Revealing Substance: Bad Communication

The quickest way to kill a good company is bad communication. And if the company is already struggling, you'll kill it twice as fast. Some recent comments on several posts reinforce the fact that spin only provides a short-term win, assuming it does at all.

Steorn

In August 2006, all the buzz was about an Ireland-based company called Steorn after it used an advertisement in The Economist to invite the world's scientists to test what basically amounted to the latest redesign of Tesla's Coil, which would lead us to the creation and production of free energy. Cool? Here is the latest news coverage about Steorn (or at least the last posted on its site). Otherwise, the concept only seems big on YouTube.

Royal Spring Water

Last March, I received a "special report" from Texas-based Royal Spring Water, under the auspices of American Water Stocks, that claimed two billion people will soon be in dire need of drinking water and that is why you should bank on a water stock with potential gains of 220 percent. Pink Sheets, an inter-dealer electronic quotation and trading system in the over-the-counter (OTC) securities market, recently posted a warning on the stock.

Rare Method

It's probably not fair to include this one with the other two, but after they demonstrated a public relations fumble (with the exception of Brian Clegg, who was amazingly sharp and has since moved on) over some mysterious numbers, I couldn't help notice that their financial communication is clear as mud. The current Rare Method "achieves record year" news header carries some questionable subtext: "We experienced a decline in revenues, gross income and EBITDA in Q4 2008 compared to Q4 2007 of 8.6%, 22% and 120%, respectively, as a result of reduced U.S. revenues from $1,076,888 to $596,627 due to postponed marketing programs as our U.S. clients monitor the economic crisis." They also "adjusted our staffing levels to control costs."

Please don't mistake the follow up as anything more than what it is. I'd love to read that Steorn solved the world's energy crisis, Royal Spring Water stocks soared, and Rare Method is to have a record year. But you know, it just isn't so.

Covering Hot Topics: First Quarter 2007

Last year, we published a recap of our five most popular communication-related posts, based on the frequency and the immediacy of hits after they were posted. Today, we've decided to keep it simple, covering the top five of the first quarter.

Antonella Barba Buzzes Up American Idol

When photos of the presumably modest Catholic University student and American Idol contestant posing in front of the U.S. war memorial in Washington, D.C. surfaced on the Internet, everyone from the cruel and crude to the curious and complimentary surfed the Web to see what was there or perhaps not. For our purposes, Barba proved to be an excellent case study in publicity gone wrong. Although we were among the first to call the pornographic photos phony, Barba's insistence that she could sing despite some obvious inability, landed her a series of offers that suggests she has different talents. Recently, Star Magazine listed her as more foolish in Hollywood than no-talent American Idol Sanjaya Malakar. We know why. Do you?

Link: Barba

Julie Roehm Sues Wal-Mart For Her Behavior

Maybe it's because some people still think Julie Roehm sports some nude photos too or because "anything Wal-Mart" always seems to command attention. Either way, the suit and countersuit, that reveals scores of ethically challenged e-mails, raises dozens of questions related to business behavior in a new world with social media. Workplace privacy, business ethics, and the pitfalls of second-tier executives becoming public figures are all part of the equation. Perhaps we're oversimplifying, but our interest in this case study is about whether it pays to draw continuous attention to your own shortcomings. Roehm would have been better off leaving things alone than attacking a former employer who is tired of hearing her name.

Link: Julie Roehm

Jason Goldberg Can't Shake Bad Habits

Jason Goldberg, CEO of Jobster, presents the ultimate paradox in social media. In 2006, he used social media to float the rumor of layoffs at his company and everyone from the New York Times to (most recently) Wired Magazine, as reported by Cheezehead, has chastised him for it. Yet, as crazy as it sounds, social media saves him as often as it slays him. So in what has almost become one sequel too many for the story that would not die (much like the Halloween franchise), Goldberg seems to have taken some lessons to heart despite being unable to break bad habits. He has a nasty tendency to hint before taking action as evidenced by the layoffs, his brief 'engagement' of me, and recently, about the fate of much-loved Jason Davis at Recruiting.com, who is allowing his contract to end after Goldberg hinted that changes were in the works (Davis was not fired nor forced to resign). We're adding a post to this living case study tomorrow, hopefully to shed some light on the continuing confusion.

Link: Jobster

Royal Spring Water Dances With Creative Ethics

Although new, Royal Spring Water seems to be gaining traction as another case study to watch. Just a few days ago, we called the company on peddling fear with its anonymous publisher-produced direct mail piece that sold stocks and the end of the world. Hailing water as the new oil, Royal Spring Water seems to be coming under fire for questionable marketing practices, stock valuation, and its product, billed as "structured water." While most of the muck seems buried by a mountain of news releases about anything and everything to demonstrate momentum, we cannot help but to wonder what the future holds for a company headed by former filmmakers.

