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Saturday, December 16, 2017

Is It Different This Time?

There is an old saying in the stock market that  shrewd players say should always be avoided. It is simply "this time it is different." Time and time again, market prognosticators have been proven wrong as they claim we are in a new paradigm and yes, this industry or specific stock will grow to the sky.


Well, when it comes to structural changes in the economy, I would say that this time things will truly be different.


My topic, of course, is mechanization joined by robotization. Changes are beginning to take shape that may well open up a unique labor situation in the developed world.


Prominent socialists led by Marx and Engels forecast that mechanization in the mid-19th century would lead to massive displacement of middle class labor. They projected that people would revolt and socialism would take the place of the free market. They were wrong. They did not foresee Carnegie's steel mills, Rockefeller's inexpensive oil, or Henry Ford's $280 roadster fueled by gasoline. Additionally, they did not see the emergence of millions of white collar and clerical jobs emerging and the growth of educated professionals as well.


What now? Here is where I think things could be different. This time around the while collar jobs will be eliminated. True, new technology does create new jobs to a certain degree and some small new sectors job-wise will emerge from our new wave of technology. * Yet, the losses inevitably appear to be greater than the new positions (for humans) created.


Joseph Schumpeter popularized the term "Creative Destruction." His thesis was that new improved technology and products wiped away the old and were major sources of profit. Can anyone argue that Microsoft, Apple, Amazon, Facebook and Alphabet (Google) have not been wildly profitable? Now, what gnaws at me almost daily is that the changes to come will be profitable for stakeholders but the number of new jobs will not replace the millions lost as old markets are destroyed.


Everyone understands that self drive trucks will eliminate maybe 350,000 jobs in the U.S. over the next 20 years. Yet, what about the office jobs lost with the new tech?


Ad agencies will need far fewer people. Some day (will not forecast when), the broadcast market will be replaced by online exchanges similar to what is happening with online advertising trading. Far fewer people are needed and the "bust your chops negotiators" from central casting may find themselves unemployable sooner than you think. Big Data analytics will take some or much of the fun out of advertising and marketing but why spend $375,000 to shoot a high quality commercial and $10 million to run it on programming where attentiveness is very low? As Big Data improves, Amazon and fellow travelers will help us reach the Holy Grail of marketing--reaching the right people, with the right message, at the right time for far less money than now.


I have another conclusion regarding the rise of robots et al that invariably generates a lot of flak from existing marketers, media salespeople and emerging entrepreneurs.


My thesis is that in addition to the elimination of millions of white collars jobs over the next two decades, existing global brands will be in an even more powerful position than they are right now. With so many platforms out there, young and questionably funded upstarts cannot build brand awareness or trial easily. Yes, a few upstarts will break through as they always seem to do. Those success stories will be even fewer than today.


Big players such as Nestle, General Mills, Coke, Pepsi, P&G, Colgate-Palmolive, Unilever and Kraft may simply resort to line extensions to expand their brand families.


Now, if million of white collar or middle class jobs are eliminated, how will our economy be affected given that some 72% of it is consumer driven?


Some people are saying that the robot revolution will take the entire economy down as far fewer people will be able to purchase many consumer products.


A solution of sorts has been floated in recent months by many people including Mark Zuckerberg of Facebook, Ray Dalio of Bridgewater Associates (large hedge fund) and Sir Richard Branson of the Virgin group of companies. It is Universal Basic Income. The concept is that everyone gets an income whether they work or not. These three billionaires are essentially saying that as Robotics and Artificial Intelligence grow, there will be huge and unprecedented dislocations in the labor market. Millions will be out of work with no hope for employment. So, a basic income must be provided.

I have issues with this. Some milennials have told me that a Universal Basic Income will be necessary. Yet, they are excited about it as young people will have a basic income and can pursue entrepreneurial or scholarly ideas. I agree that a guaranteed income could produce the next Hemingway or Fitzgerald or perhaps Steven Spielberg. At the same time, I think that many will become idle and drink too much, watch TV and not accomplish a lot in life. If you think we have an opiate crisis now, image if millions more, especially in economic depressed areas now,  are displaced with little hope for a leg up via a good job?  Also, what type of cycle of dependency would be created if people knew they had an income (very modest) for life? It would seem that income inequality would have to soar far beyond what it is today. Experiments are now going on in both Finland and Ontario, Canada with the Universal Basic Income.

Recently, I ran this idea by someone whom I admire very much but who is far more liberal politically than I (not hard). She surprised me by having the same concern about a long term cycle of dependency. Also, she stated that unless you are old or handicapped, you need to do something. She suggested a revival of something similar to the Works Progress Administration (WPA) from the Great Depression years as a link to Universal Basic Income. Yes, it might create still another bureaucracy but it might save the spirit of millions.

So, the next 20 years may truly be different. Businesses are going to squeeze costs out and answer to shareholders by increasing profits. Robots and Artificial Intelligence will likely not be stopped.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

*this concept was best illustrated to me in the writings of Professor Randall Collins of the University of Pennsylvania
   

Monday, December 4, 2017

Superficiality

My favorite definition of superficiality is appearing to be true or real only until examined more closely. In the business world, and perhaps even more sadly, the personal one, I have found that superficiality rules.


Over time, I have heard people say that they had made a really "deep dive" into a particular topic. Dig a bit deeper into their "analysis" and it is clear that the analysis they provided was superficial at best. At the same time, if you try to examine a topic from many sides, people are annoyed. I once had a boss who would ask me a question and he would stop to interrupt me and tell me to give him "the bottom line." Sometimes it was okay, but often the issue and my recommendation or analysis was next to impossible to articulate in 30 seconds. I took to sending him a long memorandum as a follow-up. He must have had a reverence for the written word as he would devour it and pass it on to others in top management. I believe it really helped my career and also discovered that he was not a master of discretion. So, after a few years, I would hand him a memo and plead that it would be "for his eyes only." My Machiavellian tactic worked great as, within 24 hours, six or seven people would tell me they had read my confidential report and liked it. I did not do this often but it helped my career and gave me a reputation as being thoughtful.

So these days and for maybe the past two decades, I try to surround an issue. If I am exploring a new topic, I often read five-six books about it. Invariably, my initial thought is wrong. As a follow-up, I always look for articles or new books that refute the position that I have taken after taking the initial plunge in to the topic. I realize that this takes time and often, in business, you have to pull a lot of information together and make a fairly quick decision. All too often, however, people make their initial decision and never revisit or explore new data a year or 10 years later when the landscape has likely changed.  With things happening at warp speed in the new world of media, I am really surprised by what I hear, see and read from alleged media professionals these days. A few examples:

—someone whom I never worked with but have known for years, sent me a draft of a media plan for an important client of his. I read it and initially was impressed by what a carefully crafted analysis he had made. As I worked toward the end, my blood pressure surely must have been rising. He provided TV performance estimates (i.e., reach & frequency projections) that were sky high and would have been questionable 20 years ago. When I confronted him with my concern, he said that it did not matter as people wanted to believe the unrealistic projections. I went in to a long monologue about how today milennials (his target, by the way) rarely watch TV without another device going. So, all performance estimates have to be wildly overstated today as they do not and never have really captured commercial attentiveness which now has to be at an all time low. He left the numbers in and sold the plan.

—more than one person has said that they will not test mobile executions until it gets to a 10% share of advertising expenditures. It will not be too late but why wait and think of what you might learn about this emerging medium in the meantime?

—all too many people still spend a great deal of their budgets in the U.S. even though there are countries where they have solid growth and distribution that have economies expanding at a rate at least twice that of the United States. I never say stop spending at home but with the tremendous wealth shift from the West to the East, this seems very shortsighted.

—in general, many are using media cliches from 20-30 years that no longer apply in today’s world of commercial avoidance and many new platforms.

My friends and acquaintances need to work a bit harder and take an authentic “deep dive” in to a host of issues. One fellow told me that I am too intense and I should imitate him and “coast to retirement.” That is not I and it is not a good way to go out.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com 




Wednesday, November 22, 2017

Media Deals and Scale

In recent weeks the business press and the three business oriented cable channels in the
U.S. have been buzzing about possible mega-media buyouts of famous names.

The most prominent has been 21st Century Fox selling part of its asset base to Disney. Why would they want to do that?

Well, their entertainment business is not overly profitable as most movie studios are not. They appear to want to keep their broadcast network, Fox Sports, and Fox News and Fox Business. Why would Disney want their movie studio, perhaps FX and a few other properties? Soon, Disney will launch their own exclusive streaming service. They could use the huge backlog of films that Fox has in their library. If Disney wishes to take on Netflix, they need lots and lots of content. Some things they cannot buy from Fox. Disney owns ABC so the Fox Network is off limits legally. Given that they own ESPN, Fox Sports is a non-starter as well.

The issue that many talk about regarding the the legacy media companies is that they lack “scale”.  In today’s world, bigger is invariably better (with very few exceptions) and “content is still king” proving that Sumner Redstone was right about 30 years ago when that term was attributed to him. Speaking of Redstone, how much longer is CBS viable as an independent entity? For decades, CBS was “The Tiffany Network” that dominated the Nielsens most years and made executives and shareholders a fortune. They still have an impressive lineup of assets including everything with a CBS in front of the name plus Showtime, CW, Smithsonian Channel, and Simon and Shuster among others. Yet, they are increasingly becoming a small player in the scheme of future media. Their market capitalization as I write is $22.6 billion. Impressive compared to thousands of publicly traded companies. Yet, according to both The Wall Street Journal and CNN, Apple has $262 billion in cash parked overseas. So, technically, they could purchase CBS whole without effecting their cash on hand much and with no debt.

