When a company lists for the first time on the Venture exchange, one of the first orders of business is to build a website. Without a website, goes the thinking, how can anyone understand who you are? If not for a website, where would people go to see your opportunity?
At least that’s been the thinking for the past fifteen years. But it’s starting to change. Strange as it may seem, the website is increasingly seen as unnecessary, or at least of secondary importance to something public companies have long been in fear of: Social media.
Liana Shahinian is Vice President International Relations at Ximen Mining Corp. (TSX:V.XIM
, Stock Forum
). When she joined the company, it had no website to speak of. Several months later, that hasn’t changed. But nobody is complaining.
Shahinian and IR consultant Ward Kondas were told by CEO Chris Anderson he wasn’t interested in putting out yet another corporate website with the usual ‘about us’/slide deck/management profiles. He wanted to do something different. Something that would make potential investors see Ximen in a new way, as an innovative company embracing new tech.
The Ximen team stepped outside the box and opted to use Facebook as the online base of operations for the company, giving them a greater connection to potential investors and the ability to post items quickly.
The strategy appears to be bearing fruit.
The Ximen Facebook page has accrued 10,296 likes
in just six months, an astonishing return considering many public company websites have monthly page views measured in the hundreds, and many investor relations firms feel like their job has been well done if they can gather 500 investor leads.
“For me, the idea was really inspired by Barack Obama’s Presidential election,” says Shahinian. “That election proved you can really use social media for more than just talking about your lunch, you can use it to build out a network, a community, of people who are interested in what you are doing and inspire them to action.”
Shahinian, who has been tasked with taking Ximen to Europe on the back of her continental business experience and ability to fluently do business in German, Russian and Armenian, is quick to point out that it has been “company wide acceptance” that has stoked Ximen’s early social media success.
“There was no resistance,” she says. “Everyone is on board and it’s working for us.”
Traditional websites, especially in the mining space, are often yawn-inspiring. The majority are put together by companies who, for a price, provide a cookie-cutter template that houses all public company documents and provides a basic idea of the projects underway. For hard working execs sticking drills into the side of a mountain, traveling around North America seeking financing, such sites fill a basic need without much effort.
But they have plenty of downside. Kondas points out that, when things are moving fast at a corporate level, the last thing you need is to have to find your developer and have them fit site changes into their schedule.
“It’s expensive and slow,” he says.
“Maybe it takes a few days to make the changes,” says Shahinian. “With Facebook, I can do it in seconds, edit it if I need to, all the supporting documents are there, and it’s where the people are.”
For CEO Anderson, the lack of a website hasn’t been a burden. “In fact, it helped build a little mystery around the company,” he told me earlier in the year. “We have a lot of industry insiders who are involved in the company, who have been watching the Brett project for a long time before it came into our hands, and the desire for more information has perhaps encouraged people to call us, to be proactive.”
Anderson points out his company won’t be website-free for long. “It makes sense to provide as many methods of communication as possible, so this doesn't mean the company won't have a website,” he says. “It’s just that our focus is more broad and innovative than what you might find in many old world mining industry mainstays.”
Ximen’s strategy is the polar opposite of conventional wisdom, which says you do what everyone else is doing because, hey, it must be working for them.
But Anderson, Shahinian and Kondas have delivered results, and in quick time.
To compare and contrast, the Facebook page for the controversial junior gold explorer Barkerville Gold Mines
has just 67 likes. Major player Goldcorp
, with a market cap of $24 billion, has less than 4000 Facebook likes, just 40% of Ximen’s fanbase. The largest mining company in the world, the $182 billion BHP Billiton
, has a full social media and community building department of experts, but it only has 18,366 Facebook likes, not a lot more than the Ximen team have managed off the side of their desk.
The web-to-Facebook shift has not been accidental for Ximen. Rather, it’s part of a distinct break from convention in the investor relations space in which enhancing communication with shareholders is the point of the exercise, rather than shielding management from the huddled masses and limiting public comment.
“Sometimes investors hesitate to contact a company through the website or by phone,” says Shahinian, “but social media allows for that communication. It encourages people to connect.”
And connect they do. Giant retail companies can have social media followings in the millions (Best Buy has 6.9 million Facebook likes
while Nutella has 16 million
. Coca-Cola has 47.6 million
) which gives them the ability to hit an audience the size of a top-rating network TV sitcom with just a few keystrokes.
