A number of readers of Media Realism have been quite successful in their advertising, marketing or sales careers. Several have contacted me over the last year or so with a very interesting question. To paraphrase, it usually goes like this: “things have gone well for me and I would somehow like to give back to the industry or to society as a whole.”
Some of these people have recently retired but others are very active in the business world in their prime earning years. All seem to be quite generous to traditional charities but want to go beyond mere “checkbook” involvement.
A few comments from executives who have corresponded with me:
--“I wrangled an invitation on to a cultural board in my city. The first few meetings were fun as fellow members were true movers and shakers in our mid-sized market. I soon grew bored. We had little impact on what was to be presented to the public. People wanted me there to have my firm do some high quality pro-bono work for the organization, write a really large personal check and get friends to buy high priced tables at their annual fundraiser. Also, they moved so slowly it drove me nuts. This was not my cup of tea so I resigned after a couple of years. I am still deciding what to do next.”
--“I started a small foundation. It has been great. My kids are on the board with me and we review grants together. It has help me bond with my adult children. Each one can pick a gift that they have final say on over the rest of us. Our selection skills get sharper each year and our targeted gifts seem to be doing some good. The big issue going forward is do we disperse everything when I die or does it continue (on a small scale) for generations. People do not understand that you do not need to be mega-rich to do this.”
--“I tutor high school kids in my city one afternoon per week. The school administration is not particularly friendly toward me but the kids appreciate my help. It is gratifying to see a struggling math student raise her college board scores a few hundred points and get in to a decent college. I plan to hire a former student when he graduates next year if I can afford him.”
What do I suggest? Community involvement and checks to legitimate charities are all good. Here is one thing that I have suggested to a few people who still have plenty of energy and fear boredom in retirement--Give back by finding a way to help young entrepreneurs.
Many of us have done well. If you see a young man or woman struggling with a start-up, why not give them a hand? If someone comes asking for advice, why not give it? It will not affect what you eat for breakfast or make you cancel that trip to the south of France. In some cases, you might want to give small financial assistance or buy a modest equity position or serve on their board. If things go bust, so what? Again, a small loss will not affect your lifestyle one damn bit.
All of us know in our hearts that it is not the government or schools or the non-profit sector that will turn America around. It will be who it always has been in the U.S.A--the dreamers who take a chance, keep our economy growing and who ultimately will be the engine of economic growth and job creation.
Experience may be the best teacher but it also can be a cruel one. Many of you have already traveled that road and somehow succeeded. Help these kids avoid the pitfalls. You must have something valuable to contribute that can help fuel the entrepreneurial spirit in our country.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, July 15, 2015
Friday, July 10, 2015
The Biggest Entrepreneurial Flaw
It is not news to state that most new businesses fail. People blame competition, a bad economy, lack of working capital, not reading trends correctly and a host of other factors. All of these things are true to a certain degree for failed enterprises. The more I observe, I more I believe a great deal of the failure of struggling entrepreneurs is due to the time management of the entrepreneur.
Many who fail try to do everything themselves and refuse to delegate small, time consuming tasks to others. Remember the Carter presidency? Allegedly, if one wanted to use the White House tennis courts, you had to sign up just outside the Oval Office. The president would glance at it frequently. When one is mired in minutiae such as that, how successful can a global leader be? I once knew a media director at a fair sized shop who had the cleanest billing backlog in the business. He had NO backlog. What stunned me was how he bragged about it. To myself, I called him the highest paid billing clerk in American Advertising. Yes, he had no backlog but soon he had no job and the pattern happened a few more times before he left the business. He had the brains to be a complete media person but it was hard to wrap his head around issues even at industry gatherings where I occasionally saw him.
I always put in some long hours but tried to play to my strengths and hired someone for my weaknesses or the when the risk/reward ratio seemed out of whack. So, I followed industry trends, stayed in touch with big clients, was careful about what was released to clients but had others monitoring billing and most day to day activity on smaller accounts.
On a larger scale, founders have to sometimes step down as CEO to succeed. This is hard to do given the egos involved but is often necessary. Do you believe that Google would be the dominant company that it is today if Sergey Brin and Larry Page, the brilliant founders, had not hired Eric Schmidt, a seasoned executive to actually run the place? They had the humility to, in effect, “fire themselves” to free themselves up to continue to innovate.
I know a small agency CEO who literally does everything. Nothing leaves the shop without his fingerprints on it. He is cranky and exhausted but claims that he loves it. Staff turnover is huge and he does not seem to grasp that few are learning much of anything as he makes all decisions. Some get lazy and do poor work knowing the boss will “fix it.” They are surviving, for sure, but have not grown agency billing in years. I do not think that they ever will.
What are you? A manager, a visionary, or a swashbuckling entrepreneur? Figure that out and you can enhance your chances for success almost exponentially. As Plato said 2400 hundred years ago, “Know Thyself.”
