Philip Pearson, co-manager of the GLG Technology Equity fund, says:

“We will be looking to participate in the IPO and already effectively have a stake through our holding in Mail.ru, a publicly listed Russian social network whose stake in Facebook is worth around 1/3rd of its market cap.

“The debate about the value of Facebook tends to focus on short term user trends, revenues and earnings but fails to spot the key attraction. That is the fact that, to an advertiser, the price you pay “per eyeball” on Facebook (or just as importantly on display ads where you are logged in to your Facebook account ) is roughly 1/10th the price you pay for that eyeball on TV ads. This appears to be way too low when you consider how much more you know about the Facebook user than you know about the demographic watching a TV show. As this price gap collapses, we should see dramatic growth in Facebook’s revenue and much of this will drop through to the bottom line. When you model that through, even at $100bn Facebook looks significantly under-valued.”

Openwork is to launch an ‘App’ enabling advisers to obtain protection quotes via Apple mobile devices, as part of its on-going drive to ease the way in which network members are able to write business.

Developed in conjunction with Assureweb, the Openwork-branded App, unveiled at the 2012 Openwork National Conference in Birmingham on 19 January, will allow advisers to access quotes from Openwork’s panel of protection providers, Openwork Select, or from its single-tie proposition, Zurich Plus.

Users of Openwork Select will be able to obtain quotes via the App from all five providers on the panel – AEGON Scottish Equitable, Friends Life, Legal & General, Zurich and Liverpool Victoria (LV=).

The App, which can be downloaded to the iPod Touch, iPhone and iPad, will be made available to advisers in mid-February.

Paul Shearman, Mortgage, Protection and General Insurance Proposition Director, says: “Tablet use has been rising across the network and the App will significantly enhance the accessibility of protection quotes for our advisers as part of our on-going ‘ease of doing business’ initiative.”

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With all the media attention viral videos (videos that typically become popular through internet sharing) are getting at the moment, MRM’s Dan Sherville looks at how they can work for, and sometimes against, your brand

Have you seen the video about Fenton? What about the one on a Scottish train? Or maybe the new John Lewis advert? Chances are you probably have, over eight million people have watched them within a matter of weeks, and the figures don’t seem to be slowing.

Viral videos, like the ones above, are starting to reach much wider audiences than ever before.  As more and more news publications pick up on internet crazes, viral videos are starting to gain a fair few column inches. As an example, the Fenton video was covered by The Telegraph, BBC, Mirror, Metro and the Guardian in the weeks following its release. The video that captured a commuter throwing Sam Main off a Scottish train has gained similar notoriety, prompting an investigation in to the identities of the two men, and again, has featured heavily in the press this week (Telegraph, Daily Mail, BBC, The Sun).

The common feeling that ‘everything you do these days will end up on the internet’ seems to be coming true, and it’s starting to have an impact on organisations as well. One of the most successful viral campaigns of late has been the Old Spice series of adverts. For a brand that has long been associated with dull products for elderly men, their radical viral campaign has amassed them hundreds of thousands of new followers, been viewed by over 250 million people, and completely transformed their brand. The campaign seems to have paid off financially for the firm as well. When their first video went viral – accruing millions of views in the process – sales of the company’s body wash rocketed 107% in a month, and continued to help revolutionise their brand image (see infographic for more details).

However, not all viral videos can be good for business. When musician Dave Carroll discovered that his $3500 guitar had been broken by United Airlines and he wasn’t eligible for compensation, the song and hit video ‘United Breaks Guitars’ was born.  The video attracted 150,000 hits on its first day, and is a perfect example of how viral videos can work against your brand.  The Times reported that within four days of the video being posted, United Airlines’ stock price fell 10%, costing shareholders $180m.

So what makes a video go viral? Well YouTube seem to think they’ve cracked the code, so much so that they now employ a team that specialises in spotting videos that are likely to go viral so they can offer their Partner Programme to the uploader early on, in the hope that the video becomes a hit.

Viral videos are rapidly becoming another method of spreading brand awareness. They’re catching on like wildfire and all sorts of businesses are trying to get involved. They are quickly becoming another tool in a company’s social media campaign, and can make or break your brand.

Following the FSA’s recent stance on the use of Twitter, and the government’s calls to restrict Facebook and Twitter during times of civil unrest, MRM’s Dan Sherville looks at the new ways of consuming media and how they are changing

Throughout the chaos of the recent London riots, what struck me as quite surprising was where I had turned for updates, and how I was getting information in amongst all the confusion – I had gone to Twitter.

A couple years ago I wouldn’t have even considered Twitter as a reliable source of information, but during the riots I was completely glued to my feed, franticly trying to find out the latest news and goings-on.  And it seems as though many of you are doing a similar thing. Research from MRM’s very own Michael Taggart found that in a count of the weekend’s national newspapers, there were 247 mentions of the word ‘Twitter’, a good indicator that journalists are becoming ever more obsessed with the social media tool.  Similarly, the public’s interest doesn’t seem to be slowing down either, roughly a year ago users were generating around 65 million tweets a day, and now the figure is closer to 200 million.

