Let’s Not Confuse Job Creation With Need to Get Work Done on Cusp of 9/11

US slips to 5th on world competitiveness scale. Obama jobs plan holds opportunities for marketers

As we tap out this post, U.S. stocks are down about 3 percent today wiping out a brief rally earlier in the week. Experts point to fresh euro-zone sovereign-debt worries, the surprise resignation of an ECB board member and concerns about Obama's jobs plan unveiled on national TV last night. Let’s not confuse “concerns” with “uncertainty” about the plan, which sounded pretty good to us, if you don’t worry about how to pay for it.

At the core of his plan are two cuts in the payroll tax — one for employers and one for employees —The employee cut would reduce the tax to 3.1 percent of income instead of the 4.2 percent negotiated last year. If passed, it will put money in people’s pockets quickly and increase consumer demand. As marketers, you need to be ready to pounce on this.

For employers, the plan would halve the payroll tax for most small and medium-size businesses and would provide an incentive for hiring by temporarily removing the tax for new employees (and on raises for existing ones). Companies would also get a $4,000 tax credit for hiring anyone out of work for more than six months. Unemployment insurance would be extended for five million people. We were also encouraged by proposals to continue unemployment benefits for those legitimately starting new businesses. The dream of a safe steady corporate (or government) job, with benefits and a pension is fast fading into the rearview mirror and not likely to come back.

We’re hoping this crisis gets us back to our entrepreneurial roots and makes it easier for small businesses and independent contractors to be part of the mainstream—not outliers who continue to be treated as second class citizens by lending institutions and healthcare providers. More and more work in our service driven economy is going to be project-based, not permanent and we all need to learn how to hustle.

Again, you need to be ready to pounce on this pent up demand because the surge may not be sustainable, but it will be a surge nonetheless.

U.S. slips to 5th on world competitiveness scale

The United States is slipping and emerging markets are improving, but European economies still dominate the list of the most competitive economies in the world, according to a World Economic Forum report released Wednesday.

For the third consecutive year, Switzerland ranked first in the forum’s annual competitiveness survey, which assesses countries based on 12 categories including innovation, infrastructure and the macroeconomic environment. The US, which topped the list in 2008, continued its decline, also for the third year in a row. The weaker performance was attributed to economic vulnerabilities as well as “some aspects of the United States’ institutional environment,” notably low public trust in politicians and concerns about government inefficiency.

OUR TAKE: Unacceptable--regardless of whether or not you believe in the methodology of the survey.

The results show that while competitiveness in advanced economies has stagnated over recent years, it has improved in many emerging markets, the Geneva-based forum said.
“Much of the developing world is still seeing relatively strong growth, despite some risk of overheating, while most advanced economies continue to experience sluggish recovery, persistent unemployment and financial vulnerability, with no clear horizon for improvement,”
Klaus Schwab, founder and chairman of the forum, said in a statement. China, ranked 26th and up one place from a year earlier, was the highest placed of the large developing economies. Among the other major emerging economies, South Africa was 50th, Brazil 53rd, India 56th and Russia 66th.

The rankings take into account 12 categories: institutions; infrastructure; economic environment; health and primary education; higher education and training; goods market efficiency; labor market efficiency; financial market development; technological readiness; market size; business sophistication; and innovation. The deck should really be stacked in our favor.

What the business gurus suggest

A recent Wall Street Journal CEO Council
roundtable of business leaders had some interesting suggestions for getting America back to work. For your convenience, we stripped the corporate PR spin to serve up some nuggets to ruminate on over this weekend of self-reflection.

No surprise, the CEOs want lower corporate taxes in the U.S., which has among the highest tax corporate tax rates in the world, and a moratorium or a rollback of business regulation.
"The government needs to be a better partner with the business world," said Magellan Health Services CEO Rene Lerer, echoing a sentiment expressed by many.
Yet the CEOs also exhibited a practical streak that is often absent from the Washington debate, and a willingness to embrace compromise. Terry Marks, president and chief executive of The Pantry Inc., which operates convenience stores that sell gasoline, even suggested an increase in the gas tax "to invest in transportation infrastructure."

"We have to confront reality," wrote Roger Wood, chief executive of Dana Holdings Inc., the auto-parts company. "Political infighting and seemingly disparate objectives...are keeping the U.S. from finding real solutions to real problems."

The members of the CEO Council, which includes global companies some of which are domiciled abroad, generally agreed that indebted U.S. consumers can no longer drive economic growth in the U.S., and impetus will need to come from developing countries. As a result, they urged the U.S. to embrace global free trade, and make changes that will encourage the growth of export industries here. Many of their recommendations focused on developing human capital as the key to global competitiveness.

"Create more charter schools and teaching jobs for young graduates," wrote Thomson Reuters CEO Tom Glocer. "Train more engineers and German-quality skilled labor." Several also called for reform of the immigration system, to allow more skilled professionals to live and work in the U.S.

Encouraging innovation in the U.S. was also a common theme

Klaus Kleinfeld, chairman and CEO of Alcoa Inc. called on the U.S. to "reignite innovation" by creating regional alliances that join local governments, universities and investors to spark new business creation, and to invest in "research and development clusters" in areas like clean energy and life sciences. He and others also recommended an overhaul of the patent system, to reduce backlogs and address inefficiencies and the growing problem of "patent trolls."

Several of the CEOs also counseled patience. Deleveraging, they pointed out, takes time. "Slowdowns are to be expected after the rapid pace of growth in the world's economies over the past couple of decades, and businesses should take advantage of the time to re-focus on the basics and prepare for the resumption of growth," wrote Jack Ma, CEO of the Alibaba Group, the Chinese Internet company. "It's like Tai Chi [the Chinese martial art]—sometimes you need to go slow in order to go fast again."

Klaus Kleinfeld, CEO, Alcoa Inc said ."Confidence is like the air the economy needs to grow and thrive. We need a positive, forward-leaning message from the president—and business leaders—aimed at the real challenge: improving American competitiveness and fostering growth and innovation."

Brent Saunders, CEO, Bausch & Lomb Inc. quipped: "Institute a lower corporate tax rate to encourage domestic investment including incentives to invest capital and conduct research in the United States. The U.S. corporate tax rate is on average ten percentage points higher than other world economies, which is a key factor in driving corporate investment overseas."

Jack Ma, CEO, Alibaba Group: "Put your trust in young people and in small businesses. Young people will bring the new ideas an innovations that will create a brighter future. Small businesses are the backbones of the world's economies in terms of employment, tax base and overall contribution to society, and in some cases they are tomorrow's big companies."

Rene Lerer, M.D., CEO, Magellan Health Services: "The government needs to be a better partner with the business world. There needs to be a concerted effort to create jobs throughout the country through a governmental-private partnership. The corporate community needs predictability and support. If we can move forward with the philosophy of "no surprises" with clear and predictable guidelines and support that would go a long way."

George C. Halvorson, chairman and CEO, Kaiser Permanente: "Health care costs are damaging the total economy and destroying government budgets. We spend twice as much money buying care as any other country on the planet... We need to significantly improve the processes of care delivery to the point where we get better care for less money than we spend now. "

Bold talk and great ieas. Can they back it up when the quarterly pressure’s on to deliver the numbers they need to appease their analysts and stakeholders?


VCRGD6XDXT3T

Smart Marketers Find Opportunities in Slow-Growth/No-Growth Economy

Thought leadership, content marketing leads the way when already long sales cycle gets even longer. QR codes can help, but no one size fits all solution.

Today’s ho-hum Labor Department report for August show the U.S. economy neither added nor lost jobs during the month, the worst performance since last September. Cuts in the public sector entirely offset the private sector's gain of 17,000 jobs. Figures from earlier months were also cut, due largely to steeper cuts by government. The unemployment rate remained unchanged at 9.1 percent. The economy does have some bright spots: Weekly filings for jobless claims remain relatively steady rather than signaling a pickup in layoffs. Sure, spending activity has slowed, but consumers boosted their spending ahead of the August maelstrom of events. And businesses, while nervous, haven't panicked in a way that would create a self-reinforcing downward spiral.

Government stats show the private sector actually added an average of 83,000 jobs over the past three months. That ain’t going to turn the economy around but, economists say the pace suggests continued slow growth ahead.

Home prices and consumer spending show signs of life

The S&P/Case Schiller Home Price Index http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----
increased 3.6 percent in the April-June quarter and consumer spending in July rose 0.8 percent-- its fastest rate in five months. Economists pointed to strong demand for motor vehicles which shows confidence to make significant, fairly long term purchases. OUR TAKE: If nothing else that should ease some concerns that we’re sliding into another recession. You don’t need to be a PhD economist to know we’re simply stuck in a slow-growth, frustrating, wait-and-see, spin your wheels, don’t-take-on-any-big risks economy. It doesn’t mean folks (and companies) aren’t spending. It DOES mean the sales cycle and purchase consideration cycle is longer. That’s where thought leadership and content marketing comes in as we’ve pointed out in earlier posts.

