Online Influencers and their Impact on business, stock price, sales....

Social media and social networks continue to act as the newest medium in online communications. The KEY question is, "How do corporations leverage the power of online influencers to spread their message?"

• Important: What is an online/social network influencer? Recent data that Meteor Solutions collected shows that the type of friends, fans and followers a brand amasses on social media sites matters more than the number. On average, approximately 1% of a site’s audience generates 20% of all its traffic through sharing of the brand’s content or site links with others.
• These “influencers” drive an even higher share of conversion. These very important Internet users can directly influence 30% or more of overall end actions on brand websites by recommending the brand’s site, products or promotions to friends.

Years ago large newspapers, television stations, and those with fame were considered to be industry influencers. With the introduction of individual websites, blogs, and social networks anyone with key industry knowledge and a large following or fan base can be considered an influencer. Many companies are realizing the impact bloggers and tweeters can make on specific products or industries.

EXAMPLE: Many small cap companies look at social networks each day to see which blogger or facebook poster with thousands of followers is having a conversation about their product or a competitor.  If a specific company notices a blog, microblog or youtube channel that can help bring their industry attention, they make an attempt at creating conversations with those individuals.

The Solution: A website that acts as virtual directory for industry influencers and those companies looking to make connections to them. As of now there is no website that compiles data on Influential Bloggers, Microblogs (ex: facebook, twitter, linked in) or key product/industry analysts. With the help of social monitoring tools an online directory of social/industry influencers can be gathered.

The Value: Extremely helpful to companies and specific individuals who want to capitalize on the following and credibility they’ve created. This new concept of engagement is a new spin on advertising or company promotion. Small-Medium sized businesses have very little time to focus on building out their own online networks; let alone looking for influential individuals to help tell their company story.

• After the website is built with a medium sized directory, Influencers can apply to be added to the site.  Companies looking to network with specific influencers now have access. Google Ads along with sponsors can be part of the income made on the site.
• Value for the Influencer - learning new products, gaining industry insight, and the ability to network with new companies.

Tyler Trimbath - Pittsburgh Operations

Is Reed Hastings CEO of Netflix ($NFLX) using PRISM?

Back in December 2010, Alon Kutai penned a very interesting article on Reed Hastings of Netflix ($NFLX) on the ProActive Newsroom in reference to a short position on NFLX by Whitney Tilson, who is a very well-known and highly regarded professional value investor. "Stop the Presses - Netflix CEO Reed Hastings post on Seeking Alpha" was about Whitney, the Founder and Managing Partner of T2 Partners LLC and his well-articulated and cogent bearish thesis in his article, entitled, “Why We’re Short Netflix.” Reed Hastings, CEO of Netflix, responded to Tilson’s December 16^th article on Seeking Alpha. As one would expect, each side of “point/counter-point” exchange drew its share of supporters.

Now Ezra Marbach is singing the praises of Hastings on his Blog in an article titled, "Will Netflix CEO Hastings usher in a new era for online finance, investor relations & social media?":

Over the years, Netflix has experienced intense scrutiny especially as its stock price has appreciated. In response, CEO Hastings has been the model of transparency and accessibility. He regularly updates a PowerPoint presentation detailing Netflix’s strategy and future challenges and pens a lengthy shareholder letter after each and every earnings announcement. Hastings also broke with tradition and opened his quarterly earnings calls to all investor questions regardless of their source. Questions are submitted via email and earnings calls are Q&A-only in order to provide for more interaction with the sell-side, buy-side and retail investor communities.

In an even more dramatic move, Hastings went on the offensive recently in response to a critical presentation by a prominent value investor short Netflix. Instead of following the Patrick Byrne playbook of disparaging short sellers, Hastings responded respectfully and diplomatically by submitting a persuasive blog post to an investor site. He also conducted a lengthy and incredibly informative interview with former Merrill analyst Henry Blodget at Business Insider. Hastings was rewarded for his efforts as reflected in his stock’s subsequent move higher.
Like any CEO, Hastings values his time. He chose to target large online networks of engaged investors to deliver his message. And it worked. So why aren’t other CEOs following a similar playbook, especially small-cap CEOs who are typically starved for attention? Clearly Hastings’ methods aren’t rocket science.

The simple answer? Except for StockTwits and Motley Fool, the current group of financial content websites (i.e. TheStreet, SeekingAlpha, Minyanville, Benzinga, etc.) has done little to pursue public companies and their pent-up desire for a social media presence to complement their IR websites. Instead, massive amounts of valuable investor content sits largely undisturbed on predominantly little trafficked IR websites. Furthermore, CEOs like Netflix’s Hastings who have loads of strategic and actionable investor information to communicate (within the parameters of RegFD) have yet to be unleashed online.

Netflix Business Opportunity

View more presentations from Reed Hastings

I try not to plug ProActive here on this blog, but our PRISM product is doing exactly what Reed Hastings of Netflix is doing.

Forbes: Email is Not Dead. The Groupon Update by The Wall Street Journal

As a big user of email, I have been somewhat skeptical of Social and Digital Media communication tools in their platforms. Yes, I am a big LinkedIn user, but I have it configured to that messages in LinkedIn come through my email. This article by Erika Murphy at Forbes confirmed some of my beliefs.