We live in an unusual era where the greatest companies that have ever existed are literally busting with cash. In addition to Apple, Alphabet (Google), Amazon, and Facebook all in the position of buying out almost anyone. So, what does all of this mean? To me, Disney is doing the right thing to possibly buy portions of Fox simply to stay viable in our brave new world of media. CBS does not appear long for this world. In recent weeks, both Apple and Facebook have announced that they will be producing original video content. This has to make Netflix a bit nervous as these monsters may lose a few billion a year on their video ventures for a long time and never run out of funds. Also, Alphabet has never fully monetized You Tube although they appear to be making small steps in that direction.

One thing few people are talking about is that with more players such as Apple and Facebook getting in to creating content (likely without commercials), this has to be another body blow to advertiser supported TV. There are only so many hours in the day and Netflix, Amazon Prime Video as well as non-commercial stalwart HBO continue to grow. When viewers are given more options from Apple, Facebook and YouTube, TV, as we know it, has to suffer.

My forecast is not particularly prescient or brave—the ultra big will only get bigger and legacy media companies will likely have to sell out fairly soon to survive.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Sunday, October 29, 2017

I Am Too Old To Change

I have been involved in the world of business for well over 40 years. In that time I have heard a line from dozens of people that really annoys me or makes me sad in some cases. It is simply, “I am too old to change.” The world is changing at a faster pace than ever before. Using the “too old to change” excuse strikes as a stalking horse for completely giving up.  I have heard people use it for refusing to lose weight, start an exercise program, stop spending so much, and, of course, not embracing our digital age either personally or professionally.

A particularly poignant example came from someone in the advertising agency business who felt that his days were numbered. He is a deeply experienced creative who has won numerous awards for his TV creative and great print executions. When he wrote to me and said he was too old to change, I laughed out loud. “How old are you, I fired back? 53?” He replied, slightly wounded “51.” I told him that he was much too young and too talented to be throwing in the towel and waiting for the end. “We are all dinosaurs”, I went on, but “even I, far older than you, have shifted gears a great deal in recent years. If I can do it, so can you.”

To me, the important thing is to not pretend to have an overnight conversion. You can, however, be seen as shifting how you spend your time, and getting current over a fairly brief period. It requires quite a bit of reading, perhaps attending a conference or two on your own nickel, and asking questions to younger staffers who may look at you as a person whom the business has passed by.

The habits of a lifetime are deeply embedded in most people. Yet the business landscape, especially, the media world is changing rapidly and no one can sit tight and try to ride it out until retirement. Success is largely a matter of perception. If you say that you cannot do something new, then you surely cannot.

My attitude, perhaps a bit simplistic, is that if you are still breathing, you can change. All of us have seen people who have changed for the worse in many ways, but honestly, I have seem a number that I have seen change for the better as well.

One person whom I know very well says that he is working tooth and nail to restore his relationship with every member of his family. It is tough going and his wife tells him that he can never achieve it given his years of mistakes and former broken promises. I wish him well and sense a greater determination in him than ever before.

As C.S. Lewis wrote, “You are never too old to set another goal or dream a new dream.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Thursday, October 19, 2017

Demographic Update

For years, I have been pounding the drum telling people that demographics should be the first line of analysis for media placement, marketing, investment and societal issues. I use them everyday and any forecasting that I do is usually tempered by a heavy dose of demographic scrutiny. Last June, the US Census Bureau released some updated figures across several financial measures that I would like to share with you. What I like about the Census Data is not simply the size of the sample. It is that they often provide the median for many things that they measure.

You have all heard the old line that “you can drown in a river with an average depth of six inches.” The average, of course, is the arithmetic mean. I do not find it particularly useful when looking at many demographic characteristics and especially so when it relates to income, net worth or wealth. The median makes far more sense to me. It is the 50th percentile so it takes out the extremes at both the top and the bottom.

So, here are a few Census factoids:

In the U.S. media household net worth is $80,039. Take out equity in their primary residence (if they have one) and it drops to $25,166. So, other words, sans house many American families have $25k or less in assets.

We all check our retirement accounts regularly. The median value of retirement accounts was reported as $58,500 (it has to be higher now with the recent record breaking rally on Wall Street). Still, not a fortune especially if you are over 50. And, some one third of working Americans have a retirement account balance of zero.

Some good news came from the Federal Reserve recently. Median household income hit an all time high by the end of 2016 and was at $59,039. The problem is that it was at $58,665 in 1999. So, when pundits say that the middle class is stalled or disappearing they are not exaggerating. It has been a tough slog back for millions of American families to recover from the Great Recession of 2008-2009.

What about earnings? The Census tells us that just under 45% of U.S. households have an adjusted gross income or taxable income (after exemptions and standard deductions) of under $30,000. Some 80% have a taxable income under $100,000 and approximately 5% over $200,000.

In the U.S., the Federal Reserve tells us that the top 1% of households have 38.6% of the net worth. The bottom 80% have 23.8% of U.S. assets.  Credit Suisse measured it globally and the top 1% control  almost exactly 50% of the world’s wealth. Credit Suisse also projects that the top .7%  worldwide are millionaires in U.S. dollars.

As marketers who are in the higher echelon of both income and net worth, can we truly relate to these data? Our economy has clearly improved, albeit slowly, the last few years, but financial markets have done very well. Yet, only 51.9% of Americans have any holdings in equities. So, the bottom half has benefited not at all from a 23,000 Dow Jones Industrial Average.

I hate to end on a sour note but I cannot resist mentioning a new and, to me scary, milestone regarding the national debt. This year the national debt is crossing the $20 trillion dollar mark. It will be 7% more than our Gross National Product(GNP) this year. So what, you may say, that is just a number. Well, economic historians often place an 80% national debt to GNP ratio to be a danger zone. Yes, we are lower than Greece, Japan and many European nations. It still, however, gives me pause. Will our new tax reform or cuts, if they pass, be revenue neutral? It seems unlikely. And, my friends, what about the unfunded liabilities in Social Security, Medicare and Medicaid?  They are somewhere between $100-200 trillion without reform. How about  one more zinger? If we ever have real interest rates again, not 12%, but let us say, 5%, the annual budget deficit will soar out of control as most of our national debt is now short term at artificially low rates.

So, we face growing wealth inequality and huge debt and how do we market to the struggling 50th percentile and below?

Time for a drink. Cheers!

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com



Sunday, October 15, 2017

Can It Go On Forever?

Herbert Stein was Chairman of the Council of Economic Advisors until both President Nixon and Ford (He today may be more famous for being the father of writer, humorist, sometime actor and investor Ben Stein). Urban legend credits Stein with saying, “If something cannot go on forever, it will stop.”

Over the last ten years, two weeks have not gone by where someone has not asked me something close to this: “TV just does work as well as it used to. When will it stop getting so much advertiser money?”  Usually, if it is in person, I break in to my version of a Mona Lisa smile and say simply that I just do not know. If it is in an e-mail, I often conjure up Herb Stein’s alleged quotation.

Years roll by and people foolishly say that this year will be the last of the network upfront market. Yet, each spring the cavalry charge begins anew and smart people place big bets on a declining medium where all of us admit attentiveness to commercial messages is at all time lows. I stay silent. Yes, the bomb is ticking but the fuse is longer than most of us suspected. Or, as Lord Keynes put it, “Markets can stay irrational longer than many can remain solvent.”

Why does TV still get such a large share of advertising funds? Well, to me, it is pretty simple. Social media is exciting but does it move the needle for most products? Mobile may have the most potential but is still in its early stages of development and the message has to be very spare. TV is a safety blanket for marketers. You know it still can move sales but ratings are lower and over-state attentiveness more than ever. It is still the gold standard for many and Nielsen, though tarnished, remains the currency by which the medium is measured and attentiveness be damned.

For years, I have encouraged advertisers to branch out and test other platforms but not abandon TV altogether for many products. Each year, it seems the case for a substantial investment in TV gets weaker. Yet, as the economy rebounds, so do broadcast revenues.

I suppose that the great late American philosopher, Lawrence Peter “Yogi” Berra said it best—“It ain’t over ’til its over.”

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Wednesday, October 4, 2017

Letting Go

A few years ago, I ran in to a former colleague at a store. It had been perhaps 15 years since I had seen him. We spent a few minutes catching up and then he asked if I ever ran in to Mr.X, whom we had both worked with at the same time. When I told him that I saw him every few years accidentally,  just as we were meeting now, he exploded saying that he hated the bastard and would like to punch his lights out.


I smiled and he did not think it was funny. He went off on a long riff as if it were yesterday of all the horrible things the man had done to him. "He was awful to you, too.  Remember the day he threw you under the bus at the client meeting so he could look good?" I agreed that I remembered it.


He was annoyed that I seemed so calm about it all. I gave him my standard speech about not looking at life through a rear view mirror. He shook his head rather violently. "What are you going to say next, Don? That I should do some expressive writing and get him out of my system or chant and meditate? Get a personality transplant?"


I told him pretty directly that this was hurting him a lot and not the person with whom we both had serious issues. Stealing a well worn line, I told him that he "was swallowing poison and expecting the other guy to die."


This broke the ice and I pulled out another platitude. Life has been good to both of us and we survived and prospered over the last few decades. I went on to say that you cannot live in the past or the future but only in the present. That jerk will not likely be part of our day today or tomorrow so let’s move on.