New data on content marketing/thought leadership

More than 90 percent of marketers believe content marketing is effective at helping them achieve their search engine optimization (SEO) goals according to a new benchmarking study from research firm Marketing Sherpa http://www.marketingsherpa.com/ and Internet Marketing Report maintains that “content marketing is quickly becoming the most effective way to ramp up business on the web,” especially with regard to SEO, Email and social media. The Marketing Sherpa report says content marketing is most effective when in Educates, Builds Trust and Speaks to Success. Help prospects solve problems

If nothing else, your prospects are looking for information that will solve their problems, boost their business and make their lives better. Sherpa researchers report that the 5 most effective forms of content marketing are the tried and true ones:
· White papers
· Newsletters
· Survey data
· Blogs
· FAQs

QR Codes Best in Magazines, Newspapers & Packaging
Young males affluent most likely to jump on QR bandwagon

A new comScore study on mobile QR (Quick Response) code scanning readable by smartphones, found that 14 million mobile users in the U.S., representing 6.2 percent of the total mobile audience, scanned a QR code on their mobile device. Who’s scanning the most on their mobile devices? Researchers, no surprise, said it’s the young, male, affluent audience: male (60.5% of code scanning audience), skew toward ages 18-34 (53.4%) and have a household income of $100k or above (36.1%).

More than half of all QR code scanners were between the ages of 18-34. Those between the age of 25-34 were twice as likely as the average mobile user to engage in this behavior, while 18-24 year olds were 36% more likely than average to scan. More than 1 of every 3 QR code scanners had a household income of at least $100,000, representing both the largest and most over-represented income segment among the scanning audience.Among mobile users who scanned a QR code on their mobile devices in June, 58 percent did so from their home, while 39.4 percent did so from a retail store and 24.5 percent did so from a grocery store.

The most popular source of a scanned QR code was a printed magazine or newspaper, with nearly half scanning QR codes from this source. Product packaging was the source of QR code scanning for 35.3 percent of the audience, while 27.4 percent scanned a code from a website on a PC and 23.5 percent scanned codes from a poster/flyer/kiosk.

So as we slog through this slow-growth economy, keep experimenting with new ways to drive your message home, but remember patience, and disciplined persistence will keep you top of mind with prospects—and content marketing that educates, builds trust and speaks to success will get you in the door.

Happy Labor Day.

VCRGD6XDXT3T

Blogging Remains Top B2B Content Marketing Tactic

Whatever is old is new again. Timeliness and relevance still reigns in this instant message, zero-attention span environment.

What’s the top B2B content channel to support your primary marketing objectives? Facebook? Twitter? Youtube? Webinars? Actually it’s blogging, the good old fashioned workhorse of business thought leadership, according to a new Focus Research report on the challenges and priorities of B2B marketers.

According to researchers, nearly two in five (39%) B2B marketers cited Blog Posts as their No. 1 type of content to support their primary marketing objectives. Webinars and Virtual Events came in next, cited by 38 percent of respondents, followed by Industry Whitepapers (31%), Videos (23%) and Data-Driven Research Reports (20%).

OUR TAKE: This research shouldn’t surprise you. In today’s fragile “wait and see” business climate, sales cycles have gotten longer. That’s increased the need to keep your prospects engaged during the consideration phase of the sales cycle. To that end, smart marketers are providing valuable content to decision-makers and influencers at their target customers. Blogs have been particularly successful as they can be updated and delivered much faster than a webinar, video or white paper—but with a lot more “meaty content” than a banal twitter post or Facebook “like.”

Blogs drive traffic and search results

Hubspot’s latest study shows that the number of companies actively blogging has grown to 65 percent today from 48 percent in 2009. Here’s why. Researchers found that companies that blog have 55 percent more visitors, 97 percent more inbound links and 434 percent more indexed pages than companies that don’t blog.

But, I’m not a writer

You don’t have to be a journalist—or hire one on staff—to create a meaningful blog for customers. You just need to show customers you understand their pain points and can help them solve their problems. If you understand your market, you’ll never run out of material. You can alternate an opinion post one week with a customer testimonial the next week, with an employee (or product) spotlight the next week with a short how-to article the next. Still not enough? Then try linking out to articles or research in the trade publications your prospects follow and then comment on the article with your authoritative spin on whether you agree or disagree with the findings.

“Blogs are a great way to get your name out there as a thought leader—and search engines love them, Bill Sheridan told us over coffee the other day. Bill is the editor and electronic communications manager of the Maryland Association of CPAs a very progressive professional society when it comes to connecting with members in this electronic age.

So don’t worry about being a writer, or even a hotshot blogger. Just be the expert in your target niche and if nothing else, be the best friend of your customers, prospects and decision-influencers at your target companies. Give them some ammunition to convince their boss, CFO or board and they’ll be your advocate for life.

VCRGD6XDXT3T

Don’t Sweat the Stock Market, Sovereign Debt crisis or Jobs Report

There’s lots of work to be done and companies are spending money. They’re just not hiring full-timers to do it. Be wary of over-weighting your marketing portfolio on Facebook.

It’s a lazy, muggy Saturday in August. Like millions of American’s we’re headed to the airport, but not for vacation. We’re on our way to a hot, landlocked Midwestern city for the start of a client’s biggest annual convention. That’s right. It kicks off on the first Saturday in August, goes full tilt first thing Sunday morning and extends only into Monday for most attendees. Perhaps it’s a sign of the times, but more and more B2B event organizers have realized that to attract a crowd in this zero-job-security economy, they’ve got to minimize the amount of time attendees spend out of the office. And they better stress the educational and business development parts of the conference, and de-emphasize the aura of a drunken social junket.

We’re not going to spend much time here re-hashing yesterday’s jobs report and the roller coaster week on Wall Street. From a glass half full perspective, it wasn’t so much the 120,000 new people added to American payrolls last month, it was the breadth of the new jobs, as many sectors—not just one or two-- showed some initial signs of hiring activity. Are we worried about the bloodbath on Wall Street which essentially wiped out the entire year’s worth of gains in 2011? Not so much. The market has long been decoupled from the overall economy as corporate earnings are more a factor of (a) low interest rates; (b) relatively easy access to credit and (c) the ability to sustain operations with fewer employees which improves the bottom line.

NOTE: None of the aforementioned factors are sustainable in the long term—especially doing more with less, as frustrated underappreciated workers will bolt for the doors when the job market eventually improves. While many are concerned about the debt ceiling right now, we’re more concerned about the “Great Brain Drain” that will eventually devastate companies who don’t start taking better care of their burned out talent.

OUR TAKE: If you’re a savvy B2B marketer, business are being very selective about how they spend their dollars for advertising, capital improvements, technology and raw materials, but they ARE spending—and they’re doing so at a healthier clip than individual American consumers. Our advice, be just as selective about who you target and fortunately there are a great many tools out there to help you stay hyper focused on the best prospects for new business.

If you’re waiting for us to start trumpeting the merits of mobile and social media, you’ll be disappointed. There are hundreds of thousands of other blogs you can spend time with. We just want you to be smart about how you use these widely publicized, albeit hard to measure tools. And just like the financial advisors whose balanced portfolio approach will successfully guide their clients through the latest financial crisis, you don’t want your marketing portfolio too heavily invested in any single channel.

Face the facts about Facebook

New research indicates that Facebook shouldn’t automatically be the linchpin of your social media strategy. Data from ROI Research, Inc. found that companies who actively use social media found Twitter more effective than Facebook for getting your customers/followers to talk about your product or service, recommend it to friends and buy it. ROI researchers found Twitter to be 13 percent more likely than Facebook to induce followers to attend your promotional or sponsored event; 12 percent more likely to talk about your company or product; 6 percent more likely to recommend your company or product and 12 percent more likely to link to an ad for your company or product.

And that’s not all. Upstart StumbleUpon.com recently unseated Facebook as the No.1 social media site for referring traffic to other website, according to the web analytics firm, StatCounter. If you haven’t checked it out yet, StumbleUpon.com is a search engine that finds and recommends videos, articles and other web-based content to you based upon your tastes and the interests of your peers.

Finally, a Smartbrief poll on Social Media found that marketers and others interested in social media in business say their companies have not lost money because of social media, but more than 25 percent said they “spent too much on maintaining a social presence for the level of return we’re seeing.” Another 3 percent said they lost money because of legal issues, leakage of sensitive information, or brand damage.

Bottom line. You need to use the tools that most effectively connect you to your clients, customers and prospects for the long-term. You don’t need to be cool for the sake of being cool. Don’t be afraid to experiment. But just like investors who chase the latest fad, marketers who chase the latest cool communication tools without carefully weighing its merits and pitfalls will get burned in the long run.

VCRGD6XDXT3T

Finishing What You Start

What U.S. military and women’s soccer team can learn from savvy marketers. Hiring trends optimistic for digital media. Speed and innovation key.

For better or worse, it’s that time of year when vacations, out-of-office replies and steamy summer weather conspire to slow down the pace of business decision-making worldwide, even in the U.S. For most of us here at HB, it’s the most stressful time of year, because we worry we’re overlooking something or just plain not trying hard enough when the phone’s not ringing off the hook and frantic emails aren’t clogging our inboxes.

Other folks—the smart ones—take this opportunity to catch their breath and contemplate where their businesses are going, what could be going better and what could be done more efficiently.

Thanks to the ease of social media, online video and virtual events, our guess is that there have been a record number of new media initiatives started in both the corporate and not-for-profit world. But, rather than really analyzing what’s working and not-working well, most organizations just keep launching new initiatives to show they’re cool, up-to-speed and always in touch with their customers, clients and constituents. Of course, constant startup, without the discipline of mid-course corrections, much less finishing, will simply drain your energy, your resources and your organization’s patience and take you off your core mission. Either that, or a cynical CFO, VC or IT person asks to see some measure of return on resources expended. At that point, most innovators throw in the towel…or start something new.

