Trust: The last barricade to social media success
November 9th, 2006 by Todd Van Hoosear
Credibility. Authenticity. Trust. Reputation. Influence. Ethics. If I had these words on my meeting bingo card at last week’s SNCR and SMC events…
Social media is huge, but still only a small percentage of companies is blogging, and a much smaller number is podcasting (Topaz will be putting out a press release in the next couple of days with some specific stats culled from SMC Boston attendees, I’ll link to it here once it’s out). What’s holding companies back? What’s stopping a large public company from, say, podcasting their financial conference calls?
In one word, trust. Sure, there are some issues of business validation, ROI, etc., but thanks to the efforts of groups like SNCR and everyone out there focusing on measurement, these are being addressed. The technology certainly works. But does it work too well, and not always in the company’s favor?
A recent Investor Relations Report from Kennedy Information led with the headline “Podcasting Emerges as New IR Tool.” In October, Seagate became, according to John Furrier, the first company to reissue its earnings call on a podcast, as opposed to traditional online streaming services.
So what’s to prevent a “media mashup” pro from modding a podcast to change the numbers, and redistributing it? What’s to prevent a content scraper from repurposing your podcast, blog post or video for nefarious purposes. This general issue was top of mind for fellow SNCR attendee Amy Paquette, who works in Cisco’s PR group. Her concern is, I’m sure, shared by most communication folks at public companies.
Trust is also top of mind with the regulators, who are tasked with (in the SEC’s case) protecting investors from misuse and misrepresentation of company information (among other things). Trust is what drove the SEC to develop RegFD. But as companies get themselves educated and begin to adopt social media, they’re starting to consider the implication of social media on things like RegFD. This was a topic initially explored by Amy Gahran and me in January, and popularized with Jonathan Schwartz’s empassioned plea for opening up RegFD to blogs and RSS (which, by he way, received a response online from the SEC chairman).
It’s clear that companies are learning to give up control. Our media training slides, for instance, don’t talk about controlling the conversation any more. Richard Edelman stressed this issue of control at the last Syndicate show, and most PR agencies, if they haven’t fully embraced social media, are definitely talking about blogs and how they change the corporate conversation. A few of them are taking a stab at podcasting and even video.
Those who remain staunch supporters of the old “command and control” model of PR will ultimately either adapt or die. Forget “disruptive technology:” In astronomical/geological terms, social media is what you would call an ELE (Extinction-Level Event, pronounced “Ellie”).
I used to think that there was room for tradition. But the more I work in social media, the more I see all media heading in this direction. Yes there’s still plenty of room for good media training and good messaging. But if you don’t prepare your company or your clients for this, it will be your loss–look out for that fireball.
So the remaining question is, who do you trust? Well, the good news here is that there is no single truth-with-a-capital-tee here. Everyone is still learning. How do you know who to trust? The biggest piece of advice I can give is, find someone who is actually doing this stuff, not just talking it. For all the knocks that Edelman has taken, they’re at least out there trying this stuff out. But more importantly, find somebody who’s not afraid to admit to what they don’t know. Hubris is a very dangerous trait, as numerous Greek gods, heros and humans found out the hard way.
If someone is talking a good game, call them on it–ask them to show it to you, and find out if the avatar wears no clothes, to put it in Second Life terms. If your social media guru can’t do it him or herself, they should be willing and able able to find somebody who can. If they’re advocating anything but transparency, honesty and responsiveness, they’re not the right partner for you.
Giving up control to social media requires faith in an imperfect but well-intentioned system. It will be a long process, but it is slowly making converts of even the most conservative of companies. As more and more standards develop, and as entities like the SEC and the major trading floors begin to adopt it (here’s a wake-up call, folks: the Chairman of the SEC is commenting on CEO blogs now), we’ll see more and more adoptors, fewer screw-ups, and hopefully better communication with our markets, no matter what industry we’re in.
This entry was posted on Thursday, November 9th, 2006 at 6:00 am and is filed under News & Commentary, PR, Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
November 9th, 2006 at 8:03 am
“A recent Investor Relations Report from Kennedy Information led with the headline “Podcasting Emerges as New IR Tool.” In October, Seagate became, according to John Furrier, the first company to reissue its earnings call on a podcast, as opposed to traditional online streaming services.”