In more modern times Warren Buffett sums up the issue well. At one of his famous “Woodstock for Capitalists” annual meetings where he and vice-chairman Charlie Munger answer questions for hours, he said: "Be realistic in assessing your talents. A number of CEO’s have no idea where their circle of competence begins and ends.” Find out your circle of competence and great things may occur.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Many who fail try to do everything themselves and refuse to delegate small, time consuming tasks to others. Remember the Carter presidency? Allegedly, if one wanted to use the White House tennis courts, you had to sign up just outside the Oval Office. The president would glance at it frequently. When one is mired in minutiae such as that, how successful can a global leader be? I once knew a media director at a fair sized shop who had the cleanest billing backlog in the business. He had NO backlog. What stunned me was how he bragged about it. To myself, I called him the highest paid billing clerk in American Advertising. Yes, he had no backlog but soon he had no job and the pattern happened a few more times before he left the business. He had the brains to be a complete media person but it was hard to wrap his head around issues even at industry gatherings where I occasionally saw him.
I always put in some long hours but tried to play to my strengths and hired someone for my weaknesses or the when the risk/reward ratio seemed out of whack. So, I followed industry trends, stayed in touch with big clients, was careful about what was released to clients but had others monitoring billing and most day to day activity on smaller accounts.
On a larger scale, founders have to sometimes step down as CEO to succeed. This is hard to do given the egos involved but is often necessary. Do you believe that Google would be the dominant company that it is today if Sergey Brin and Larry Page, the brilliant founders, had not hired Eric Schmidt, a seasoned executive to actually run the place? They had the humility to, in effect, “fire themselves” to free themselves up to continue to innovate.
I know a small agency CEO who literally does everything. Nothing leaves the shop without his fingerprints on it. He is cranky and exhausted but claims that he loves it. Staff turnover is huge and he does not seem to grasp that few are learning much of anything as he makes all decisions. Some get lazy and do poor work knowing the boss will “fix it.” They are surviving, for sure, but have not grown agency billing in years. I do not think that they ever will.
What are you? A manager, a visionary, or a swashbuckling entrepreneur? Figure that out and you can enhance your chances for success almost exponentially. As Plato said 2400 hundred years ago, “Know Thyself.”
In more modern times Warren Buffett sums up the issue well. At one of his famous “Woodstock for Capitalists” annual meetings where he and vice-chairman Charlie Munger answer questions for hours, he said: "Be realistic in assessing your talents. A number of CEO’s have no idea where their circle of competence begins and ends.” Find out your circle of competence and great things may occur.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, July 4, 2015
Update: The Over the Hill Gang
It is a bit hard for me to believe but I launched Media Realism six and one half years ago today. Nearly 300 posts later, I have tracked readers in 139 countries and heard from people involved in advertising, media and marketing in 96 of them.
My first post was on January 4, 2009. It was entitled “Integration problems? Maybe the “Over the Hill Gang can help.” It covered the issue of how much digital one should use in a media plan relative to conventional media options. I suggested that you go to very mature people in the industry who may be retired or about to retire to get a straight answer.
Now, that several years have passed I think this group of people may be more valuable than ever to serve as consultants or mentors to younger media strategists. My original group consisted of several men and women who were 58-62 years old with over 30 years experience in the media wars. None was what I would call rich but all were millionaires. They were the type profiled in the 1996 book, THE MILLIONAIRE NEXT DOOR or what famed economist Robert Heilbroner dubbed “The Common Millionaire.” So, each had or has a net worth of $1.5-5 million. Not rich but not struggling either.
As the years have passed a few people have moved out of this group but many new acquaintances have entered who fill the bill nicely. Some of my original kitchen cabinet demurs now when I ask their opinion on a media topic as they say they are too far removed from day to day activity to give an informed point of view. All, however, remain sharp eyed analysts who watch changes in the media world with interest.
Why go to these people? I have found that people who are too close to a problem tend to get very defensive when you talk about the future or possible threats. The value of these graybeards is that they have run the marathon and are now entering the stadium for the last quarter mile or they have recently crossed the finish line. Nothing can hurt them now.
So, my best sources and most objective colleagues and more insightful critics tend to be those about to retire or those who have left the business in the last two years. Many still consult a bit, and a few trade media and advertising shares quite aggressively so they still have money in the game despite the lack of paycheck.
One friend told me that a young person now refers to him as an “eminence grise” which he says beats an executive vice president or sales director any day.
Here are a few comments from people whom I correspond with frequently and I find invaluable sounding boards:
--"Don, I have my house paid for as well as my beach house. My kids are through college and I paid for my daughter’s wedding. My 401k is low seven figures. If I get whacked in the next corporate belt tightening, so what? So, I call things as I see them and am candid with my CEO (privately) about everything. He is in the same boat as I but a lot wealthier. We both know the game we have loved is coming to an end and fairly soon”.
--“I got downsized last year. They were afraid of a lawsuit given my age so I got a nice severance package. My wife and I spent a few months in Paris last year and I have yet to touch my rollover. I sleep better than ever but maintain a lively interest in all aspects of advertising and marketing. When you ask me to comment on blog topics, I love it. I am as objective as I will ever be”.
--“Consulting is hard. Everyone asks me to be candid and then get super pissed off when I call it as I see it. I am cutting back. It works best when top management asks me to analyze a problem or give a P.O.V. I do a write up and then meet with them face to face. Some only ask me back if I echo their opinion going in but others seem to appreciate my brutal candor”.
--“No one can do much to me anymore. My major bills are behind me and how much golf can one play? I see things more clearly than I did five years ago. When I retire in a year or two, I hope people seek my counsel. If not, I will be fine. I would like the money but I do not need it. That independence is my greatest strength”.
