  • Extensive disclosure
  • Anglo-Saxon law based
German-ScandinavianGermany, Austria, West Europe, Japan
  • Stakeholder Balance
  • Moderate disclosure
  • Roman-Germanic law based
Emerging MarketsChina, Russia, South America, India
  • Stakeholder Balance
  • Low disclosure
  • Emerging legal systems
Based on  “Challenges of Governing GLOBALLY”, by Marc J. Epstein, Strategic Finance, July 2012 (PDF)

The trend is toward the stakeholder balance model. More about this in future posts.

Key Takeaways

  • The definition of Corporate Governance is rather simple. Its execution is not.
  • Corporate Governance involves different stakeholders both internal and external to the organization.
  • There are different models of Corporate Governance and they vary by geography.

Using A Theoretical Model to Think About the Value of Investor Relations

Academics are big on constructing hypothetical models to prove their financial theories. They blithely disregard such things as taxes, transaction costs and the fact that emotional, sometimes illogical humans are part of the market process. In short, they don’t allow messy reality to interfere with their elegant equations. Many an academic prize (and even some Nobel Prizes) have been won by building explanatory models that make such huge assumptions. In fact, my favorite quote about finance makes a nod to this as it relates to the Efficient Market Hypothesis. Fischer Black, a former Professor at the Massachusetts Institute of Technology (MIT), which sits next to the Charles River in Cambridge, Massachusetts, took a job with Goldman Sachs in New York, situated next to the Hudson River. After working there for a while, he was heard to remark, “Markets look a lot less efficient from the banks of the Hudson than from the banks of the Charles”[1]

As I consider myself only a quasi-academic – that is I teach but I don’t engage in any of the pedantic research that clogs the academic financial journals (plus, I have not yet sewn patches on the elbows of my tweed jacket, nor have I taken up smoking a pipe), I thought I would serve up for the benefit of our readers a theoretical quasi-model to help them think about the value of investor relations. Recognizing that investor relations is a discipline that involves real people and information, I will keep it quasi-simple.

Start by thinking of two hypothetical firms, both in the same industry and each performing exactly the same in financial terms. That is to say, according to their past performances, their growth rates are similar, their rates of return do not differ in any material way and they serve the same customer base. Firm A discloses exactly what is required by the regulations, and nothing more. It makes no effort to explain its more complicated accounting treatments and it does not reveal anything about its strategy or future plans. It does not respond to investor inquiries, does not make management available to investors and analysts, and does not present at any industry conferences. In short, beyond the regulatory filings it makes, it remains silent.

Firm B on the other hand, tries to be as open and transparent as possible, going beyond the regulatory disclosure requirements to explain its business and strategy, meeting with investors and keeping up a steady stream of information that keep investors informed on a timely basis, not just on a regulatory filing basis. Management meets with investors and regularly presents at industry conferences.

The question to be asked then, is under that hypothetical situation, should Firm B get a higher valuation than Firm A? I submit that under these conditions, it is highly likely that a premium will be attached to the valuation of Firm B, compared to Firm A. There are several reasons for this, chief of which is that investors will view the greater transparency into operations and management thinking about the future as enabling them to make better estimates about future cash flows. Secondly, the cost of acquiring information has been lowered by Firm B, and this should show up in their valuation. Finally, the amount of information asymmetry between the company and the investors has been lowered by Firm B, which should also be reflected in a higher valuation.

Now, if you want to nominate me for an academic prize, be my guest. Of course, with my luck it will turn out to be a quasi-prize…

[1] As quoted in Against the Gods by Peter L. Bernstein.

Fewer than Half of Companies Are Prepared for a Social Media Threat

twitter social mediaIs your company ready to respond to a social media threat that could damage your company and brand reputation? Surprisingly, research from eMarketer found that only 40% of corporate communications professionals believe their companies are prepared to respond to a social media-based threat effectively.

As if that’s not bad enough in 2012, only half of companies included in eMarketer’s research used social media to track and respond to consumer conversations and feedback.

