State of the Union, GOP debates, economy and B2B

Things suck less than before. Housing over-supply and jobless claims dropping. Travel industry improving. Holidays sparked double-digit surge in tablets, e-readers.

Last night’s GOP debate from Tampa was supposed to be about the private sector’s ability to create jobs that Big Government hasn’t been able to generate the past three years. Instead it came down to two rich guys competing to see who paid more taxes on money they may or may not have earned fair and square through actual “work.”

Gingrich compared himself to Reagan, calling himself "exactly the kind of bold, tough leader" that Americans want, "someone who is prepared to be controversial when necessary." Romney cited his record in running the Salt Lake City Olympics and said Gingrich "had to resign in disgrace" as House speaker after an ethics controversy, a characterization Gingrich disputed. Ron Paul and Rick Santorum, when given a chance to get a word in edgewise, showed they’re smart, thoughtful and experienced. They’re probably too intelligent for the average American voter to get and not well enough funded (or well-connected enough) to stay with the leaders till the finish line. Too bad. But’s it’s nice to see common sense and modesty has made it to the Final Four.

In tonight’s State of the Union address, the Prez will undoubtedly point to great strides his administration has made since he took over the train wreck that was the U.S. economy in 2009. There’s certainly been progress, but how much can be attributed to policies put in place vs. how much has come from the natural corrections a free market economy allows. Housing and excessive private debt, the two biggest scourges of the recession, he'll likely say are finally showing signs of improving. Even cantankerous NY Times columnist, Paul Krugman, was upbeat in his NY Times column yesterday “Is Our Economy Healing?”

But you could also argue that the historical rate of home ownership in the U.S. has been about 60 percent of American households. We got near 70 percent just before the housing bubble burst and are still painfully regressing to the historical mean. Should we be fighting the law of averages or setting better home-ownership policies down the road?

In tonight’s address, we’ll surely hear talk about fixing income inequality, but we’re more concerned here about technology inequality. The Holidays sparked a huge gain in U.S. in ownership of tablets, e-readers. And, the Pew Research Center’s Internet & American Life Report released yesterday said the share of adults who owned table computers nearly doubled overnight to 19 percent from 10 percent in November. The boost in tablet ownership was especially high among college educated folks earning over $75K per year. We suspect the rate of cutting edge technology ownership and systems is also tilted in favor of large business vs. small businesses.

Our take: Whether you’re a B2B marketer, business owner or media outlet, you absolutely must take this mobile data into consideration before you get too far down the road with your 2012 strategy. If you don’t have the budget for mobile and related-platforms, find a way to make it fit.

Jobless claims down

The number of people seeking unemployment benefits for the first time plummeted last week to 352,000, the fewest since April 2008, the Labor Department said. But is that real progress or are companies finally realizing they can’t continue to operate indefinitely with staffs stretched too thin, disgruntled and fatigued?

Separately, the government said consumer prices were unchanged last month, the latest sign that inflation remains tame. Lower gasoline prices offset rising costs for food, medical care and housing. The Federal Reserve projects consumer price inflation will fall from about 2.8 percent in 2011 to roughly 1.7 percent this year. That’s progress, but is it enough to spike a surge in demand?

Travel industry bouncing back

The travel and tourism industry has added about 224,000 jobs since reaching its low point in December 2009 according to the US Travel Association. Meanwhile, hotel occupancy reached 59.8 percent in 2011 (projected to hit 61 percent in 2012), up from 54.6 percent in 2009, according to Smith Travel Research. And the Bureau of Transportation Statistics said full-time jobs in the airline industry finally began to improve last year after 28 consecutive months of decline. No one enjoys flying anymore. It’s a cattle call for most budget conscious consumers and a horrific time drain for most business travelers, but people still need to meet and press the flesh to close business and preserve relationships (whether of the business and familial kind).