Letting go is hard to do. We all need to do it. I find that I can forgive and have done so on a number of times but forgetting is a lot harder.  People have also forgiven me. As I get older, I also find that I try to see the issue from the point of view of whomever was my nemesis. Was I wrong? Was he or she going through significant personal turmoil at the time so they lashed out at  those beneath them corporately (That proved to be true several times)?

Living in the present is liberating and, candidly, it is all that we have. If you are holding a long standing grudge, why not give it a try?

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.

Wednesday, September 27, 2017

Thoughtful Disagreement

Over the last year or so, I have studied Ray Dalio very closely. He is the CEO of Bridgewater Associates. the largest hedge fund in the U.S. I watch his interviews on CNBC, Bloomberg, and Yahoo Finance very closely,  replayed his TED talk on management several times , and have watched any YouTube entries with him in them going back a few years.

He is disarming for a multi-billionaire. In his TED talk, he shows a clip of himself as a guest on “Wall Street Week” in 1982. When the sound bite is over, he says “what an arrogant jerk I was.” Shortly after that, his business almost went under and he had to re-trench. Clearly, he has come back with a vengeance.

One thing that interests me is the way that he runs his enterprise. He encourages what he calls “thoughtful disagreement.” From 24 year old rookie to 62 year old veteran, everyone is allowed and encouraged to state their views even it meaning criticizing the boss. Having viewed an army of yes men and women for 45 years, it is truly something to see and think about. Clearly, he works with a group of uber-intelligent analysts who, after a few years, begin to have independent means. So, they can speak their mind and not have the money worries that many of us have experienced. So, I have often wondered how applicable his approach is to other companies or industries.

Over the years, I conducted hundreds of personnel reviews. Many people told me beforehand that they wanted “constructive criticism”. Maybe I always did it wrong, but whenever, I criticized  a staffer even mildly, people generally became defensive and some visibly angry. The same was true when discussing issues with most, but not all of the top management, I encountered. Some made it clear that it was “my way or the highway” while others said they welcomed dissent but rarely embraced it even when it was mild. So “thoughtful disagreement” rarely saw the light of day in my career.

The same thing is true of discussing politics. I do not think that I ever changed anyone’s mind on a political issue even when the discussion was civil. So, I  usually avoid such issues. Why waste one’s time?

Dalio said business ideas should be discussed in front of your team and undergo a “stress test.” If it passes the test, then you have a good chance of success. My caveat to that is that everyone has to be honest in the discussion and pretty well informed on the issues. It has been rare, in my experience, to see both variables, honesty and well informed, present among all or even many members of the group. On a personal basis, I like to read outside my comfort or belief zone and put my ideas through stress tests all the time. Generally, they hold up pretty well but I have noticed my views on certain issues moderating a bit in recent years.

So, consider this. Bridgewater, led by Dalio, is the largest hedge fund among many. Clearly, they are doing more than a little right.  Do you encourage “thoughtful disagreement” among your team? Would they do it if you tried?

In advertising and marketing, things are changing faster than ever. All of us, if honest, know that we are having a difficult time staying on top of media changes that seem as if they are happening daily. You need to test a lot of little things on new platforms knowing that most will fail. The spirit of an entrepreneur is needed even if you are with a global brand powerhouse. The tiny failures will not even be a financial rounding error to a giant firm. You realize that you cannot stand still. Thoughtful disagreement and lively stress tests might be a great tool  going forward.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.

Friday, September 22, 2017

Where Are The New Entrepreneurs?

Historically, there has been an old cliche that small business was the growth engine of both the overall U.S. economy and job formation. A cliche, yes, but it was still true. As we write in late 2017, the landscape has changed. Fewer people are starting their own businesses than even a dozen years ago. What is causing this sea change and can it turn around?

The Great Recession of 2008-2009 savaged the U.S. economy and people who were hurt then and saw many others who had businesses go down for the count, appear to be a bit gun shy. So, while, the terrible downturn is still reasonably fresh in people’s minds, the memory of it probably inhibits some from doing a start-up. Here are some other reasons that I have pulled together from several sources plus some of my own personal conjecture:

1) Regulation—conservatives scream a lot about businesses being over-regulated but there is definitely some truth to it. Talk to anyone who has started even a small shop in the last few years and they will, to a person, complain about the heavy licensing and permitting that is needed for even the most modest enterprise. Also, many people who leave a job have non-compete clauses which prevents them from getting back into the same fray for months or even a few years.

2) The Wal-Mart-ization of America—no, this is not a complaint about how the world’s largest retailer underpays its workers and may be skinny on benefits. It is simply that ultra-big companies have scale and small players cannot compete against them in many categories. Add Amazon to the retail mix, and many rural businesses never see the light of day as online shopping continues to escalate.

3) Big companies are showing more entrepreneurial flair than ever. Leading firms such as Google and Facebook have venture departments within their companies that fund and experiment with new arenas. Many would be entrepreneurs embrace the heady atmosphere of being around lots of big brains in a super stimulating environment. The workplace has to be fascinating.

4) Immigration reform—The term entrepreneur was coined by early French economist Jean Baptiste Say and is translated as “adventurer”. I love immigrants—they are hungry, work their butts off, and come to our rocky shores hoping for a better life. By pulling up stakes and coming here, many, almost by definition, have the spirit of an “adventurer.” If we had a sane immigration policy that fast tracked people with skills that we desperately need, you can bet that more new companies would be formed.

5) Most new products fail and most new ventures go bust within three years. Only .4% of firms last 40 years. It is a high risk game. Today, many have become risk averse and it is hard to blame them.

6) As technology improves, there is no question that new jobs are created. Yet, do not forget one important point. A tech company today can get to $1 billion in sales with a relative handful of employees compared to any time in the past.

7) New companies seem to be mushrooming the most in areas that are the usual suspects—Silicon Valley, The Boston Area, Austin, and Brooklyn and Manhattan. As rural areas empty out, there is little growth in business startups there even though living and operational costs may be low.

There is one statistic that has me encouraged. Over the last two years, there has been more small business births than deaths. If this is the beginning of a trend rather than a short term blip on the screen, there may be fine things on the horizon for our country.

Take the advertising business, for example. Few people are starting new advertising agencies these days. Always a highly speculative venture, advertising is changing so fast that starting a full service shop these days from scratch is generally a child’s dream.  However, small boutiques with speciality services are popping up all over. Graphic designers who were doing project work a year or two ago are morphing in to small shops known for fast turnaround, zero pretense and low fees. Experts on mobile are doing well although some of the real stars are getting snapped up by WPP and other giants. There will always be talented and unappreciated men and women who will go out their own. Others may simply have to be their own boss and hang out a shingle.

Watch new business formation carefully. It is an important bellwether for tracking the vibrancy of a free market economy.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.



Monday, September 18, 2017

Sleepwalking Through Life





I, as many of you, am a big fan of Warren Buffett. Recently, I was watching a You Tube video where the great Oracle of Omaha was speaking to an MBA class. When asked to give advice he gave his normal admonitions about business ethics and responsible investing. In this one, however, he added the advice of “Do not go sleepwalking through life.” I was pleased as it is a theme that I think is vitally important but neglected in pop psychology and often commencement addresses.

Buffett commented that you should find out what you love to do and then make that your career. He suggested doing what you would do if you were not getting a salary and did not need the money. Then, he said he actually did that by offering value investor guru Ben Graham his services for free if Warren could simply work for the master for a while. Graham hired Warren but did not take him up on the working for free offer.

When I was becoming an adult most people were keen to give me advice. Often, they would tell me to not worry about what you were going to do for a living. The line most often used was “you will fall in to something and then make it your career.” Even then, growing up in rural Rhode Island, I knew that had to be limiting. Given my free market proclivities a career in government was unlikely and unappealing. Heavy industry or production had little pull for me and, in finance, I could make a decent living but always be in the minor leagues. Only my father spoke to me sensibly and directly and told me to try a few things and find something that I really liked. It was profoundly good advice.

Hearing Buffett’s words recently, I was struck by how many people I had observed over the years who were truly sleepwalking through life. Things always seemed to be on auto-pilot with them. They had no plans beyond the next paycheck. I found it particularly annoying when I found it happening with the many people who are far more intelligent than I. They watched a great deal of TV, were addicted to sports, but seemed to have little awareness of what was going on around them. Others seemed to fritter away their time with hobbies or make work projects. Yes, many of these things are stress relievers or some persnickety people want to have things just so in their homes. Yet, it takes time and over the years, some of them become breathtakingly boring. Their world has become tiny.

In my advertising career, I was accused of being overly interested in talking with sales reps. My response was simple—“Sales reps see more people in a week than you, Mr. or Ms. Account Person in a year. They know where the marketplace is going if they pay attention at all and, if they pay close attention, they have a great view of trends forming. You do a nice job of servicing our clients marketing needs but sales reps can give us a nice idea of competitive threats”.  Most dismissed me as a neanderthal.

Over the years, I have been a very ambitious reader. I used to mail books to friends and colleagues a great deal but have cut back drastically. The response often was “that is way too long. I will never get through that.” Or, “This is great. I will be on a long flight in three months and, if I remember, I will take it along.” I was trying to help their careers. They did not get it.

Another form of sleepwalking is what used to be known as the “let George do it” syndrome. Some days I feel that I am one of the few people left in America who are concerned about our $21 trillion + national debt and our entitlement overhang of perhaps $200 trillion or more. Mention it and people dismiss me as a crank or more annoyingly say, “Someone will do something and take care of it.” I shoot back, “I am been waiting for over 40 years and regardless of the party in power, not much gets done.”