Soccer, military and finishing

If you saw Sunday’s heartbreaking World Cup overtime loss by the U.S. women’s soccer team to Japan, you know what we mean. How many times did the commentators and even U.S. national team coach, Pia Sundhage use the term “finishing” or lack thereof? The U.S. kept blowing scoring chances throughout the scoreless first half and through much of the second half. Then every time they managed to bang one through the back of the net, the plucky Japanese squad would score the equalizer a few minutes later. When it came down to overtime penalty kicks, you could tell on the Americans’ faces they knew they would be toast.

We’ll keep our political views out of this forum, but, we can only sustain so much “nation-building” in Afghanistan, Iraq and other war-torn regions around the globe at any given time. Without the resources and strategy to finish what we started, we’ll have nothing to show for all the lost lives and billions of wasted dollars across the globe….kind of like a website with lots of outdated “news”, and old links leading nowhere.

Upbeat hiring trends for digital media professionals

Ed Koller, Managing Partner of Howard-Sloan-Koller Group wrote to clients on Monday that “innovation” was the dominant word in business last year. “But know we know that innovation alone is no longer enough. Speed is the overarching mandated. Speed to market for products; speed to hire for talent.”

HSK says despite the gloomy job market nationwide, there is a “staggering volume of demand” for digital product development, content development, sales and marketing professionals. As New York Times columnist, Thomas Friedman wrote last week, companies “are increasingly picky. They are all looking for the same kind of people —people who not only have the critical thinking skills to do the value-adding jobs that technology can’t, but also people who can invent, adapt and reinvent their jobs every day, in a market that changes faster than ever.”

Finishing what you start (video)

So if you’re an employee, manager or business owner, how do you make sure you and your teams are ready to really finish what they start? We recommend this video by best-selling author and futurist, Seth Godin who argues we don’t need people to be more creative. We need people to keep thrashing and have the courage to ship—when they say they’re going to ship.

WARNING: The vid’s about 18 minutes long. Don’t view it unless you have time to watch it all the way through and give it your undivided attention.

VCRGD6XDXT3T

End of Space Shuttle Program Doesn’t Mean End of American Innovation

VC investments way up and B2B advertisers look to third wave of advertising

We’re no rocket scientists here, but today and July 20 will mark historic milestones for the U.S. space program. In case you missed it, today was the final “spacewalk” by the crew of the Space Shuttle Atlantis. And when the shuttle lands on July 20 at Kennedy Space Center, it will be on the 42nd anniversary of the first moon landing. For many of us born at the tail end of the Baby Boom, Neil Armstrong’s historic moonwalk was one of our earliest memories of actually paying attention to something on the evening news. This month, as the space program goes into early retirement, it signals our generation’s official descent into middle age. But, we don’t seem to be the only ones running out of steam. That’s just not acceptable to us here.

As Frank Bruni of the New York Times wrote the other day, the shuttle was the “centerpiece of our country’s gaudily ambitious space adventures. The shuttle program was a pre-eminent symbol of our belief that there were literally no limits to where we could go and no boundaries to what we could accomplish, so long as we hitched our ingenuity to our imagination and marshaled the requisite will. The program’s end carries the force of cruel metaphor, coming at a time when limits are all we talk about. When we have no stars in our eyes.”

Yesterday, a sobering U.S. Chamber of Commerce Report was released. According to the Chamber, almost two-thirds—64 percent—of small-business executives surveyed said they weren't expecting to add to their payrolls in the next year and another 12 percent planned to cut jobs. Just one in five (19%) said they would expand their work forces. This comes after a Labor Department report Friday showed employers added few jobs in June, and unemployment rose to 9.2 percent. The Small Business Administration says small businesses, defined as companies with fewer than 500 workers, employ about half of the workers in the private sector. In the Chamber's survey of 1,409 executives, conducted by Harris Interactive, small businesses were defined as firms with revenue of $25 million or less.
A Gallup/USA Today poll conducted in late April found that 55 percent of Americans considered it unlikely that children today would have better lives than their parents, while only 44 percent considered it likely. Those responses were the most negative, by far, over the last quarter-century, and they undercut a central tenet of American optimism.

And 39 percent of the respondents in a recent New York Times/CBS News poll characterized that decline as permanent, at least in economic terms. That was a marked increase from 28 percent who said so last fall.

The President talks a great deal about charting “the frontiers of innovation,” but his administration doesn’t seem to have a plan and maybe we shouldn’t leave it to the government to do it for us.

Our take: The U.S. space program was created not out of scientific curiosity but out of national security to keep pace with the Russian space program. Right now we have a different kind of threat and that’s economic threat of China, India and other fast developing economics. We need to have an economic/innovative version of NASA right now……education, starting companies and smart, efficient marketing.

3rd Wave for advertising

If you get a free moment, take a look at J. Brooke Aker’s piece from Online Media Daily about the maturity of display advertising. Aker also quotes Google’s Neal Mohan who’s argues we are just now entering the 3rd Wave of digital advertising maturation that futurist Alvin Toffler predicted in the 1980s. Apparently we have moved from media explosion (Internet, ubiquitous connectivity and multiple devices) to technology that makes ads efficient and makes media pay, to a user-centric 3rd wave.

Our take: We’re encouraged by this assessment because this is where consumers have much more say -- in the ads they skip, ads they replay or their preferences for ads. Amen to that.

Venture Capital on the Rise

Total capital raised by U.S. venture firms in the first half of this year hit $8.14 billion, that’s a 20 percent increase over the same period last year, according to Dow Jones. Meanwhile, the National Venture Capital Association said capital fundraising during the first half of 2011 totaled $10.2 billion from 76 funds, a 67 percent increase by dollars compared to the first half of 2010.
Next week we’ll look at how content marketing is challenging traditional advertising for smart B2B marketers.


VCRGD6XDXT3T

Mid Year Review: Companies Thriving, Wage Earners and Homeowners Still Suffering

How smart B2B marketers thrive in this schizophrenic economic climate

U.S. stocks rose sharply today, on pace for their biggest weekly gain in a year. Strong readings of manufacturing activity lifted spirits ahead of the long holiday weekend and investors may feel confident that no major “fireworks” are forthcoming from the euro zone and Greece debt crisis to ruin their barbecues and parades. Industrial, financial and tech stocks have led the rally, which is good news for many of you readers who work in—or sell into—those sectors. The market registered sharp gains after data released by the Institute of Supply Management showed the U.S. manufacturing sector expanded briskly in June. The ISM's manufacturing purchasing managers' index rose to 55.3 in June from 53.5 in May. Experts say readings above 50 indicate expanding activity.

If you’re wondering how the financial markets and corporate profits can be so high at a time when the jobless rate, housing market and energy prices are in the dumps, researchers at Northeastern University may have some clues. In their newly released study, (PDF file) “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth. The study, said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery. The study called that $27 billion loss in aggregate wages and salaries during the seven quarters after the recovery began “the first ever such decline in any post-World War II recovery.”

“Aggregate employment still has not increased above the trough quarter of 2009, and real hourly and weekly wages have been flat to modestly negative,” the report concludes. “The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders.”

Our Take: Consumers are still very pessimistic about their home values and job security, so if you depend on luxury goods, discretionary spending for travel and entertainment, then you’ll have to pick and choose your marketing spots very carefully. But, if you’re targeting decision makers in the heavy equipment or large corporate sector, then you need to get on their radar ASAP as they’re setting budgets for long-term capital expenditures right now.

Here are some key marketing trends to watch for the second half of this year

First two non-events: the new HP tablet and the Zynga billion dollar IPO. These are not game changers as much as late arriving “me too’s.” Don’t be fooled by the hype

Location infiltrates the advertising market

Location-based advertising is set to triple its percentage of mobile advertising in the next four years. The increase will partially be due to the US’s high adoption rates of mobile devices with GPS capabilities. Revenue for this advertising market is projected to increase ten-fold in the same time period, according to Pyramid Research.

Our Take: Consumers will have greater access to this type of advertising in the near future because of technology progression. Advertising companies at the front of location-based services could see much higher demand from businesses in the near future.

eReaders on the rise, tablets cool off

The ownership of eReaders has surpassed that of tablets largely due to price differences and improvements in technology. The entry price for eReaders undercuts tablets by a few hundred dollars, and eReaders are taking up a share of the tablet market as they begin to incorporate internet-based applications, like browsing the web and checking mail.

Our Take: The rise in eReader adoption will lead to a shift in support and resources from companies appealing to consumers. In part because of their lower price point and lesser technology, eReaders are cheaper to develop applications for than tablets. As many industries are probably in a hurry to try and capture the market opening caused by the iPad craze, it actually may be wiser to focus on the rapidly expanding eReader market. eReaders are also more literature-focused, which could lead to higher adoption rates in the corporate world. Additionally, recent reviews for products such as the nook and kindle have been raving according to CNET www.cnet.com , while their price factor helps them beat out the iPad in a recent CNET head to head comparison.

A new approach to banner ads

New Google studies show that the average rate of users who click on ads is 0.1 percent. A separate study, conducted by Real Media, shows that the main reason people ignore ads is because they did not want to leave the web page they were currently on. In light of this information, startup Adkeeper www.adkeeper.com has put a new spin on ads, one that increases that click rate by 34 times—that’s right, 34 times higher! Adkeeper is making advertisements ‘less interruptive’ as company founder, Scott Kurnit, told the NY Times on Tuesday.