So, to all of you younger people out there, may I suggest that you find one of these type of individuals as a sounding board for ideas, the state of the business or for career advice.
Who to avoid? There are three types to run not walk away from. They are:
1) Anyone who is remotely bitter. If someone talks about how they got “screwed” by an organization, I would avoid them. You do not want someone who looks at life through a rear view mirror. I know people in their 80’s who buy stocks that they think have a great future and want to leave them to their grandchildren. This is the type of optimistic thinker you want to cultivate.
2) Someone who repeatedly tells “war stories” of advertising’s golden age. I find it fun to reminisce for an hour with an old friend or colleague but you have issues in front of you and problems in the future. Look for forward looking types.
3) Avoid all whiners. There are still contemporaries of mine who talk about how great things were when one could buy three TV stations in a market and get a 90% reach. Great. Those days are gone and are not coming back. Ever. Such harmless losers cannot help you.
You will find that these older pros are usually flattered when asked for advice. Let then back inside the tent for a day or two and you may learn something.
To all my United States readers (approximately half of the Media Realism audience), may I wish you a Happy Independence Day weekend.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
My first post was on January 4, 2009. It was entitled “Integration problems? Maybe the “Over the Hill Gang can help.” It covered the issue of how much digital one should use in a media plan relative to conventional media options. I suggested that you go to very mature people in the industry who may be retired or about to retire to get a straight answer.
Now, that several years have passed I think this group of people may be more valuable than ever to serve as consultants or mentors to younger media strategists. My original group consisted of several men and women who were 58-62 years old with over 30 years experience in the media wars. None was what I would call rich but all were millionaires. They were the type profiled in the 1996 book, THE MILLIONAIRE NEXT DOOR or what famed economist Robert Heilbroner dubbed “The Common Millionaire.” So, each had or has a net worth of $1.5-5 million. Not rich but not struggling either.
As the years have passed a few people have moved out of this group but many new acquaintances have entered who fill the bill nicely. Some of my original kitchen cabinet demurs now when I ask their opinion on a media topic as they say they are too far removed from day to day activity to give an informed point of view. All, however, remain sharp eyed analysts who watch changes in the media world with interest.
Why go to these people? I have found that people who are too close to a problem tend to get very defensive when you talk about the future or possible threats. The value of these graybeards is that they have run the marathon and are now entering the stadium for the last quarter mile or they have recently crossed the finish line. Nothing can hurt them now.
So, my best sources and most objective colleagues and more insightful critics tend to be those about to retire or those who have left the business in the last two years. Many still consult a bit, and a few trade media and advertising shares quite aggressively so they still have money in the game despite the lack of paycheck.
One friend told me that a young person now refers to him as an “eminence grise” which he says beats an executive vice president or sales director any day.
Here are a few comments from people whom I correspond with frequently and I find invaluable sounding boards:
--"Don, I have my house paid for as well as my beach house. My kids are through college and I paid for my daughter’s wedding. My 401k is low seven figures. If I get whacked in the next corporate belt tightening, so what? So, I call things as I see them and am candid with my CEO (privately) about everything. He is in the same boat as I but a lot wealthier. We both know the game we have loved is coming to an end and fairly soon”.
--“I got downsized last year. They were afraid of a lawsuit given my age so I got a nice severance package. My wife and I spent a few months in Paris last year and I have yet to touch my rollover. I sleep better than ever but maintain a lively interest in all aspects of advertising and marketing. When you ask me to comment on blog topics, I love it. I am as objective as I will ever be”.
--“Consulting is hard. Everyone asks me to be candid and then get super pissed off when I call it as I see it. I am cutting back. It works best when top management asks me to analyze a problem or give a P.O.V. I do a write up and then meet with them face to face. Some only ask me back if I echo their opinion going in but others seem to appreciate my brutal candor”.
--“No one can do much to me anymore. My major bills are behind me and how much golf can one play? I see things more clearly than I did five years ago. When I retire in a year or two, I hope people seek my counsel. If not, I will be fine. I would like the money but I do not need it. That independence is my greatest strength”.
So, to all of you younger people out there, may I suggest that you find one of these type of individuals as a sounding board for ideas, the state of the business or for career advice.
Who to avoid? There are three types to run not walk away from. They are:
1) Anyone who is remotely bitter. If someone talks about how they got “screwed” by an organization, I would avoid them. You do not want someone who looks at life through a rear view mirror. I know people in their 80’s who buy stocks that they think have a great future and want to leave them to their grandchildren. This is the type of optimistic thinker you want to cultivate.
2) Someone who repeatedly tells “war stories” of advertising’s golden age. I find it fun to reminisce for an hour with an old friend or colleague but you have issues in front of you and problems in the future. Look for forward looking types.
3) Avoid all whiners. There are still contemporaries of mine who talk about how great things were when one could buy three TV stations in a market and get a 90% reach. Great. Those days are gone and are not coming back. Ever. Such harmless losers cannot help you.
You will find that these older pros are usually flattered when asked for advice. Let then back inside the tent for a day or two and you may learn something.
