Due to the popular nature of the article “Google Adwords is not meant for Investor Relations ” an expansion on the concepts and liabilities of Google Adwords and possible solutions to the problem needed to be addressed.
The article is in response to the fact that within 70 characters there is not enough space for disclaimers, and therefore, the advertisement can be misleading and a misstatement of fact. That there are many investor relations firms abusing the Adwords platform by stating price projections and information that has little to no public information to back-up the statements.
More so, due to the definition of entanglement, if the link goes to a web source of which the company has participated in preparing the content for, the company most likely would be brought into mix, starting with the hyperlink that generated the investor.
It is my opinion that the SEC will take the same approach as the FDA did in April of this year, and begin sending warning letters and notices to individuals and accounts abusing the Securities Act on the Internet.
In actual fact, if the advertisements are being posted by individuals unrelated to the company, and the company doesn’t endorse the ads, the company needs to take the responsibility onto themself to:
- File an abuse complaint with GOOGLE
- With the advice of your corporate lawyer, copy the advertisements the company is aware of, post within their web page that they do not endorse the following advertisements and they are not from the company. Possibly post this within the context of the website, that individuals let the company know of any ads, posts, or information that led them to the website purporting to represent the company. (Interaction is helpful, if put to good use.)
- With the advice of your legal counsel, report the misuse to the SEC
Google Adwords can be used appropriately, as stated on the website www.otclistings.com in the comments section by George Tsiolis, the Founder of AGORACOM, , “I encourage public companies to use Pay Per Click Search Engine Marketing for investor relations – just make sure to use it responsibly.”
Therefore, I had to think carefully what the word responsibly means to me and in the eyes of the regulator based on their already published opinions.
Using the internet, not just Google responsibly suggests that the company has considered:
Timing– that all mediums are simultaneous in the event of information made public
Reach– the information has market reach to all investors and markets, with a high stress on “public availability”
Well Known Location– that the information posted is in a well known location where it is reasonable to expect investors to go to in a timely fashion, such as, EDGAR, your website and corporate blog. That this domain is made public and notified in all press releases, filings, and posted information, to ensure it is a well known location.
Timeframe and Detail- That dates, times, statements made, and restatements made are all in order, and in the event it’s a summary, that there is the availability of a drill-down to more detailed information of which that path is clear and easy to follow.
Disclaimers– Disclaimers do not protect the company, its directors, or staff from misstatements of fact.
So how does this fall into the context of Google Adwords?
As mentioned before, Google Adwords is on a closed circuit, only available to the highest pay per click advertisers and availability of key words. It naturally fails as a standalone internet application the test of; timing, since its random; and reach and public availability, due to the closed circuit nature. Therefore, the statements being made within the ads are an advantage to a select few, and thus, could be interpreted to contravene the Securities Act and Anti-fraud provisions. I say “as a standalone” internet application on purpose. Like the FDA, I don’t believe having disclaimers one click away is sufficient, however, I do believe in Form FD and the use of the corporate website for disclosure, which public companies have as an available mechanism that the FDA doesn’t appear to provide to drug companies.
Possible Solution. Consider copying the advertisements you endorse within Google Adwords and publishing them on the website as a disclosure statement, or within a Form FD, informing the public that these are advertisements that they “may” see within the Google Adwords platform. If necessary, supply links to a drill down of information that backs up the statements and explains the comments made by the advertisement within the disclosure. As long as it is in a public place, such as your website, available to all and is a known place to go to, that it is posted before or at the same time as starting the advertising campaign, and is not a misstatement of fact, this is a great approach to dealing with regulations that remain unclear…until now. Consider including in the same disclaimer that these Adwords are the only Adwords the company endorses and that the company has not contributed to, endorsed, published, or discussed any other Ad Words accept those disclosed. In the event you have used Adwords in the past, it may be advisable to get copies of those Adwords and the dates they were posted, the statistics of how many views and clicks, and publish them in as timely fashion as possible were Form FD applies. This would need to be at the advice of your Lawyer.
In any event, the solution could be sufficient for covering the concerns of public information and statements being made, and would alleviate the stress factor while using Google Adwords for your Investor Relations campaigns. If you are using Google Adwords, I suggest discussing this possible solution with your Lawyer.
Mark Bragg, Knowledge Publisher