Recently, my wife and I were in New York City and took in a Broadway play on a Saturday afternoon. As we left the theater it was raining. Immediately it seemed that several hundred people around us pulled out their Smartphones and began texting. My initial impulse was to think that they were calling cabs. Then it hit me. They were simply plugging back in to their social networks. What had they been missing the last two and a half hours?
Many were simply checking for text messages and voicemails. At the same time, a significant group was using social media platforms such as Facebook and Twitter. A smaller subset of them, were using a location-based service (LBS) that allows friends and some business associates to track each other. In other words, you let these friends know where you are at any point in time.
Let me confess that this has been a hard concept to wrap my head around and it is definitely a generation gap issue. Were my wife and I to meet someone after the matinee broke up, we would text them or call them to let them know that the play was over. But with LBS, you let a designated list of friends know exactly where you are.
LBS offers marketers some new and interesting ways to reach the Smartphone user who is increasingly referred to as the “untethered’ consumer. The most prominent LBS company right now is Foursquare although several others are getting traction in the category as well.
The basic principal behind LBS is that friends can see where their friends are (all participants agree to this). Early on very large cities such as New York, Los Angeles, San Francisco, Atlanta, and Chicago were where Foursquare thrived. How do marketers benefit from it? If you have a brick and mortar location, you can offer your current customers and importantly, future customers some nice incentives. Should someone introduce friends to a location, they can be rewarded. Or, all friends of Tom can be notified that, as his friend, you will receive an introductory discount. This type of approach, sometimes called “social mobile” is not to be confused with location-based marketing. In a social mobile situation, the conversation is between mobile friends based on location. The company gets in to that conversation via the friend.
If you check in to a location often, services often provide rewards such as a badge or elite status a la an airline frequent flyer plan. If a person checks in at a location more than any one else over a week or a month then he or she becomes the “Mayor” of that location. You get nice discounts for being the Mayor as you are raising awareness of the location.
If this is going to work, EVERY employee at a retail location has to be thoroughly familiar with the Foursquare or other LBS promotion. Apparently, in a famous case study, a well known chain ran a promotion where any Mayor of a unit would automatically be given a dollar off on drinks. At checkout, someone would announce that they were Mayor and show their phone and the counter person would say something to the effect of “so what.” Things often go awry during tests, but LBS execution has to be tighter than normal to work.
There are many services out there besides Foursquare. Do you know about Facebook Places, Loopt, Whrll, SCVNGR, Gilroy, Gowalla and Brightkite? If not, check them out. One of them may offer you something that could be inexpensive and effective and hit an upwardly mobile young demographic quite well. You can test in a location or two or an entire market before a big rollout.
A long time associate raised an issue about this. He said, “My days of bar-hopping are long over. So, if I join Foursquare, I would let people know that my wife and I are having a drink at the bar at Angelo’s while we wait for our table.” In a word, yes!
To many of us who are a bit long in the tooth, this is a product that will not likely be part of our lifestyles soon as is e-mailing, texting, blogging, and tweeting. But, if we want to reach people half our age effectively, we have to consider it and test it.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, June 27, 2011
Monday, June 20, 2011
The Student Loan Bomb
Today, the headlines scream about the $14 trillion and growing national debt. Something much smaller but also scary has caught my attention in recent months. It seems that credit card debt has kept falling due to our continued economic uncertainty. It now rests at about $850 billion dollars. But, in the last year, it has been passed by student loan debt. Several independent projections place student loans to be at approximately $1 trillion dollars by year-end 2011.
Why the huge increase? Well, tuition costs have been outpacing inflation very strongly for the last 20 years. And, since 2008, the drop in home values has made it more difficult or even impossible for many parents to cover costs by taking out a home equity loan. As of now, the average student graduating from college has about $24,000 in loans and $2,100 in credit card debt. Some say that by next year, the average loan amount will exceed $30,000.
I went online and checked out a few private sources for student loans. If you have borrowed $30,000 you pay $350 a month for 10 years to pay it off. That will be a real strain for some young people starting out. They may need to buy a car, get an apartment, and maybe a bit of furniture. Will they have $350 a month left over to pay off the loan? Many will have to move back in with Dad and Mom at a time when they really would value some independence.