First, take a look at the statistics related to the preferred method of sharing negative experiences about a brand or product according to U.S. internet users by age:

18-34 year olds

  • Social network such as Facebook or Twitter = 32%
  • Calling the company directly = 24%
  • Emailing friends, family and colleagues = 21%
  • Third-party site such as Consumer Reports or CNET = 19%
  • Other = 4%

47-65 year olds

  • Social network such as Facebook or Twitter = 9%
  • Calling the company directly = 42%
  • Emailing friends, family and colleagues = 23%
  • Third-party site such as Consumer Reports or CNET = 20%
  • Other = 6%

Clearly, if your target audience is 18-34 year olds, your brand needs to be spending time in the social media space both tracking conversations and engaging consumers.

Now, take a look at the top 5 reasons U.S. internet users use social media for customer service (all ages):

  • Seeking an actual response from a company about a service issue = 50%
  • Praising a company for great service = 48%
  • Sharing information about a service with a wider audience = 47%
  • Venting frustration about poor service = 46%
  • Asking other users how to get better service = 43%

Based on those numbers, consumers are saying positive and negative things about brands via social media, and they expect answers from companies. Those conversations also affect companies’ bottom-lines because they can have a direct influence on buying decisions.

The content and conversations published via social media has a direct effect on consumer purchase decisions as follows:

  • “Positive information I’ve read online has reinforced my decision to purchase a product or service recommended to me” = 87% (up from 80% a year earlier)
  • “Negative information I’ve read online has made me change my mind about purchasing a product or service recommended to me” = 80% (up from 68% a year earlier)

Despite the fact that social media content and conversations are directly affecting consumers’ satisfaction with brands and companies as well as buying decisions, the majority of companies are not involved in social media enough.

According to the eMarketer study, preparedness of companies to deal with a social media-based threat is surprisingly low:

  • Prepared = 40% (up from 33% a year earlier)
  • Not Prepared = 30% (down from 33% a year earlier)
  • Neither Prepared Nor Unprepared = 29% (down from 34% a year earlier)

Consumers have been talking about brands and venting frustrations for years via the social web. The fact that so many companies are unprepared to respond to social media-based threats and that so many aren’t even effectively tracking and participating in social media conversations is shocking. These conversations certainly aren’t going to stop. What are the waiting for?

An infographic from Larry Buchanan was published on Adweek, which displays the highlights from the study visually. Follow the preceding link to take a look.

Image: Bernard Goldbach

Quantifying and Visualizing Logo Trends

color_samplesThinking of using a leaf in your brand’s new logo design? You might want to think twice about that decision, because it’s not unique. That’s according to data from the U.S. Patent and Trademark Office as analyzed in James I. Bowie’s new blog, Emblemetric, which uses quantitative analysis from USPTO data to decipher and report logo design trends.

Nearly 3.8% of logos use a leaf in their designs (that includes generic leaves only, not specific types of leaves such as maple leaves or elm leaves). The trend of using leaves in logo design picked up steam in 2000, and today, leaves are considered a visual shorthand of an eco-friendly brand message. However, the use of leaves in logo design is even more popular in specific industries such as agriculture, chemicals, pharmaceuticals, and beverages (approximately 10%-13% of logos in these industries use leaves in their logos). Even the advertising industry is above average in its use of leaves in their own logos (approximately 4%).

Bowie also researched the use of color in logo design. He found that most logos include the colors blue, red, or green. Red took the top spot in the beverages and hospitality industries while blue is most popular in the chemicals, insurance, medical, and pharmaceutical industries.

More interested in the geography of logo trademarks? Bowie has analyzed that, too. He wanted to learn if logos differ based on the location of the companies and organizations they represent, and his research found the following geographic breakdown of U.S. logo trademark share:

  • West = 23.5%
  • East = 21.6%
  • South = 20.3%
  • Non-U.S. = 18.1%
  • Midwest = 16.5%

Bowie found that logos in the west are far more likely to use basketballs than any other region while logos in the east are more likely to use marijuana plants and surfboards. In the south, logos are more likely to include tobacco leaves, and logos in the midwest are more likely to include corn stalks. Foreign logos are more likely to include alcohol bottle labels than in any U.S. region. You can get all the details about these logo color trends by region here.

So far, Bowie’s blog is interesting and entertaining. I’m patiently waiting for the swoosh and circle analyses – two of the most overused elements in logo design, in my opinion. What trend in logo design is most intriguing to you? Leave a comment and share your opinion.

Image: Joanna Kopik