Why does this matter?

Twitter is rapidly becoming an influential force in its own right, and the media appear to be taking full advantage. All you have to do is a quick search for #journorequest to see that more and more journalists are using the social networking service for case studies / quotes / news and even job offers.

The way we search and consume media is clearly changing quickly. Ofcom recently published their annual communications report which found that nearly half of UK adults said they used social networking sites in the first three months of 2011, and just under a quarter of mobile internet users are accessed news and information on a daily basis in April 2011, compared to just 10% the year before. Similarly, where PC usage mainly consists of search engines and email, the most commonly used service accessed on mobile phones is social networking, used by 57% of mobile internet users.

However, internet usage is not just increasing with consumers, advertisers are spending more and more each year, especially the financial sector which, as a proportion of overall advertising spend, saw an 11 percentage point increase from 2009 to 2010.

The social media effect is also changing the way journalists report breaking stories. Reporters such as Mark Stone (@Stone_SkyNews), Paul Lewis (@PaulLewis), Billy Kenber (@billykenber) and Andrew Hough (@andrew_hough) were all seen to be tweeting live during the riots in London, and were following up with full articles the following day. On many occasions, the above journalists were beating most of the 24 hours news services to the scene and were distributing video content long before the television crews had arrived.

What does this mean for the media?

In light of this, many publications are shifting their approach from the more traditional methods of print media, to a much more technologically involved system. The Guardian for example has fully engaged itself with ‘live update feeds’ in which news is reported in a similar fashion to tweets – short comments updated on a regular basis – to keep their readers informed on events as they happen. Recent examples of this include the blogs covering the uprising in the Middle East and North Africa and live coverage from the 2011 Labour conference in which comments were being posted from competitor publications, twitter and from journalists on the scene.

Perhaps the lines are starting to blur between print and rolling 24 hour TV news, or maybe there is no such thing as a media deadline anymore because of the live nature involved with Twitter and newspaper websites. In any case, everyone is talking about Twitter, YouTube, LinkedIn, Facebook etc, and the UK’s most influential people are now on the social web. It is clear that the industry is evolving, and since the public has access to so much freely available information now, journalists, PRs and consumers alike need to evolve too in order to keep up.

Openwork will support the charity – set up on the initiative of Her Royal Highness The Princess Royal in 1991 to help carers gain recognition and provide them with the support required to meet their diverse needs – in the form of a £50,000 a year grant from the Openwork Foundation, the network’s community programme.

The grant, which will run from 2012 to 2014, will create two new funding programmes for young carers: Opening Doors and Respite Break. ‘Opening Doors’ is aimed at identifying hidden young carers to enable them to access the charity’s services; while ‘Respite Break’ is a focused programme to allow those undertaking the heaviest caring roles to attend a relief break aimed at increasing their self-awareness and identifying their aspirations.

The Openwork Foundation was established in 2005 and is funded and supported by Openwork’s staff and advisers.

Commenting, Sam Tesch, Openwork Foundation Manager, says: “The Princess Royal Trust for Carers has done invaluable work for young carers over a long period of time and we are very pleased to be able to offer them our support for the next three years.”

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Twenty-three cyclists set off for Jordan in October and cycled 320km in four days across the Arabian desert, from Madaba in the north to Aqaba in the south, raising money to support disadvantaged children and young people in the UK and overseas.

Northern Rock and Just Retirement were the key sponsors and the Jordan cycle expedition was the Foundation Group’s first multi-event challenge, including a day trek in Petra at extreme temperatures – ranging from 40C during the day to just above freezing at night.

The Jordan expedition was the 11th overseas Cycle Challenge embarked on by the Openwork Foundation – which aims to support some of the most disadvantaged people in society and enable them to lead more independent lives – under its theme ‘Cares 4 Kids’. Last year the Foundation was able to fund grants for £400,000 to charities nominated by Openwork staff and advisers, helping over 13,000 children.

The Foundation team in Jordan included Brian Harding, Devesh Ambasna, David Harvey, Dominic Chapman, Nick Paling, Mike Elworthy, Adam Roberts, Phil and Sonia White, Neil Hurrell, Tex Nagra, David Ridley, Sam Tesch, Jon Gunter and Ramon Puig.

Commenting, Sam Tesch, Openwork Foundation Manager, says: “Completing the Jordan challenge was tougher than we expected. We cycled and trekked in forty degree temperatures over the mountainous Arabian desert.  Sleeping in an open beduoin tent was another challenge but helped bond the team and although the journey was both mentally and physically stretching, the knowledge that we were raising money for those less fortunate kept us going. On behalf of the Foundation and our team of cyclists I’d like to thank everyone for their generous donations.”