Our Take: Although the articles take on adkeeper is heavily skewed towards entertainment and consumer-oriented industries (and not B2B), there is still a strong possibility that Adkeeper can help businesses. If a company is targeting the right audience and advertising on the right sites, then consumers will save these ads. For example, many may be reading an article and see an ad that they do not necessarily want to click on right away. However, if the ad appeals just a tiny bit to them and their industry, they can easily save and go back to it later.

Have a great Independence Day Weekend and remember what a great (and resilient) country this is despite all our current challenges.

VCRGD6XDXT3T

Signs of a Turnaround?

IPOs, venture capital and philanthropy up. Why smart companies respond ASAP to online customer complaints


IPO Market

Just when you thought a double dip recession was on the horizon, signs of optimism are emerging. I noticed a significant drop in gas prices on a weekend trip through the Northeast Corridor. The Dow seems to have found a support level at 12,000 (up over 100 points again today), despite ongoing agita over the debt crisis in Greece. Technology IPOs have generated nearly $330 million in fees for major banks and brokerages houses according to a New York Times report yesterday. That’s the most since 2000 and nearly 10 times what they generated for a comparable period last year. According to the National Venture Capital Association, investors have poured nearly $6 billion into early stage startups the first three months of this year, that’s up 14 percent from the first three months of 2010.

Charitable giving on the rise

Another study that caught our eye was from the philanthropic front. Charitable giving recovered somewhat last year, according to new estimates by the Giving USA Foundation, but experts are predicting that this year will present more challenges to nonprofit fund-raisers. Individuals, companies and philanthropic institutions made gifts and pledges totaling an estimated $290.89 billion in 2010, an increase of 2.1 percent on an inflation-adjusted basis over a revised estimate of $285 billion the year before. The increase was the first since 2007, when the recession started and led to the biggest decline in giving in more than 40 years.

The power of responding to your online complaints

A new Harris Interactive study confirmed what we’ve been preaching for years—you’ve got to deal with angry customers/members/subscribers ASAP now matter how steamed they are. Here’s why. Researchers found that among customers who got a response from a company after complaining about them online (or on social media):

* 34 percent deleted their negative review
* 33 percent turned around and posted a positive review
* 18 percent turned into loyal customers

As the old saying goes. It’s 10 times easier to keep an existing customer happy than to find a new customer. Thanks to social media and the web, your customers are better armed today than ever before. The Harris findings should be posted over every call center from Nebraska to Mumbai. Smart organizations who heed them will be rewarded handsomely down the road.

VCRGD6XDXT3T

Economy Hinting at Double Dip, But Hiring Strong in Tech, Financial Arena

Big companies more likely than small business to weather latest storm. Also, why great writing still matters for B2B. How this impacts you.

It may be too soon to predict a return to the days of “irrational exuberance,” but you have to scratch your head when social media companies with questionable financials are leading the IPO market back to life and the equity markets end a six-week slide yesterday because retail sales only went down by 0.2 percent.

Most of us are a lot smarter than we were in the late 1990s, but that doesn’t mean we can’t be lured into the financial equivalent of Weinerian temptation. We know it’s wrong, but we can’t help ourselves. Or you can put a positive spin on this less-than-rational exuberance. How? Maybe we just want this protracted downturn to end so badly that we’ll do just about anything to jumpstart it. Can you say Obamanomics?

Food and gas prices remain high, unemployment is inching back over 9 percent and Americans’ equity in their homes has shrunk to nearly 38 percent, nearing the lowest percentage since World War II, according to a Federal Reserve report this week. For some perspective, it was about 61 percent in 2001. What’s more, home prices have fallen by a third since their 2006 peak, reaching their lowest level since 2003, the Standard & Poor’s/Case-Shiller index of U.S. home prices through May 31. What’s more, the Federation of Independent Business, a trade group representing small business in America, just released its worse monthly hiring survey in eight months. If you sell to small business, those budgets are likely to remain tighter than a portly New Jersey Governor’s belt buckle for some time to come.

Despite this generally depressing news, hiring in the technology and financial services industries, where many of you are engaged has been robust. The U.S marketing director for a well-known online career site told me last week that both job postings and hiring of seasoned execs in financial services is coming back strong and is “white hot” for those in the technology sector. Also, the U.S. trade deficit narrowed again in April which means that’s now two consecutive months in which American companies sold more goods overseas than were imported. Also, last week’s Business Roundtable CEO survey showed that larger companies are more likely to expand their workforces than shrink them in the next six months. Why? They’re more likely to be sitting on piles of cash, they have better access to credit and more exporting capabilities.

Our Take: If you sell to consumers, then there’s still rough sledding ahead, because lack of job security and inability to use homes as ATM machines will keep your customers tight-gripped on their wallets and purses. But, in the B2B sector, companies are looking at the long-term picture, as evidenced by strong 6-figure hiring in the tech and financial sector and bolstering infrastructure and capital expenditures. For instance, a new Commerce Department report said U.S. companies sold more computers, heavy machinery and telecommunications equipment in April, especially to foreign markets. That pushed exports to a record high for the second straight month and narrowed the trade deficit for the first time since December.

Great writing still matters for business marketers

Today’s Wall Street Journal had a great piece by Droga5 chairman, Davi Droga, about the importance of great copy writing in today’s short-attention span, twitter era. “The truth is that good copywriting paved the way for the tweet long before Twitter was actually invented—but who needs all those characters?” he asks.

Social media impact on business

Researchers are finding that social media is great for generating exposure for your business, increasing traffic to your website and improving your search engine rankings, but not so effective for generating leads, increasing sales or reducing marketing expenses. A new study of 3,342 marketers conducted by Social Media Examiner found that while 88 percent of respondents said social media generated exposure for their business, 72 percent said it increased traffic and 62 percent agreed it helped their search engine rankings. On the flip side, only 43 percent of marketers said social media increased their sales, just 49 percent said it cut marketing costs and 51 percent said it generated quality leads.

Why clarity is the new cool

Finally, we recommend this pithy new post by Forbes Chief Product Officer, Lewis D’Vorkin about the importance of clarity in this hyper-cluttered information age.

“Start with clarity, then come up with cool, he says. “If you don’t, you end up with new but incoherent.” We couldn’t agree more.

As regular readers of this blog know, throughout this economic downturn we haven’t wavered from our position: Be smart, stay the course, keep your marketing and product pipeline full at all times, and you’ll always be ready to pounce on new opportunities. That’s a lot more fun (and financially rewarding) than being a hot idea- or hot IPO) chaser.

VCRGD6XDXT3T

LinkedIn and Tablets Increase Decisions for B2B Marketers

With consumers and small business on one side and ‘tortured” corporate customers on the other, how much longer will users put up with forced updates and interminable boot up time? Google and Apple reinvent computing and computer retailing. Has Mars/Venus gender battle moved to tablets?

Whether or not you think last week’s lofty IPO and post-offering “pop” for professional networking platform LinkedIn signaled a new “tech bubble about to burst,” the head of a large engineering and technology society told me Friday that he was encouraged by the amount of “let’s try and see how it goes” innovation he’s from emerging media, information and technology companies. This ability to innovate, react, evolves and correct early stumbles may be the key to success in the next decade and beyond. Meanwhile, the old guard seems to be drifting further and further back in the rear view mirror.

Hewlett-Packard Co. reduced its 2011 outlook and warned of weaker results in its current quarter in a hastily arranged earnings call last week, a day after an email from CEO, Leo Apotheker to his top brass, warning of tough times became public. News of the memo and the revised outlook sent H-P's shares down 9 percent in early trading on the New York Stock Exchange. HP’s pessimistic outlook is a result of changes the Palo Alto, Calif., company is making in its services business and poor demand for personal computers among consumers. Apotheker said weak PC sales to consumers is an industry-wide problem due in part to the rise of tablet devices such as Apple Inc.'s iPad. Dell, Acer and Sony among others have been whining a similar tune of late.

In response, HP will soon release its own tablet, dubbed the TouchPad, but it will not only have to contend with Apple’s passionately followed products (and social media army), but with Apple’s incredibly successful retail stores—and Google’s lightweight computing devices, which we’ll get to in a minute.

OUR TAKE: We’re not here to predict who’s going to win the table and smart phone wars, but it’s relevant for B2B marketers to know which types of screens, devices and security environment that your target consumers are spending their time when they receive your messages. And that not only includes tablets and smart phones, but LinkedIn-style social networking platforms for professionals and other busy grownups who don’t have hours of free time on their hands and only post when they something relevant to share (or answer).

Gender impact on tablet adoption

If you’re targeting consumers and small business, it’s increasingly likely you’ll to be reaching decision makers not on clunky PC’s, but on open access, easy to use devices –tablets, iPads, smart phones and “smart” notebooks that boot up quickly, and can easily handle rich media, video, apps, downloads and the like. According to a report in today’s New York Times, based on Forrester Research, the majority of tablet owners are male, while the majority of e-readers (such as Barnes’ and Nobles’ Nook Color) are female. Researchers say this has more to do with desire for simplicity (female) or tech power (men) than it does with color, design and actual reading experience although women supposedly want a more contemplative book-like reading experience and men allegedly want a more multimedia, action-oriented experience. Regardless of preference, consumers and business decision-makers are gravitating toward gadgets that are fast, fun, adaptable, easy to carry and easy to fix (often by you, the end user). And these tend to be the devices that don’t block advertising messages as effectively as most corporate spam filters and firewalls. In exchange for this freedom, recipients of your messaging will demand well-thought out creative that’s targeted, relevant and makes full use multimedia.