To all my United States readers (approximately half of the Media Realism audience), may I wish you a Happy Independence Day weekend.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, June 24, 2015
2016 Political Advertising
Candidates for president are lining up in both major parties with the Republicans having as many as 20 entries while the Democrats have three declared to date. This has caused much chatter in the media and joy in the management offices of television stations in early primary states and those dozen or so states in November, 2016 that will be known as “battlegrounds.” Also, and very importantly, online and social media political advertising will likely soar. With so many apparently well funded candidates plus record breaking Political Action Committee (PAC) spending, it may be the year for many of us in battleground states to lean heavily on Netflix, HBO, and PBS to avoid the nonstop political messages.
Consistently, projections seem to indicate that what will really zing in 2016 is digital media spending. Rolling up all campaigns in 2012, digital snagged about $200 million from all campaigns. In 2016, the working estimate that I hear the most is for digital to flirt with $1 billion which is an eye-popping five fold increase over the previous presidential year. Areas talked about the most are online video and social media which may be hard to track so the tally might understate the action. Watch for a dramatic increase over the mid-year elections of 2014 in Facebook postings, You Tube Videos that have gone viral, and targeted e-mails and many more Twitter tweets. Social media is very inexpensive and can be done on the fly. It is perfect for the pace of the world of 2016.
While all the action is soaring in digital, conventional TV and cable will also likely have great years and will still dwarf digital spending. Local TV stations are currently struggling in a very lackluster year across the country but their bean-counters at headquarters are licking their chops when forecasting for 2016. Here are some off the record comments from some broadcasters I know regarding next year’s TV action. Their candor is humbling:
--“Thank God for the Roberts court. They have guaranteed us nice billing through the next two political cycles. The Citizens United decision struck me as insane but it sure gives my station a big helping hand.” (To oversimplify, in Citizens United, the court, in essence, removed limits on individual, corporate and union political spending)
--“It is curious. People still line up to spend money with us and we should do great with the presidential primaries in our state and get some nice money in the general election with a reasonably competitive US Senate race and a real battleground in the presidential sweepstakes. But, honestly, the cable guys can offer so more precision than we can to a candidate. They can run different messages on various channels and really target in both demographically with channel selection and geographically with zoned buys. Yet, political dollars will easily bail out my network affiliate station next year. Will they wise up and use more cable and ramp up digital? Who cares? By the time they do, I will be retired!”
--“About 30 years ago, I was a strong and aggressive young salesman. When I was assigned the political sales beat one year, I asked for a meeting with my sales manager and general manager. In the session, I asked if I were in trouble. They said of course not. Well, politicals were a dumping ground in one sense in those days. You had to give the lowest possible rate and you also bumped lots of long standing advertisers in strong programming. They assured me that my future was safe. Today, everyone brags about political spending. It is amazing how things have changed. The awful truth is that the business is weak in most markets and political bucks are a shot of adrenaline that we desperately need for our billing. Now, as a GM, no one is upset if they are assigned political spending.”
Some people, in a minority, were not so bullish on network affiliate prospects for political billing:
--“Karl Rove has to be angry with losing the last two presidential races. This time, they will not get outsmarted and ultimately out-advertised as they were in 2008 and 2012. The GOP has to be grooming pollsters and media people who will be state of the art next year in terms of forecasting and media execution. And, my bet is they will use a lot less over the air TV than people may think. They have tons of money but they will allocate it very well.”
--“This forecasted spot TV bonanza may be a mirage. Iowa will do great for their caucus and WMUR in New Hampshire will break records. After the GOP field thins, it will change probably after the South Carolina primary. Watch for social media to grab some serious money.”
--A long time media researcher says: “Let’s say it is Clinton vs. Bush. They both have baggage and large numbers of people who will not vote for them simply due to their names. So, TV is not going to persuade people as much as you might think. It may help get the vote out on November 8, 2016 but I do not see it as crucial or as big as others do. The “ground game” of getting the vote out will be the key".
So, digital spending for politicians will grow exponentially next year. With the record amounts being spent, the rising tide will raise both digital and television be it over the air or cable. Nothing, as I like to say, lasts forever. So, watch for on line to overtake broadcast in the years to come (2024?) in political campaigns. At that point, broadcast TV will be in a world of hurt without their huge biannual bailout.
If you would like to contact Don Cole directly, you may do so at doncolemedia@gmail.com
Consistently, projections seem to indicate that what will really zing in 2016 is digital media spending. Rolling up all campaigns in 2012, digital snagged about $200 million from all campaigns. In 2016, the working estimate that I hear the most is for digital to flirt with $1 billion which is an eye-popping five fold increase over the previous presidential year. Areas talked about the most are online video and social media which may be hard to track so the tally might understate the action. Watch for a dramatic increase over the mid-year elections of 2014 in Facebook postings, You Tube Videos that have gone viral, and targeted e-mails and many more Twitter tweets. Social media is very inexpensive and can be done on the fly. It is perfect for the pace of the world of 2016.
