Today, the headlines scream about the $14 trillion and growing national debt. Something much smaller but also scary has caught my attention in recent months. It seems that credit card debt has kept falling due to our continued economic uncertainty. It now rests at about $850 billion dollars. But, in the last year, it has been passed by student loan debt. Several independent projections place student loans to be at approximately $1 trillion dollars by year-end 2011.
Why the huge increase? Well, tuition costs have been outpacing inflation very strongly for the last 20 years. And, since 2008, the drop in home values has made it more difficult or even impossible for many parents to cover costs by taking out a home equity loan. As of now, the average student graduating from college has about $24,000 in loans and $2,100 in credit card debt. Some say that by next year, the average loan amount will exceed $30,000.
I went online and checked out a few private sources for student loans. If you have borrowed $30,000 you pay $350 a month for 10 years to pay it off. That will be a real strain for some young people starting out. They may need to buy a car, get an apartment, and maybe a bit of furniture. Will they have $350 a month left over to pay off the loan? Many will have to move back in with Dad and Mom at a time when they really would value some independence.
Some students at top schools or those who go on to graduate or professional schools easily borrow six figure sums. Unless they get a terrific job right out of school, they will be paying off loans forever. There will be people who will not be able to purchase a home until they are fifty and others may still be paying off their student loans when it is time for their own children to go to college. Or, they may work at a job that they hate for many years simply to pay off the debt.
The current group of millennials are in a box—they will have to wait far longer than previous generations to buy a home, start a family, take a chance on launching a business and, importantly, save for their own children’s college education.
The awful truth is that some will default on these loans. Debt will completely run their lives and one minor train wreck will derail their financial future. College loans from government programs cannot be discharged in bankruptcy but many will have difficulty meeting the payments unless the employment situation turns around very dramatically.
What is going on? To me, it is simply one more re-set in our economic reality. For the last few generations a college degree meant a guaranteed lifetime in the middle class or upper middle class. Not so any longer! Home prices could only go up and now we see the fallacy of that belief. Others felt salaries would always rise each year and we all know that is no longer true. And, consumers of all ages cannot continue to go deeper into debt. Taking on heavy debt for education does not seem like a great investment anymore either.
Some schools will have to adjust as well. An experienced educator has told me that she believes that small liberal arts colleges had better find some big seven figure donors and fast. If they don’t, parents will rebel at the school fees and lack of lucrative grant packages. Professors may be asked to teach an extra course each semester with no increase in pay. A few may simply close their doors in the next decade. Good state schools will become VERY hard to enter. Parents will see the outstanding value that they represent so the academic environment in them will likely get more rigorous as excellent students line up to enter.
Finally, some people will bypass college altogether which is fine for some but a disaster for many others. Politicians tell us that education is a vital part of our infrastructure much like highways and bridges. It is hard to disagree with that sentiment but if the present trend continues with high fees and large loans, something has to give.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, June 20, 2011
Monday, June 13, 2011
Mobile Musings
Mobile marketing is, in my opinion, set to take off. Up to now, it is somewhat akin to wind energy. It is ubiquitous, stronger in some locales and demographics than others, has many applications, and is very difficult to harness. But, the potential has always been huge.
The term most often applied to mobile is “the third screen.” Simply, put the first screen was TV. Marketers for 60 years have been able to reach millions of prospects in developed countries with exhaustively tested messages that they controlled completely. This one-way form of communication put the marketer in an enviable position. In the 1950’s, soap operas emerged as the three giants—Procter & Gamble, Colgate-Palmolive, and Unilever provided all the advertising for specific programs. The automotive companies did it in the evening as well. Millions of families watched the message at the same time.
Since then TV has fragmented and American homes of even modest affluence have a TV set per person and laptops are another form of TV as well. Television remains the most potent form of advertising in the world FOR THE MOMENT.