Conclusion

Whether you’re a glass half-full or glass half-empty type of person, indicators keep showing that more of your favorite beverage is in the glass than when the current Administration took over. We don’t take sides for any political debate, so you’ll have to decide for yourself whether the private sector can keep the small engine of momentum running by itself, or will it need a continuous helping hand from the government? As we’ve said many times before, things are never as bad as they seem when times are lousy—just as they’re never as idyllic as they seem when we’re flush with cash, customers and back orders (or waiting lists) for our services.

If nothing else, now is the time to hit the gas on your marketing, hiring and expansion plans, before the tsunami of pent up demand leaves you in its wake.

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Too Many Gadgets, Too Little Time

Will 2012 be more volatile than 2011? (take insta-poll). Encouraging economic signs

Do we have gadget fatigue?

According to a new study from Underwriters Laboratories (UL), the nonprofit product testing and certification organization, 48 percent of consumers of 1,200 surveyed consumers—ALMOST HALF—believe high-tech companies bring new products to market faster than people need them. Is the pace of innovation too fast for consumers? Are companies rushing new product out the door just to keep up with their competitors (versus consumer desires). The report found the at U.S. manufacturers value “speed to market” more than any other criteria. In a New York Times interview, UL’s chief strategy officer Sara Greenstein quipped that “innovation is too fast only if corners are cut.”

Apple sold about 40 million iPads in 2011—no surprise there despite being the most expensive offering on the market, by far. But, non-tech manufacturers such as Amazon (Kindle) and Barnes & Noble (Nook) managed to sell 30 million e-book readers in 2011. That’s a 108 percent increase over 2010, according to I.H.S. iSuppli. E-book readers have far fewer features than pure tablets, but analysts say the line is blurring between e-books and tablets. Forrester Research says Amazon (Kindle Fire) and Nook Tablet managed 7 million sales combined in Q4 of 2011.

Our Take: Sales of the hybrids represents a low-cost interim step that could be chalked up to budget-conscious Holiday shoppers as much as to true consumer demand. If you’re designing creative for the on-the-go consumer, focus on pure tablets and mobile devices. Also make sure you don’t confuse “adoption rates” from regular usage rates. For instance, British consulting firm Arieso found that the heaviest one-percent of mobile users account for 50 percent of the world’s traffic and the heaviest 10-percent of users account for 90 percent. Arieso also found that two thirds (64%) of “extreme” users were using a laptop, whereas only one-third were using a smartphone and 3 percent had an iPad.

Why taking a break from our electronic devices is healthy and productive

New York Times columnist Nick Bilton offers good food for thought in his latest rant about technology addiction.

“Our brains often need to become inattentive to figure out complex issues,” according to Jonah Lehrer, a neuroscientist and author of new book “Imagine How Creativity Works. University of California psychology prof, Jonathan Schooler, said daydreaming and boredom seem to be a source for incubation and creative discovery in the brain and are part of the creative incubation process.”

Will 2012 be more volatile than 2011?

Take our InstaPoll and see how your peers feel.

Encouraging signs on the economic front
• Companies added 325,000 workers last month, the highest monthly tally in more than 10 years according to ADP
• The Labor Department said the economy has added 2.4 million jobs since hitting its low point in February 2010
• Weekly applications for unemployment benefits dropped to 372,000—11 percent lower than
this time a year ago the Labor Department said
• Manufacturing companies have added—not cut—jobs for two consecutive years. Before last year, manufacturing haven’t added jobs since 1997 the Department said.
• The number of Americans who signed contracts to buy homes in November rose 7 percent, to
the highest level in 18 months according to the National Association of Realtors.
• Also 12/21 a Thomson Reuters University of Michigan survey of overall consumer sentiments
showed a substantial jump to 69.9 in December from 64.1 (a 9% gain) and The Conference Board’s Leading Economic Index rose to 118 points—it’s seventh consecutive monthly gain.

As Isaac M posted last week on our blog: “I'm a small business owner, running a technology consultancy for schools. Over the past year, my numbers have become significantly better, private and public schools are doing a lot of buying, and America's getting back up on its feet from where I see it!”

Let’s be smart—not blindly optimistic--in 2012 and hope Issac is right.



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