SEC Accepts Social Media for Disclosing Material Information

The SEC has officially announced that posting corporate information on social networking sites such as Facebook and Twitter are equal to releasing information via a news release and on the corporate website. In general, the SEC stipulates that companies must make material information available to all investors simultaneously via SEC filing or press release.

The SEC made the move following an investigation into the Facebook posting of Netflix CEO Reed Hastings. He bragged that his company's monthly viewing had exceeded one billion hours for the first time. As a result of posting this information on Facebook, Netflix stock promptly closed higher during that trading day.

The SEC decided to loosen its rules for disclosing information and decided not to start any proceedings against Hastings.

Although this is in itself good news, it is not as straightforward as it looks. The catch is that a company must tell its investors which outlets it is intending to use. Ironically enough, the best way to do this is via a press release!

The SEC announcement gives companies more channels to disseminate news. As I see it, a publicly-traded company cannot replace press releases with postings on Facebook and Twitter. Furthermore, the legal department of the company needs to review any posts concerning the company before posting them.

My advice? Be wise! Use official news distribution channels such as PRNewswire to inform your investors, customers and the public at large. Before distributing a press release, the legal department of PRN reviews it and will therefore ensure that your press release complies with the SEC’s rules and regulations. This also means that a CEO cannot “brag” anymore, but needs to state the (dry) facts. 

Companies also need to learn how their investors want to receive news. Not everybody uses Facebook and Twitter, and even if they do, they normally use it for informal purposes. Especially institutional investors will find news the old-fashioned way (using EDGAR, checking press releases and corporate websites), since that’s the way they research and keep up. Private investors (especially those interested in penny stocks) are more likely to embrace Facebook and Twitter for updates and news.

The SEC did not specify what steps a company needs to take for using Facebook, Twitter, et al. It is also unclear what is material information and what not.

Until the SEC formulates strict guidelines, my advice for companies:

1) Write an official press release

2) Have it approved by the legal department

3) Distribute it via PRN et al + post it on the corporate website

4) Post the press release on the company’s Facebook page, Twitter account, LinkedIn page, Pinterest account.

5) Put it on your corporate blog

(Image courtesy of dailyfinance)

Target’s Manatee Marketing Lesson

When Susan Clemons was searching Target.com, she found a grey, plus-sized dress. The grey color was described as “Manatee Grey." A manatee is a big, rather large and shapeless sea animal also known as a sea cow.

Ms. Clemons took offense and tweeted Target "What the Plus sized women get "Manatee Grey" while standard sizes are "Dark Heather Grey." @Target #notbuyingit

Target promptly issued an apology and tweeted that it was looking into fixing the misunderstanding.

Target employees posted on the store's Twitter page: "We apologize for this unintentional oversight and never intend to offend our guests. We've heard you, and we're working to fix it ASAP,"

In the end, Target decided to remove the offensive description. The garment in both regular and plus size versions is now labeled as "Dark Heather Grey."

What does this case teach marketing professionals?

Be careful with your product descriptions
When describing a feature or a color, keep it positive. Try to use words that are neutral but still appeal to (potential) customers. In this case, a physical description such as “dove grey” or “anthracite grey” could have worked. If not, you can always use poetic ones such as “magical grey” or “kissing stone gray”.

If I would have been the copywriter for Target, I would have gone for “Dolphin Grey”. It’s not only the same shade of grey as manatee, but playful dolphins are universally loved (thanks to Flipper et al). My other option would have been “pearl grey”, since  associations with (semi)precious stones are always appealing to buyers – just think of jet black, jade green, turquoise blue!

React quickly in case of crisis

Target did a great job by immediately tweeting back and apologizing. Instead of hiding behind excuses, Target apologized and fixed the problem. They followed the golden rule of crisis management: apologize (mea culpa), quickly fix, and communicate.

Use the correct social media to communicate

Target obviously uses and monitors social media to communicate with its (potential) customers. Once the complaint was tweeted, it also used Twitter to respond.

In this social media age, it’s essential to monitor what is written about you as a company in (near) real time and react accordingly. For B2B enterprises, other social media than Twitter would be more appropriate.

All in all, Target got a lot of free publicity and handled the incident in a elegant way. All in all, the media put Target in a positive light. Some even pointed out that the customer was suffering from hypersensitivity.

Personally, as a marketing professional and lawyer, I am puzzled. I don’t understand how a company such as Target (which should be mucho PC) allowed its copywriters to hammer out product descriptions like this. Furthermore, it is also very strange that its legal department did not object to the description (sua culpa!). They are lucky that the customer did not sue for mental distress!

All in all, being PC in marketing is a grey area, isn’t it

Google Nose (Beta) – Google’s Perfect April Fools’ Day Prank 2013

If you googled during the first day of April, you might have noticed a new tab: “Google Nose beta”. There was also a link under the search field: “New! What’s that smell? Find out with Google Nose”

Google Nose offers “the sharpest olfactory experience available."  It promises the latest sensation: searching with your nose.

Google Nose uses professional knowledge statistics to combine images, descriptions and scents.

Afraid of bad smells? No problem, SafeSearch protects you from foul odors!

According to Google, the product intersects "photons with infrasound waves" and "temporarily aligns molecules to emulate a particular scent." The "mobile aroma indexing program" at the heart of the product has amassed a “15 million scentibyte database of smells from around the world.”

Google Nose is even available on mobile devices with its "Android Ambient Odor Detection" which allows users to collect smells on their smartphones.

Google even created a YouTube video explaining how users can “search for smells.”

It all seems too good to true, right? Well, that’s because it is! This fake product is Google’s April Fools’ Day prank 2013.

In my opinion, it’s brilliant! Just a pity I will never be able to find out what space smells like.....