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“There is some respite for the authorities in today’s UK inflation data in that in contrast to the recent past we haven’t had an upside surprise.  Absolute price levels for goods and services though remain at much higher levels than a year ago. The Consumer Price Index has come in as most people in the market expected at 4.8% year on year, however, the Retail Price Index at 5.2%% remains at painful levels.  The outlook for 2012 on inflation is better – inflation will fall – but there is still a lot to do before we get to more acceptable price rise levels, with much scope for disappointment on the way.

“Inflation data has also been released across the EU today. In contrast to the UK statistics the picture there has revealed more price pressure than expected.  Despite the turmoil in Europe and evidence that economic activity is slowing fast, inflation is reported today as exceeding commentators expectations in France, Sweden and Hungary.”

The pair, co-managers of the GLG Technology Equity Fund, say Amazon’s decision to sell the Kindle Fire at $199 – which represents a loss on every unit sold – marks a sector-changing shift, likely to force many companies to reconsider their business strategies and current place in the technology ecosystem.

“Amazon is forecast to sell six million Fire tablets in Q4 and it will make a loss on every single one of them – its initial margin is negative,” says Burton. “It can do this because it has alternative revenue streams – it can sell you Prime and other digital content. Amazon is prepared to sacrifice short-term earnings in the belief it will recoup its lost operating margin and ultimately make more money by boosting its total future addressable market via quality content. Reports are that the price in the UK will also be a loss-making £100, when the Fire goes on sale here in January. Business models like this are destructive to the whole industry. However, it shows that proprietary content is where the value lies and that is where the fight will be over the next six to 12 months.”

Following the launch of the Kindle Fire, the managers say companies caught between Amazon and Apple – which own comparable portfolios of assets (high value content, devices and cloud propositions) – will, in future, require a credible strategy to survive the structural shift to content ownership. “Amazon selling boxes at a loss leaves the Asian supply chain companies holding their head in their hands,” says Pearson. “The middle ground of box vendors could be wiped out. Even some of the integrated vendors that might have benefited from the shift to mobile computing are now falling into the ‘loser’ camp. Structurally, the number of companies who will be writing cheques to own and distribute content is going to increase exponentially.”

Those businesses already in possession of high quality content are, if relatively limited in number, well placed to benefit from this structural shift, say the managers. “Disney has a lot of proprietary content – past and current – from which the bulk of its value derives,” says Burton. “Netflix will also profit from this shift while ITV is a company working hard to make more content. But we do not think any of this value is reflected in the numbers just now.”

Nor do the managers believe most sector analysts understand the true impact on valuation models of the broader shift to mobile connected computing.

“Short-term earnings multiples have been blown out of the water,” says Pearson. “Investors have to realise that there has been a terminal value shift and that means you have to look four or five years out, not at a company’s one-year forward price-earnings ratio, which is what Wall Street likes to do. Many of the structural losers in the sector look cheap on a one-year earnings basis but this ignores the erosion of their future market opportunity. You only have to look at Amazon’s readiness to sacrifice short-term earnings with the Fire to understand that valuing technology businesses on a 12-month basis is meaningless.”

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The promotion means Shaw becomes joint manager on the Kames UK Equity Fund along with Stephen Adams, its head of UK equity. The Kames UK Equity Fund aims to maximise investor’s total return from capital and net income from a portfolio of UK equity.

Shaw’s promotion is part of Kames Capital’s stated aim of recognising and rewarding success and talent across its business.

He is currently joint manager with Audrey Ryan on the Kames UK Opportunities Fund and is the manager of the institutional Kames UK Equity High Alpha Fund.

Shaw’s new role is effective from 1st January 2012.

Kames Capital head of retail sales Steve Kenny says: ‘I would like to congratulate Peter on his promotion to joint fund manager of the Kames UK Equity Fund. It is excellent recognition of his abilities and his value to the business.

‘It is a further endorsement of how as a business we recognise, reward and nurture our talent. It also underlines why our award winning UK equities team* continues its success in achieving excellent performance across our range of retail funds.’

Encompassing a number of Openwork Enterprises with valuation businesses, the survey proposition will enable advisers to introduce clients to a choice of dedicated surveyors, thereby ensuring their clients are fully aware, briefed and prepared with the knowledge of their prospective purchases and accordingly more able to make a sound financial judgement as they continue on their property buying journey. Currently, a significant proportion of buyers simply accept their lender’s valuation survey, which does not necessarily include a comprehensive inspection of the property, as proof that the building is in good repair and a sound investment.

Metropolis Surveyors, Openwork’s largest valuation business, will be the lead valuer in the proposition. Operating a network of around 70 employed and consultant surveyors in England and Wales, Metropolis is owned by the Enterprise Kings Group, one of the UK’s largest independent estate agency and lettings businesses.

Commenting, Paul Shearman, Mortgage, Protection & General Insurance Proposition Director at Openwork, says: “Home buyers often remain unaware of potential problems with their property until after completion, which in the case of structural defects can cost thousands of pounds to rectify. Our survey proposition will help our advisers overcome this problem by giving them greater control over the buying process while ensuring their clients have the best possible information when making what is one of the biggest financial decisions of their lifetime.”

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