Selling your brand image for advertising purposes is inherently dangerous: the consumer ’s view of the product you agreed to help peddle affects your own brand image, and sometimes one bad apple can ruin your image completely.
In today’s world of online marketing and email newsletters, companies put more on the line than ever before. Allowing advertisers to send ’special alerts’ to your E-list too often and your list becomes worthless as members simply delegate all of your messages to their spam.
The quality of the advertising itself is also an issue, especially when you put your own brand name at the top of the email. Online corporations that market other online corporations without regard to the advertisement’s authenticity or quality but only the whether the check clears the bank run a high risk of their own brand image becoming suspect.
Newsmax is a prime example of a company that makes both of these mistakes.
Newsmax not only uses their email list to send an annoyingly large number of advertisements to their subscribers daily under the guise of ‘Newsmax Specials’ or ‘Alerts,’ they seem to not care to screen their advertisements for quality at all. Sure, at the end of the day it is the advertiser’s responsibility to make sure that their ads aren’t fraudulent, but Newsmax practically stakes their entire reputation on these ads without double checking them.
About a week ago Newsmax sent me an advertisement featuring energy analyst John Myers and his latest recommendation, Tamm Oil and Gas (TAMO). Who John Myers is and whether or not he is an Energy Analyst I don’t know, but at the very least his analytical skills are of dubious quality. It took me less than thirty seconds to decide that the email was a ploy to make the advertiser some quick dough, and just a few minutes (thanks to the very helpful tools at MSN Money Central) to reassure myself that I wasn’t missing out on the deal of a lifetime.
TAMO formed out of Hola Communications (not sure how the industries relate, but it seems their then new CEO was a Canadian Energy speculator), and owns a large selection of Oil Sands in Canada. The first red flag? Oil Sands are only profitable if Oil prices go way up and stay there, a possibility as China’s oil appetite grows but not a done deal. TAMO’s oil sands are undeveloped, but according to their website they are currently in the process of test drilling and getting ready to move dirt. On their latest SEC filing TAMO claimed about $10k cash (no real change from the third quarter, or for that matter any quarter they’ve filed) with no outstanding debts. Now I’m not an Oil Sands engineer, but it seems to me that a company doing oil sands explorations and testing is going to have heavy operating costs, so no debt and no cash: second red flag.
One possibility is that TAMO’s costs are low because they own their own exploration, drilling, and testing equipment. However, also according to their latest SEC filing the company’s total hard assets (equipment, furniture, computers, etc) amounts to a whopping total less than $400: third red flag.
And for a last note about their finances, TAMO declares the value of their Oil Sands properties as ‘unevaluated,’ but they had no problem increasing their properties’ estimated worth from $4million to nearly $17million: fourth red flag.
With all the above in mind, it was no surprise to read the very fine print at the bottom conveniently difficult to read that said:
“this paid advertising issue of John Myers (hereafter “MYERS”) does not puport to provide an analysis of any company’s financial position or prospects and is not to be construed as a recommendation by MYERS and is not in any wat to be construed as an offer or solicitation to buy or sell any security. Tamm Oil & Gas Corp. (hereafter “Tamm”), the company featured in this report, appears as paid advertising in an effort to increase industry and investor awareness.”
I’m not surprised that I received a spam email purporting to guide my wallet to riches, but I am concerned for Newsmax’s sake that they risk their reputation as a Conservative news organization of decent repute by allowing their advertisers to peddle horrible financial advice under their banner.
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James Thoburn is a student at the University of Chicago. He created Backyard Politics to bring together individuals interested in actively participating in the political discussion without giving up their day job. His other interests include running, golf, and music.
Hey I clicked on your page by chance on yahoo while hunting for something completely irrelevant but I am very glad that I did, You have just captured yourself another subscriber.