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Marketing Your Brand

Developing a brand doesn’t stop once you’ve come up with a name, logo and tagline.  An ongoing investment needs to be made not just in marketing your business and products but also in marketing your brand.  Over time, brands develop value.  Some of the top brands in the world are valued at tens of millions of dollars.  Brand equity is every brand manager’s ultimate goal, but how do you get there?

It could be argued that brand equity evolves organically as a result of traditional marketing of the business or product associated with that brand, but I believe there should be a specific investment in brand marketing each year.  Marketing budgets typically consist of the traditional product and service marketing-related tactics, but what about brand-building initiatives?  A portion of the marketing budget should be set aside for internal and external brand-building.  [Read more…] about Marketing Your Brand

2 out of 3 People Who Follow Celebrities on Social Networks also Follow Brands

New research from The Nielsen Company reveals some interesting data related to the people who follow brands on Twitter and Facebook. According to Nielsen, “U.S. adult Internet users who follow a celebrity on a social networking site are four times more likely to follow a brand than the average American Internet user.”

To put it another way, 64% of U.S. adult Internet users who follow a celebrity on sites like Twitter and Facebook also follow a brand.

But there’s more!

Check out the following statistics from the Nielsen study:

  • Those 64% area also more likely to “offer advice and opinion to fellow online consumers.” As you might expect, much of this advice is related to movies, music, and television programs.
  • Those 64% are significantly more likely to use the Internet for financial transactions than the average U.S. adult Internet user.
  • 1 out of 4 of those 64% use the Internet for online banking and credit card account management.
  • The most popular categories purchased online by those 64% include clothing, shoes and accessories (18.2%), music (13.8%), and books (13.6%).
  • Top online activities of those 64% include emailing, paying bills, and social networking.

That 64% of U.S. adult Internet users is also more active than average American adult internet users in other ways:

  • 86% more likely to comment or post on social networking sites
  • 83% more likely to view consumer generated online video content
  • 67% more likely to visit a social networking site
  • 45% more likely to play online games.

Celebrities are brands, so it makes sense that brands in other industries can learn something from how celebrities use social networks to build audiences. At the very least, this study demonstrates that people who follow celebrities online are very active in the online conversation and are comfortable making online transactions. In other words, these are the kind of people who will buy your product online and talk about it online if they like it. For some brands, this could be a great audience to tap into in order to jumpstart word-of-mouth marketing and an online brand buzz.

Image: stock.xchng

Comparability in Sustainability Reporting

Take yourself back over 500 years to a market in the middle of any medieval town.

Farmer Giles is trying to sell his goats when along comes Farmer Bob. “How many goats will you give me for my woolly sheep?” he asks.

Farmer Giles strokes his chin. “Two,” he replies and the deal is done.

Then along comes Farmer Harold, leading a cart full of apples. “How many goats will you give me for my apples?” he asks.

Farmer Giles looks surprised. “Apples?!” he asks. “Yes, apples,” replies Farmer Harold. “You gave him two goats for his sheep, how many for my apples?”

Now Farmer Harold has a cunning plan. His wants to sell his cart of mouldy apples to Farmer Giles by pretending the mould is really some new form of wool.

However Farmer Bob gets there first. “Don’t be daft, you can’t compare apples to “pairs”, especially if it’s a cartload of apples and a pair of goats. Silly man!”

Thankfully, before the scene becomes too Pythonesque, a guard intervenes and the farmers all go their separate ways.

An Inadequate Approach
Although the trade system of barter has been largely replaced by the monetisation of goods and services, the principle of comparability is as relevant today as it’s ever been.

It is especially important from the point of view of both business consumers’ and stakeholders’. They need to be able to compare different products and services in order to determine which is best for them.

In the whimsical example above, two goats are roughly equivalent to one sheep because of the relative difference in wool yield each gives. Apples, on the other hand, don’t produce any wool (unless you’ve kept them for far too long…)

Similarly, making their good and services comparable in terms of sustainability is one of the greatest challenges facing companies today.

For instance, as reported in Pricking the Balloon of Corporate Hot Air, the top 500 companies in the world use 34 different methodologies to collate and verify their greenhouse gas emissions.

Not surprisingly, investors have branded this scatter-gun approach as “inadequate” and the WWF has called for “increased standardisation among industry sectors”.

