Tag Archives: RegFD

4 Reasons Brands Shouldn’t Rely Solely on Social Media to Communicate

Posted on April 4, 2013 by | 8 Comments

I wasn’t the only social media denizen who scratched their head and said “Really?” in response to the SEC’s ruling a few days ago that cleared the way for public companies to disclose material news via social networks. It turns out I was in good company, as many others looked in askance at the ruling too, including Fortune’s Dan Primack (“SEC’s new social media policy falls short.”)

Now, don’t get me wrong.  Fundamentally,  I support brands using social channels to communicate.  I am completely and utterly convinced of the efficacy and utility of social networks as a means to communicate with key audiences.

twitter tos textBut I also know from my experiences in managing several of PR Newswire’s social media presences for the last couple years that social networks are not perfect communications channels.  For a variety of reasons, I’ll never rely solely upon them as key communications channels.  Here’s why.

  • Reliability – If you’ve ever used Twitter, you’ve probably seen the Fail Whale that appears when Twitter is over-capacity.  Facebook users experience problems with their API and delays in getting content to post all the time. Simply put, you never know when your social network will slow down – or even grind to a halt. Call me cynical, but Murphy’s Law dictates that at some point, you’ll encounter a service problem right at the moment you absolutely, positively need to post something.
  • Service & platform changes – The social networks all reserve the right to make changes to their services and their platforms, without any prior warning to users, and change they do.  Over the last several years, we’ve seen the networks start and end relationships with search engines and each other, change how user content is displayed and an increase in the commingling of ads within streams of user-generated content.  All of these changes have affected (in some cases significantly) how and when social content is shared and viewed.
  • Feed management algorithms — It may come as a surprise to some, most social networks employ manage what content their users see.  Using algorithms, they bias news feeds, tweet streams and the updates they display to users, surfacing content that’s proven popular and/or is from those closes to the users’ social graphs.  More mundane posts are buried. Point is, just because a company posts content to a social network, there is no guarantee that all their friends, followers and fans will see it.  In fact, one can be fairly certain that relatively few members of your social audience will see your message at the moment it’s posted.
  • Security – Social networks can be hacked, and while they obviously try to protect themselves, it’s not at all uncommon to see spammy messages spewing forth from hacked accounts.  Company accounts are not immune, and the stakes go up if you’ve cultivated a particularly influential and well-connected audience populated with analysts, bloggers and journalists.

facebook tosIf this post has you sweating a bit, it might be a good idea to take a quick look at the various terms of service the social networks require us to agree to in order to establish accounts.  None contain service level agreements and guarantees that you get from a paid vendor.  (Note:  PR Newswire is a paid vendor.  We build security and redundancy into what we do, and we consider uptime a requirement, not a nice-to-have.)

So, while I don’t consider myself to be a Chicken Little, and indeed, I think it’s great that companies can safely add communicating via social networks to their communications mix, I do believe that brands need to be cautious about becoming over-reliant on social networks, from which they have no guarantees and over which they can wield no real control.

sarah avatarAuthor Sarah Skerik is PR Newswire’s vice president of content marketing, and is the author of the e-book “Unlocking Social Media for PR.”  Follow her on Twitter at @sarahskerik .

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Social media, the SEC & the impact for public companies

Posted on April 3, 2013 by | 2 Comments
Author Scott Mozarsky is PR Newswire's Executive Vice President and Chief Commercial Officer.

Author Scott Mozarsky is PR Newswire’s Executive Vice President and
Chief Commercial Officer.

The Securities and Exchange Commission issued guidance yesterday that permits public companies to disclose material information such as earnings through social channels — such as Facebook and Twitter – as long as investors have been alerted about which social media will be used to disseminate such information.  The SEC guidance related to an investigation that it has completed concerning a post by Reed Hastings (Netflix’s CEO) on his personal Facebook page that contained material information regarding Netflix’s performance.

So, is the SEC guidance a good thing or a bad thing, and what is impact do we expect this guidance to have on disclosure and the investing public?

We believe fact that the SEC is embracing social media and encouraging companies to use social channels to disseminate information is a very good thing.  Companies benefit by disclosing information as broadly as possible.  Using social channels in addition to company websites and press releases to distribute material information ensures more engagement with a broader audience.  In fact, PR Newswire is encouraging our customers and other public companies to complement their disclosure of material information by using social channels in addition to press releases, their websites, emails, etc.