Just to correct this, companies like GE have been podcasting earnings conference calls since early 2005.
And the main reason companies don’t provide MP3s has nothing to do with what is claimed in your post. It is that their lawyers advise them against providing a permanent audio (or text) record so they can’t easily be sued by shareholders if things go wrong.
I’m not saying that’s good counsel, just that that’s the reason many companies won’t do it.
For more on podcasting in IR, see our recent article on the topic.
November 9th, 2006 at 8:13 am
Dominic, loved the insight, and loved the article–thanks for sharing the link.
I appreciate the correction too. I should’ve researched the claim a bit more–it seemed a bit unlikely that nobody had tried it before then.
It’s a shame the session on IR and podcasting drew such poor attendance.
There’s a long way to go in terms of acceptance and commercialization. I hope they hold the same session again next year–I’d expect a lot more attention on the subject given where the SEC *could* go with this…
November 9th, 2006 at 8:31 am
Todd,
I keep having to remind myself that few companies have really mastered Web 1.0. They’re not primed to move on to Web 2.0! But with the SEC’s e-proxy proposal, the Transparency Directive in Europe and similar initiatives in Australia and Canada, not to mention the continued global push with XBRL, there’s a good chance the Web will finally get pushed to the front of the IR agenda. When that happens, there should be a big push to begin being more adventurous.
Of course, if someone said tomorrow, you can stop sending traditional news releases if your pages are RSS enabled, that’d make a big difference:-)
November 9th, 2006 at 9:41 am
This is a very difficult time, in that we are torn between “it’s going to happen so be ready” and “nobody knows about Web 2.0/nobody is using it yet.”
We are still in a time where PR people show up for a panel to explain XBRL with questions like “What is Technorati?”
To rephrase that dichotomy: we have to continue to use what is effective now while building our knowledge and skills for what will be effective imminently. And when the SEC Chairman is responding to blog posts regarding disclosure by a Fortune 500 CEO, then imminent has gotten a little imminenter.
November 9th, 2006 at 1:35 pm
About your comment on those who will adapt or die. It ain’t gonna happen that way. It will be just like everything else in PR. Everyone is about to start saying they are doing it. About half the people will do it well. A quarter of people will just sort of fake it. And a quarter will just say they do it and not do it. In a year, you won’t find any PR person saying “don’t blog.”
The real difficulty for clients will be figuring out who is actually doing what. Who actually understands that this whole 2.0 stuff is about people. Actual public relations (key word there is public.)
I personally think it will be easy. Just go to an agency’s site and see if they use the term next-generation, revolutionary or leader, and you can pretty much bet that those are people who haven’t had a creative idea since 1992.
November 9th, 2006 at 2:12 pm
Leader? You won’t give me leader? Sheesh what a grouch…
You’re right. I was probably a little to caffeinated and just coming down off of a social media high when I wrote this. Just remember, the dinosaurs died because they were too slow. Or because of the smoking. One of those anyway (is that a Calvin & Hobbes reference? Somebody help me with that last visual…)
November 9th, 2006 at 3:59 pm
I think that was the Far Side.
And if I were a dinosaur, I would definitely stick with the low-tar cigarettes
November 13th, 2006 at 6:31 pm
Podcasting will and should become the next standard for quarterly conference calls. Ask any equity analyst or institutional investor and they will tell you the convenience of podcasting would make thier lives a lot easier at least 4 times a year, and likely more.
Why is it taking so long? Corporate America moves slow? Podcasting is confusing?
My feeling is that there’s less incentive for companies to embrace the new technologies then there was when webcasting was on the rise (remember Reg FD?)
IROs and agency reps need to help management teams understand how new technologies can help them more effectively communicate with shareholders, potential shareholders and analysts…and in the process expand the addressable audience for thier corporate message.
Paul
Public Company Hell
http://www.publiccompanyhell.com
November 14th, 2006 at 10:58 am
Paul, I’d like to think it’s that easy–that we just need a kick in the butt from the SEC.
I had the opportunity to speak on a marketing trends panel at Babson last week, and while I’m not sure how much of what I had to say was taken seriously, I saw the ears perk up when I told attendees that Chairman Cox was reading and commenting on blogs (more on this in a future post).
I think your last point is very important–it’s up to us as agency and communications professionals to direct our clients in the right direction here.