TruthyPR

Everything you know about investor communications is wrong

Activist shareholders have always come in two flavors: political agitators and value-seeking investors.  The former have always been regarded as cranks since their goal was not money, which differed from the goal of every other shareholder.  The latter have always seemed to have an influence proportional to their investment stake.  Carl Icahn has powerful, but still limited, influence due to the size of his stakes in the companies he follows.  Throughout all of this, management has always retained the upper hand with both kinds of agitators.

All that has changed.  Since 2002 when Hewlett-Packard was forced to actively fight Walter Hewlett's well-funded online/offline campaign to block the Compaq acquisition, activist investors have been gaining in power.  Hewlett ran an aggressive online campaign, which HP's management matched at every step. 

Today, there are many Walter Hewletts of there, and there will be many more in the future.  The SEC announced last year that companies may now distribute proxy ballots electronically, lowering the bar for a campaign like Walter Hewlett's to be cheaper than ever.  The overall drop in the stock market has created buying opportunities for hedge funds that now routinely agitate for management changes that will increase the value of the stock.

This week I published an analysis of the new breed of online activist investor, Eric Jackson, and his campaign to change the strategic direction of Yahoo.  Eric Jackson's story is about how management no longer has the upper hand with investors because of the zero-cost of publishing on the Internet. Jackson only had a stake of 96 shares in Yahoo, but had a tremendous impact on the company.

I co-wrote the piece with Jeff Connaughton of Quinn Gillespie & Associates and we're very excited to investigate this trend in the future.

Take a moment and check out our article currently running at PRNewsOnline.com and in this month's print issue.

Disclosure: Virilion has performed work for both Carl Icahn and Hewlett-Packard in the past.

The best viral campaign commercial this cycle (and it's not Obama)

Campaign commercial are a dreary lot.  If you remove the independent expenditure and attack ads from the mix, the ones actually above board and from the candidates are typically pretty boring fare.

The Internet, and in particular YouTube, has changed all that.  Now every candidate with a team worth their salt uploads their video to YouTube and crosses their fingers hoping for a viral effect.  This has reached all the way back into production, where people who make these commercials realize their audience is huge.  No longer do you have to be running a national campaign like the "Harry and Louise" campaign with a multi-million dollar ad spend to have a national audience.  With that introduction, watch this video:

This is the commercial I like the most this cycle and which has broad crossover appeal.  It's from an Oregon candidate named Steve Novick, who has a hook for a left hand and is running for US Senate.  I like this far more than the now-famous Obama "Yes We Can" video mostly because Steve is talking about policy at the same time he is giving Americans a radically funny introduction to his disability.  (I say that as an Obama supporter who has played that video over and over again looking for something of substance in it.)

The video has 113,00 views and is still growing.  There's no doubt that this video has helped positively shape his reputation with Oregon voters and helped provide him a national profile.  At the same time the video is a very positive contribution to the ongoing discussion about disability in America.

Check out the video on YouTube and some of the comments, my favorite of which is a Pennsylvania voter hoping that perhaps he would move there and serve a term or two.

DC Ad Club winners (yes, we won stuff!)

The DC Ad Club recently held their 40th annual awards and Virilion took several awards and citations for excellence for clients, including:

• Strong American Schools: SAS's campaign "Ed In '08" won awards for public service interactive site and an honor for print collateral;
• URTheSpokesperson.com: a teen reckless driving awareness campaign with a really fun e-card generator; and
• UNICEF: We helped create an outpost on MySpace for UNICEF, and they've seen amazing success and attention through it.

There was some really impressive work in the competitions.  Some other worthy work you should check out include:

• The Dude O Matic: a "make your own movie" tool for teens to convince their parents to buy them a cellphone; and
• The Destroy A Printer game: My personal favorite is the Samsung-commissioned game where you destroy three printers in a dark alley with a bat, a golf club, and a chainsaw.

If you've got an idea that needs a creative way of being presented to the public, please call me.

What does the Theory of 1,000 True Fans means for public relations, public affairs, and non-profits?

If you were paying any attention to the the music industry last year, you may have noticed that Radiohead ran an experiment where they basically gave away their latest album online a "pay what you want" model.

Two amazing things happened: 

1. over the course of a few months 1.2 million people downloaded it; and
2. on average they paid either nothing or a lot of something for it, the average of which was $5.

Industry observers expect they grossed at least $5 million.  Then in the last two weeks, Nine Inch Nails did something similar when they released an album with the first nine tracks for free, the full album for $5, and then subsequent packages with additional material for increasingly higher prices.  The highest package was a limited edition ultra deluxe CD package, signed and numbered, for $300.  All 2,500 of these sold out in 24 hours, grossing the band $750,000 alone.

These bands are putting into practice the Theory of 1,000 True Fans, an old concept only lately well-labeled by digital thinker Kevin Kelly. The theory says that for the creative class, all you need to make a decent living is 1,000 true fans who will buy pretty much anything that you produce.

When you have 1,000 true fans and the Internet, your distribution costs are near zero, and you don't need companies like Tower Records to distribute your music anymore, which is why we don't have Tower Records around any longer.

What does this mean for public relations, public affairs and non-profits?  The expectations of the public are changing.  To develop an audience, you are expected to publish and talk about your work constantly.  The very fact that you're reading this analysis for free, despite the fact that ten years ago it would be called "research" and carry a hefty price, is an ode to the veracity of this theory.

Organizations that don't publish are finding it very difficult to engage their audiences when their opponents and competitors talk to them all the time. 

"Does this mean I need a blog?" a nonprofit executive recently asked me.   No, it means you, or someone in your organization needs to write something almost every day about the work you do to further your mission.  The "blog" is just the vehicle you use to post it.  Perhaps tomorrow it's an e-mail list, and the day after it's a posted URL on Facebook.   The day after it may be a postcard.

What's changed is the expectation.  Today's public expects more out of the organizations they give their attention, loyalty, and money to nowadays, or they withhold it.

Shabbir's latest digital public relations case study, co-authored with Jason Alcorn, can be downloaded in PDF format at TruthyPR.com.  (shabbir)