The second screen, the personal computer, allowed for what some have dubbed as “participatory marketing.” Many times on-line advertisers literally asked for feedback from customers. In the on-line world, you could provide vast amounts of information about your service or product that could never come across clearly in a 30-120 second TV commercial. People have liked communicating with brands they use and like and the second screen has been a great success and still has much growth to come.
The third screen, better known as the “Smartphone”, has the real time benefit of the personal computer, but also moves with you completely from location to location. Think about when you left the house today. The last three things you did were likely to be check for your car keys, you wallet or purse, and your mobile device.
I doubt if many of you think that I am going out a limb when I forecast that the revolutionary aspects of the third screen will have a more profound effect on global marketing than screens one and two combined.
The key is in the complete mobility that mobile offers plus the consumer behavior upheaval caused by what is increasingly dubbed the “untethered consumer.” Most people see mobile as a great way to pay bills without benefit of a laptop; what they miss is that it is turning the entire consumer buying process upside down. You can research a product on site and compare pricing at nearby competitive locations all with the Smartphone held in your hand. In TV, the viewer is increasing in control with many choices and DVR’s that allow for commercial avoidance. Now the Smartphone puts the consumer in control and marketers will have to serve his/her needs or face extinction in many categories.
Consider some simple math. At last count, some five billion people across the world have cell phones. One company, China Mobile, is said to have 1 billion customers across Asia. Put this in perspective by considering that there are approximately a billion personal computers, and two and a half billion TV sets. So, twice as many people have cell phones as TV’s. Impossible? Visit a third world village. Solar powered chargers bring phones to billions in villages that may never have wired TV or cable and perhaps a few decades before electricity finds a way to them.
Here at home in the US, 94% of us have cell phones and each year millions, especially the young, drop their landlines. By the end of this year, it is projected that half of US citizens will have Smartphones. This is a giant opportunity for nimble marketers and a potential nightmare for the Rip van Winkles among us.
What makes mobile unique? It is truly personal. Yes, TV and computer are largely personal these days but not always. Mobile is personal and goes absolutely EVERYWHERE with you. We use the device for personal communications with friends and family and also for social network connections. Companies need to be invited in to this world but, if they are, there is authentic potential for personal marketing at a new plateau.
Location comes to the forefront on the third screen. Smartphones have location-based technology built in so marketers can customize remarkably specific messages and offers based on where you are and what time it is. This is a game changer that many overlook at present.
Mobile is well, mobile. Obvious, yes, but think of the tremendous implications. All other media except sound are consumed when you are either standing still or sitting. What is more boring than waiting in line for your plane to board or for other passengers to be seated? Mobile allows you to check e-mail, send or check text messages, or make a purchase. You are untethered and can communicate or shop wherever you are.
There has been little in the way of ramp up speed for mobile. They can tap into Internet networks easily, which also increases the confidence of new users who are familiar with the on-line world.
We are not in the lead here in some areas. For several years, for example, Koreans have been watching TV for free on their mobiles and many foreigners use the many available applications far more than their American counterparts. Over the next few years as young people master the many dormant applications, mobile should become an even more potent marketing tool especially when they teach their cash rich parents how to use them.
Soon, I have plans to put together a post on mobile and social media. But, here is a great example of search via mobile using 2D codes. It comes from Chuck Martin’s interesting book, “The Third Screen”, (Brealey, 2011, pages 161-162.) “Heineken printed EZcodes on its six-packs of beer as part of its Know the Signs campaign. Once the code was scanned and the age of the buyer verified, an app called Breathalyzer could be instantly downloaded. The app works like this: a person notices a friend over-consuming alcohol; the phone’s owner preselects from a list of characters (The Sleeper, the Groper, the Flirt, etc.) her friend most resembles when tipsy, then hands the phone to the friend. The friend blows into the phone microphone, the “breathalyzer,” which shows that the person has had too much to drink (it does not truly function, of course); a humorous video showing the selected character in action launches. The EZ-code also links to another app called Taxi Magic that uses the Smartphone location to show a list of taxi companies nearby. Select the taxi company and the call is automatically placed.”