Score One for the Email Side

The Wall Street Journal raised hackles in the email marketing community almost two years ago when it declared email was dead. Technically what it said was that email was fast becoming less relevant and soon wouldn’t be the dominate online medium by which people would communicate, but it might as well have taken out an obituary for the channel based on the fast and furious rebuttals that flew after the article ran.

But in such war of words, events always trump statistics: Like Ben & Jerry’s decision to ditch email marketing in the UK in favor of social media marketing last year.

And, now, like Groupon customers’ apparent helplessness when its service provider’s servers in Las Vegas went dark.

In the old days, business shut down if your phone box went down, now it is email:

“Groupon has a great brand but it is not strong enough to survive without its email subscribers.” Without the email, he concluded, Groupon wasn’t able to generate nearly the same level of sales.

In our experience at ProActive, the same is true of investors. Email is intrusive and you have to react to it. The trick is to use it selectively in sending to investors. Too many emails and they push the "unsubscribe" button. Too few and it means that we are not getting client messages out for clients. As Fobes states:

But undoubtedly the main story line is this: without that email reminder, people didn’t think to go looking for their deal. And that surely will make email marketers smile, even though it was one of their own that made Groupon go dark.

What we try to do at ProActive is to get very selective in what we send. We have 68,000+ emails in our growing database and we have "touched" those people either face to face or via our PRISM platform. The Hubspot platform also gives us a unique database tool that gives us data that can be very important to individual clients as the figure our their "Social Media Strategies."

StockTwits - establishing a leadership position in financial social media

The innovation taking place and ingenuity being exhibited in social media continues to accelerate at warp speed. In the financial world, we continue to see the coalescence and overlapping of investor relations and public relations roles.  This is because the audiences that comprise a company’s investor community and relevant corporate community are no longer mutually exclusive. To this end, public companies are leveraging social mediums to reach both their investor and customer audiences. 

At ProActive we have created a powerful digital platform (PRISM) to heighten our company clients’ visibility and increase their transparency in their quest to better connect with these very audiences.  Sourcing third party content and establishing relevance to our client companies is a large part of what we do.  It’s all about relevance. In the eyes of these audiences, third party content tied into a company’s product and/or service is more effective in validating the product and or service of these companies. Once the content is created, getting it seen by investors is where the real value is added.

One of the content distribution sites we work closely with is StockTwits which is the largest social network for the investor community (70,000 members and counting). The site, and its parabolic popularity growth amongst investors, is a tremendous asset it furthering our client companies’ awareness goals. Investor Relations organizations like ours, have the ability to post information on their client companies and create a thread.  Messages that are posted by the respective IR firm are denoted as such with a green “IR” tab. 

Similar to ProActive's Twitter account, comments from investors on StockTwits are short, sweet and to the point. A major distinctive benefit to posting a message on StockTwits as opposed to Twitter is the "distribution reach."  All messages sent through Twitter are automatically posted on StockTwits, BUT the distribution ends there. However, messages posted on StockTwits make their way to:

• CNNMoney.com,
• Yahoo! Finance,
• Bloomberg,
• Bing, as well as
• Twitter, Facebook and Linkedin. 

Also, StockTwits is specific to investors. Twitter, in contrast, is not.  Financial messaging is co-mingled with consumer messaging.  The site boasts having a solid mix of professional traders, long-term investors and hedge fund managers.  As such, the StockTwits site has significant appeal for companies looking to have their message heard.  

Howard LindzonI recently had the opportunity to chat with StockTwits CEO, Howard Lindzon (see his Blog which ranges from Biotech to Bat Mitzvah!). It is clear that he has an ambitious vision for the site. He states:

“On our site, investors and traders alike have the ability to have their comments amplified to the most heavily trafficked financial websites.  StockTwits is one of the most powerful centralized social distribution channels in existence for companies listed on NASDAQ, NYSE or AMEX. We have major plans in the pipeline to grow our relevance and our value proposition.”

Consistent with this financial social media trend, I am fascinated by recent news of a new hedge fund being formed. A UK-based hedge fund whose entire investment style is predicated on Twitter sentiment was set to launch on April 1^st. As reported here earlier this week, the fund was originally set to kickoff with $40 million in assets. Indications of interests have ballooned to around $100 million and have thus caused the fund’s launch to be delayed.  

Popularized by a strategy study conducted last year, the Derwent fund intends on utilizing sentiment signals from Twitter messages to predict short-term deltas in broader-based market indices.  In the study, it was documented that sentiment change among Twitter users presage movement in the Dow Jones Index up to 6 days in advance with 87% accuracy. http://newsinfo.iu.edu/news/page/normal/16074.html

With this in mind, I am confident that more and more new and existing hedge funds will find creative ways to further leverage the information and data generated on StockTwits. 

All in all, social media is becoming more relevant and important for IR efforts. StockTwits is the most powerful entry point to social media for IR due to its’ growing targeted audience and its’ tremendous distribution and reach.  And we will see more professional traders using social media to find opportunities.  If your IR plan does not include StockTwits yet, it is never too late to get started.