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The media value of activist investors

In our final look at the messy, public coup d’etat mounted by a consortium of activist shareholders against Darden Restaurants, we’re going to have a look at Darden’s media profile throughout the ordeal, and what the conquering activist funds did to exploit it.

Let’s start off by reminding everyone that Darden has a very savvy communications department. Their twitter feed is well maintained. It’s a good balance of infographics detailing successful food-charity outreach programs and vivid pictures that make you hungry. This isn’t a brand-specific twitter feed (not specifically the Olive Garden or Longhorn’s), but rather the Darden Restaurants corporate account.

Sophisticated media presences are to be expected from a company whose name includes the term “Brands”. Darden spent $409M on marketing in 2013, so one can expect that there is a team there with a working knowledge of media and how it’s shared. They’re adept at arranging organic media placement, and seem to wear it as a point of pride, perhaps valuing overall impressions over sentiment of those impressions. A promotion selling a limited number of never-ending pasta cards caused a stir on a few levels after it crashed the Olive Garden corporate website. Some of the cards turned up on eBay, causing more social media chatter, and they hit a late night comedy double with spots in Jimmy Kimmel’s monologue and as the subject of their own Letterman Top Ten List. Darden shared both clips on its website, and clearly considered the promotion was a success.

But understanding how social channels work is expected of companies today. Managing consumer-side stories correctly is boring ‘blocking and tackling’ style work, just waiting to be upstaged by a splashy gaffe. As the activists sharpened their carving knives, they brought up a wise crack Jon Stewart tweeted about the OG’s “Italiano Burger” not fitting with their menu. The number of impressions they were making, their industry-leading brand recognition, the organic content they generated all ceased to matter for a minute as their promotions department was painted as comically out of touch by way of out of context social media jujitsu.


Adding a burger to an Italian casual dining menu is the type of thing that could be seen as innovative if it catches on, and phased out quickly if it doesn’t. But that isn’t the way it works with Barington and Starboard breathing down their necks.

The activist funds made hay, nitpicking the Olive Garden’s every marketing move. High profile brands are easy targets, so journalists tend to pile on. Someone at the Associated Press wrote a readers’ digest version of the Activists’ second-guessing, a wiseacre headline writer had the place telling the Olive Garden “Not to fill up on breadsticks!, and the ordeal became a neat chuckle for editors all around the country as they syndicated it all over the place on Sep. 12th and 13th.


The good work that Darden did to build a media profile didn’t matter. A well distributed critical report and a clever headline had them quite clearly losing media ground right ahead of the crucial vote. The goodwill bought by $409M in advertising, organic placement on late night talk shows and a generally good public sentiment was all undone for what equates to $1,000 worth of banner ad space. And while the casual news reader isn’t likely to be a Darden Brands shareholder with votes of consequences, it would be foolish to think that those voters weren’t paying attention to how the company’s media profile is being managed as they prepared to make their decisions.

data visualization wins investors

Tim Howard

Tim is our CEO at IR Smartt Inc. He leads the strategy and business development teams, driving the company forward. Tim's previous professional experience included extensive work in Journalism and Online Publishing.