While all the action is soaring in digital, conventional TV and cable will also likely have great years and will still dwarf digital spending. Local TV stations are currently struggling in a very lackluster year across the country but their bean-counters at headquarters are licking their chops when forecasting for 2016. Here are some off the record comments from some broadcasters I know regarding next year’s TV action. Their candor is humbling:
--“Thank God for the Roberts court. They have guaranteed us nice billing through the next two political cycles. The Citizens United decision struck me as insane but it sure gives my station a big helping hand.” (To oversimplify, in Citizens United, the court, in essence, removed limits on individual, corporate and union political spending)
--“It is curious. People still line up to spend money with us and we should do great with the presidential primaries in our state and get some nice money in the general election with a reasonably competitive US Senate race and a real battleground in the presidential sweepstakes. But, honestly, the cable guys can offer so more precision than we can to a candidate. They can run different messages on various channels and really target in both demographically with channel selection and geographically with zoned buys. Yet, political dollars will easily bail out my network affiliate station next year. Will they wise up and use more cable and ramp up digital? Who cares? By the time they do, I will be retired!”
--“About 30 years ago, I was a strong and aggressive young salesman. When I was assigned the political sales beat one year, I asked for a meeting with my sales manager and general manager. In the session, I asked if I were in trouble. They said of course not. Well, politicals were a dumping ground in one sense in those days. You had to give the lowest possible rate and you also bumped lots of long standing advertisers in strong programming. They assured me that my future was safe. Today, everyone brags about political spending. It is amazing how things have changed. The awful truth is that the business is weak in most markets and political bucks are a shot of adrenaline that we desperately need for our billing. Now, as a GM, no one is upset if they are assigned political spending.”
Some people, in a minority, were not so bullish on network affiliate prospects for political billing:
--“Karl Rove has to be angry with losing the last two presidential races. This time, they will not get outsmarted and ultimately out-advertised as they were in 2008 and 2012. The GOP has to be grooming pollsters and media people who will be state of the art next year in terms of forecasting and media execution. And, my bet is they will use a lot less over the air TV than people may think. They have tons of money but they will allocate it very well.”
--“This forecasted spot TV bonanza may be a mirage. Iowa will do great for their caucus and WMUR in New Hampshire will break records. After the GOP field thins, it will change probably after the South Carolina primary. Watch for social media to grab some serious money.”
--A long time media researcher says: “Let’s say it is Clinton vs. Bush. They both have baggage and large numbers of people who will not vote for them simply due to their names. So, TV is not going to persuade people as much as you might think. It may help get the vote out on November 8, 2016 but I do not see it as crucial or as big as others do. The “ground game” of getting the vote out will be the key".
So, digital spending for politicians will grow exponentially next year. With the record amounts being spent, the rising tide will raise both digital and television be it over the air or cable. Nothing, as I like to say, lasts forever. So, watch for on line to overtake broadcast in the years to come (2024?) in political campaigns. At that point, broadcast TV will be in a world of hurt without their huge biannual bailout.
If you would like to contact Don Cole directly, you may do so at doncolemedia@gmail.com
Saturday, June 13, 2015
Ad People and Mobility
Not a month goes by where I do not hear from a reader who is a young person, usually in media, at an agency who wishes to talk or e-mail about his or her future. Generally, they work at small or mid-sized firms and they tend to be in the back roads of American advertising meaning smaller cities rather than advertising hubs. They often ask how they can stay current with the rapid changes going on, ask what they should be reading, and where they think they can learn the most.
Generally, I suggest that they ask their boss to send them to media and digital conferences. They can learn a lot, make a contact or two, and prove its worth by writing a report to management or doing a power-point on what is happening in the marketplace. If one is a thousand miles from an advertising mecca, this could help your entire shop. Most say their CEO says that it is too expensive. Well, at that point, I suggest that they move to an advertising hub if they want to continue to grow.
The response is interesting. If someone is in their 20’s and single, they tend to be open to the idea. Some find the idea of New York intimidating while others say they want to own a house not far from the office. That pretty much kills New York.
Mobility is something that demographers have looked at for some time. Since the time of the Alexis de Tocqueville’s analysis of America in the first half of the 19th century, U.S. citizens have been the most mobile people on earth. It has always fascinated me how when Southeastern England boomed during the Margaret Thatcher era, many unemployed in the north of England stayed on the dole or lived marginal lives when a move a few hundred miles away could have guaranteed some gainful employment. In continental Europe, it is often but not always more extreme. There is evidence that in some smaller Italian cities, it is not unusual for a young adult to stay in their hometown and often rent or purchase an apartment in the same building as their parents. This is great for family life and a sense of community but it does limit employment opportunities for some very talented people. I have witnessed the same thing in Portugal.
So Americans will move but there are caveats. As a general rule, the higher your level of education the more likely you are willing to move for a good job. If you have not finished high school, you are not apt to leave home even if you are unemployed. One reason for this is that you cannot afford to travel to a new location and look for work. So, if you live in rust belt town in rural Pennsylvania and are poorly educated and out of work, you do not have the resources to go to Texas and search for work there.
The ad people whom I have discussed this topic with often ask for a town with a VERY low cost of living and a vibrant advertising agency community. Well, there are not any if you are honest about it. The least expensive places to live in America are metros areas such as McAllen-Brownsville, TX, Johnson City, TN, Johnstown-Altoona, PA and Anniston, AL. They are surely some talented people living there but those metros will never be ad hubs.