Meanwhile Google took another swipe at Microsoft last week when it introduced a new kind of computer called a Chromebook, which stores everything online. Google hopes that the devices, which it says will eliminate the need for software updates and hard drive backups and will boot up within eight seconds, will replace PCs running Microsoft’s Windows software in offices and homes around the world.

OUR TAKE: Users are losing patience with endless Windows updates, interminable bootup times and business applications (spreadsheets, presentations, word processing) that work fine, but get over-engineered every 12 months so users have to keep relearning how to use them. Corporate warriors don’t have much choice in the matter, except to covet their spouses, kids and friends’ devices. But, consumers and small business owners DO have a choice, and they’re overwhelmingly going for portability and simplicity over fortress-like security.

However, if your core decision-makers are still in large organizations, then no matter how many fun, easy to work with gadgets they have at home, they’ll still be at the mercy of command and control IT departments—and that means, slow connectivity, limited multimedia and downloading opportunities.

That affects your creative and your ability to get into targets’ sub-conscious. Here, the main objective is simply to get in the door, not to be eye-catching. Corporate spam filters will flag anything they don’t deem plain vanilla. In this environment, it’s best just to play it straight. Stick with bullet points, features and benefits—forget about storytelling and dazzling techno tricks.

Users tired of being tortured

“Whether it be Microsoft or other OS vendors, I think the complexity of managing your computers is really torturing users out there,” Sergey Brin, Google’s co-founder and director of special projects, said recently at the Google I/O developer conference “That’s a flawed model fundamentally. And I think Chromebooks are a new model that doesn’t put the burden of managing your computer on yourself.”

Experts say Google will not have an easy time challenging Microsoft, which dominates the workplace. We think that’s due more to inertia, fear and cozy VAR relationships than it is a result of better products. While Google has bested Microsoft in operating system software for mobile phones, it has taken on Microsoft in the workplace before and failed to budge it, most notably in word processing and spreadsheet software and collaboration tools.

Google says Chromebooks will attract corporate technology buyers because Google automatically updates the Chrome operating system over the Internet and there is no need to back up computers because if they are lost or ruined, all the data exists online. “We’re venturing into a really new model of computing that I don’t think was possible previously, even a few years ago,” Brin purportedly said at Google’s recent user conference, adding that it’s just a much easier way to compute.

Computing in a whole new way

The Chrome operating system, which Google introduced in 2009, does away with desktop software and storing data on a computer. Instead, it is not much more than a browser, and all of a computer user’s information, like documents, photos and e-mail messages, is stored on the Internet, or in “the cloud.” Instead of desktop software like Microsoft Word or iPhoto, people use Web-based software like Google Docs, Microsoft Office 365 or Picasa.

Corporate I.T. departments are not known for quickly adopting flashy new products. However, tablet computers with touch screens, like the iPad, are replacing laptops in some workplaces, so the Chromebook may be late to the game. Microsoft has also seen some softness in its sales for its operating system software. Google’s strategy is to go after businesses and schools first. If students get used to a Web-based operating system, they might request it in their offices later on, and if people use it at work, they might decide to buy one for their homes.

The tagline at the end of Google’s promotional video for Chromebooks? “Ready when you are.” So are we. And so should you, if you’re a smart B2B marketer.

VCRGD6XDXT3T

Obama Nails Osama. Now ReFocus on the Economa

Take pause to celebrate nation’s military (and social media) milestone. But smart marketers know real worries remain and are picking spots carefully. TV ownership falls in U.S.

Whether or not you’re a fan of the current Administration, the stunning events of Sunday evening’s purported rubout of USA’s public enemy No.1 in Pakistan should give you a sense of…hmmm….if not patriotic pride at least confidence that our legislative and military leaders can honor a highly ambitious and longstanding promise to their citizens. That’s good enough for us (as is the President’s birth certificate). We don’t need to see grisly pictures of the massacre and open-sea burial of al Qaeda's top motivational speaker to know that the job got done quickly, efficiently and with minimal collateral damage.

Well done USA! Now let’s get back to business.

Is the threat of terrorism over? Hardly. At this stage of the game, bin Laden was more of guru consultant than an operative and we should prepare for retaliatory strikes and another spike in fuel prices. Both threats will continue to impact business by making air travel, commuting, shopping and raw materials more expensive and less efficient. The high unemployment rate, lousy housing market and huge disconnect between the stock market and economic conditions aren’t helping.
Our take? Expect another surge in the use of online shopping by consumers and the use of webinars and virtual meetings and conferences by the business community.
Social media in the spotlight

Another facet to this stunning news event was the speed with which millions of ordinary citizens got wind of bin Laden’s demise via social networking—not via the “official” news media and the reassuring voice of a trusted network anchor.

Thanks to Twitter and Facebook, the mobile devices of 45,000 baseball fans lit up at Sunday’s Phillies-Mets game and chants of U-S-A reverberated throughout Citizens Bank Park before the scoreboard operators or players knew why. Unconfirmed reports — that turned out to be true — of Osama bin Laden’s death circulated widely on social media for about 20 minutes before the talking heads of the major broadcast and cable networks reported news of the raid at 10:45 p.m., about an hour before Mr. Obama’s address from the White House.

While social media is not always reliable and is not a great platform for insight and analysis, it’s the communication tool ideally suited for breaking and sharing news and information and thanks to the proliferation of mobile devices—it’s the “tool” most likely to be used first when someone wants to be in the know (or sharing what they know).

Several reports said Twitter saw the highest sustained rate of posts ever--with an average of 3,440 per second from 10:45 p.m. to 12:30 a.m. ET—and there were more than 5 million mentions of Bin Laden on Facebook in the U.S. Text messages and social networks did not only help people get and spread the news about Bin Laden’s death, but they are believed to be significant contributors to the spontaneous gatherings at Ground Zero in NYC and outside the White House in DC. Once the Prez made his announcement, users of Instagram, a photo-sharing application for the iPhone, flooded the service with photos of Obama speaking, snapped from televisions and laptop screens. Soon there were photos of American flags and then photos from the crowds gathered in New York and Washington.

Most of these digital natives are not eschewing conventional news media entirely. They know they’ll get the analysis, commentary and fact-confirmation over time. But, if your media plans are still not aligning your spending with where your target market spends its time, then now is the time to have a serious reality check.

Ownership of TV Sets Falls in the US

Speaking of historic milestones, The Nielsen Company reported yesterday that the number of TV-less homes in the U.S rose for the first time in 20 years and that will have an impact on ratings numbers for all forms of broadcast television. According to Nielsen, virtually every U.S. household (98.9%) had a TV set the last time it checked. Now the number is down to 96.7 percent. While some experts say the drop reflects rising poverty in which some low-income households can no longer afford the cable boxes and digital accoutrements required to watch most channels satisfactorily, a more plausible explanation is that younger people, who’ve grown up with laptops and mobile devices in their hands, are not purchasing conventional TV sets when they get out on their own as they’re so used to gaming and watching their favorite shows and movies from the web.

Our take? Not only will the number of traditional TV households continue to decline, but the number of multi-tasking, attention-divided consumers will continue to rise. Conventional broadcasters and their sponsors still have a long way to go when it comes to targeting their messages to consumers and presenting content at a pace, and uninterrupted form, that will keep them engaged.

The world’s not necessarily getting more complex. It’s just getting smaller and moving faster than we’ve been used to. You can’t possibly keep up with all it all. Trust your friends, colleagues and professional networks to help you out. And when they do, always make sure you return the favor.


VCRGD6XDXT3T

Americans consuming more media, but also more distracted

Smart B2B marketers are embracing the multi-tasking consumer with relevant multi-platform campaigns. Hiring, pay trends bode well for marketers.

New research from Abritron and Edison Media Research indicates that Americans spend about 20 percent more time consuming media (traditional and new media) than they did 10 years ago. Researchers attribute this to the widespread adoption of smartphones and a 26 percent rise in the number of Americans with access to the Internet. Researchers say U.S. consumers now spend 8 hours and 11 minutes per day with radio, TV and the Internet, up from 6 hours and 50 minutes a day in 2001. But are they really paying attention commensurately.

Our take? As a whole, these numbers are quite plausible, but the amount of time consumers and business decision-makers are giving media their undivided attention has likely gone down. Younger consumers are particularly oriented to multi-tasking and the savviest marketers have learned to embrace this trend, rather than fight it.

Keep this in mind as you pore over recent reports from a number of highly reputable pundits and research firms who’ve been lamenting the apparent mismatch between media consumption patterns and media dollars received. Despite the projection that online advertising will increase its share of US major media ad spending by more than 10 percentage points between 2009 and 2015, spending on digital, including internet and mobile, has not yet risen to match consumption patterns, according to research firm eMarketer.

Among the major media of television, Internet, radio, mobile, newspapers and magazines, US adults still spend the most time each day with TV. Researchers at eMarketer estimate that adults watched television for 42.9 percent of the time they spent each day with those media in 2010, and ad dollars align closely, at 42.7 percent. The Internet, by contrast, took up 25.2 percent of adults’ daily media time in 2010, but received just 18.7 percent of US ad spending.

