Sex sells, even in mining – but take a closer look

The executives of Toronto-based junior miner KWG Resources (Canadian Securities Exchange: KWG) have published a video which attracted quite some attention. One, no. 23 in a series of more than 28 videos called the “Mining Minute”, has featured two women wearing short shorts and cropped tops, making light chat about KWG’s mining projects, in the setting of a lakeside cabin. One of the women is the presenter of these programs, Theresa Longo. The videos drew mostly negative comments from a wide range of parties. Frank C. Smeenk, President and Chief Executive Officer of KWG, responded by reportedly saying, unapologetically, “Sex sells.” There are good and bad sides to the particular video and the video series. But most people have looked, and thought, no further than just that one video, no. 23, aired in August 2016. Video no. 23 might unfortunately have created the false impression of a company run by lascivious, unthinking old geezers. Or savvy old geezers who are just following Donald Trump’s guidelines for media and marketing: There’s no such thing as bad publicity: Go left when everyone else goes right; Never apologize; Own your message; Say what others are too afraid to say; Spend the money to get the effect; All publicity is good publicity.

So what exactly happened?

  • KWG has many videos on YouTube. The older project videos and news inserts have respectable viewer numbers of 400 to 800 views each.
  • In March 2016, KWG launched episode 1 of “Mining Minute”, hosted by Theresa Longo, who has model good looks. She introduces the segment and interviews CEO Frank Smeenk. Usually the interview is in an office and she wears a business outfit.
  • The views dropped to about 200-300 per episode, until episode 20, when they showed the video of Ms. Longo on a beach in a skin-baring outfit, “broadcasting internationally” from Costa Rica. The views spiked at 2,158.
  • The numbers normalized again until episode 23, with Longo and the surname-less “Ashley” (actually the model Ashley Nicole) in their skimpy clothes at a lake, which caused all the fuss, jumping to 99,000 views.
  • Next, they dropped right back down again in episode 28, with about 300 views and Longo in business attire.

This confirms that in terms of the general public and social media, sex does indeed sell. It is a sad comment on the state of the world and reveals definite cynicism on the part of KWG’s decision-makers.

But let’s be factual. There are positives and negatives to this campaign. If you read only my negative comments, and not the positive ones, or vice versa, you are as guilty as other commentators of jumping to conclusions, same as I initially did.

On the negative side:

  • As the viewing numbers show, this kind of interest is temporary. All risqué social media, including the not-very-risqué video no. 23, attracts large numbers of viewers who are after cheap thrills, then it stops attracting viewers once the newness has worn off. People who look at a video with pretty, half-dressed girls will not necessarily continue looking at other videos on the same subject, but without the eye candy. This conversion does not happen, because of who these viewers are. They are not likely to be 99,000 mining engineers or investors, but rather social media gawkers.
  • The brand attributes are vague. Theresa Longo explains in one video that the idea behind the videos is to create brand awareness and support. KWG engaged her because of her thousands of Twitter followers – so she does have access to public support. The problem is that it is not clear from the video series what the brand attributes of the company are.
  • The lightheartedness is misplaced. When questioned about the bikini-top insert, Ms. Longo explained that “they were having fun”. Mining is not about fun. It is not a fun industry. It is dangerous, complicated, and expensive. Ms. Longo is known for many things, including being an aspiring actress and having a butt workout routine, but not for her experience in mining, though she has worked at mining trade shows. She should’ve known better, or someone should’ve told her.
  • A wide net means less targeted information, more wasted money. By pitching the videos at general, non-professional viewers (they explain common terms, answer FAQs and keep things simple, really simple), they are “spraying and praying”. To get to a wider audience, they are also extensively using social media. They are hoping that from the bigger pool of people, there will emerge a few investors. This much they state in one of the videos. Most mining investors and analysts are financial experts, engineers, and professionals, or represent conservative institutions. From experience I can tell you they are extremely punctilious, detail-oriented and risk-averse.  These videos would probably not appeal to them. They would, more than likely, be looking for some kind of expert opinion, and the process of engaging and securing deals with investors would follow an entirely different route – as news releases by KWG have proved. If they were investors, they could also question the value-add of the entire video series.
    Despite many comments (with exclamation marks) appearing about the video on financial websites, most were superseded by conversations related to the company’s investments, partners, technical reports and dividends. Some comments mentioned the poor technical quality and content of the videos. In fact, KWG’s share price has barely moved the entire month of August.