Shift to the most expensive metros and you find San Jose, CA, Stamford, CT, San Francisco, Boston, New York, Washington, DC and Austin, TX. While Stamford is a magnet for money managers, the rest are high tech hubs that should be hubs for the new world of digital advertising.
When people ask me why go to a big city, I give several reasons:
1) Peer pressure. You can learn from many pros around you. If you are a lone media planner or writer in Duluth, you may have unlimited potential. Yet, even your boss and coworkers do not realize how good you are or could be. In a more competitive and larger environment, you will grow by necessity.
2) Stability--the ad business has never been stable and there are no guarantees. If you are in an ad capital and your company goes south, there are other places to work. Or, you can do a start up yourself. In a small city if your shop is king and has problems, you may have to shift careers.
3) New Media--people in outlying markets say they are 100% up to speed on the changes going on in the industry. They know it is nonsense. If you work in an ad hub you are in the middle of what is going on today. Several markets are the “Silicon Valley” of advertising.
4) Chance for advancement--many 10-20 person shops are places that are great to work in, lots of fun, allow you to do good quality work and build lasting friendships. At some point, unless you own the place, you will hit a brick wall regarding growth. In a major advertising center, you may max out but at a higher plateau than if you stayed in the small town.
What if you try the big city and hate it? Go back to a smaller market! All of us deserve to be happy and, if you lower your sights, you may be content out of the mainstream. There is nothing wrong with the quiet life.
Yet, if you do not try to reach your full potential, you could wind up old and bitter as many that I have met over the years. So, when you are young, go for it!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, June 7, 2015
Job Geography
Several months back, I was watching a morning news show on cable and a governor was talking about his plans to create more good paying jobs in his state. He muttered something about tax incentives and said over the next several years it was likely that on his watch the state would become a hi-tech leader. I just had to laugh. It is simply not going to happen in his political lifetime.
I will not name the man or his state but he seems more than a bit out of touch with the new world of job geography in the United States. I have done more than a little research on this topic and job growth other than in natural resources tends to lean heavily on two major factors--education level of the local population and the degree of innovation going on in the business community.
To explain, let’s back for a minute. A few years ago, I was playing a verbal game of trivial pursuit regarding businesses. Someone threw up the question, “Where was Microsoft founded?” One said Redmond, Washington and everyone else but I said Seattle. I said Albuquerque. “How do you know that,” our lead questioner asked without hiding his annoyance. I told him that I had followed the fortunes of the company for over thirty years and remembered that Paul Allen and Bill Gates, the founders, were Seattle born and wanted to move back home very early on in the game.
At the time, Seattle was not doing all that well as a metropolitan area. Once Microsoft took off and eventually went public, the Seattle metro started to do better. After going public, many Microsoft employees became instant millionaires. So, a number of them cashed out and started their own businesses locally. They started a few thousand new businesses and most stayed in the area. Two prominent firms led by Microsoft alumni are Real Networks and Expedia. Why stay in Seattle? Well, the talent pool is full of very smart people. Demographers often refer to it as a “thick labor market.” If you look at these “thick” markets such as Silicon Valley, Austin, Boston, Denver, Atlanta, and increasingly, little Boise, you see them generating a hugely disproportionate share of patents relative to the size of their population. The number of patents taken out is an excellent surrogate for measuring innovation from my perspective.
If you look at economic history an interesting pattern develops as an industry begins to take hold. First, in the baby stage, the innovators can be scattered all over the place. Take the auto industry. In 1920, there were over three hundred car manufacturers, many in the Midwest but in a large number of states. Many went bust and some were swallowed up by bigger players. When an industry starts to hit its potential, a consolidation takes place and the players become more concentrated, e.g., Detroit for cars and Hartford for insurance. Finally, as you mature, you may move to cheaper markets to operate in and the clustering is gone.
Interestingly, most of our high tech areas tend to be very expensive places to live and to do business. Silicon Valley has a very high cost of living and especially so in housing. Why do startups continue to go there? I think that it is very much a function of the thickness of the labor market mentioned above. If you operate in Silicon Valley, you can attract great people with great ideas. Also, the best and the brightest love the social interactions. Think of the learning opportunities in a community like Silicon Valley where literally hundreds of tech companies are operating and many flourishing. Innovation and higher productivity have to come from such an environment. Many foreign giants have large offices in hi-tech cities for the same reason.
Also, and very importantly, is availability of money. Many venture capital (VC) firms still operate there and use what has been called in the industry “the 20 minute rule.” When a 20 something techie in a hoodie passes muster after their brutal cross examinations in their presentations for seed money, the VC pros do not simply write the checks and patiently wait. They usually want the new venture to open locally. This allows them to offer hands on advice and often help with hiring. Techies may not know how to run an accounting department or find a good general manager while they dream up the next life-changing new product. The VC leaders, who money is on the line, know just the men and women to help fill in those needed posts.
The growth of tech has caused some interesting pay discrepancies across the nation. In the brainiac markets, salaries are higher for ALL workers not just the tech savvy pros. In fact, people with high school diplomas in thick labor markets generally make more than college graduates in places that are struggling such as Flint, Michigan or Johnstown, Pa. Standard of living is another matter. Housing is very inexpensive in the lower income areas but so is pay. Increases tend to be much higher and faster in the high growth tech areas.