So, at the risk of sounding like an angry old scold, may I suggest that you get engaged. Do not live an un-examined life. There is a big world out there and you have something to contribute. You might even have more fun than you are having now.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a comment on the blog.

Thursday, September 7, 2017

The Future of Jobs--A Contrarian View

A few years ago, two people approached me and asked for my opinion of what the job market would look like in about 10 -12 years. I went at an answer tooth and nail pulling together data from a wide variety of sources. Then, as a trial balloon, I sent my forecast out to a few people whose opinions I value greatly. The response was mixed. We will come back to that but first here is my forecast:


By 2027, we will not have a two tiered employment market but actually three.

From what I see today it  will likely shake out as follows:


1) The top 10-12% will be made up of very smart individuals. These sharpies will have mastered the new technologies or will have so much money or power in a firm that they can manage those who have. They will push and likely succeed in making their products or services even more efficient and will garner increasing profits and market share.

2) The next group will not be that large; perhaps 5% of the workforce. These people will not be tech mavens but they will cater to the whims of the top 10%. Personal trainers, interior decorators, financial planners (although index funds will hurt them), SAT Tutors, and household managers will top the list. Suppose an investment banker (a woman) marries a successful surgeon (man). Their income will be huge but the one commodity they will not have much of is time. A manager will be hired who will get the kids to school, pick them up after squash practice, make dinner and do the laundry. They will be paid quite well.

A new servant class will emerge to address the needs of the emerging 2nd gilded age.

3) Things get rough for the group below these two which may be 80-83% of the population. Robots will take some of these jobs and continued growth in offshoring will do even more damage. Lawn services, roofers, building security, some food service and home health care are likely to be here. These jobs can often resist automation as you will need some hands on action. Importantly, you will need less. I saw a video of a coffee shop in the Bay Area that has machines that make a perfect cup of quality coffee (not the dreadful vending machines that "brewed" coffee years ago!) . It had one employee who collected the cash that some customers still used and was there in case of a machine malfunction. So food service jobs will still exist but there will be far fewer of them. A problem, of course, will be that these jobs will ALWAYS have low salaries as one can digest the necessary skills in a few days and you are very easily replaceable.

Now, will all 80-83% have dead end jobs? Of course not. But, and this is important, raises for middle managers will likely be smaller over time and upward mobility will get tougher except for the most resourceful. I have always bristled when people would say “this time it is different.” They say it with real estate or stock market booms or even overpriced media properties. Yet, here I am saying this time it IS different. When The Industrial Revolution came along many people were free to leave the farms and move to urban areas as improvements in farm equipment had made yields higher with less labor. As electricity came along and steel mills started to roar, millions of new non-farms jobs were created. Henry Ford used his assembly line to build cars, paid workers well, and cars came to the masses.  And so it went for decades.

Historically, increases in technology have increased the number of jobs, good paying jobs, too. Now, we face something a bit different. Like many of you, I am fascinated by the future of self drive cars and trucks. What, however, will happen to the hundreds of thousands of truck drivers in the U.S? No, they will not all go away, but major companies will find self drive vehicles safer and cheaper to operate. Efficiency will always win out.

Also, don’t forget Big Data. It will not simply be a turbo-charged marketing tool. As I write people are working on ways for Big Data to measure worker productivity. Workers will be under more pressure than ever and will face greater scrutiny. The coming together of data points will not be dissimilar to your credit score. It will be hard to fight this in performance or compensation reviews.

Right now, some plants are using robots along with people. I read of one where when a night shift is required they go 100% robots as they are more dependable. Schools do more online courses which cut the number of faculty required and do not use up much classroom space or heat or electricity. I would not want to be a 26 year old Latin or Greek professor these days!

The media world is affected, too. As mega-shops place more on line advertising on exchanges, fewer people can handle billions more in billing. The logarithms get more sensitive and effective every day. An acquaintance has told me he loves what they do but is glad he is 60 and can pull a platinum parachute as he leaves his media giant.

Should the top tier get far wealthier due to the efficiency, the flip side is that the bottom 80% but especially the bottom half could get poorer. We have seen how the wealthy have an aversion to tax increases and they have the contacts and deep pockets and influence to fight them. So, we are heading toward a world of the tech haves or financial heavies and the tech have nots regardless of how many of us own the latest smartphone.

When I looked at this almost inescapable trends to deeper inequality in the US, I went back to my first teacher in Economics—Adam Smith. At 20, I read the WEALTH OF NATIONS (1776) for the first time. The father of modern economics taught me the merits of the market system and the tremendous benefits of free trade. In WEALTH OF NATIONS, the great Dr. Smith wrote: “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” Amazing. He wrote that way back in 1776 but it appears that we are headed that way in the next 10-15 years. What to do? Elect Bernie Sanders or a clone in 2020? No way. That could kill the economy. Smith often talked about the value of unfettered markets but admitted that sometimes they needed a little fettering. While he bristled at his own prescription as government entering in to markets was against what he called “natural liberty”, perhaps a progressive income tax and some careful financial regulation would prevent consolidation of economic power in to the hands of a few. My libertarian friends would argue that unfettered markets are great and that crony capitalism has caused much of the inequity in society. Let me be clear—there will ALWAYS be unequal distribution of income in a relatively free market. Some people are more intelligent, some work harder and some are just plain lucky. Yet, if the trends that I see continue, we will be seriously out of whack.


The response to my thesis has been interesting. A few said that I had read too much science fiction and others said that I was a gloom and doomer.  Some quietly agreed and admitted that they will be on top. I consider myself an optimist but, to me, the handwriting is already on the wall. Companies will use tech to squeeze out costs and as one person said to me several years ago, "Robots and logarithms do not require vacations, sick leave, health insurance, raises or a  401K."

I sincerely hope that I am totally wrong with this hard nosed forecast.  Yet, unless things change in a big way, I do not see how much of it is unavoidable.

If you would like to contact Don Cole directly you may reach him at doncolemedia@gmail.com or leave a message on the blog.

Tuesday, August 29, 2017

What is a Fair Price?

When I was about 8 years old, I started to collect coins. The collection was nothing special as I look back on it, but it taught me a very valuable lesson. I went with my dad to a coin shop and paid $6 for a coin. Some two years later, I looked the coin up in the “Red Book” which placed a value on coins and saw that my original purchase was listed as $12.00 in uncirculated condition which mine was. I excitedly told my father that I had doubled my money. He smiled and said, “Not so fast, Don.” Then he proceeded to explain to me that the Red Book price was close to what a dealer would charge me if I wanted to BUY the coin now. If I were selling it to him, I would be lucky to get $8 and more likely $6 which is what I had paid for it. The lesson that I learned at my tender age was that a coin, a house, a used car, a collectible, or a stock was only worth what someone else was willing to pay for it.

In Consumer Behavior, theorists often refer to a phenomenon known as the endowment effect. If something is owned by you, you endow it with a value that is often distant from marketplace realities. People who think their home is worth a million dollars are shocked when their realtor places it at $650,000 and even then the bids that arrive are lower. The used car that you have pampered for 12 years does not fetch nearly as much as the price you envision for it. Learning that things are only worth what others are willing to pay for them was a great lesson to learn when very young.

Over the years, I have  been shocked by people who survived in the advertising and media business not realizing the simple truth of auction market pricing. I would suggest a bid on a property or a sponsorship and a colleague might say, “We can’t offer that. The station will not make any money on it.” I would often respond simply that such a low amount was what the property was worth to our client and add that, if the price was truly too low, they would not sell it to us. You did not have to be abrasive or obnoxious about it. Simply state that our offering price was all that the client could pay or what we were willing to pay.

Another sales tactic that always really amused me was when a rep would say, “We have worked so hard putting this together. You have to pay more than your offer.” Once, sitting across from a particularly odious salesperson, I smiled and said, “I didn’t know that you were a Marxist.” He looked wounded at first and then slowly became angry. I outlined Marx’s long discredited labor theory of value which briefly described that the value of a commodity can be objectively measured by the average number of hours required to produce that commodity. Think about that for a moment. Let’s say that I decided to knit a sweater. I assure you, my friends, that I could spent 1,000 hours working on it and, at $15 per hour as a wage, no one would want to buy the ugly sweater that I had produced at any price—but especially not at $15,000. Well, I use that absurd example to make the point that it mattered nothing to me that someone had spent a lot of time putting a proposal together. If it did not reach the people whom the client needed to reach at the right price in the right environment, we would go elsewhere.

In the years to come, prices for advertising or  program or event sponsorships will fluctuate depending on market conditions and competitive demand. There is no intrinsic value to media time or space across any platform. It is only what someone is willing to pay for it. Ideally, both sides get a win-win in an important negotiation. Pricing to me has always been something of an economic miracle. Sometimes dozens of people in many countries contribute to putting a product or service together. Each makes some money every step of the way. The finished product, however, is only worth what the consumer thinks is a fair price and one hopes the producer can make a profit at that level.

The little boy with the shiny uncirculated silver quarter is now almost 60 years older. He has not forgotten the lesson he learned so long ago.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Sunday, August 20, 2017

Netflix, Disney and Cable

I have been away for a few weeks with somewhat limited access to e-mail and some of my normal business news sources. Opening up the mail last night, I found a number of statements about the state of the media world. Those that I can repeat included:

“Netflix is toast. Disney’s moves will take a few years but Netflix will be crushed.”