Link: Royal Spring Water

Blogging ROI Is Real With The Right Measures

We are always a bit discouraged knowing that bad news tends to trump good news in attracting attention (for traditional and social media alike), but one idea surfaced above the clutter this quarter. Although it is only a sliver of a bigger theory we're working on in between servicing our clients, the 5-in-1 tool concept for blogging accomplished its objective: we were hoping executives and communication-related professionals would think of social media as a very versatile tool rather than force cookie-cutter frameworks upon companies. Simply put, appreciating that social media is a tactic and not a strategy, we recommend looking at existing communication challenges and/or opportunities before attempting to apply social media. By doing so, it's easier to establish measurable objectives that can deliver a tangible ROI.

Links: Blogging ROI, Social Media

Those were the top five most read posts for the first quarter 2007. Runners up (no order) included: Julio "Assad" Pino, JetBlue, Social Media Influence, AP Style on Web site, Using The Force.

A special thanks to all those who dropped by, added comments, and continued to help us shape a blog that is hopefully more useful than entertaining, but sometimes entertaining all the same. Thank you very much. Until tomorrow.

Peddling Fear: Royal Spring Water

There are several ways to effectively market an IPO, but distress direct mail marketing with multiple messages from a mysterious third-party publisher is not one of them.

Of course, that did not stop Texas-based Royal Spring Water from giving it a go last week. A "special report" published under the banner of American Water Stocks, but devoid of contact information, claims two billion people will soon be in dire need of drinking water and that is why you should bank on a water stock with potential gains of 220 percent. As a communication observation, I can only guess
that Royal Spring Water is gambling on the idea that even a faceless smoke-and-mirrors endorser (but disclaimed as a paid non-endorser) can generate capital to offset operating losses.

Sure, this bottler and distributor of pure water from the Artesian wells of the "Ogallala Aquifer" has added a warehouse and distribution center in Los Angeles in order to meet sales demands in the state of California. It has reportedly concluded a private label deal with Vista Ford dealerships and Pacific Athletic Club, both in California, among others. And, its pitch that it has an exclusive "structured water" formula, sold under the label "RHYTHM Structured H2O — A life Changing Experience" sounds interesting enough.

Yet, this is precisely why one has to wonder about a company that would gamble with its reputation and possibly garner legal consequences by spending $20,000 with American Water Stocks in a mailer that comes dangerously close to crossing the stock "solicitation" line. (Right. For $20,000, you too could see your company projection to be "overperform" if you don't mind the half-page disclaimer underneath that refutes its own claim, assuming you can find the ghost of a company that did the piece.)

The reason why aside, the multiple messages mangle any sense of logic. The opening message to "forward-thinking investors" reads:

"Forget about oil shortages, flu pandemics, and terrorist attacks. The world is on the verge of a crisis that's unprecedented in human history. Because when water becomes scarce, nothing else matters.

What I'm about to tell you in this special investor report may shock you, sadden you, and even make you a bit angry. But I feel it's my duty to let you know how the world's most precious natural resource is in serious danger of depletion.

I'll also show you how the demand for clean, safe water is exploding around the world, and I'll name a company that's gearing up to supply this growing demand—and which could potentially make its early investors very wealthy as it grabs a share of the $420 billion market for freshwater."

The mysterious "I" person is never named, but goes on to fulfill his or her promise that 12 pages of fear marketing can indeed shock, sadden, and even make people feel angry. Unfortunately, not for the reasons they hope.

You see, it's no surprise to me that the executive management team of Royal Spring Water got their start as independent film producers of movies that didn't go anywhere (one was about how a transcriptor struggles to keep up with the rapidly changing technology around her. Oh my!). Today's equally compelling plot line links the end-of-the-world water to unbelievable stock gains. Simply put, it is investor prospecting communication at its very worst.

Look, there is no refuting clean drinking water is an issue worth consideration or that the bottled water industry is booming (Aquafina, Dasani, Arrowhead, and others all posted gains last year), but this hardly doubles as an excuse to misrepresent paid advertising as a special report from a third-party source. And personally, I would be disappointed to see more of it.

Lessons for today: First, never risk your company's reputation for a get-rich-quick stock scheme, especially when you seem to have a markable product. Second, never assume in today's world that your targeted mailer will only be seen by unsavvy investors willing to gamble on your hype. One of them just may be a member of the social media with an eye out for communication. Good. Bad. Or indifferent.