“Those of us focused on the internet channel have complained for years that it hasn’t been getting its fair share of media dollars based on time spent,” said eMarketer CEO Geoff Ramsey in a statement. “However, the precise extent of that imbalance has been shrouded in mystery and exaggeration. Now we know—it’s a gap of 6.5 percentage points.”

Allen Mutter, author of the popular Newsosaur blog observes that newspapers have lost nearly half of their ad revenues in the last five years, yet some analysts believe they still are getting three times more advertising than their readership deserves.

Because the allocation of ad-market share is a zero-sum game, print has to be benefitting at someone's expense. And two notable victims, in this case, are Internet and mobile advertising.

As Mutter notes, the most egregious mismatch discovered by the eMarketer study found that only 0.5 percent of advertising goes to mobile phones even though people spend more than 8 percent of their media time using them. With 25 percent of media mindshare devoted to the Internet and barely 19 percent of ad dollars going to the web, it is being shortchanged, too. This is good news for newspaper publishers because it proves that they have done an excellent job to date of convincing marketers of the value of their medium. Yes, they’ve cornered a disproportionate share of advertising in comparison to other media. We’ll have to see how the pay wall experiment at The New York Times and other leading dailies plays out.

Our take? We salute the time the Times for taking bold action, but it’s just too hard to get savvy consumers to pay for something they’ve been used to getting for free. The Times’ tiered subscription offering is just too confusing—both for subscribers, casual readers and their own customer service department too handle right now—and that will have costly bottom line ramifications down the road. We also expect savvy readers to go in via the backroom of blogs and social networking sites to get the NYT articles they want without being subject to a direct pay-per-read tax. There are simply too many other places to get one news in real-time for free.

Hiring, pay trends bode well for marketers

Companies are shelling out for seasoned marketers with e-commerce skills according to executive search firm, Crandall Associates. VP’s of e-Commerce are commanding $113K to over $200K with Internet marketing directors and interactive creative directors not far behind. What’s more, about 20 percent of those senior marketing folks expect to be hiring themselves in Q2, says Crandall. Meanwhile, new hiring data from Robert Half Associates says 20 percent of companies are looking to hire those with social media skills and 16 percent are looking to hire those with media services expertise. This data mirrors overall corporate hiring trends. Last week, Business Roundtable’s quarterly survey of CEOs found that 52 percent of companies planned to hire workers in the U.S. over the next six months and just 11 percent said the plan to reduce their workforces. That’s the widest gap hiring versus cutback gap ever recorded in the nine-year history of the survey.

And what kind of social marketing activity demonstrates the best ROI for companies? Almost three in five (59%) companies surveyed by MarketingProfs.com said “Ratings and reviews” provided the most bang for the buck, followed by “Your company/brand community” (56%) and “Your company/brand blog” (48%). These activities outpaced such tactics as “Participating in industry blogs and forums, Facebook, Twitter and Linked In (41% to 28% respectively).

So, it looks like companies are willing to pay more for real talent again instead of hiring what they can get at recession-era bargain rates. We’re betting that the next wave of high performing marketers are not only those with in-demand skills today, but those who can adapt their skills—and campaigns—to meet an ever-changing set of market conditions.

VCRGD6XDXT3T

Is This Ad Spending Recovery for Real?

Upbeat mood helps twitter following. Social media usage drives mobile device satisfaction, but declining call quality and proposed AT&T merger could be fly in mobile growth ointment.

Yesterday’s revised numbers from the U.S. Commerce Department indicated the economy is growing at a faster—i.e. less anemic rate—than previously believed. Government GNP prognosticators Friday upped their estimate of Q4 economic growth to an annualized rate of 3.1 percent from a 2.8 percent estimate issued last month.

On the media side, a just-released report from Kantar Media said total advertising expenditures increased 6.5 percent in 2010, buoyed by a strong fourth quarter and a big push from small advertisers outside the Top 1000. Internet display advertising increased 9.9 percent over 2009, cable TV rose 9.8 percent and network TV spending surged 5.3 percent. Expenditures in consumer magazines were up 3.3 percent, but B2B magazines dropped another 1.2 percent, and local newspapers sank 4.6 percent—its 21st consecutive quarterly decline.

Our take? Consumer, businesses and lenders have become less pessimistic about homes and jobs. TV, mobile and the Internet will continue to thrive this year—we expect double digit gains. If we can find any cheer on the print side, it is that ad pages in the Finance category were up 9.3 percent according to year-end 2010 PIB numbers and ad pages from Technology sponsors were up 2.3 percent. Tech and finance are two of the most important, and most cyclical, sectors for many of our clients and we expect to see more long-form thought leadership campaigns in 2011, not the direct response or mass branding campaigns that have dragged down other print categories.

Upbeat mood helps Twitter following

A new Indiana University research paper says that people who use Twitter congregate online according to their mood, not just by age or similar interests. For example, the research, found that people who send Twitter messages that include the word “loneliness” also tend to flock together on Twitter. To understand how mood plays a role in the camaraderie of people on social networks, researchers monitored 102,009 active Twitter users for six months. The researchers then applied a psychology theory, “subjective well-being,” to each message to understand its mood. The results found that people who are happier on the social network tend to re-tweet or reply to others who are happy, too. The same results were found with those who were unhappy.

The researchers summarized that “online social networks may be equally subject to the social mechanisms” that govern the real world, where real-life interaction can revolve around mood and feeling, too.

Active mobile users are active online searchers

According to the NEW BIGresearch Simultaneous Media Usage Survey, mobile users who actively search for information, such as news, sports and TV/videos, are more likely than general consumers to conduct regular product research online. When it comes to searching for financial information and services, active mobile users are nearly twice as likely as general consumers to conduct regular product research on online. When it comes to sharing online research findings, nearly 97 percent of all active mobile users say they give advice about products and services, and word of mouth (face-to-face) is the most prominent means.

Cell phone service quality continues to disappoint

If it seems you’re losing more calls than usual on your mobile phone these days you’re not alone. On top of the proposed AT&T / T-Mobile merger which could eliminate choice and advantageous competitive pricing for consumers, the quality of wireless phone calls has hit a plateau, according to J.D. Power and Associates. According to Power, one major driver is the increasing number of cellphone calls placed or answered indoors, as people use their cellphones to replace or supplement landlines. Indoor calls tend to be fuzzier than outdoor calls, because the signal must penetrate walls and windows to reach the tower. Regardless of where the calls were made, J.D. Power said the quality on all handsets — both smartphones and traditional cellphones — seemed to have worsened over the last six months, with smartphones eliciting more complaints than traditional handsets.

But last week, overall satisfaction with smartphones and traditional mobile phones is considerably higher among owners who use their devices for social media activity, compared with satisfaction among owners who do not access social media platforms on their phones, according to the J.D. Power and Associates 2011 U.S. Wireless Smartphone Customer Satisfaction Study.

Among smartphone owners who use their device to access social media sites such as Twitter, LinkedIn and Facebook, satisfaction averages 783 on a 1,000-point scale—nearly 22 points higher than among those smartphone owners who do not often use social media sites on their device. Currently, more than one-half of smartphone owners report having used their device to access social media sites via the mobile Web or mobile applications. While rates of mobile social media site usage are not nearly as high among owners of traditional mobile phones (9%, on average), satisfaction among traditional handset owners who use their device for social media is notably higher than that of traditional handset owners who don’t access social media (754 vs. 696).

“It’s not unexpected that smartphone owners access social media sites from their device more frequently than traditional mobile phone owners due to features such as larger screens and QWERTY keyboards,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates in a news release. “However, these findings demonstrate that equipping devices with powerful features and service is key to creating positive customer experiences with wireless devices.”

For a fifth consecutive time, Apple ranks highest among manufacturers of smartphones in customer satisfaction with a score of 795 and performs particularly well in ease of operation, operating system, features and physical design. Motorola (763) and HTC (762) follow Apple in the smartphone rankings. Sanyo ranks highest in overall wireless customer satisfaction with traditional handsets with a score of 715. Sanyo performs well in three factors: physical design, battery functionality and operation. LG (711) and Samsung (703) follow Sanyo in the traditional handset rankings.

Once again, innovation and dedication to customer service carry the day. Customers are better armed than ever before to share their experiences with the masses. Thanks to mobile technology, social networking and the web, the strong players—with a disproportionate share of happy customers happily sharing their stories--will further distance themselves from the laggards.

VCRGD6XDXT3T

Don’t Be Fooled by Psychological Benchmarks on Labor, Oil Prices

Time for B2B marketers to shine

Like the Dow 10,000, the 4-minute mile and the .300 hitter, we’ve always been fascinated with benchmark numbers. Is a .302 hitter really that much better than a .299 hitter? No. Is your 401k really worse off when the Dow dips to 9,992 from 10,003? Of course not.

So, when Friday’s labor report came out about brisk hiring in February pushing the U.S. unemployment rate below 9.0 percent for the first time in nearly two years, forgive us for not popping the champagne corks. Sure an 8.9 percent unemployment rate marks a real milestone not since before the recession, it’s just a number that ignores how much ground the economy has yet to regain. It also hides the more disturbing trend of people dropping out of the labor force—primarily recent graduates and highly experienced workers. That’s the kind of folks we need out there the most—high energy and high experience—whether you’re in software, financial services, driving a bus, hauling waste management or teaching.