Some students at top schools or those who go on to graduate or professional schools easily borrow six figure sums. Unless they get a terrific job right out of school, they will be paying off loans forever. There will be people who will not be able to purchase a home until they are fifty and others may still be paying off their student loans when it is time for their own children to go to college. Or, they may work at a job that they hate for many years simply to pay off the debt.
The current group of millennials are in a box—they will have to wait far longer than previous generations to buy a home, start a family, take a chance on launching a business and, importantly, save for their own children’s college education.
The awful truth is that some will default on these loans. Debt will completely run their lives and one minor train wreck will derail their financial future. College loans from government programs cannot be discharged in bankruptcy but many will have difficulty meeting the payments unless the employment situation turns around very dramatically.
What is going on? To me, it is simply one more re-set in our economic reality. For the last few generations a college degree meant a guaranteed lifetime in the middle class or upper middle class. Not so any longer! Home prices could only go up and now we see the fallacy of that belief. Others felt salaries would always rise each year and we all know that is no longer true. And, consumers of all ages cannot continue to go deeper into debt. Taking on heavy debt for education does not seem like a great investment anymore either.
Some schools will have to adjust as well. An experienced educator has told me that she believes that small liberal arts colleges had better find some big seven figure donors and fast. If they don’t, parents will rebel at the school fees and lack of lucrative grant packages. Professors may be asked to teach an extra course each semester with no increase in pay. A few may simply close their doors in the next decade. Good state schools will become VERY hard to enter. Parents will see the outstanding value that they represent so the academic environment in them will likely get more rigorous as excellent students line up to enter.
Finally, some people will bypass college altogether which is fine for some but a disaster for many others. Politicians tell us that education is a vital part of our infrastructure much like highways and bridges. It is hard to disagree with that sentiment but if the present trend continues with high fees and large loans, something has to give.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Why the huge increase? Well, tuition costs have been outpacing inflation very strongly for the last 20 years. And, since 2008, the drop in home values has made it more difficult or even impossible for many parents to cover costs by taking out a home equity loan. As of now, the average student graduating from college has about $24,000 in loans and $2,100 in credit card debt. Some say that by next year, the average loan amount will exceed $30,000.
I went online and checked out a few private sources for student loans. If you have borrowed $30,000 you pay $350 a month for 10 years to pay it off. That will be a real strain for some young people starting out. They may need to buy a car, get an apartment, and maybe a bit of furniture. Will they have $350 a month left over to pay off the loan? Many will have to move back in with Dad and Mom at a time when they really would value some independence.
Some students at top schools or those who go on to graduate or professional schools easily borrow six figure sums. Unless they get a terrific job right out of school, they will be paying off loans forever. There will be people who will not be able to purchase a home until they are fifty and others may still be paying off their student loans when it is time for their own children to go to college. Or, they may work at a job that they hate for many years simply to pay off the debt.
The current group of millennials are in a box—they will have to wait far longer than previous generations to buy a home, start a family, take a chance on launching a business and, importantly, save for their own children’s college education.
The awful truth is that some will default on these loans. Debt will completely run their lives and one minor train wreck will derail their financial future. College loans from government programs cannot be discharged in bankruptcy but many will have difficulty meeting the payments unless the employment situation turns around very dramatically.
What is going on? To me, it is simply one more re-set in our economic reality. For the last few generations a college degree meant a guaranteed lifetime in the middle class or upper middle class. Not so any longer! Home prices could only go up and now we see the fallacy of that belief. Others felt salaries would always rise each year and we all know that is no longer true. And, consumers of all ages cannot continue to go deeper into debt. Taking on heavy debt for education does not seem like a great investment anymore either.
Some schools will have to adjust as well. An experienced educator has told me that she believes that small liberal arts colleges had better find some big seven figure donors and fast. If they don’t, parents will rebel at the school fees and lack of lucrative grant packages. Professors may be asked to teach an extra course each semester with no increase in pay. A few may simply close their doors in the next decade. Good state schools will become VERY hard to enter. Parents will see the outstanding value that they represent so the academic environment in them will likely get more rigorous as excellent students line up to enter.