That said, similar to the guidance that the SEC provided regarding web disclosure back in 2008, yesterday’s statement by the SEC was ambiguous and could be read to permit disclosure of material non-public information solely through social channels.  This would not be a good thing for companies, investors, capital markets, analysts, traders, journalists, or anyone else with a stakes in public companies.  We believe it is highly unlikely that companies will use social channels as their sole means of disclosing material information.  Doing so would limit severely limit the audience.

What does this mean for our customers?

The SEC has clearly stated that the purpose of Regulation FD (Fair Disclosure) is to promote broad and simultaneous disclosure of material information.  Investors should have an even playing field.  Selective disclosure is not a good thing and is prohibited by Reg FD.  Given that the internet and social channels have become a central part of everyone’s lives, the SEC wants to encourage companies to use their web sites as a core part of their overall disclosure strategy and this now extends to social media.

Companies that use their websites as the sole means of disclosure run the risk of uneven disclosure that disadvantages certain types of investors.   The SEC has been clear that the idea that investors might have to go and look for the information rather than getting it through a broader distribution is far from ideal.  The SEC has also previously noted that some investors don’t have easy access to the Web.  Additionally, law firms have consistently been advising their clients that the only way that such clients can be certain that they are meeting their disclosure obligations is to push the information to investors using press releases and other online distribution.

For more on the implications and risks of this ruling for the financial markets and investing public, please see Scott’s discussion on the Building Investor Compliance blog titled, “PR Newswire applauds SEC guidance on social media.”

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Setting the Record Straight Regarding Web Disclosure

Posted on June 13, 2011 by | 4 Comments

A recent blog post on the IR Web Report asserted “STATISTICS from trackable links in company press releases suggest that even small companies’ websites are the most heavily used sources for financial disclosure information, and that dissemination via PR wire services is mostly ignored by investors.”  This statement simply couldn’t be further from the truth, and we believe it’s our duty to set the record straight.

Of course, both sides of the discussion have their biases and business agendas.  The author of the IR Web Report provides IR website consulting services to companies and has a vested interest in seeing more public companies embrace web disclosure. And press release distribution is PR Newswire’s core business, though we too have a thriving IR web site services division.

But agendas notwithstanding, the facts tell a different story, and reveal why fewer than a dozen public companies have made the switch to web disclosure.

A misguided characterization of press release stats

IR Web Report’s use of tracking clicks from the press release on the PR Newswire site to the issuing company site as the sole measure of traffic driven by a press release gives a very incomplete picture of the traffic generated by the message, and is, in fact, a very poor measure of how well a press release distribution worked.  Why?  The answer lies in syndication.   When you send a press release out over PR Newswire, it will appear – in full text and in many cases with the links you embedded in the copy – on thousands of web sites, ranging from financial powerhouses like Yahoo! Finance and CNN Money to a huge network of personal finance and investing sites, media web sites and blogs.   The version of your press release appearing on these sites will drive traffic to the URLs and links you included in the copy.  One needs to look at the total effect of the syndicated press release – not just the traffic referred from the newswire web site.

Don’t forget social sharing
Social sharing is another important component of press release visibility, and PR Newswire content is shared on Twitter, Facebook and LinkedIn at an astonishing rate – thousands of times each day.  Social sharing provides important and credible third party promotion and redistribution of news among audiences eagerly pursuing equities news.

In reality, a handful of companies are using web disclosure

The PR wires – PR Newswire included – remain the easiest and fastest way to comprehensively and simultaneously reach the spot news desks at Dow Jones, Reuters, Bloomberg, the AP and other financial news services, other relevant media and online audiences.

Many companies that have explored web disclosure find it’s difficult for them to make a sudden shift and begin to rely on an IT department or web staff that may or may not understand the complexities and vagaries of Reg FD the way that the wire services do.  As a result, a number of well-documented mishaps have resulted in early and uneven disclosure of financial news from companies large and small.

For these reasons, the number of companies that have switched from using press releases to relying solely on web disclosure remains so small.

The company web site really should be the financial communications hub

All that said, it’s important to note that PR Newswire is an avid proponent of delivering excellent, robust and up-to-the-second financial communications on corporate web sites.   It’s common knowledge that a company’s website is ultimately where audiences should go to find the most comprehensive and up-to-date information available related to that organization.  It’s also commonly understood that social media sites are important for broadening the reach of various types of content, but it’s the company website that should be the place where it all comes together.  On these points most IR pros – and the team here at PR Newswire – agree.

