Client: RiskMetrics Group (New York)
PR Team: The Rosen Group (Cherry Hill, NJ)
Campaign: Analysts' Price Target Study
Time Frame: July 2001 - ongoing
Budget: $9,000/month retainer
Making abstract concepts tangible to the average person is never easy. This was the challenge The Rosen Group faced when new client RiskMetrics Group asked for help building its exposure with the mainstream business press - and its expectations weren't modest.
"They wanted The Wall Street Journal and CNBC, says The Rosen Group's VP John Roderick.
RiskMetrics is a consulting firm that produces software that analyzes and determines levels of risk within financial markets and investment portfolios. The firm, which was spun off from JP Morgan in 1998, builds software using complex statistical models designed to assess the probability of certain events within markets - the kind of esoteric math work that can scare off the most avid business-pages reader.
While RiskMetrics had become a household name within the cerebral niche of financial risk management (such as economists, hedge fund managers, and central bankers), the company was absent from the radar screens of individual investors.
RiskMetrics wanted to raise both its own profile and that of risk management to the level of the individual investor, making RiskMetrics the established thought leader in the area of risk management in the financial press.
While the firm does not sell its software to individual investors, institutions that deal with consumers, such as brokerages, may use it. Therefore, it seemed important to have small investors aware of RiskMetrics.
The Rosen Group thought the best way to establish RiskMetrics as a thought leader and put the issue of risk in the financial pages was to link the firm's work to something both timely and tangible to the average investor.
"It needed to be something easily understood, says Roderick. "We had to take it from the math to the emotion."
It was July 2000, and the topic of conflicts of interest surrounding the ratings of so-called sell-side stock analysts at the major investment banks and brokerages was just starting to make headlines. While it would take a few more months before the conflicts involved in Wall Street's stock-rating system would erupt into a full-fledged scandal, The Rosen Group saw that analysts were beginning to draw serious ire from investors and the financial media.
Among the analysts' more controversial practices was the publishing of so-called price targets for stocks (prices that analysts said stocks were likely to hit in the near future). The targets were usually extremely bullish, and were often based on very generous assumptions.
The Rosen Group decided to have RiskMetrics test the likelihood that these targets would ever be realized. RiskMetrics' models found that 46 stocks were carrying price targets that had less than a 20% chance of ever being hit. In a market where analysts were increasingly scrutinized, such results would likely interest the financial media.
"We knew these results were sexy, says Roderick.
The Rosen Group took the findings to New York Times financial reporter Gretchen Morgenson, who had begun to cover the stock analyst issue. She wrote an August 2001 story based on the study, and seemingly overnight, RiskMetrics was all over the business pages.
Morgenson was awarded the Pulitzer for business reporting earlier this year. The Times cited her coverage of analyst conflicts as a main reason for her award.
Since her article, RiskMetrics pros have been cited as thought leaders in the area of risk in a plethora of top business publications, including The Wall Street Journal, Fortune, BusinessWeek, Barron's, CNBC, and CNN/fn.
Roderick says the campaign is ongoing, and RiskMetrics continues to be sought by the press as an established thought leader in the field of risk management.