Finally, some people will bypass college altogether which is fine for some but a disaster for many others. Politicians tell us that education is a vital part of our infrastructure much like highways and bridges. It is hard to disagree with that sentiment but if the present trend continues with high fees and large loans, something has to give.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, June 13, 2011
Mobile Musings
Mobile marketing is, in my opinion, set to take off. Up to now, it is somewhat akin to wind energy. It is ubiquitous, stronger in some locales and demographics than others, has many applications, and is very difficult to harness. But, the potential has always been huge.
The term most often applied to mobile is “the third screen.” Simply, put the first screen was TV. Marketers for 60 years have been able to reach millions of prospects in developed countries with exhaustively tested messages that they controlled completely. This one-way form of communication put the marketer in an enviable position. In the 1950’s, soap operas emerged as the three giants—Procter & Gamble, Colgate-Palmolive, and Unilever provided all the advertising for specific programs. The automotive companies did it in the evening as well. Millions of families watched the message at the same time.
Since then TV has fragmented and American homes of even modest affluence have a TV set per person and laptops are another form of TV as well. Television remains the most potent form of advertising in the world FOR THE MOMENT.
The second screen, the personal computer, allowed for what some have dubbed as “participatory marketing.” Many times on-line advertisers literally asked for feedback from customers. In the on-line world, you could provide vast amounts of information about your service or product that could never come across clearly in a 30-120 second TV commercial. People have liked communicating with brands they use and like and the second screen has been a great success and still has much growth to come.
The third screen, better known as the “Smartphone”, has the real time benefit of the personal computer, but also moves with you completely from location to location. Think about when you left the house today. The last three things you did were likely to be check for your car keys, you wallet or purse, and your mobile device.
I doubt if many of you think that I am going out a limb when I forecast that the revolutionary aspects of the third screen will have a more profound effect on global marketing than screens one and two combined.
The key is in the complete mobility that mobile offers plus the consumer behavior upheaval caused by what is increasingly dubbed the “untethered consumer.” Most people see mobile as a great way to pay bills without benefit of a laptop; what they miss is that it is turning the entire consumer buying process upside down. You can research a product on site and compare pricing at nearby competitive locations all with the Smartphone held in your hand. In TV, the viewer is increasing in control with many choices and DVR’s that allow for commercial avoidance. Now the Smartphone puts the consumer in control and marketers will have to serve his/her needs or face extinction in many categories.
Consider some simple math. At last count, some five billion people across the world have cell phones. One company, China Mobile, is said to have 1 billion customers across Asia. Put this in perspective by considering that there are approximately a billion personal computers, and two and a half billion TV sets. So, twice as many people have cell phones as TV’s. Impossible? Visit a third world village. Solar powered chargers bring phones to billions in villages that may never have wired TV or cable and perhaps a few decades before electricity finds a way to them.
Here at home in the US, 94% of us have cell phones and each year millions, especially the young, drop their landlines. By the end of this year, it is projected that half of US citizens will have Smartphones. This is a giant opportunity for nimble marketers and a potential nightmare for the Rip van Winkles among us.
What makes mobile unique? It is truly personal. Yes, TV and computer are largely personal these days but not always. Mobile is personal and goes absolutely EVERYWHERE with you. We use the device for personal communications with friends and family and also for social network connections. Companies need to be invited in to this world but, if they are, there is authentic potential for personal marketing at a new plateau.
Location comes to the forefront on the third screen. Smartphones have location-based technology built in so marketers can customize remarkably specific messages and offers based on where you are and what time it is. This is a game changer that many overlook at present.
Mobile is well, mobile. Obvious, yes, but think of the tremendous implications. All other media except sound are consumed when you are either standing still or sitting. What is more boring than waiting in line for your plane to board or for other passengers to be seated? Mobile allows you to check e-mail, send or check text messages, or make a purchase. You are untethered and can communicate or shop wherever you are.