Pretty amazing, huh? A beer company makes a nice statement about responsible drinking without offending anyone and does it where the person is and can do some good! Some of these types of programs can be tested locally and then rolled out to wider geography.
For several years, people have been using TV to drive people to company web sites. TV sales teams need to partner to use TV commercials to drive people to Smartphones. Remember, even when people are sedentary and watching TV, the Smartphone is not far away!
My advice is simply this. If you have a client with a customer base largely under 40, start testing mobile NOW! You may have a false start or two but the train will be leaving the station soon. If you audience is mostly over 60, you have a bit of time. Don’t be like our politicians who refuse to honestly face our financial future, and “kick the can down the road.” The politicians may get away with it. If you are a marketer and completely ignore mobile, the world will be passing you by very soon.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The term most often applied to mobile is “the third screen.” Simply, put the first screen was TV. Marketers for 60 years have been able to reach millions of prospects in developed countries with exhaustively tested messages that they controlled completely. This one-way form of communication put the marketer in an enviable position. In the 1950’s, soap operas emerged as the three giants—Procter & Gamble, Colgate-Palmolive, and Unilever provided all the advertising for specific programs. The automotive companies did it in the evening as well. Millions of families watched the message at the same time.
Since then TV has fragmented and American homes of even modest affluence have a TV set per person and laptops are another form of TV as well. Television remains the most potent form of advertising in the world FOR THE MOMENT.
The second screen, the personal computer, allowed for what some have dubbed as “participatory marketing.” Many times on-line advertisers literally asked for feedback from customers. In the on-line world, you could provide vast amounts of information about your service or product that could never come across clearly in a 30-120 second TV commercial. People have liked communicating with brands they use and like and the second screen has been a great success and still has much growth to come.
The third screen, better known as the “Smartphone”, has the real time benefit of the personal computer, but also moves with you completely from location to location. Think about when you left the house today. The last three things you did were likely to be check for your car keys, you wallet or purse, and your mobile device.
I doubt if many of you think that I am going out a limb when I forecast that the revolutionary aspects of the third screen will have a more profound effect on global marketing than screens one and two combined.
The key is in the complete mobility that mobile offers plus the consumer behavior upheaval caused by what is increasingly dubbed the “untethered consumer.” Most people see mobile as a great way to pay bills without benefit of a laptop; what they miss is that it is turning the entire consumer buying process upside down. You can research a product on site and compare pricing at nearby competitive locations all with the Smartphone held in your hand. In TV, the viewer is increasing in control with many choices and DVR’s that allow for commercial avoidance. Now the Smartphone puts the consumer in control and marketers will have to serve his/her needs or face extinction in many categories.
Consider some simple math. At last count, some five billion people across the world have cell phones. One company, China Mobile, is said to have 1 billion customers across Asia. Put this in perspective by considering that there are approximately a billion personal computers, and two and a half billion TV sets. So, twice as many people have cell phones as TV’s. Impossible? Visit a third world village. Solar powered chargers bring phones to billions in villages that may never have wired TV or cable and perhaps a few decades before electricity finds a way to them.
Here at home in the US, 94% of us have cell phones and each year millions, especially the young, drop their landlines. By the end of this year, it is projected that half of US citizens will have Smartphones. This is a giant opportunity for nimble marketers and a potential nightmare for the Rip van Winkles among us.
What makes mobile unique? It is truly personal. Yes, TV and computer are largely personal these days but not always. Mobile is personal and goes absolutely EVERYWHERE with you. We use the device for personal communications with friends and family and also for social network connections. Companies need to be invited in to this world but, if they are, there is authentic potential for personal marketing at a new plateau.
Location comes to the forefront on the third screen. Smartphones have location-based technology built in so marketers can customize remarkably specific messages and offers based on where you are and what time it is. This is a game changer that many overlook at present.
Mobile is well, mobile. Obvious, yes, but think of the tremendous implications. All other media except sound are consumed when you are either standing still or sitting. What is more boring than waiting in line for your plane to board or for other passengers to be seated? Mobile allows you to check e-mail, send or check text messages, or make a purchase. You are untethered and can communicate or shop wherever you are.