In fact, the example IR Web Report called out, Boeing, is a long-time user of PR Newswire’s MediaRoom service, which enables the Boeing communications team to manage their media site and incorporates a live XML feed of the press releases they issue via PR Newswire to ensure the news is available on their site within milliseconds of being disclosed via the wire.  This long-standing and tested solution fully satisfies the timing and accuracy requirements of Reg FD.  Multiple levels of security safeguard content until release.  PR Newswire has had thousands of companies engaged in this seamless process for many years.

For years PR Newswire has focused on automating communications processes where it makes sense to do so, enabling communicators to swiftly reach key audiences and update their web sites so they may devote their time to the higher-touch and more complex aspects of their jobs.  Along the way, we add quality control (our editors routinely catch and fix mistakes in almost 2/3 of press releases submitted for the wire) and rigorous authentication of sources that means media and web sites can trust – and immediately act upon – press releases they receive from PR Newswire.  We devote entire departments to developing audiences for investor news, and building the syndication network that delivers enormous online reach.  There’s more to press release distribution than meets the eye.  We’re very proud of the work we do and the services we provide, and we thank you for allowing us to set the record straight.

John Viglotti is PR Newswire’s vice president of investor relations products & services.

PR Newswire offers secures investor relations web sites that are easy to update, flexible and can incorporate an up-to-the-millisecond feed of your press releases.

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Take a Pause, Reflect, Remember – The Spirit of Disclosure

Posted on November 1, 2010 by | 1 Comment

With October marking the 10th anniversary of RegFD, now is an appropriate time for everybody in the industry – communicators, IROs, CEOs, institutional investors, retail traders – to take a step back and consider the true value of this landmark legislation.

In a nutshell, RegFD is designed to ensure that all individuals, companies and investors, everywhere, no matter size of fund, geographic location or industry status have access to the same information at the same time and with the same degree of opportunity.  To borrow a phrase from the military, RegFD is meant to guarantee that “no one is left behind.”

It is a simple, direct, egalitarian concept that should be applauded at every turn.

Yet recently, in a select few but visible instances, the foundation upon which RegFD is built is coming under threat.  Under the auspices of “SEC interpretive guidance” and the notion that certain corporate websites may attract enough traffic to be perceived as a common meeting point, the best intentions of “full-and-fair disclosure” are being brushed aside in favor of the limited engagement and single-pronged disclosure associated with advisory releases and/or website only disclosure.

Plainly and simply, this practice contradicts the intent of Reg FD.  It limits engagement and creates an uneven playing field among investors. It makes life more difficult for the large majority of investors and for the media disrupting their workflow.  In most instances, it limits or delays pick up and opens the door for companies to engage in selective disclosure. While it very well may allow a company to comply with its legal obligations, it is not the right option for anybody who has any involvement with a publicly traded company on any level.

Sure, you may accuse PR Newswire of being biased because our business will be impacted if a large number of companies move towards web only disclosure.  And yes, part of our business is built on providing a proven, efficient system for disclosing material information to the widest possible audience.  That said, this part of our business accounts for less than 10% of our overall global revenues, and we have significant revenues relating to hosting and managing investor relations websites that benefits from web disclosure.  This issue is a lot bigger than PR Newswire or any of its competitive set.  An integrated approach to disclosure is the only way that a company can accomplish maximum engagement with its constituents and create a level playing field.  This can only be achieved through the use of push and pull tactics including a strong corporate website as well as press releases and other tools.

If you take a moment to reflect on RegFD and the spirit of disclosure, it becomes quickly apparent that the “solutions” being proposed today are not in the public’s best interests.

RegFD is about enhancing access.  Not limiting it.

RegFD is about ubiquity.  Not selectivity.

The Spirit of Disclosure is about being open and engaging.   Not restrictive.

The Spirit of Disclosure is about understanding the needs of the “man on the street.” Not just the “man in the suite.”

So, to the vast majority of investors, media, corporate communications professionals, attorneys and public executives who still recognize the immense value that full-and-fair disclosure provides, I ask you to celebrate ten years of improved disclosure due to RegFD and join me in ensuring that it remains as vital tomorrow as it is today.

Authored by Scott Mozarsky, chief commercial officer, PR Newswire

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