NY Times columnist, Paul Krugman, points out today that most of work still being done by humans today is work that can’t be easily automated. That goes for manual labor as well as for white collar information workers. And the tables are shifting on those two fronts as U.S. white collar jobs are increasingly being automated and manual labor jobs are increasingly becoming specialized. Check out Paul’s take on this 21st century conundrum here

One key gauge of the labor market's health—the labor force participation rate, which measures the percentage of adults who have jobs or are seeking them—remains stuck at its lowest point since the mid-1980s. But, as the Wall Journal’s Phil Izzo and Morgan Stanley Economist, David Greenlaw explain, “a low participation rate both saps the economy's long-term growth potential and can obscure deeper problems in the labor market. If, for example, labor force participation today were at the same level as before the recession, the jobless rate would have been 11.5 percent in February.”

As of February, 4.4 million people had been out of work for more than a year. The labor force participation rate stood at 64.2 percent, down from 66 percent in December 2007 when the recession began. We expect the jobless “rate” to go back up over 9 percent in the coming months as formerly discouraged workers rejoin the job hunt process. That’s still a positive sign of slow, steady improvement. Don’t let next month’s jobs report stall you’re hiring or expansion plans.

Impact of $100+ per barrel oil

Unfortunately, employers and consumers must deal with the implications of the rising price of oil, which hit a 2.5-year high, closing at $104.42 a barrel Friday. Is it going to hurt? Yep. Many reliable sources are predicting $4 or $5 per gallon at the pump as we head into peak summer driving season. While Libya accounts for just a small fraction of world oil output—which Saudi Arabia has told us they could easily cover—it’s the uncertainly, not true supply and demand that’s driving this price spike. Unfortunately, rapidly rising prices not only hurt consumers and businesses immediately as it costs more to commute, shop, fly, run their equipment, etc. The price shock cuts into profits, hiring plans and consumer shopping plans as real hourly wages have gone up only one cent this year for those lucky enough to be employed.

Hiring picture brighter for media professionals

Despite all the agita described above, the lift in “intention to hire” is the biggest in 11 years according to researchers at Bernhart Associates who conducted a survey of digital and direct marketers. If the Fed and naturally occurring economic drivers can’t stimulate demand, that’s where great marketing and sales follow up comes in. And no one does that better than U.S. media mavens.


VCRGD6XDXT3T

Time Warner Leverages SI Swimsuit Issue to Launch All-Access Subscription Model

Watch out for ‘brain drain’ at your company as economy improves

In case you somehow missed it, the annual midwinter Oogle-palooza for the publishing industry, aka. the Sports Illustrated Swimsuit Issue hit newsstands, mailboxes and inboxes this week and once again managed to raise eyebrows and male pulse rates. But, this year the buzz wasn’t just about the risqué swim attire, which included see-through suits, body paint suits, and one “suit” which consisted of nothing more than a strategically placed kayak paddle. According to Bloomberg Sports (see video report), Time Warner is using its billion-dollar Swimsuit Issue franchise as a launching pad for its new “all-access” subscription model. Here’s the bet—raise subscription prices 23 percent in hopes that subscribers (and advertisers) will buy into SI’s full range of content delivery platforms including digital, online, mobile and tablet (other than Apple-i).

Our take? Even without Apple on board, the all-access model is a good call will gain traction throughout the publishing business as some content – action sports, celebrities, how-to and yes near-naked women—is simply more compelling with audio and video streaming than words on a page. However, we don’t like the strategy of charging subscribers—and presumably advertisers, more for the privilege. It shouldn’t be treated as a premium offering so much as a must-have for any publisher hoping to survive and stay relevant 11 years into the new century.

Just as most publishers are still figuring out newsstand sales by the number of returns they receive nine months later and are still sending annoying renewal notices—rather than billing subscribers’ credit cards via negative option—they need to get out of the quaint mindset of being publishers and realize they’re competing against bloggers, social networks, software companies, mobile apps, cable companies and telecom’s for subscriber/advertiser mindshare. It’s a faster, more cut-throat game than they’re used to—with smarter, hungrier players who generally pay their staffs better to come up with ideas.

Producer price index hits highest level in 27 months

On Wednesday, the Labor Department reported that producer prices in the United States rose in January. The core index, which excludes the volatile food and energy sectors, rose 0.5 percent, the biggest jump in 27 months, the agency said. Yesterday, The Fed announced it expected economic growth of 3.4 percent to 3.9 percent this year, up from the previous forecast of 3 percent to 3.6 percent. Even Fed head Ben Bernanke said “the economy is straightening out” but joblessness could remain high for several more years as companies continue to post profits with a smaller workforce than they had before.

Brain drain on the horizon at your company?

Our take? Despite the lousy job and housing market, the latest economic growth report, coupled with the recent rise in consumer and producer prices shows we’re essentially operating in a non-recessionary climate. It’s hardly a go-go era, but essential staples for households and businesses are being purchased on an ongoing basis and of course, advertising and marketing spend will have to grow to lift demand.

Here in the B2B media business, we don’t put too much stake in the jobs reports. Our industry has always been a fluid one based on ideas and contacts—not raw output or years of service you’ve put in at the same company or government organization. We’ve always relied on a deep pool of experienced independent contractors to get things done and there’s more than enough work to go around—it just doesn’t fit into the W2+B (steady paycheck, plus benefits) hiring model.

What’s more, the lift in “intention to hire” is the biggest in 11 years according to researchers at Bernhart Associates who conducted a survey of digital and direct marketers.

As New York Times columnist Bob Herbert pointed out last week, businesses have figured out how to prosper without putting the unemployed back to work in jobs that pay well and offer decent benefits. Corporate profits and the stock markets are way up. Businesses are sitting atop mountains of cash. Put people back to work? Forget about it. Has anyone bothered to notice that much of those profits are the result of aggressive payroll-cutting —companies making do with fewer, less well-paid and harder-working employees?

Unfortunately, Bob (and corporate America), you have to look at the long-term viability of “doing more with less.” Just as your customer prospect pipeline dries up when you cut back too far on your advertising and marketing programs, too many workers who’ve been doing double- and triple-duty to hold onto their jobs during the downturn are simply getting exhausted and not seeing commensurate increases in compensation or status for holding the fort down during the depths of the recession. They’re out the door as soon as the first decent opportunity comes along. Many organizations will be facing a serious “experience vacuum” as knowledgeable workers bolt for the doors and take their smarts, contacts and ideas they were too afraid (or disgruntled to share) with them.

It will take years for the influx of newbies to get up to speed and become productive. Let’s hope you’re treating your best people as well as you can right now. Now that the economy’s on the rebound, your toughest test is yet to come. Gotta go now. They just posted behind the scenes videos about the making of the Swimsuit Issue. The Twittersphere’s abuzz with rumors of wardrobe malfunctions.


VCRGD6XDXT3T

Don’t Let the Dow and Prez Fool You. Economy’s Got a Long Way to Go

But, smart B2B marketers uncover great opportunities in all economies. Let the Super Bowl, not Washington or Wall Street, guide you in 2011.

You can expect the President to put forth the rosiest picture possible in his State of the Union Address tonight as the Dow crossed the 12,000 barrier for the first time since mid-2008. Factory production, retail sales and existing home sales are rising, while unemployment claims are holding steady or slightly declining in many parts of the country.

Between standing Obama-vations from the Democratic half of the audience, The Prez will likely gloss over some persistent drags on the economy beyond the obvious “jobless recovery.” Not only is the official out-of-work rate stuck around 9.4 percent, but with the slight uptick in economic conditions, many of the long-term jobless who’ve simply given up are returning to the job search game. That will likely drive the jobless RATE even higher. Meanwhile most state and local governments are broke and won’t be able to meet their pension obligations or payrolls much longer unless they continue gouging businesses and homeowners in their districts. Many parts of Europe remain unstable, China is flirting with hyper-inflation and higher food and energy prices could throw a wet blanket on household spending.

Mind you. We’re not predicting more doom and gloom here. Just be smart, so you can make the most of this recovery. Pessimism solves nothing. Remember back in April 2009when everyone else was ducking and covering? We called the end of the recession and followed it up a few weeks later with a sunny assessment of the media landscape.

Why we’re being pinpoint bullish: Super Bowl

What we like about the financial markets this time around is that most of the run up is based on legit corporate earnings and the overall market P/E is in the teens--relatively cheap by historical standards. And then there’s the Super Bowl.

Chevy and GM are back after a two-year hiatus. As many as nine card brands may be jockeying for position to pay $3 mil for 30 seconds of your time in what’s typically the most-watched TV program of the year. We’re not so much encouraged by the game day air time as by the pre-game run up—starting up to 4 weeks out and driven by online and social media. The smart money also says to look for social couponing giant Groupon to join the fray. This could signal wide scale acceptance of the social couponing category and a possible resurgence of the IPO market.

“While we’re clearly seeing a recovery, it will be more muted than after other downturns,” Zenith Optimedia CEO, Steve King, said in a statement earlier this month. It will take until at least 2012 to match 2008 overall ad spending levels, he added. Zenith predicts Internet advertising will increase 48 percent from 2011 to 2013, followed by commercial TV, movie theater ads (+19%), outdoor advertising (+18%) and radio up 10 percent, with print advertising falling two percent.

Making sense of converging media

No one honestly knows which platform, device or gadget is going to be the true winner in this decade of media convergence. And do we really have to crown a king? Blogger Seth Godin had a nice way of sorting out the landscape in his post last week.