There has been little in the way of ramp up speed for mobile. They can tap into Internet networks easily, which also increases the confidence of new users who are familiar with the on-line world.
We are not in the lead here in some areas. For several years, for example, Koreans have been watching TV for free on their mobiles and many foreigners use the many available applications far more than their American counterparts. Over the next few years as young people master the many dormant applications, mobile should become an even more potent marketing tool especially when they teach their cash rich parents how to use them.
Soon, I have plans to put together a post on mobile and social media. But, here is a great example of search via mobile using 2D codes. It comes from Chuck Martin’s interesting book, “The Third Screen”, (Brealey, 2011, pages 161-162.) “Heineken printed EZcodes on its six-packs of beer as part of its Know the Signs campaign. Once the code was scanned and the age of the buyer verified, an app called Breathalyzer could be instantly downloaded. The app works like this: a person notices a friend over-consuming alcohol; the phone’s owner preselects from a list of characters (The Sleeper, the Groper, the Flirt, etc.) her friend most resembles when tipsy, then hands the phone to the friend. The friend blows into the phone microphone, the “breathalyzer,” which shows that the person has had too much to drink (it does not truly function, of course); a humorous video showing the selected character in action launches. The EZ-code also links to another app called Taxi Magic that uses the Smartphone location to show a list of taxi companies nearby. Select the taxi company and the call is automatically placed.”
Pretty amazing, huh? A beer company makes a nice statement about responsible drinking without offending anyone and does it where the person is and can do some good! Some of these types of programs can be tested locally and then rolled out to wider geography.
For several years, people have been using TV to drive people to company web sites. TV sales teams need to partner to use TV commercials to drive people to Smartphones. Remember, even when people are sedentary and watching TV, the Smartphone is not far away!
My advice is simply this. If you have a client with a customer base largely under 40, start testing mobile NOW! You may have a false start or two but the train will be leaving the station soon. If you audience is mostly over 60, you have a bit of time. Don’t be like our politicians who refuse to honestly face our financial future, and “kick the can down the road.” The politicians may get away with it. If you are a marketer and completely ignore mobile, the world will be passing you by very soon.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, June 6, 2011
Reckless Endangerment
Gretchen Morgenson has long been my favorite financial journalist. For a number of years her New York Times columns have shed a lot of light on the weaknesses in our financial system. Also, she, like me, is a bit of a Neanderthal and still believes that 2+2=4. Early on she warned us of the dangers of derivatives and other sophisticated financial products.
Very recently, along with Joshua Rosner, a housing finance expert, she has written a new book called “Reckless Endangerment” (Henry Holt & Company, 2011). It covers some familiar ground focusing on how the 2008 meltdown of America’s financial system enriched a few at the expense of the rest of us. But, what makes this book different is that the two give the crisis some perspective.
Like some of you, I devoured the first wave of books that came out covering the crisis. Most of them, while riveting, covered the personalities and gave you hour by hour accounts of the last days of Bear Stearns and Lehman Brothers. Reckless Endangerment focuses on the housing meltdown and digs deeply to give us the reasons for it. They go all the way back to the Clinton administration in the 1990’s and their desire to expand the U.S homeownership base. Mortgage giant Fannie Mae goes under the microscope and does not fare well. The authors accuse the quasi-government agency of using money and political influence to escape regulation.
They are not afraid to name names. Even casual business observers know of Angelo Mozilo, Chairman of Countrywide Mortgage who was indicted and convicted in extensive legal proceedings. But dozens of others doctored loans to make people appear creditworthy and they have simply walked away with no repercussions. Three members of the United States Senate were named for getting under market interest rates on their loans: Chris Dodd of Connecticut who was Chairman of the Finance Committee and architect of the financial reform bill (sic), liberal icon Barbara Boxer of California, and Kent Conrad of North Dakota. Conrad’s involvement stunned me. For years, he had been my favorite Democrat in congress. Balanced and measured, he fought to put a halt to increases in federal spending.