AA1000 Comparability Principle

A Principled Approach
However, there would not be an issue if all of these companies adopted the Institute for Social and Ethical AccountAbility’s AA1000 standard.

Key in this standard is the principle of comparability, which is defined as:

the ability to compare information on the organisation’s performance with previous periods, performance targets, or external benchmarks drawn from other organisations, statutory regulation or non-statutory norms.

This principle ensures that any sustainability report which meets the AA1000 Standard has had its key metrics examined to ensure they are comparable to other businesses.

In addition, the standard goes on to say:

if the indicators chosen … are unique to the organisation, comparability of performance with other organisations may not be possible

This means companies should engage with the wider community of their peers and other organisations in order to determine how their performance should be measured.

It also links very well to the principle of Materiality. In the AA1000, this requires that companies consider which indicators are normally used by other organisations operating within its sphere.

No more mouldy apples
Standards such as AA1000 are not a silver bullet and, as with all human activity, rules and standards can be circumvented by any concerted effort to distort appearances or withhold information.

However, as the concept of Collaborative Governance starts to take hold, many companies will start to realise that it is in their best interests to ensure that they can be directly compared to their competitors.

This is because if companies in the same sector report different indicators or use different methodologies, it will act as a lens and increase the perception that something is being concealed.

So, returning to the medieval market at the start, companies need to move to assure stakeholders that their sheep and goats are truly comparable and not mouldy apples in disguise.

If they don’t it will only breed distrust, which is unlikely to go down well with investors and regulators alike and could well lead to the intervention of more than just a friendly guard.

SEC Interpretive Release Part 1 Section 1

As mentioned here previously, the Securities and Exchange Commission recently released an “Interpretive Release” regarding SEC guidance on the use of company web sites.  The document totals 47 pages and can be found here in its entirety.

As reported in my prior post the release is intended to address four specific parts:

  • Clarification of how information posted on a company website can be considered “public” and guidance on complying with Regulation FD.
  • Clarification of the liability framework for certain types of electronic disclosure.  Of note, is that companies cannot require users to waive any protections from federal securities laws as a condition of participating in forums or blogs.  Also, included is guidance on linking to third party information without having to “adopt” such information.  How companies can provide historical data without it being considered “republished.”
  • Clarification of how anti-fraud positions apply to postings by the company or on behalf of the company in blogs and forums.
  • Clarification of which information is not generally subject to the Sarbanes-Oxley Act regarding “disclosure controls and procedures.”
  • Clarification that information may not need to satisfy the “printer friendly” standard in some cases, which would free companies to use “dynamic” technologies.

We’ll start by breaking down the release into each attempted clarification.  It should be noted that in addition to being an interpretive release, the document is also a Call for Comment.  As such, those involved in the production and maintenance of Corporate Websites and the Investor Relations section thereof, should carefully study the release in order to make relevant comments to the SEC.  Such comments are the best way to influence the course of any further action or clarification.

Part 1 Section 1

The first 15 pages of the release primarily cover prior actions by the agency.  So, we’ll jump right in at the first section of “new” information entitled: “Application of Certain Provisions of the Federal Securities Laws to Information Presented on Company Web Sites”

The first section is: “Whether and When Information Is “Public” for Purposes of the Applicability of Regulation FD”

Now, let me just say that if you are looking for some straight forward, “Do this”, but “Do not do this”, then you have the wrong document.  Still, there is some valuable information in here for those charged with maintaining company websites and compliance with regulations.

The information in this first section pertains mostly to when information that is posted on a company’s website can be considered “public” for compliance with Regulation FD.  Specifically when disclosure of information in a private manner to a specific individual or group of individuals can be considered acceptable based on the information having been public.  In order to be considered “public” information must be “disseminated in a manner calculated to reach the securities market place in general through recognized channels of distribution, and public investors must be afforded a reasonable waiting period to react to the information” (see note 1)

The catch here has long been whether or not the company’s website constitutes a “recognized channel.”  As the SEC notes, they have stated previously that such a website could someday be a recognized channel.  Is today that day?  Well, sort of.

The SEC notes that in order to be a recognized channel, investors must know the website’s location, that the company should let investors know that it does now, and intends in the future, to publish important information on its website, and that such information be easy to find, as well as the information be made available for a long enough period of time before any subsequent non-public disclosure.

So, how does a company go about making its website a recognized channel.  Ah, welcome to the gray area.