“Say goodnight, Comcast and Time Warner. AT&T’s purchase of Time Warner will prove to be one of the biggest blunders in American business history.”

“A freestanding ESPN is going to drag cable down, down, down.”

“Disney does not get it. They clearly have no idea how hard it is to start a streaming service from scratch.”


What is all the hysteria about? On August 8th, Disney Company CEO Bob Iger announced several things. First, Disney will end its partnership with Netflix in 2019. After that, Disney content will not be found on Netflix. Also, Disney will launch it own streaming service in 2019 which will be the only place where one can watch new Disney material including action and animation. Content from the Disney Channel, Disney Jr. and Disney XD will be available on this entity as well.

Separately, ESPN, a Disney property, will begin a streaming service in 2018. It will feature 10,000 events a year including much live programming. Simultaneous to both announcements, Disney revealed that they will have a majority stake in BamTech, which is a significant streaming as well as marketing service.

So, the Disney changes are what precipitated the four quotes that I received from Media Realism readers and friends. Are the above comments correct? What is going to happen?

Here is my quick take on what appears to be going on:

1) Over the last couple of years, ESPN, until recently, a spectacular cash cow for Disney, has been struggling a bit. They were bidding up the rights fees for various sports properties which they were trying to pass on to advertisers. As more people cut the cable cord and young people used many online properties to get sports news, ratings began to sag a bit. ESPN, in a belt tightening move, laid off a number of on air personalities, some of whom were making seven figures in compensation.

2) For years, many pundits were saying that a large group of people ONLY were cable subscribers to obtain ESPN and its sister channels. If ESPN went freestanding, Disney could earn more money than now. Anecdotally, a number of young men in their 20’s told me that they would definitely dump cable if they could receive all ESPN platforms on line for $15-18 per month.

3) Cable has definitely lost some penetration in the recent past due to cord cutting and cord-nevers. As part of an experiment, I used Netflix, You Tube and Apple TV as a surrogate for a cable subscription about 18 months ago and had 95% of my video needs met admirably.

4) Netflix—the August 19th edition of BARRON’s, a Dow Jones publication, cautioned stock investors about Netflix. It is selling for over 200 times earnings, has high debt and, as they put it, are a “hit renter” rather than a “hit owner.” It would require them to spend massive amounts on content to keep growing. The author suggested that with such a high market cap they could easily float some new shares to either pay down debt or finance new programming. I agree but have a different take on Netflix than most. Several years back, I thought that Netflix had arguably the best business model that I have ever seen (Single exception! I grew up outside Providence, RI so the mob may have had a better one in the 1950-70’s given the high cash nature of their business interests). To me, as a consumer, Netflix is an outstanding product. I absolutely love it. As an old movie buff, I have over 100,000 films to choose from and also their made for Netflix properties, a few owned and others rented which are often of excellent quality. The pricing to me is a steal. Consumers these days are sensitive to price increases so they may have to move subscription rates up slowly. Outside of the US growth is still fairly strong and they now have an eye popping 100 million + subscriber base. My problem is that movie making and TV shows are generally a pretty crappy business. Over my active media career, I tracked that 72% of new televisions shows were cancelled in the first year (I would assume that today a similar statistic would be operative). And, most films lose money. So, Netflix had a wonderful model but now that they have become a programmer they have added a lot to their risk exposure. Also, people tend to forget a vital thing about Netflix growth. For years, they were competing against hapless Blockbuster. I am certain that in the future, the Harvard and Wharton MBA programs will be using Blockbuster as a preeminent case study on how NOT to run things. Netflix shrewdly hopped on the digital train as it left the station and Blockbuster continued to build brick and mortar stores as one new CEO replaced another. Blockbuster also refused to consider a bid to buy a substantial hunk of Netflix went Reed Hastings (founder of Netflix) went to them hat in hand.  Also, Netflix is now facing direct competition from Amazon Video and will soon have another deep pocketed competitor in Facebook. And, do not forget that Alphabet (Google) has a sleeping giant in YouTube if they choose to get in the mix in a much bigger way.

So, what is going to happen over the next 36-48 months? I do not know and anyone who tells you they do is as sensible as those talking heads that I see on CNBC or Bloomberg telling you precisely what is going to happen to the Dow Jones Industrial Average over the coming week. Clearly, while no one knows how the media merry-go-round is going to develop, there is certain to be some upheaval. Disney has content and Comcast and Time Warner (likely to soon become AT&T) have both scale and buying power. Netflix has consumer preference but not the deep pockets of a Facebook or Alphabet. So, on balance, I would have to say that Netflix which I love as a consumer may well be the most vulnerable when I look at it unemotionally as a media analyst.

Frederick the Great of Prussia once famously said that “God is on the side of the big battalions.” Directionally, that is where my bet would be as well for 21st century media.

If you would like to contact Don Cole directly, you may reach him at doncolemedia.blogspot.com or leave a message on the blog.

Saturday, August 5, 2017

Malcolm Gladwell's 10,000 Hours

Since its publication in 2008, many of us have read Malcolm Gladwell’s bestseller,  OUTLIERS: The Story of Success (Little Brown and Company). Gladwell gets a lot of criticism for being something of a pop psychologist who is selective with his research but I always find him to interesting and fun to read.

When OUTLIERS had been on the bestseller list for many weeks, an aggressive young salesperson visited me. He asked me if I had read the book and I said yes. We discussed it for a few minutes and he then said, “I will know as much about media as you do in another four years.” I smiled and said maybe you are right. Annoyed, he replied, “No, I will. I have been in the business a year working 40 hours per week so that makes 2,000 hours. When I have five years under my belt, I will have my 10,000 hours in and be an expert just as Gladwell said.” I tried very hard not to laugh and responded, “I think that you are taking Gladwell a bit too literally. You get stuck in meetings and sales calls daily where you do not learn anything new. Also, you drive to a few appointments a day in Atlanta traffic. Those 2,000 hours per year are not all solid gold in terms of learning the business.” He was clearly not happy with me.

In my life, there were two examples that illustrated my point that I tried to articulate to the young lad but he failed to accept. The first happened in college. I was interested in a young woman and she told me that she saw that famous pianist Van Cliburn was performing the following Sunday. The problem was that he was performing in Providence. I said no problem, I had a car, I was from Rhode Island, and I knew the venue well. Off we went and I must say I enjoyed being with her more than the recital. After the performance, she asked “Don, can we go backstage and meet him?” I said sure thing but was a bit nervous.

About a dozen people were there and I asked him to sign the program and he was most gracious and my young lady friend was thrilled. Then, a stage mother pushed a nervous 10-11 year girl up to the great man. She said, “Van, my daughter practices four hours per day."

Van Cliburn gave a pained smile and said “When I was young my mother was working so I would come home from school alone and work on my music. Sometimes, she was late coming back from work. She never asked me how long I played. Always, she asked what did you do? Learning to play well is all about focus. The only valuable time is when you are totally in to what you are doing. Very often, it does not take as long as you think some days.” That really impressed me.

Some 35 years later, I was playing in a golf junket at Pebble Beach with my brother.  Two time PGA champion Dave Stockton did a clinic for us before the tournament. He echoed Van Cliburn by asking us how often we practiced at the driving range and how many balls we hit when we did. He stressed that we should never stand in the practice area and hit one ball after another. Rather, we should watch the flight of each ball hit, especially the bad ones and try to access what went wrong. The number hit was not nearly as important as trying to discern what went right or wrong with your most recent swing.

Over the years, I have unknowingly practiced the 10,000 hour drill. There is a particular topic about which I have read 700 books. Literally. I do not consider myself an expert but I know more than most. In recent years, I have devoted with few exceptions an hour a day to another topic. Before I die, I hope to be near expert level in that discipline as well.

Interestingly, Gladwell gets some criticism from the originator of the 10,000 hour theory. He was Professor Anders Anderson of the University of Colorado. The concept was developed in a paper he wrote entitled, “THE ROLE OF DELIBERATE PRACTICE IN THE ACQUISITION OF EXPERT PERFORMANCE.” Unlike Gladwell, he stressed that the QUALITY of practice was important. So, both Van Cliburn and Dave Stockton were saying the same thing to me before OUTLIERS was published.

The morale? Be wary. Just because someone has been in a business for 10, 20 even 30 years does not guarantee that they are a true expert nor does it mean that they have kept current with what is going on. This is especially true in today’s world of media and marketing.

I have played golf since 1958. An invitation to play in next year’s Masters Golf Tournament is not in the cards despite my extensive practice!

If you would like to contact Don Cole, you may reach him directly at doncolemedia@gmail.com or leave a comment on the blog.


Sunday, July 30, 2017

"I Am Not Really Needed"



Like many of you, I do not get a hard copy of a daily newspaper anymore. On line subscriptions to both the Wall Street Journal and The New York Times cover my needs very well. One exception is the Sunday New York Times. It is delivered to my sidewalk each weekend and I devour it with my morning coffee. Given my age, I often linger for a few moments over the obituaries to see if anyone whom I knew or knew of in advertising, broadcasting, or publishing has passed on. Yes, in ten years time, it may become my sports page!

A few months ago, I saw a name that seemed to register a bit in the cobwebs of my memory.   I read the obit carefully and think that I may have remembered this fellow. We met very briefly for a few hours but what he said has stuck with me.