The book outlines a number of crimes committed across the board in banking and in regulatory agencies that helped contribute to the financial meltdown. Yet, to date, little has been done to punish them.
The authors put it well—“A system where perpetrators of such a crime are allowed to slip quietly from the scene is just plain wrong.”
What struck me personally was the total disregard of ethical values of so many players in government and in business.
Can another crisis happen again and soon? The authors mention that it may not take the same form but as long as the “too big to fail” mantra exists some large institutions will likely get in to more monetary mischief at taxpayer expense.
This may not be light beach reading but it does read like a thriller at times. I highly recommend it for your summer reading list.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Very recently, along with Joshua Rosner, a housing finance expert, she has written a new book called “Reckless Endangerment” (Henry Holt & Company, 2011). It covers some familiar ground focusing on how the 2008 meltdown of America’s financial system enriched a few at the expense of the rest of us. But, what makes this book different is that the two give the crisis some perspective.
Like some of you, I devoured the first wave of books that came out covering the crisis. Most of them, while riveting, covered the personalities and gave you hour by hour accounts of the last days of Bear Stearns and Lehman Brothers. Reckless Endangerment focuses on the housing meltdown and digs deeply to give us the reasons for it. They go all the way back to the Clinton administration in the 1990’s and their desire to expand the U.S homeownership base. Mortgage giant Fannie Mae goes under the microscope and does not fare well. The authors accuse the quasi-government agency of using money and political influence to escape regulation.
They are not afraid to name names. Even casual business observers know of Angelo Mozilo, Chairman of Countrywide Mortgage who was indicted and convicted in extensive legal proceedings. But dozens of others doctored loans to make people appear creditworthy and they have simply walked away with no repercussions. Three members of the United States Senate were named for getting under market interest rates on their loans: Chris Dodd of Connecticut who was Chairman of the Finance Committee and architect of the financial reform bill (sic), liberal icon Barbara Boxer of California, and Kent Conrad of North Dakota. Conrad’s involvement stunned me. For years, he had been my favorite Democrat in congress. Balanced and measured, he fought to put a halt to increases in federal spending.
The book outlines a number of crimes committed across the board in banking and in regulatory agencies that helped contribute to the financial meltdown. Yet, to date, little has been done to punish them.
The authors put it well—“A system where perpetrators of such a crime are allowed to slip quietly from the scene is just plain wrong.”
What struck me personally was the total disregard of ethical values of so many players in government and in business.
Can another crisis happen again and soon? The authors mention that it may not take the same form but as long as the “too big to fail” mantra exists some large institutions will likely get in to more monetary mischief at taxpayer expense.
This may not be light beach reading but it does read like a thriller at times. I highly recommend it for your summer reading list.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, May 31, 2011
The Triumph of American Pop Culture
Over the years, I have spent a lot of time monitoring and studying Consumer Behavior. Often described as the psychology of marketing it really is the convergence of nine different disciplines: Marketing, Advertising, New Product Development, Anthropology, Sociology, Branding, Economics, Psychology and American Pop Culture.
The last element, American Pop Culture, is very powerful but does not always get the attention and analysis that it deserves. This may be because it is a difficult concept to articulate but it absolutely permeates much of the Consumer Behavior in the US and also around the world.
Some define American Pop Culture as America “dumb-downed” or everything that is left after high culture (literature, the arts) is taken away. Others deem it to be everything that is superficial or consumerist in nature.
For me, it is more commercial culture meaning things mass-produced for mass consumption. Pop Culture ideas typically appeal to a broad mass of the population.
Over the last 50 years, American Pop Culture has traveled very well—foreigners in developed countries may complain about American influences but they love blue jeans, Coca-Cola and Pepsi, Hollywood movies, our musical tastes, Disney, our love affair with the automobile and increasingly, fast food.