With that kind of reach comes new issues, however. Some of those companies have multiple departments dedicated to social media and expensive consultants that will agonise over a 140-character tweet for weeks before finally taking it to their audience. That kind of community-by-committee can defeat the purpose of the exercise, but it can also be explosively successful as a marketing tool when done right.
Large companies are increasingly taking the internal position that social media interactions mean more than website interactions. Even back in 2011, Starbucks had 21 million Facebook likes but only 1.8 million website users per month. Coca-Cola’s website drew 270,000 users per month, a far cry from its then-20.5 million Facebook fans. Tech news media outlet Mashable.com engages tens of millions of users per month, with only 30% of that engagement happening on their website.
On the investor side, public companies have traditionally veered away from using social media in any but the most basic fashion, largely due to the potential for harm with presenting an open door to the company in a tight regulatory environment. Confusion over the ramifications of allowing user comments, for example, leads some to simply close off that feature, rather than risk the ill-considered thoughts of some users being considered company-approved content.
Creative Edge Nutrition (OTO:FITX
, Stock Forum
) has a surging Facebook presence in the medical marijuana space, but has come under fire for promoting links to articles with incorrect information about the company, rather than correcting the bad info. The Creative Edge board recently told CEO Bill Chabaan to stop posting anything but company approved material to social media
, something Chabaan’s sizable Facebook fanbase was not happy about.
NovaGold Resources (TX:T.NG
, Stock Forum
) has received praise for its social media strategy, which includes a Facebook page with plenty of video
, and a Twitter feed manned by a staffer
that is open to questions from followers.
NovaGold IR rep Erin O'Toole tells me the strategy has been successful, stating, “The number of questions [varies], but it is more about having open lines of communication across many platforms.”
Verisante Technology (TSX:V.VRS
, Stock Forum
) CEO Thomas Braun also embraces Facebook
as a means of sharing company info, though he also maintains a corporate website. Braun points to his Facebook following as just one part of a multi-format program designed to give potential investors several information gathering options, depending on their preference. Facebook allows for more information than a traditional corporate website with less regulatory hassle.
“Sometimes you have to be careful what you put on a corporate website for regulatory reasons, but we can put pretty much everything on the Facebook page. If we have some pictures of our product or a link to a news article and it doesn’t warrant a news release, we can put that on Facebook easily and investors can find all the content.”
The Verisante Twitter account
allows for more of a conversation, says Braun. But the CEO says the company, which is developing products that detect cancer, is not above turning Facebook comments off if they get hairy.
“Right now we have them turned on, but if someone comes along and wants to be troublesome, I don’t have time to deal with that at the micro level,” said Braun at the recent Canadian Investor Conference in Vancouver. “It’s a great tool to get information out and keep in the public eye, but I have a business to run, so you can’t let it get out of hand.”
Shahinian hasn’t had any problems with comments – yet – but says she’s always monitoring the situation.
“Comments have been fine,” she says. “If there’s something negative, we leave it be. If someone has a problem with the company, we want to know about it.”
Kondas has spent 14 years in the field and says this experiment has been an eye opener.
“With the market climate as it is, fluidity has been critical,” he says. “Communicating through the standard channels is fine, but the business has changed. Creativity has been critical in our getting the story out, and though it would be easy for us to get stuck in our traditional ways of doing things, we meet in the middle. It’s been a complimentary relationship.”
“With social media, the usual question is, what’s the return on your investment?” says Kondas. “If you look at what we’ve done, you can answer that saying, what are ten thousand potential investor leads worth to a public company? I’d say they’re more than worth the time we’ve put into this.”
One of the side benefits to the shift to social for Ximen has been exposure to a demographic that doesn’t usually play in the resources space.
“A lot of the thinking in the mining space has been archaic for a long time,” says Shahinian. “People are very set in their ways. The younger generation appreciates our bringing company information to where they are doing business. You can’t please everyone, obviously, but social media is becoming broader all the time and a website is so static. On Facebook, and Twitter, it’s always moving. There’s an urgency, and a conversation happening. As a company, we want to be in the middle of that conversation.”
FULL DISCLOSURE: Ximen Mining and Verisante Technology are Stockhouse Publishing clients