That is where we are headed next.

Note 1: From page 18 of the release, which cites Faberge, Inc. in footnote 48.

Google Invites Investors Home

google-earnings-release-on-ir-website-page-1

When Google speaks, people listen. Whether it is the enormous market capitalization, the global reach of the company’s well-known brand, or simply the expectation that the company will continue to be a worldwide innovator, when Google does something new, it matters to more than just Internet searchers.

Recently, Google released its first-quarter earnings in a manner that broke the traditional mold for releasing financial information. Instead of posting the actual press release and financial numbers via one of the financial newswires, Google released only a short statement saying that its earnings statement had been posted on the company’s investor relations website. A link to the IR website at was provided. However, no actual numbers or commentary was included in either the release text or its headline.

The full text of the statement released on Marketwire was just 50 words.

MOUNTAIN VIEW, CA–(Marketwire – April 15, 2010) –   Google Inc. (NASDAQ: GOOG) has released its first quarter 2010 financial results. Please visit Google’s investor relations website at http://investor.google.com to view the earnings release. Google intends to make future announcements regarding its financial performance exclusively through its investor relations website.

Releasing Financial Information on Company Website

This is not the first time Google has published its earning press release and materials on its investor relations website. In fact, Google and most other corporations routinely post such information on the IR websites in order to make it easily accessible to investors and potential investors. It also reduces the workload of the IR Department by freeing them up from responding to routine investor requests for publicly available information.

However, until this quarter, Google had always followed the time honored tradition of releasing earnings information via financial newswire. Like most other corporations, Google orchestrated a carefully timed dance in which a press release with the earnings data was submitted to one of the financial newswires. Then, they waited for the release and its contents to begin showing up in additional news streams to verify that the release had been done correctly. Only then, did the company release the earnings data online, thereby ensuring that the information had been publicly released in an unquestionable manner first.

With its first-quarter earnings, Google took a different track by simply releasing a notification that the information had already been released (or likely simultaneously released) on the company’s own website.

Google is not the first publicly traded company to release its earnings information on its corporate website, however, it is the first worldwide household name to do so. Ironically, the updated guidance giving companies like Google the green light to do just that came almost a year and a half ago. So, why did it take so long for companies to start using their websites to release financial information, and will other companies follow in Google’s footsteps.

Slow Moving Regulation Meets Internet Speed

In 2008, the U.S. Securities and Exchange Commission updated its Internet guidance for publicly traded companies using websites and electronic media for the first time since 2000. The update brought the agency’s Internet guidance up from archaic to merely out of date. However, in doing so, it opened the door for exactly the sort of thing that Google did with its first-quarter earnings for 2010.

The SEC Interpretive Release addressed several issues, and just as tellingly, specifically did not address even more issues. However, the interpretation did bring acceptance to the concept that a publicly traded corporation’s website could be used in certain circumstances to release information and communicate with stockholders. As long as the company’s website was a “recognized channel” for distributing information, then publishing material on that website would count as publicly releasing the information.

The criteria for considering a company website to be a recognized channel included that investors know the website’s location and that the information be easy to find. Most importantly, the guidance required that the company inform investors that it publishes important information on the website and that it plans to do so in the future. Google has already been stating in its financial filings that it has a website, where it is, and that it does publish financial information there.

Despite this go ahead from the SEC, the vast majority of companies continued to operate under the old financial news release first, website second model. The question was whether companies were just that slow moving, or whether there was some fear about changing a paradigm that was already working.

Penguins must leave the safety of the ice in order to find food in the oceans. However, there is no way of knowing whether a killer whale or other predator is lurking in the waters below. The only way to find out is to jump in and see what happens. Of course, no one wants to be the first on into the water, so the penguins inch closer and closer to the edge until finally, one of them drops into the water below. If nothing happens, then the rest of the penguins jump quickly into the waters to feed. If, on the other hand, a predator appears, the penguins move back to try again another time.

In the case of corporate financial earnings, many companies figured why take the chance of angering shareholders or provoking the wrath of regulators. At issue were both the inertia of a long-used methodology, as well as the pesky problem of letting investors know exactly when and where financial information would be released in the sometimes unreliable world of the Internet.