Surprising people are reacting to innovation. In 2013, Wal*Mart, yes, Wal*Mart, opened up Walmart.com in San Bruno, CA (Silicon Valley) rather than in corporate headquarters in Arkansas. Why? How many sharp online marketers and designers want to live in Bentonville, Arkansas? The talent pool is in Silicon Valley and if they are to beat back Amazon (a tall order), they need the best people in the business to do it.
So, ad agencies ought to look at this trend look and hard. People often have told me over the years how their mid-sized market would one day become an advertising mecca. It did not happen. Now, a new danger seems to be emerging. What if Apple, Google, Amazon and few others take their online and mobile advertising in-house? There will certainly be a talent pool nearby to handle the speciality jobs required. You probably have noticed that a large number of media assignments for billion dollar global advertisers are under review this year. As they shift away from conventional media (largely TV) over the next several years, will agencies be able to hang on to most of the digital assignments? Or, will they too have offices in Seattle, Silicon Valley and Austin? It will be interesting.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or post a comment on the blog.
I will not name the man or his state but he seems more than a bit out of touch with the new world of job geography in the United States. I have done more than a little research on this topic and job growth other than in natural resources tends to lean heavily on two major factors--education level of the local population and the degree of innovation going on in the business community.
To explain, let’s back for a minute. A few years ago, I was playing a verbal game of trivial pursuit regarding businesses. Someone threw up the question, “Where was Microsoft founded?” One said Redmond, Washington and everyone else but I said Seattle. I said Albuquerque. “How do you know that,” our lead questioner asked without hiding his annoyance. I told him that I had followed the fortunes of the company for over thirty years and remembered that Paul Allen and Bill Gates, the founders, were Seattle born and wanted to move back home very early on in the game.
At the time, Seattle was not doing all that well as a metropolitan area. Once Microsoft took off and eventually went public, the Seattle metro started to do better. After going public, many Microsoft employees became instant millionaires. So, a number of them cashed out and started their own businesses locally. They started a few thousand new businesses and most stayed in the area. Two prominent firms led by Microsoft alumni are Real Networks and Expedia. Why stay in Seattle? Well, the talent pool is full of very smart people. Demographers often refer to it as a “thick labor market.” If you look at these “thick” markets such as Silicon Valley, Austin, Boston, Denver, Atlanta, and increasingly, little Boise, you see them generating a hugely disproportionate share of patents relative to the size of their population. The number of patents taken out is an excellent surrogate for measuring innovation from my perspective.
If you look at economic history an interesting pattern develops as an industry begins to take hold. First, in the baby stage, the innovators can be scattered all over the place. Take the auto industry. In 1920, there were over three hundred car manufacturers, many in the Midwest but in a large number of states. Many went bust and some were swallowed up by bigger players. When an industry starts to hit its potential, a consolidation takes place and the players become more concentrated, e.g., Detroit for cars and Hartford for insurance. Finally, as you mature, you may move to cheaper markets to operate in and the clustering is gone.
Interestingly, most of our high tech areas tend to be very expensive places to live and to do business. Silicon Valley has a very high cost of living and especially so in housing. Why do startups continue to go there? I think that it is very much a function of the thickness of the labor market mentioned above. If you operate in Silicon Valley, you can attract great people with great ideas. Also, the best and the brightest love the social interactions. Think of the learning opportunities in a community like Silicon Valley where literally hundreds of tech companies are operating and many flourishing. Innovation and higher productivity have to come from such an environment. Many foreign giants have large offices in hi-tech cities for the same reason.
Also, and very importantly, is availability of money. Many venture capital (VC) firms still operate there and use what has been called in the industry “the 20 minute rule.” When a 20 something techie in a hoodie passes muster after their brutal cross examinations in their presentations for seed money, the VC pros do not simply write the checks and patiently wait. They usually want the new venture to open locally. This allows them to offer hands on advice and often help with hiring. Techies may not know how to run an accounting department or find a good general manager while they dream up the next life-changing new product. The VC leaders, who money is on the line, know just the men and women to help fill in those needed posts.
The growth of tech has caused some interesting pay discrepancies across the nation. In the brainiac markets, salaries are higher for ALL workers not just the tech savvy pros. In fact, people with high school diplomas in thick labor markets generally make more than college graduates in places that are struggling such as Flint, Michigan or Johnstown, Pa. Standard of living is another matter. Housing is very inexpensive in the lower income areas but so is pay. Increases tend to be much higher and faster in the high growth tech areas.
Surprising people are reacting to innovation. In 2013, Wal*Mart, yes, Wal*Mart, opened up Walmart.com in San Bruno, CA (Silicon Valley) rather than in corporate headquarters in Arkansas. Why? How many sharp online marketers and designers want to live in Bentonville, Arkansas? The talent pool is in Silicon Valley and if they are to beat back Amazon (a tall order), they need the best people in the business to do it.
So, ad agencies ought to look at this trend look and hard. People often have told me over the years how their mid-sized market would one day become an advertising mecca. It did not happen. Now, a new danger seems to be emerging. What if Apple, Google, Amazon and few others take their online and mobile advertising in-house? There will certainly be a talent pool nearby to handle the speciality jobs required. You probably have noticed that a large number of media assignments for billion dollar global advertisers are under review this year. As they shift away from conventional media (largely TV) over the next several years, will agencies be able to hang on to most of the digital assignments? Or, will they too have offices in Seattle, Silicon Valley and Austin? It will be interesting.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or post a comment on the blog.