“I don't believe this is a winner take all situation, any more than one bestselling book makes all other books obsolete,” wrote Godin. “I think different pillars work for different devices, and there will continue to be winners in all of them.”

So look beyond the dizzying array of technology and media consumptions options we’re facing. If the intense competition for our screens, brains and wallets brings us more options with better service and realistic pricing, then we say Amen to the chaos. Bring it on.

VCRGD6XDXT

More tipping points have tipped as we tip a glass to 2010

Online advertising to eclipse newspapers ads with video a key driver. Display closing in on paid search. Sneaky contextual ads not fooling DVR owners and liberal arts still matter for fostering entrepreneurship.

When the year-end ad spending totals come in early next month, many forecasters expect to see more dollars under the online advertising column than the newspaper advertising column in 2010 -- including advertising in newspaper online editions. Assuming these projections hold true, it would mark another major milestone for online advertising.

"It's something we've seen coming for a long time, but this is a tipping point," said eMarketer CEO Geoff Ramsey, in a statement. "Marketers are devoting bigger shares of their budgets to digital media as they see more customers shifting time toward the Web."

Ramsey’s widely cited research expects online ad spending to grow 13.9 percent to $25.8 billion, while advertisers are expected to spend just $22.8 billion on print newspaper ads -- down 8.2 percent year-over-year. Ramsey told Online Media Daily Tuesday that increased consumer use of the Web isn't the only reason marketers are putting more dollars online. "The bad economy has actually accelerated the shift to digital advertising," Ramsey said. "Online ads -- especially search ads -- are increasingly seen by many marketers as a more reliable bet than print ads, which are often difficult to tie to a measurable financial result."

By 2014, eMarketer predicts that growth in spending on online display ads will outstrip that for paid search -- although search will continue to take a greater share of dollars. This year, both search and display are on track to outpace overall U.S. online ad spending, estimated by eMarketer at just under 14 percent. The increase in display advertising will be driven partly by the dramatic rise predicted in online video advertising, set to grow by at least 34 percent every year through 2014. Banner ads will experience more moderate gains of between 7 percent and 16 percent annually, while rich media spending will stagnate.

Do Timeshifting Viewers Pay Attention to commercials in playback?

If you missed our post last week, we shared our take on the new research showing internet viewership has caught up TV. On Tuesday Nielsen trumpteted new findings trying to debunk the myth that time-shifting DVR viewers are NOT skipping through the ads. The DVR is now in nearly 40 percent of U.S. homes. As Nielsen noted, it’s a double-edged sword for advertisers. On one hand, DVRs enable TV networks to hold on to viewers who use time-shifting to watch their favorite shows when it is convenient for them and who might otherwise seek alternate ways to watch programming – or not watch at all. On the other hand, DVRs allow viewers to skip content that doesn’t interest them, including commercials, potentially undermining TV’s longtime ad-supported business model. In its latest report on DVR usage, The Nielsen Company highlighted a number of key findings, including:
• Viewers do watch commercials on their DVRs. Among DVR homes, playback lifts commercial ratings by 44 percent among 18-49s after three days. Among all 18-49 year-old viewers DVR playback adds 16% to commercial ratings after three days
• More than 38% of DVR users are over age 45.
• When DVR playback is included, DVR households watch more primetime programming than non-DVR households.
• Overall, 49% of time-shifted primetime broadcast programming is played back the same day it was recorded, and 88% is played back within 3 days.
• DVR playback peaks at 9pm and 10pm.
Download the full report DVR Use in the U.S.

Here’s our take: While it’s true about 40 percent of US homes have DVRs, and we agree with Nielsen that DVR owners watch more TV and commercials overall than they would otherwise, and the contextual ads within popular shows are getting better and more seamless. However, Nielsen found the most popular time for playback mode is 8-9pm prime time. And as Don Seaman, director of communications analysis for the media agency MPG [mpg.com] told the New York Times earlier this week, even if DVR users are theoretically watching commercials in playback mode, they’re not doing so with their undivided attention – they’re the ones most likely to be milti-taksing he said, -- texting, Facbooking etc during the commercials, using that as “down time” to do other things until the commercial is over.”

Why liberal arts still matter….entrepreneurship

If you think innovation is the province of those trained in engineering, computer science and high finance, we’d like to remind you that great ideas can come from anyone, anywhere any time, and we suggest your organization makes a full on effort in 2011 to expand its horizons beyond the Product Development Group. Peter Katopes, Interim President, of LaGuardia Community College in Queens, NY had a great Letter to the Editor in Tuesday’s New York Times that caught our attention.

Here’s the gist of it: “If it is true that the ‘jobs of the future’ will be different from those of the present and that we need the ‘best and the brightest minds’ to confront future challenges, then what could we better offer our young people than to train their minds through the liberal arts? To confront problems that have not been encountered before requires both a grounding in the past and the skills and understanding to make sense of today’s world.

As for the question of jobs, we hear much about the need for entrepreneurs in business and technology, but what we also need for future prosperity will be an entrepreneurship of the imagination, encouraged by a rigorous immersion in the liberal arts, which might lead to currently unthought-of solutions to currently unimagined problems.“
Amen Peter.

Have a safe, happy Holiday and let’s hit the ground running together in 2011.


VCRGD6XDXT3T

Internet Viewership Catches Up to TV

Income still a factor in digital divide. Twitter use overstated?

While many have predicted that the Internet would inevitably become the most-watched communications medium some day, a new Forrester Research study confirms that day may be already here. The average U.S. household watches 13 hours weekly of traditional broadcast TV, equaling the same amount of hours spent online, according to Forrester. The report, released Monday, bases the findings on Forrester's survey of more than 30,000 consumers.

As you might expect, Gen Yers, ages 18 to 30, spent equal or more time with the Internet, and for the first time, Gen Xers ages 31 to 44 followed suit. Younger Boomers, ages 45 to 54, also now spend an equal amount of time with both media. Researchers said the amount of time spent watching TV has remained constant in the past five years, but Internet use has risen 121 percent since 2005.

Our take? It’s not so much the device, it’s the convenience factor of the web and the feeling of control. Consumers (and business decision makers) aren’t going to be told what to watch and when. They’ll consume it on their own terms--if you're relevant.

Look at mobile for instance. The percentage of mobile users who report texting on a monthly basis jumped from 61 percent from 54 percent, with an increasing amount of older users communicating beyond phone calls. In fact, one in four online mobile owners now log on to the mobile Internet. More than one-third of Gen Yers online mobile consumers connect at least monthly. About 200 million consumers now access their Facebook pages through a mobile device globally, according to Forrester.

The Forrester study found nearly one-quarter of U.S. interactive marketers plan to pilot mobile search programs in the next 12 months. Meanwhile, as Online Media Daily reported yesterday, the convenience of “search anywhere, anytime” has become a major attraction for mobile users. About 16 percent of online mobile users now use their mobile phone to check news, sports, or weather, and 13 percent look up directions or maps. When Forrester analyzed individuals who access the mobile Internet at least weekly, the numbers skyrocketed to 60 percent and 52 percent, respectively. Researchers indicate news, stocks and sports scores are what they’re seeking most although we suggest they’re not looking at music, event tickets and adult entertainment. Most telling for us is that the heaviest mobile users are most likely male and college-educated, and their average household income is more than $92,000.

So the web, for all its open access, democratization of the world’s information remains tilted toward the more affluent and better educated members of the populace. Internet usage still tilts toward the affluent and the well-educated.

Household income remains the greatest predictor of Internet use for Americans, according to a recent study by the Pew Research Center. In both their access to and use of the Internet and a suite of other technological devices and applications, households earning more than $75,000 a year significantly outpace lower-earning households, particularly those making less than $30,000 a year.

While 95 percent of high-income households use the Internet at home in some fashion, just 57 percent of the poorest do. The well-off are also more likely to own cellphones, computers, e-readers and other entertainment devices.

Unsurprisingly, the wealthy engage in online commerce and search for health information more often. However, while there is relatively little disparity across income brackets for consumption of television and print news sources, the richest households are more than twice as likely as the poorest to read online news.

“The correlation between income and participation in many Internet activities might be expected,” said Jim Jansen, a senior fellow at Pew. “What is surprising is the scale. It really shows the impact that income has on leveraging the advantages of the Internet.”

OMG! Who uses twitter?

A new study released this week by the Pew Research Center found that only 8 percent of Americans who were active on the Internet are enthusiastic users of twitter and only about 2 percent were extremely active/daily users. This compares to 74 percent of adult Americans who actively use the Internet. Among the highly active, they check in several times a day to see primarily what new content has been posted. As expected, the heaviest users were techies, marketers and young urbanites, but surprisingly, Latinos and African Americans were twice as likely as whites to use it – Pew did not have an explanation for that and that would sure balance the research pointing to the affluent hogging their share of the world’s bandwidth.

So, what’s all this mean for B2B marketers? It means your customers (and their bosses) need a compelling story about what makes your product/service so great. You need a story that works as well in words and pictures as it does in video form and on a mobile device. You need a story that’s stays fresh and relevant, but at the same time, can be told as well next Thursday or three weeks from today as it can right now.

Next time we’ll talk about thought leadership content that’s dynamic and real-time yet has sustainable shelf life. It ain’t easy, but what really is these days?


VCRGD6XDXT3T