There has been little in the way of ramp up speed for mobile. They can tap into Internet networks easily, which also increases the confidence of new users who are familiar with the on-line world.
We are not in the lead here in some areas. For several years, for example, Koreans have been watching TV for free on their mobiles and many foreigners use the many available applications far more than their American counterparts. Over the next few years as young people master the many dormant applications, mobile should become an even more potent marketing tool especially when they teach their cash rich parents how to use them.
Soon, I have plans to put together a post on mobile and social media. But, here is a great example of search via mobile using 2D codes. It comes from Chuck Martin’s interesting book, “The Third Screen”, (Brealey, 2011, pages 161-162.) “Heineken printed EZcodes on its six-packs of beer as part of its Know the Signs campaign. Once the code was scanned and the age of the buyer verified, an app called Breathalyzer could be instantly downloaded. The app works like this: a person notices a friend over-consuming alcohol; the phone’s owner preselects from a list of characters (The Sleeper, the Groper, the Flirt, etc.) her friend most resembles when tipsy, then hands the phone to the friend. The friend blows into the phone microphone, the “breathalyzer,” which shows that the person has had too much to drink (it does not truly function, of course); a humorous video showing the selected character in action launches. The EZ-code also links to another app called Taxi Magic that uses the Smartphone location to show a list of taxi companies nearby. Select the taxi company and the call is automatically placed.”
Pretty amazing, huh? A beer company makes a nice statement about responsible drinking without offending anyone and does it where the person is and can do some good! Some of these types of programs can be tested locally and then rolled out to wider geography.
For several years, people have been using TV to drive people to company web sites. TV sales teams need to partner to use TV commercials to drive people to Smartphones. Remember, even when people are sedentary and watching TV, the Smartphone is not far away!
My advice is simply this. If you have a client with a customer base largely under 40, start testing mobile NOW! You may have a false start or two but the train will be leaving the station soon. If you audience is mostly over 60, you have a bit of time. Don’t be like our politicians who refuse to honestly face our financial future, and “kick the can down the road.” The politicians may get away with it. If you are a marketer and completely ignore mobile, the world will be passing you by very soon.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The term most often applied to mobile is “the third screen.” Simply, put the first screen was TV. Marketers for 60 years have been able to reach millions of prospects in developed countries with exhaustively tested messages that they controlled completely. This one-way form of communication put the marketer in an enviable position. In the 1950’s, soap operas emerged as the three giants—Procter & Gamble, Colgate-Palmolive, and Unilever provided all the advertising for specific programs. The automotive companies did it in the evening as well. Millions of families watched the message at the same time.
Since then TV has fragmented and American homes of even modest affluence have a TV set per person and laptops are another form of TV as well. Television remains the most potent form of advertising in the world FOR THE MOMENT.
The second screen, the personal computer, allowed for what some have dubbed as “participatory marketing.” Many times on-line advertisers literally asked for feedback from customers. In the on-line world, you could provide vast amounts of information about your service or product that could never come across clearly in a 30-120 second TV commercial. People have liked communicating with brands they use and like and the second screen has been a great success and still has much growth to come.
The third screen, better known as the “Smartphone”, has the real time benefit of the personal computer, but also moves with you completely from location to location. Think about when you left the house today. The last three things you did were likely to be check for your car keys, you wallet or purse, and your mobile device.
I doubt if many of you think that I am going out a limb when I forecast that the revolutionary aspects of the third screen will have a more profound effect on global marketing than screens one and two combined.
The key is in the complete mobility that mobile offers plus the consumer behavior upheaval caused by what is increasingly dubbed the “untethered consumer.” Most people see mobile as a great way to pay bills without benefit of a laptop; what they miss is that it is turning the entire consumer buying process upside down. You can research a product on site and compare pricing at nearby competitive locations all with the Smartphone held in your hand. In TV, the viewer is increasing in control with many choices and DVR’s that allow for commercial avoidance. Now the Smartphone puts the consumer in control and marketers will have to serve his/her needs or face extinction in many categories.