Tuesday, June 2, 2015
Recovery, what recovery?
Depending on which talking head on cable business channels you are listening to, we are in the 6th or 7th year of recovery from The Great Recession of 2008. Everyone cheerfully admits that the economy is recovering at a painfully slow rate, but almost all appear cheerful that things will turn out just fine in the near future.
On Friday, after a brief vacation, from my laptop, TV and most cellphone messages, I was hit with two pieces of downbeat data:
1) The official government figures were readjusted. Originally, GDP growth for the first quarter of 2015, was placed at -.2% but was not said to be -.7% owing to bad weather in the 1st quarter plus the muscular U.S. dollar making American goods less attractive overseas.
2) The US Federal Reserve, hardly a subversive organization, released their report on The Well Being of US Households. The report, as usual, had disturbing statistics for those among us who eat demographics for breakfast. A few highlights were:
--Some 47% of Americans could not cover a $400 emergency or sell something to cover the amount owed. (several of us wondered about whether they could go to friends or relatives)
--31% have gone without some form of medical care in the past year as they could not afford it.
--53% of those earning under $40,000 per year described themselves as “just getting by.”
--Despite the distance from 2008-2009, some 14% are still “underwater’ on their mortgages ( amount owed is greater than what they could sell the dwelling for).
I ran these stats by some successful people who said it was “nonsense” or “impossible”.
Then I looked toward less obvious choices. I contacted a broadcaster whom I have known for years in a rust-belt DMA. He said, “Don, of course, the data are accurate. Car advertising has perked up here because the fleet is old (over 10 years) and people’s cars are falling apart and they need to get to work. But, the increases are far lower than most recoveries in the past. The dealers are using alternative media and there is little that we can do. Also, our retail business is awful. Two of our biggest clients closed their doors in the past year. People in our town are not spending--they do not have much money.”
Retail analysts are focusing on companies such as Tiffany’s which recently reported blowout earnings despite the stronger dollar discouraging some European buyers. Their target is not simply the often mentioned to 1% but really covers the top 5% of households who are doing just great. Yet, both Michael Kors and Coach disappointed with earnings lately and their stocks got hammered. Change in consumer tastes? Perhaps.
What is going on? If you want to be entertained and hear some straight talk, google or go on You Tube and watch retail analyst Howard Davidowitz. Unlike the talking heads on the mainstream media, he gives you the unvarnished truth as he sees it. When asked why mid-level retailers are largely struggling he states: “The people do not have any money.”
So, look beyond the New York, Boston and San Francisco’s of the world. Most people are struggling despite stock market strength and strong Tiffany earnings. As a mountain state broadcaster wrote to me, “Recovery, what recovery?”
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
On Friday, after a brief vacation, from my laptop, TV and most cellphone messages, I was hit with two pieces of downbeat data:
1) The official government figures were readjusted. Originally, GDP growth for the first quarter of 2015, was placed at -.2% but was not said to be -.7% owing to bad weather in the 1st quarter plus the muscular U.S. dollar making American goods less attractive overseas.
2) The US Federal Reserve, hardly a subversive organization, released their report on The Well Being of US Households. The report, as usual, had disturbing statistics for those among us who eat demographics for breakfast. A few highlights were:
--Some 47% of Americans could not cover a $400 emergency or sell something to cover the amount owed. (several of us wondered about whether they could go to friends or relatives)
--31% have gone without some form of medical care in the past year as they could not afford it.
--53% of those earning under $40,000 per year described themselves as “just getting by.”
--Despite the distance from 2008-2009, some 14% are still “underwater’ on their mortgages ( amount owed is greater than what they could sell the dwelling for).
I ran these stats by some successful people who said it was “nonsense” or “impossible”.
Then I looked toward less obvious choices. I contacted a broadcaster whom I have known for years in a rust-belt DMA. He said, “Don, of course, the data are accurate. Car advertising has perked up here because the fleet is old (over 10 years) and people’s cars are falling apart and they need to get to work. But, the increases are far lower than most recoveries in the past. The dealers are using alternative media and there is little that we can do. Also, our retail business is awful. Two of our biggest clients closed their doors in the past year. People in our town are not spending--they do not have much money.”
Retail analysts are focusing on companies such as Tiffany’s which recently reported blowout earnings despite the stronger dollar discouraging some European buyers. Their target is not simply the often mentioned to 1% but really covers the top 5% of households who are doing just great. Yet, both Michael Kors and Coach disappointed with earnings lately and their stocks got hammered. Change in consumer tastes? Perhaps.
What is going on? If you want to be entertained and hear some straight talk, google or go on You Tube and watch retail analyst Howard Davidowitz. Unlike the talking heads on the mainstream media, he gives you the unvarnished truth as he sees it. When asked why mid-level retailers are largely struggling he states: “The people do not have any money.”
So, look beyond the New York, Boston and San Francisco’s of the world. Most people are struggling despite stock market strength and strong Tiffany earnings. As a mountain state broadcaster wrote to me, “Recovery, what recovery?”
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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