    Rtrvd. 2016-08-24

    Rtrvd. 2016-08-24

  • Conflict with stakeholders needs to be avoided. Every mining company needs a “social license” to start and operate projects. If local communities and lobbyists are against the project, they can tie it up for eternity in lawsuits and activities designed to stop development. The video in question, though it was meant to show an interest in aboriginal stakeholders, merely served to anger them.
    ”The video is a very damning statement about KWG Resources to sexualize women to promote mining for profit on Indigenous lands,” said Pamela Palmater, the Chair of Indigenous Governance at Ryerson University. “It represents all that is really sick about the mining industry.”
    Jennifer Wabano, from Peawanuk First Nation in Ontario, whose watershed will be affected by Ring of Fire mining projects,  commented that the KWG video is deeply disrespectful to First Nations people. “It’s like Indigenous people are a joke, the way they engaged in that video, the way the models were, it’s just ridiculous,” Wabano said. “The models are half-naked. That’s not how we engage when speaking about something that is sacred to us, especially the water.”
  • It’s not a good long-term strategy. Donald Trump’s strategy is short-term and based on one thing: winning the U.S. presidential election. This video campaign, and sexy inserts by Ms. Longo, do not make for a good long-term publicity strategy.

On the plus side:

  • Using new media is necessary to attract attention and engage stakeholders. “Attractive women attract eyes,” Frank Smeenk said in an interview. “All junior companies trying to raise capital for exploration are always trying to figure out how to bring attention to their stories.” The rules for communication for listed mining companies are strictly governed by the Securities Commissions to ensure that information is scientifically correct, balanced and fairly disseminated. But mining companies can and do, and should, break out of the press-release-and-slide-presentation cycle and vary the media they use to communicate about their projects, particularly if the information is not market-sensitive but of a generally educational nature. Which media and technology to use depends on the information-accessing habits of their target market. Maybe that would be blogs on LinkedIn. I applaud KWG’s initiative of producing these videos  – at least they are making an effort to break the holding pattern.
  • The market needs to be educated. The Ring of Fire is a region in which many projects have gone bust. It is not without controversy. The content of KWG’s Mining Minute segments is not exactly rocket science, but the fact is that people like to watch people, and the talking heads provide the conduit to convey information about KWG’s projects in the Ring of Fire, and educate the market at the same time. So good on KWG for even trying (though they got the market segmentation wrong).
  • People have said the videos are sexist. Nope, they aren’t.  
    • Sexism means discrimination against people because of their sex: anything unfair to males or females, just because they’re males or females. KWG picked Theresa Longo because she is nice looking and has a lot of Twitter followers, so they have stated. She is not being discriminated against. In fact, I’m sure this was a great job opportunity for her.
    • Video number 23 does pander to a stereotype, however, and in this one video, out of all of them, one could say both women were “sexualized”. But it is debatable whether Ms. Longo’s model looks amount to “sexualization” or whether that is just the way nature made her.
    • The videos do create the impression that KWG values looks more than technical competency. And of course, for this video, they did! Besides, you could say, that in the case of models and beauty queens, beauty is their competency and their currency.
    • This was not an advertised job where candidates competed. There was no discrimination against other candidates. KWG’s people knew Ms. Longo from trade shows and she pitched them the idea, and it worked. And, like KWG’s CEO said, good looks were exactly what they wanted. So she happens to be attractive regardless of what she wears. So what? She delivers her lines carefully, minding her pronunciation and making sure not to fluff. She tries to be enthusiastic when talking about a subject that is not very interesting to mining outsiders.

Despite all the other down-sides, this worked out nicely for both Frank Smeenk, KWG and Theresa Longo. All those competent, good-looking women mining professionals out there, go pitch KWG an alternative concept, and see if they bite. But I don’t think they will.

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