Consider some simple math. At last count, some five billion people across the world have cell phones. One company, China Mobile, is said to have 1 billion customers across Asia. Put this in perspective by considering that there are approximately a billion personal computers, and two and a half billion TV sets. So, twice as many people have cell phones as TV’s. Impossible? Visit a third world village. Solar powered chargers bring phones to billions in villages that may never have wired TV or cable and perhaps a few decades before electricity finds a way to them.
Here at home in the US, 94% of us have cell phones and each year millions, especially the young, drop their landlines. By the end of this year, it is projected that half of US citizens will have Smartphones. This is a giant opportunity for nimble marketers and a potential nightmare for the Rip van Winkles among us.
What makes mobile unique? It is truly personal. Yes, TV and computer are largely personal these days but not always. Mobile is personal and goes absolutely EVERYWHERE with you. We use the device for personal communications with friends and family and also for social network connections. Companies need to be invited in to this world but, if they are, there is authentic potential for personal marketing at a new plateau.
Location comes to the forefront on the third screen. Smartphones have location-based technology built in so marketers can customize remarkably specific messages and offers based on where you are and what time it is. This is a game changer that many overlook at present.
Mobile is well, mobile. Obvious, yes, but think of the tremendous implications. All other media except sound are consumed when you are either standing still or sitting. What is more boring than waiting in line for your plane to board or for other passengers to be seated? Mobile allows you to check e-mail, send or check text messages, or make a purchase. You are untethered and can communicate or shop wherever you are.
There has been little in the way of ramp up speed for mobile. They can tap into Internet networks easily, which also increases the confidence of new users who are familiar with the on-line world.
We are not in the lead here in some areas. For several years, for example, Koreans have been watching TV for free on their mobiles and many foreigners use the many available applications far more than their American counterparts. Over the next few years as young people master the many dormant applications, mobile should become an even more potent marketing tool especially when they teach their cash rich parents how to use them.
Soon, I have plans to put together a post on mobile and social media. But, here is a great example of search via mobile using 2D codes. It comes from Chuck Martin’s interesting book, “The Third Screen”, (Brealey, 2011, pages 161-162.) “Heineken printed EZcodes on its six-packs of beer as part of its Know the Signs campaign. Once the code was scanned and the age of the buyer verified, an app called Breathalyzer could be instantly downloaded. The app works like this: a person notices a friend over-consuming alcohol; the phone’s owner preselects from a list of characters (The Sleeper, the Groper, the Flirt, etc.) her friend most resembles when tipsy, then hands the phone to the friend. The friend blows into the phone microphone, the “breathalyzer,” which shows that the person has had too much to drink (it does not truly function, of course); a humorous video showing the selected character in action launches. The EZ-code also links to another app called Taxi Magic that uses the Smartphone location to show a list of taxi companies nearby. Select the taxi company and the call is automatically placed.”
Pretty amazing, huh? A beer company makes a nice statement about responsible drinking without offending anyone and does it where the person is and can do some good! Some of these types of programs can be tested locally and then rolled out to wider geography.
For several years, people have been using TV to drive people to company web sites. TV sales teams need to partner to use TV commercials to drive people to Smartphones. Remember, even when people are sedentary and watching TV, the Smartphone is not far away!
My advice is simply this. If you have a client with a customer base largely under 40, start testing mobile NOW! You may have a false start or two but the train will be leaving the station soon. If you audience is mostly over 60, you have a bit of time. Don’t be like our politicians who refuse to honestly face our financial future, and “kick the can down the road.” The politicians may get away with it. If you are a marketer and completely ignore mobile, the world will be passing you by very soon.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, June 6, 2011
Reckless Endangerment
Gretchen Morgenson has long been my favorite financial journalist. For a number of years her New York Times columns have shed a lot of light on the weaknesses in our financial system. Also, she, like me, is a bit of a Neanderthal and still believes that 2+2=4. Early on she warned us of the dangers of derivatives and other sophisticated financial products.