For many years, I traveled a great deal on business. A great deal. While not in real miles, more than one airline gave me over 200,000 air miles to my frequent flyer accounts in the same year. When one travels that much you have your fair share of cancellations and long delays. One such delay occurred in the dead of winter. I was coming back from a client meeting in the upper midwest. The first class cabin was not full and three of us were talking when the first delay was announced. The flight attendant served a round of drinks and we all took things in stride. The captain announced a half hour later that there would an equipment change and we all had to vacate the plane. We would likely not leave for 90 minutes. An unusually well dressed man about 10 years older than I offered to buy us a drink in the airport lounge. We all exchanged what we did for a living. He had a high powered job for a prominent company in the financial arena. The third member of our party exclaimed, “Wow, you must be rich!” Our new drinking buddy shook his head no. “I consider myself successful but I will never be rich.” He went on to describe his life with a brutal candor that almost made me feel a bit sorry for him. As a youngster, like his father before him, he had gone to the right prep school and then college and was now a member of the right clubs in New York. He then went on a tirade about the federal, state and city income taxes that he paid. His real estate taxes in Westchester county were astronomical and his commute was horrendous. Were he to make any real money the Feds would hit him with a gift tax if he wanted to help his children who were now at very expensive prep schools and perhaps a large inheritance tax as well when he died.

I was getting fed up with his pity party for himself and other members of the 1% when he dropped something of a bombshell to both of us. “I am different from my partners. I know that I am not needed. Someone else can help defer taxes or evaluate a security or a new business every bit as well as I can. I am a well paid corporate functionary who leads a boring, upper middle class, unimportant existence. Yes, I am a professional but I am not and never will be a tycoon.”


He then went on to say how if he had his life to live over again he would trash his Northeastern respectable point of view. “I should have taken some risks and been willing to put up with uncomfortable situations. Moved to Africa or Asia and really made a difference with something. Then, maybe I could have been rich, and more importantly, fulfilled.”

A lot of things hit me. First, he had no idea how lucky he was relative to almost everyone in the world. His problems were ones struggling people and most of us would love to have. At the same time, he had a self awareness of how unimportant he was in the scheme of things and had genuine admiration for gutsy entrepreneurs who had a dream and went across the world to make it reality.

Last week, I asked some of my panel members if they were needed. Surprisingly, the broadcasters in senior positions generally said no. The older ones said they had a good run in the golden era of broadcasting and advertising but all felt they could be replaced quickly and easily. Ad agency owners (small to mid-sized shops) were a mixed bag. A few said they were grooming someone to take their places but a small group said almost directly that they were the glue that holds the place together and if they went, the shop would not be far behind. Perhaps broadcasters see themselves as managers while agency heads, even of small firms, perceive themselves to be builders.

We need functionaries everywhere--the state department, law firms, brokerage houses, the Vatican, and at media properties and ad agencies. Can their lives compare to the brave few who help make the desert bloom or pass through the eye of the needle in Silicon Valley and get funding and change our world? I suppose not but, in my life, I have been touched by and learned from any number of functionaries who were kind, helpful and did a good job. They were not “needed” but they were and are important.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com


Monday, July 24, 2017

The Four Headwinds


A long time ago I was at a client meeting in Florida. One fellow at the sessions was a fellow New Englander who had rarely ventured in to the South or Southwest in his life. At dinner, he mentioned how stunned he was at the amount of construction going on and asked how did Atlanta, Miami, Tampa, Houston, Dallas and Phoenix grew so fast. My clients gave answers such as no state income taxes in Florida or Texas, less regulation, and fewer union issues. My new New England friend asked me directly and I said, “Air conditioning.” The clients were not amused and let me know it after they dropped off the questioner. I stuck to my guns and do so now. In the last two weeks, I have read a book twice over that brought that moment back to me.

The book in question is THE RISE AND FALL OF AMERICAN GROWTH (Princeton University Press, 2016). Its author is Robert J. Gordon, a deeply experienced and prolific writer who is an economics professor at Northwestern University. Gordon’s book is a real tour de force. He essentially covers U.S. economic history from the end of the Civil War (1865) to 1970. It illustrates how the growth occurred and gives great credit to electricity which reduced the drudgery of many household and industrial tasks and was a great catalyst for growth.

Gordon is not an anti-tech luddite. He simply states that for us to have the dynamic growth experienced from 1870-1970 is going to be a steep challenge going forward due to four headwinds:

1) Inequality
2) Education
3) Demography
4) Repaying Debt


One by one, we find, in brief:

1) Inequality--the bottom 80% of the population has suffered wealth stagnation in the span measured from 1983-2013. The top 20% has experienced a doubling of wealth with the infamous top 1% going up several times. Interestingly, he cited studies that showed that the bottom 90% tend to have the world’s worst market timing. Those in stocks in 2008-2009 “bailed out” while the top 10% increased their holdings in 2009-2010 and saw their net worth multiply several fold in many cases. So what, you may say? Well, Gordon illustrates the growing difference between average income and median income (50th percentile). If current projections hold, every 1.0% gain in average income would only translate to 0.6% median growth. The 80-90% at the bottom will get more and more distant from the top 10%. This will effect overall buying power.

2) Education--from 1870-1970 there was a huge surge in people obtaining high school diplomas. Many high school graduates or less earned excellent money with great fringe benefits and were often union members. Today, a high school dropout will likely never earn more than minimum wage over his or her lifetime. And, college degrees are no longer a path to the upper middle class. Many recent graduates are doing work that does not require a college degree. Adding to this problem, is soaring college debt over $1.2 trillion. If a student takes on $100,000 in college debt they may be better off than a high school only graduate by age 34 IF they earn the same amount as the average college graduate. In some fields, that can be very difficult.

3) Demography--my old favorite comes to center court once more. As American baby boomers age (born 1946-1964), they are retiring at a rate over 6,500 per day. Fewer workers put a strain on funding the entitlements net (see post on “The Graying of the West” from 7/21/17).

4) Repaying debt--we have reported debt in the U.S. of over $20 trillion. Some analysts say that is absurdly low as our Social Security and Medicare/Medicaid liabilities push it up to $100-200 trillion. Right now, we have historically and, in my opinion, unnaturally low interest rates. The ratio of federal debt to Gross Domestic Product (GDP) may stabilize for a few years but has to soar if interest rates have a return to normalcy and/or if the Congressional Budget Office (CBO) estimates are too optimistic as Gordon projects.

Professor Gordon is not a “gloom and doomer.” He strikes me as a hard headed realist who sees real problems on the horizon. Electricity and the internal combustion engine changed the lives of most of the world and made the 20th century, The American Century. The four headwinds will get in the way of even the exciting technological changes to come.

The book is amazing. I have read it twice in the last two weeks and it is over 750 pages long. Admittedly, it does not read like a sexy novel but it is not the Statistical Abstract either. I am clearly an economic history and demographic wonk but I found it very absorbing reading.

Too much for you? Okay. Go to You Tube. Professor Gordon has a 12 minute version on a TED talk that sums up his opinions. It is well worth 12 minutes. Not enough? You Tube also boasts a 90 minute presentation that the good doctor gave at the London School of Economics. Finally, You Tube has a few videos of academics trying to refute Professor Gordon’s forecasts.

If you would to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Friday, July 21, 2017

The Graying of the West


This is a topic that I have touched on in posts a few years ago. It needs a revisit as the demographic urgency has increased yet virtually no country affected by it has taken any meaningful steps to reverse the situation.

Aging has been increasingly evident in many Western nations for some time. Also, it is a long standing even drastic situation in Japan, and a big problem in Russia and China as well. It all starts with ZPG.

ZPG stands for Zero Population Growth. You need fertility rates of approximately 2.1 children per woman to replace each existing generation. As a young person, I never was much concerned with it but now, incredibly, some 60% of the world’s population lives in nations with fertility rates below ZPG.

So what, you may exclaim. This is good. Fewer mouths to feed and fewer people to pollute Mother Earth. One cannot argue with that although it shows a lack of faith in technological advancement. The problem is that since World War II ended in 1945 virtually all Western nations have created some form of social safety net. In the U.S. we have Social Security, Medicare and Medicaid. In Europe, it is often referred to as retirement schemes and universal health care. All good in many people’s eyes but can the West continue to pay for it?

The European Commission published a paper a few years ago, that made even an experienced demographer such as I reel. By 2060, the German population will drop by a fifth and people of working age will plummet from approximately 52 million now to 36 million! Some dismiss problems with a smaller workforce saying that increased productivity will bail us all out. It will certainly help but caring for the massive increase in the elderly will put tremendous new pressure on the finances of even the most solvent governments (yes, there are a few left)!

To be blunt, what is going is a generational Ponzi Scheme of epic proportions. It is not brain surgery--it is simply demographics and plain arithmetic. As life expectancy increases and fertility declines, those younger people who are still working will have to pay a great deal more to take of the elderly in many, many nations.  Many will have to depend on immigrants to assist the elderly. Looking ahead a decade or two, these entitlements for the elderly will likely suffocate even the most robust economies.

Keep an eye on Spain and Italy. Both countries have had economic challenges for some time but as the societies continue to get older, the strain on their “provider state” will get intense. In the US, we have SOME breathing room. Social Security will stay solvent until 2034. Medicare/Medicaid is anyone’s guess as both Republicans and Democrats argue over health care. What both sides fail to address is the rising cost of healthcare. How will an aging population pay for it?

China is really facing a ticking bomb. Candid Chinese analysts refer to their “4:2:1” problem. Mao’s limit of one child per family in many provinces decades ago has created a situation where an adult child is asked to care for both parents and sometimes four grandparents. The World Health Organization projects that China will likely have more patients suffering from some form of dementia than the rest of the world combined by the year 2040. Think about it. It is frightening.