As a young child, I remember people laughing at those who wore blue jeans. Only farmers did that. Then came the 60’s and the lifestyle revolution and now it seems that the whole world is bathed in denim. In emerging markets, American Pop Culture seems almost aspirational for many people.
In recent years, Americans have definitely lost their taste for Kentucky Fried Chicken (KFC). Sales have been flat at best in their 5000 US stores. But in China, they continue to roll up double-digit same store gains each year. A new KFC is said to open every day in Mainland China. Their mascot “Chicky’ is even better known that Ronald McDonald although the golden arches is now opening a new location every 3-4 days in China.
Coke and Pepsi have paper-thin margins in the US but their profit growth is explosive in Asia, Latin America, and Eastern Europe. One of the most successful Initial Public Offerings this year has been Arcos Dorados (ARCO), which is the South American franchise stores of McDonalds (Arcos Dorados means “Golden Arches”). Other Pop Culture icons are catching on as well in the developing world. Those new to the middle class want the logos and the American identification that they signify be it the Nike Swoosh, the Polo Pony even the Marlboro man.
Critics say that Americans needs to start rebuilding their industrial base and fast. They certainly have a point. But American Pop Culture, though no longer potent in Western Europe and Japan, continues to tear up the track in emerging markets. We may look down on it but those brands are repatriating billions to our shores and will likely do so for a few more decades to come.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The last element, American Pop Culture, is very powerful but does not always get the attention and analysis that it deserves. This may be because it is a difficult concept to articulate but it absolutely permeates much of the Consumer Behavior in the US and also around the world.
Some define American Pop Culture as America “dumb-downed” or everything that is left after high culture (literature, the arts) is taken away. Others deem it to be everything that is superficial or consumerist in nature.
For me, it is more commercial culture meaning things mass-produced for mass consumption. Pop Culture ideas typically appeal to a broad mass of the population.
Over the last 50 years, American Pop Culture has traveled very well—foreigners in developed countries may complain about American influences but they love blue jeans, Coca-Cola and Pepsi, Hollywood movies, our musical tastes, Disney, our love affair with the automobile and increasingly, fast food.
As a young child, I remember people laughing at those who wore blue jeans. Only farmers did that. Then came the 60’s and the lifestyle revolution and now it seems that the whole world is bathed in denim. In emerging markets, American Pop Culture seems almost aspirational for many people.
In recent years, Americans have definitely lost their taste for Kentucky Fried Chicken (KFC). Sales have been flat at best in their 5000 US stores. But in China, they continue to roll up double-digit same store gains each year. A new KFC is said to open every day in Mainland China. Their mascot “Chicky’ is even better known that Ronald McDonald although the golden arches is now opening a new location every 3-4 days in China.
Coke and Pepsi have paper-thin margins in the US but their profit growth is explosive in Asia, Latin America, and Eastern Europe. One of the most successful Initial Public Offerings this year has been Arcos Dorados (ARCO), which is the South American franchise stores of McDonalds (Arcos Dorados means “Golden Arches”). Other Pop Culture icons are catching on as well in the developing world. Those new to the middle class want the logos and the American identification that they signify be it the Nike Swoosh, the Polo Pony even the Marlboro man.
Critics say that Americans needs to start rebuilding their industrial base and fast. They certainly have a point. But American Pop Culture, though no longer potent in Western Europe and Japan, continues to tear up the track in emerging markets. We may look down on it but those brands are repatriating billions to our shores and will likely do so for a few more decades to come.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, May 21, 2011
Brands in 2031
Twenty years from now, the world will be a different place. Media, as we know it, will largely be gone and the ability to garner information and the gadgetry involved will almost seem like a science fiction scenario compared to what we can do today.
Some say that brands will be diminished tremendously as the world struggles with climate change, oil shortages, a lack of clean water, overpopulation, and less arable land.