Google’s press release, it seems was designed to take care of that last problem. The company did not abandon the press release altogether, it just changed what it said. Moving forward, the company has indicated that it will continue to release financials on its own IR website. The interesting piece of the puzzle is whether or not it will issue another mini-press release telling everyone that the data is ready, or if it will skip that step altogether and rely exclusively on its own company website.

SEC Interpretive Release Part 1 Section 1 Usable Details

As we mentioned, one of the keys in Section 1 Part 1 of the SEC’s recently posted interpretive release is whether or not a company website is a recognized channel.

Recognized Channel

So, how does a company go about meeting this standard? That is where things start to get gray. The SEC notes some factors (which it calls non-exclusive) that should be considered when determining whether or not the company web site is a recognized channel of distribution. And it comes down to these factors:

Has the company done a good enough job in letting investors know that the company has a web site and that they should be looking there for information?

To fulfil this requirement, companies should be including disclosure in its reports and press releases that not only lists the site address, but also makes note that the company routinely posts important information there. Furthermore, the company needs to have a pattern or practice of posting such information on the web site. Also, the company’s web site needs to be “designed to lead investors and the market efficiently to information about the company.”

As I noted in a previous posting, not all companies place the same emphasis on their Investor Relations page. If the information is being posted on the IR page, then the site needs to be designed to efficiently lead investors and the market to that page. This will be a much easier claim with a prominent link on the home page to the IR section. It will be a slightly tougher claim with a tiny font gray link lumped in with legal disclaimers at the bottom of the page. It will be an even tougher claim with no link on the front page at all! In other words, if you want your publications on the company web site to fulfill these requirements, then you want to make sure they are very easy to find.

But a well designed site isn’t enough. Companies must also take steps to alert the markets that they have posted such information on their site. The SEC specifically notes the use of “push” technology, or more specifically RSS feeds! If you’ve been thinking about adding a feed but couldn’t justify it, now you have your reason. Other methods include press releases or other channel noting that important information has been made available.

Furthermore, for such a web published information to meet this standard, the company must keep the web site current and accurate. Also considered is what other methods the company uses to disseminate information and whether those other methods are the predominant methods. In other words, if your company throws up information on the website as a second thought, don’t expect to meet this standard.

The last consideration is kind of an unfortunate one. The SEC notes that some websites and companies get better or wider coverage in the press and other media. It goes on to say that a smaller company that does not get much media reaction to its postings on its company website may not count on such disclosures to be pubic. So, a company like Google, where both the on-line and offline media hang on its ever word can be more assured in that postings on the company website are considered public than a smaller company that gets largely ignored in media coverage can.

Basically, the SEC concludes this piece of the release by noting that although posting information on a company website would not be considered “selective” it could still not be considered public.

The waiting period issue remains largely unchanged, excepting that if the information were disclosed on the website and considered public, then the waiting period clock would start when such information was posted on the site.

Lastly, the SEC vaguely hints that your website should not go down. If a release of information sends investors flocking to your website and it crashes, that will be bad news. Make sure your site can handle the traffic it normally gets, plus a big rush if you are looking to go this route.

The Summary

The agency sums it up in the paragraphs about the waiting period by saying,

“a large company that frequently uses its web site as a key resource for providing information, has taken steps to make investors and the market aware of this, and reasonably believes that its web site is well-followed by investors and other market participants,”

can expect to have a shorter waiting period. The rest of this section points to the same standard the whole way.

The Game Plan

So, here is what you need to start with:

  1. Put your company web address in every release and report along with a note that the company regularly posts important information there.
  2. Make a prominent link to your Investor Relations page, or put the information directly on the homepage. I’d go with Option 1.
  3. Start an RSS feed that allows subscribers to be notified of any and all information posted for investors.
  4. Send out a press release to coincide with information being published on the website. You can also do it in advance, but it needs to mention a date and time and you need to meet that date and time.
  5. Release ALL information on the website concurrently with any other form of release. If you send out a press release on Monday and post the information on the site on Tuesday, you won’t be able to claim that the web site is considered your primary distribution method. If you can, release on the website FIRST, then do the other. Even a couple minutes could tip the scales into making your website your primary distribution method.
  6. Make sure your website is ready to handle a big influx of traffic. It may never come, but better safe than sorry. Obviously this applied more to smaller companies than industry giants.

Next up? Satisfaction of Public Disclosure Requirement of Regulation FD

Note: This all has nothing to do with the term “public” as it pertains to insider trading.