The nations of the world need to shift gears. Here at home we need to means test Social Security and raise the age for distributions or the system could collapse. Also, some health care proposal has to be crafted that whittles down the Medicaid burden and does not try to place it on the backs of the poor who simply cannot pay for it. Will we react in time?

Separately, a few words about senior marketing. Looking around the world, many countries seem to be doing a better job hitting the 60+ demographic than we do. In Canada, I have seen commercials aimed at the mature touting private label goods in supermarkets. Seniors are often financially challenged and are more careful shoppers, than younger adults. Also, they have more time. In Singapore, a flagship company, Singapore Telecom, known as Singtel, ran a highly imaginative campaign called Project Silverline a few years ago. The telecom behemoth asked for contributions of old iPhones and then retrofitted them by adding apps designed with senior users in mind. Very attractive plans were set up for seniors who might be on a tight budget. I would be interested in a similar plan at some point and will likely love a phone with larger keys as I get increasingly far sighted with each passing year.

In the U.S, many products aimed at seniors are almost comical. A few years ago, I was looking for CNBC and hit the wrong digits on my remote. Up popped The Andy Griffith Show. I watched for a few moments and realized it was my favorite episode ever, “Barney runs for sheriff.” For 20 minutes I was back to 55 years ago and laughed heartily at Don Knotts and Griffith. The commercial breaks were another story. Clearly, the DRTV advertisers realized that the viewership was old. A two minute spot appeared for the questionable reverse mortgages with a spokesperson actor whom I had not seen in years. Hemorrhoid remedies and denture adhesives followed finished by a spot for an alert bracelet for the elderly living alone. So, we seem to have a need for more nuanced marketing to the growing legions of the elderly in America. Some upscale players for financial institutions and luxury vacations do a nice job but few others are adequate.

So, the West has some challenges ahead and, while few will dispute the facts that I have laid out, even fewer feel moved to do something about it. Someone told me not to concern myself with it as “you will be dead before this really kicks in and, meanwhile, you get all the benefits.” Maybe so, but what kind of answer is that? If you have children or grandchildren, you have to care about the demographic cliff.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Friday, July 14, 2017

The Stealth Disruption


A few months ago a young adult approached me who said that he was working on a research paper for a graduate course. He asked what my opinion was on the most disruptive forces affecting businesses around the world. I assumed, and I was right, that he expected me to talk about advances in technology in the years to come. Instead, I threw him a curve ball that, as an American, he did not expect.

The big disruption that I mentioned to him was the shifting center of economic growth. The significant changes are going to be in emerging markets and, more subtly, to new cities within those countries with likely explosive growth.

Where did this concept come to me? Over 15 years ago, I woke up ready to go to work. A snowstorm was in progress. Not severe as the ones that plagued my native New England but one which paralyzed the southern city that I was working in at that time. So, I poured another cup of coffee and decided to wait a couple of hours before trying to  head to the office. As I relaxed, I picked up a neglected copy of FORTUNE magazine that had hanging around for several months. It was their annual issue highlighting the Fortune Global 500 and, with time on my hands, I studied the membership roster carefully. The list showed that well over 90% of the world’s largest companies were domiciled in developed countries dominated by the U.S., Japan, and Western Europe. Since then, I have tracked the list each year with a bit more caution. Dozens of newcomers have joined the international 500 as is typical of the creative destruction present in our 21st century world. Last year, I read a report from the McKinsey Global Institute that projected by 2025 China will have more billion dollar revenue companies that either the United States or Europe and that more than half of the 2025 large players will call an emerging market home. So, economic power is going to shift and perhaps faster than we can imagine to selected countries in Asia, Latin America and the Middle East.

There is a real sleeper in all of this and I tried very hard to articulate to the earnest young graduate student. It is not just that countries are seeing explosive growth relative to the developed nations of the West. A key issue is that entire new cities are emerging in these fast growing markets. On 5/22/12 I put up an MR post entitled URBANIZATION, GLOBALIZATION, AND MEDIA. A key take away from that post was that, amazingly, EVERY DAY, some 180,000 PEOPLE around the world moved from a rural area to a city. McKinsey has estimated that some 65 million people get urbanized annually. To put it in to perspective for American marketers, that is the equivalent of seven new Chicago DMA’s being formed annually. Marketers and reasonably informed citizens have all heard of Hong Kong, Shanghai, Dubai and probably Mumbai. Yet, the real dynamic growth will come from cities that most of us have never heard of ever. Again, quoting McKinsey, they are forecasting that 46 of the top 200 cities in the world will be in China by 2024. Can you name 46 Chinese cities? How about 10? I know that I could not prior to attacking this issue.  Soon Tianjin, Shenyang, Harbin, Chengdu, Taiyuan and a host of others will hit the radar screens of astute marketers.

Think of the possibilities of this growth. The UN has projected that between 1990 and 2025, some three billion people have or will become members of what has been dubbed “the consuming class,” meaning that they will have $10 of disposable income per day. A large proportion of these new consumers will be living in the cities of emerging economies. By 2030, they will account for half of the world’s spending!

All this will impact media as well. How will you reach all these new consumers? Within large countries, everyone will not be speaking the same language. An acquaintance told me to forget about it--advertise on You Tube and other global properties as everyone speaks English. He is clearly not a seasoned traveler as people everywhere, especially this new breed of consumers who are newly arrived urbanites, likely speak only their native tongue. Mobile advertising has to be a huge beneficiary of this rapidly growing trend.

So, quietly and steadily, these new cities will emerge and join the million population club. Perhaps, more importantly, they will have many newly minted members of the consumer class.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Friday, July 7, 2017

Small Town Blues


As many of you know, the Nielsen company divides the U.S. television universe into 210 separate entities know as Designated Market Areas (DMA’s). New York is clearly the largest and tiny Glendive, Montana is the smallest and ranked at #210.

A few months ago, I received an e-mail from a small market operator asking why I did not devote an MR post to markets with a low Nielsen ranking. A bit later I heard from an old associate who still toiled in a tiny market asking basically the same thing.

Hence this post. I contacted several people across the country who were either general managers or sales managers in markets ranked #110 (Ft. Wayne) to #180 (Marquette). For those of you who are amateur detectives, I did not speak to anyone in either Ft. Wayne or Marquette!

Small market TV was once a great business and then it morphed, like all over the air TV, into a good business. Now, according to my wildly unscientific sample of seven small town broadcasters and sales executives, it has a new set of struggles.

Here are some comments (some edited) from all of the participants:

--“When I talk to my competition or players in broadcasting in neighboring markets, they seem to be in a time warp. At a golf outing recently, I told a competitor that he was sleepwalking to disaster. He did not like that but he still seems to think that it is 1977 instead of 2017. The game is not over but big cracks are evident in our facade.”

-- “Last year, a local cable interconnect nabbed my most experienced salesman. I could not afford to keep him despite pleas to our owners to up his compensation. He now is stealing many of our long standing local retailers with zoned buys that deliver far less waste than we can because we cover the entire DMA. Also, he can tap into canned promotions from ESPN and others that we cannot match.”

--“I can tell you what is killing us in one word--Amazon! We lost four retailers on Main Street this year. When I drive to work each day I see the boarded up stores and it kills me. One was a clothing retailer that allegedly had been with the station at some point in every quarter for the past 62 years! Now, with more buying online and the trend toward casual clothes, he had to liquidate. Retail is in real trouble. Our local mall’s days have to be numbered.”

--“Headquarters keeps telling us to improve our news product. I was always proud of our local community involvement but the newscast was always poor. People over 70 watch it and many probably don’t have cable. A U.S. Senator stopped in to town the other day and I told our anchor to ask some pointed questions about the upcoming GOP health care bill (we are in a non-competitive market but this was real news). He did not want to do it. I almost choked when he said he might get a better response if he asked the Senator about the college football season this fall. Furious, I made him ride to the deli that was providing the food for the staff party that we were hosting for the Senator’s visit. I read him the riot act in the car but when we went in to pick up the platters, everyone surrounded him as if he were a movie star. It drives me crazy. We have a crap news product but the locals, who still watch over the air TV, love it.”


--“Technology has helped us a lot. We do not do local weather. A weather man from another one of our corporate markets does it via remote and it seems to work. Also, we can send a reporter out with one other person or sometimes alone to do a story so that cuts down on costs. We are so small that we still do Video News Releases on slow news days. Hell, every day is a slow news day here.”

--“We have never recovered from the Great Recession. I see no hope for turning our town around. Not to get political, but our local hospital may have to close depending on what health care bill the Senate cooks up soon. Why would anyone want to retire here or raise children or give birth to children if the nearest hospital is 150 miles away?”

--“I have had a great run. When I started, I did two years in a top 10 market and that was enough for me. We did a good job for decades for our small clients. Now, I know that TV does not work nearly as well as it once did. I feel guilty sometimes with clients as the returns are sad compared to years ago.”

-- "Automotive has always been our bread and butter. Local dealers make or break us. A dealer who is a close friend is alarmed. Customers have been getting seven year loans for a number of years. The problem is that they return five years later still under water on their pickup truck but need a new one. They have no cash for a down payment but they need a vehicle for commuting to work. He finances nothing but the local bank will as does his manufacturer. He sees a big problem coming. If we lose a chunk of automotive advertising, we will never hit sales goals.”