Very recently, along with Joshua Rosner, a housing finance expert, she has written a new book called “Reckless Endangerment” (Henry Holt & Company, 2011). It covers some familiar ground focusing on how the 2008 meltdown of America’s financial system enriched a few at the expense of the rest of us. But, what makes this book different is that the two give the crisis some perspective.
Like some of you, I devoured the first wave of books that came out covering the crisis. Most of them, while riveting, covered the personalities and gave you hour by hour accounts of the last days of Bear Stearns and Lehman Brothers. Reckless Endangerment focuses on the housing meltdown and digs deeply to give us the reasons for it. They go all the way back to the Clinton administration in the 1990’s and their desire to expand the U.S homeownership base. Mortgage giant Fannie Mae goes under the microscope and does not fare well. The authors accuse the quasi-government agency of using money and political influence to escape regulation.
They are not afraid to name names. Even casual business observers know of Angelo Mozilo, Chairman of Countrywide Mortgage who was indicted and convicted in extensive legal proceedings. But dozens of others doctored loans to make people appear creditworthy and they have simply walked away with no repercussions. Three members of the United States Senate were named for getting under market interest rates on their loans: Chris Dodd of Connecticut who was Chairman of the Finance Committee and architect of the financial reform bill (sic), liberal icon Barbara Boxer of California, and Kent Conrad of North Dakota. Conrad’s involvement stunned me. For years, he had been my favorite Democrat in congress. Balanced and measured, he fought to put a halt to increases in federal spending.
The book outlines a number of crimes committed across the board in banking and in regulatory agencies that helped contribute to the financial meltdown. Yet, to date, little has been done to punish them.
The authors put it well—“A system where perpetrators of such a crime are allowed to slip quietly from the scene is just plain wrong.”
What struck me personally was the total disregard of ethical values of so many players in government and in business.
Can another crisis happen again and soon? The authors mention that it may not take the same form but as long as the “too big to fail” mantra exists some large institutions will likely get in to more monetary mischief at taxpayer expense.
This may not be light beach reading but it does read like a thriller at times. I highly recommend it for your summer reading list.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Very recently, along with Joshua Rosner, a housing finance expert, she has written a new book called “Reckless Endangerment” (Henry Holt & Company, 2011). It covers some familiar ground focusing on how the 2008 meltdown of America’s financial system enriched a few at the expense of the rest of us. But, what makes this book different is that the two give the crisis some perspective.
Like some of you, I devoured the first wave of books that came out covering the crisis. Most of them, while riveting, covered the personalities and gave you hour by hour accounts of the last days of Bear Stearns and Lehman Brothers. Reckless Endangerment focuses on the housing meltdown and digs deeply to give us the reasons for it. They go all the way back to the Clinton administration in the 1990’s and their desire to expand the U.S homeownership base. Mortgage giant Fannie Mae goes under the microscope and does not fare well. The authors accuse the quasi-government agency of using money and political influence to escape regulation.
They are not afraid to name names. Even casual business observers know of Angelo Mozilo, Chairman of Countrywide Mortgage who was indicted and convicted in extensive legal proceedings. But dozens of others doctored loans to make people appear creditworthy and they have simply walked away with no repercussions. Three members of the United States Senate were named for getting under market interest rates on their loans: Chris Dodd of Connecticut who was Chairman of the Finance Committee and architect of the financial reform bill (sic), liberal icon Barbara Boxer of California, and Kent Conrad of North Dakota. Conrad’s involvement stunned me. For years, he had been my favorite Democrat in congress. Balanced and measured, he fought to put a halt to increases in federal spending.
The book outlines a number of crimes committed across the board in banking and in regulatory agencies that helped contribute to the financial meltdown. Yet, to date, little has been done to punish them.
The authors put it well—“A system where perpetrators of such a crime are allowed to slip quietly from the scene is just plain wrong.”
What struck me personally was the total disregard of ethical values of so many players in government and in business.
Can another crisis happen again and soon? The authors mention that it may not take the same form but as long as the “too big to fail” mantra exists some large institutions will likely get in to more monetary mischief at taxpayer expense.
This may not be light beach reading but it does read like a thriller at times. I highly recommend it for your summer reading list.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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