Are these comments truly representative of all small market DMA’s? Well, three players were from rust belt markets in the Midwest so perhaps the comments are a bit gloomy. One thing is certain, however. The media landscape continues to change and you cannot hide out in rural America on the assumption that Amazon cannot touch you.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com






Friday, June 30, 2017

The Staying Put Trap


A long time ago I was on a panel at a conference. We had all presented different aspects of the media landscape and the moderator said he was going to hit us with some big questions. Most were pretty vanilla but, at the end, he asked each of us to discuss briefly a strength of the America economy. We all had to think fast and the early answers were obvious things such as our relatively free market, American entrepreneurship, and rule of law. The guy next to me seemed flustered but blurted out that America had a relatively abundant water supply. People laughed but it was a pretty thoughtful response. I came last and pulled a gem out of my derriere--America, I said, had a secret strength in its economy--mobility. A few people rolled their eyes but afterward some attendees stopped me and said that they had never thought of it before.

If you look at the last 50 years, American unemployment rates have often been far below our friends in Europe as we Americans tended to be willing to move where the jobs were. I vividly remember talking to a clergyman about a small city in Italy where many families had lived in apartments in the same building for up to six generations. He said, “How wonderful” while I, the crass capitalist, said there had to be some talented people who never reached their potential by staying put for 150 years. The European Union has changed some of this but there still appears a reluctance to cross borders even if it is to another province.

Looking clearly at the data, it appears that American mobility is stalled somewhat. To me, there appears to be a few reasons. The biggest is two-career couples. If one is offered a job, a tough decision often has to be made. Can the other member of the couple find a similar job in their new city? Sometimes yes, sometimes no. What about child care? In your hometown, in-laws and grandparents often cheerfully provide it for free. That strong safety net disappears.

Some columnists on both the left and right have often questioned why more blue collar people in depressed areas don’t simply pack up and leave and go to boom towns. I read several such rants during the shale oil boom in North Dakota a few years back. Well, if you are struggling, is it easy to rent a truck, and conjure up money for a security deposit plus rent if you have no job? Week to week rentals are very expensive and you likely know no one in the boomtown. So many simply stay put.

A final issue that I observed that hinders mobility may not be obvious superficially. It is simply the American dream of home ownership. This is a deeply embedded part of the American culture. Yet, there is a problem. Owning a home often makes it damn hard to move. Back in October, 2010, Media Realism published a four part series entitled “Mid-Sized Malaise.” In part two, a talented young creative told me that he was underwater on his mortgage and felt as if he were an indentured servant at his shop where raises were nowhere in sight and there was literally no other place to work in town. I hunted him up and found that he is still there. He said, “I am not underwater on the mortgage after seven more years of payments. The problem is that my market (a mid-western city that will remain anonymous) has never really bounced back from the great recession. So, it could take me a year to sell our place. I cannot afford to go to a new market and pay rent and also continue to pay the mortgage on my home here. Also, my wife might have a hard time getting a similar job in a new market. I do a bit of freelance for people 1000 miles away but I may be stuck here forever.”

Separately, an agency chief whom I have known for decades tells me that he wanted to hire a very promising writer currently toiling in a depressed market in a flyover state. The guy was not too demanding on salary but asked that my friend buy his house as part of his employment package. My friend said that he was not in the real estate business and the deal fell through.

Some agencies hire the footloose millennials who can attach their possessions to a U-haul and arrive quickly. If things do not work out, they can leave their apartment and move on. Not so with homeowners.

So a surprising number of people are caught in a difficult situation. The downscale may not have the resources to move or a support team when they arrive at a new venue. Even potential agency stars are hamstrung by being caught in homes that are difficult to sell.

Were I on a similar panel today, I would certainly think twice about naming mobility as a secret strength of the American economy.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Wednesday, June 21, 2017

Gresham's Law in Media?


In economics, there is a long standing monetary principle called Gresham’s Law. Succinctly, it states that bad money drives out good. In other words, historically if there were two forms of a commodity in circulation that a government gives similar face value, the more valuable commodity would disappear.

There have been many examples throughout history. I even witnessed one as a youngster. American dimes, quarters, and half dollars were largely silver through 1964. The next year dimes and quarters were a mixture of nickel and copper and half dollars had only 40% silver until 1970 when silver disappeared from US coinage. What happened? Gresham’s Law kicked in with a vengeance. I vividly remember seeing people get a roll of quarters from the bank, opening it, taking out the pre-1964 (silver) coins and hoarding them. One gentlemen at the time shook his head and told me the nation was finished as we had replaced silver in our money with cupro-nickel slugs.

Relax, I am not going to call for an immediate return to gold and silver as our sole form of money. I tell the story as, to me, it seems, a version of Gresham’s law seems to be in play in the media business.

With the growth of dozens of new platforms, advertising clutter is at an all time high and, despite protests from practitioners, advertising effectiveness is at an all time low. There is so much low quality or debased advertising currency on thousands of sites, that the most valuable outlets are getting weaker. Couple that with huge increases in advertising avoidance and you can see why launching a brand is often more difficult than ever.

What do I think will happen as this trend continues? Call me crazy but I think we will revert to a 1950’s model of sponsorships. One of my earliest memories is seeing The Men From Texaco opening The Milton Berle Show and Dinah Shore singing “See the USA in Your Chevrolet.” Maybe soap operas will make a comeback in the sense that large personal care or household product companies will sponsor programs again but they will not be daytime dramas. There will be far fewer commercial messages but the sponsor will be clearly identified. Think of the intros to Masterpiece on PBS. Programming will likely be interrupted minimally but the sponsor will be well known to the viewers.

This also sets up well for established brands and large, deep pocketed companies. They can afford to keep reminding the consumer of who they are but still reach advertising shy millennials.

The other option would be to go toward a heavy pay TV model which is really what Netflix and Hulu Plus and others are providing right now.

What do you think? Is there a modified Gresham’s Law moving in to the media world?

If you would like to contact Don Cole, you may reach him at doncolemedia@gmail.com

Tuesday, June 13, 2017

Will Millennials Become Wage Serfs?


In recent weeks, I have read several articles discussing how Millennials (those born from 1977-1995. Different demographers use varying time spans so I stuck with the Nielsen Media Research dates) may often become wage serfs. Amazingly, two people e-mailed me in the past few weeks and described the fate of some Millennials as Medieval serfs.

If you remember from grade school or a course in western civilization a Medieval serf led a pretty sorry existence. They were essentially peasant farmers who worked part time on their master’s land and, in exchange for their labors, they would get to use part of their master's land to grow their own food. It was a life with virtually no ability to rise. In your entire life, you may never stray more than a few miles from your master’s holdings.

Why are both pundits and my correspondents making such a harsh judgement? To me, it stems from an idea that most of us Americans have believed for a few hundred years. The idea is that each succeeding generation is better off than the one that preceded it. The “better off” is not just financial. It can mean education, sophistication, a healthier lifestyle or leading a life that matters.

The Great Recession of 2008-2009 had a profound effect on many Millennials. A number of observers have commented that it did long term economic and social damage to that youthful demographic. Some have said that this generation is rootless--many do not want to own homes or have allegiance to their employer. I do not see it that way. The issue to me appears to be economic hardship and fewer opportunities.

Here are a few Millennial factoids that I hope make my point:

--Seven out of ten students have borrowed for college. On balance, many people say that borrowing gives many an opportunity for a good education that they may not otherwise have. True, but student debt by definition has to slow economic growth. Many have a six figure millstone around their neck when they graduate and, unless they get in to a high paid field such as medicine or finance, they may be paying off the debt for 20 years. Go to graduate school and the meter really runs wild. Interestingly, many would be better off to attend a state school, work part time and finish in six years rather than four but few seem to want to go this route.

--Some 82% of Millennials say that they want to be home owners. Why are they not buying homes in great numbers in their late 20’s? They cannot afford it! Many are saddled with high levels of student debt and others live in wildly expensive cities. Right now, 22-35 year olds are paying as much as 45% of their salaries for apartments in cities including Los Angeles, San Francisco, New York or Miami. Others in the heartland are much lower. I remember that decades ago when I made my way in the world, rental agents would not write a lease if the monthly tab was more than 28% of your salary. So, how can Millennials save up for a downpayment when they are literally struggling to meet their monthly rent?

--The U.S. Census Bureau reports that people in the Millennial age bracket earn $2,000 less in REAL TERMS than they did in 1980.

--The Federal Reserve Bank of NY finds that for recent college graduates wages have only risen 1.6% in the last 25 years when adjusted for inflation. Put student debt and rising rents or housing costs and these youngsters face an uphill battle for achieving financial freedom.

--The Huffington Post reported that in 1990, those who took college loans only borrowed 28.6% of first year income. By 2015, the average loan is the equivalent of 78.3% of first year earnings and some owe much, much more with students loans now totally a staggering $1.3 trillion.

--The financial return on education is dropping. This may simply be the result of college tuitions wildly outstripping inflation.

So, while describing these fine young people as wage serfs offends me, I can see how many people who lack my optimism would come to that conclusion. Also, why did Bernie Sanders appeal to so many Millennials in the 2016 primaries? It is pretty simple to me. He promised free college education and universal medical care. Were I 22 years old, I can see why that might be appealing!

Are Millennials doomed to be 21st century serfs? I hope not. Yet, as logarithms gobble up more and more jobs and technology marches forward, young Americans are really going to need to differentiate themselves in the labor pool to keep the American dream of upward mobility with each generation alive.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.