My take is sufficiently different than most and a few readers have asked me to share it with you. Here goes:
Historically, if you want development in a nation you need four things---steel, oil, cement, and an abundant water supply. Americans are approximately 4.5% of the world’s population yet we consume 25% of the energy. Commentators say that we are addicted to oil; the reality is that we are addicted to CHEAP oil. I have followed alternative energy, particularly wind, for over thirty years. My conclusion is that alternatives can play an important bridge for us over the next three decades or more as fossil fuels become more expensive. Fossil fuels, however, will still be the dominant player as time goes on. Developing nations want to live as well as Americans do now. The US consumption of 25% of the world’s energy cannot continue much longer as others want the same resources and are willing to pay more, perhaps a lot more, for it. We will need to learn to conserve, go to alternatives, and use more nuclear power despite the current scare from Japan. Our massive domestic natural gas reserves could help a lot. As energy prices rise due to international demand, more local agriculture will pop up. It is becoming chic to be a locovore meaning you consume largely locally grown products and avoid transportation costs.
Water is something that we do not dwell on in the United States except for low rainfall areas such as Arizona. Around the world, it is different story. Some may see clean and abundant water as a basic human right, but more than half of the people currently hospitalized around the world are there because of having ingested bad water. Great strides are being made in water purification but the price for water will go up dramatically in many parts of the world. A water pipeline from Canada to Arizona sounds farfetched today but such a solution will happen somewhere in the world.
Over the next 20 years, we will have an additional two billion people on the planet. As a result, plus the energy, climate and water issues, there are people forecasting massive famines around the world. There may be situations where certain countries will be hurt badly for a brief period but I take the optimistic view that technology will trump geology and weather issues.
Think about this for a minute. Two billion more people actually will translate in to two billion new consumers. Will all of these new people be middle class? Of course not! But right now, some 20 million people in China alone join the middle class each year. Throughout Asia, India and Latin America a similar trend is going on. Imagine a young man from rural China who moves to Shanghai to work in an office. Or consider a young woman from a remote island moves to Manila. Finally, a young fellow from the mountains of Peru settles in Lima. These young people go from being virtual peasants to a modest middle class lifestyle. They purchase soaps, laundry detergent, dishwashing liquid, razor blades used almost daily, shampoo, ties, and business suits. In their leisure hours, they may visit a McDonald’s, knock back the occasional Budweiser, and sadly, smoke a Marlboro. If things go well, they may even buy a Toyota someday.
Two billion new consumers all eager to have some stake in the lifestyle that we take for granted. This translates to explosive growth for brands that are wise enough to build a presence far outside the United States or their home markets. The big multi-nationals have been doing this for decades.
New York may be the hub of the advertising world but for how long? Right now, some 80% of advertising dollars are spent in North America, Western Europe and Japan. That ratio will shift downward and quickly over the next decade.
The future for brands, marketing, promotion and advertising has never been brighter. Just make sure that you make the world your oyster rather than your provincial back yard.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Some say that brands will be diminished tremendously as the world struggles with climate change, oil shortages, a lack of clean water, overpopulation, and less arable land.
My take is sufficiently different than most and a few readers have asked me to share it with you. Here goes:
Historically, if you want development in a nation you need four things---steel, oil, cement, and an abundant water supply. Americans are approximately 4.5% of the world’s population yet we consume 25% of the energy. Commentators say that we are addicted to oil; the reality is that we are addicted to CHEAP oil. I have followed alternative energy, particularly wind, for over thirty years. My conclusion is that alternatives can play an important bridge for us over the next three decades or more as fossil fuels become more expensive. Fossil fuels, however, will still be the dominant player as time goes on. Developing nations want to live as well as Americans do now. The US consumption of 25% of the world’s energy cannot continue much longer as others want the same resources and are willing to pay more, perhaps a lot more, for it. We will need to learn to conserve, go to alternatives, and use more nuclear power despite the current scare from Japan. Our massive domestic natural gas reserves could help a lot. As energy prices rise due to international demand, more local agriculture will pop up. It is becoming chic to be a locovore meaning you consume largely locally grown products and avoid transportation costs.
Water is something that we do not dwell on in the United States except for low rainfall areas such as Arizona. Around the world, it is different story. Some may see clean and abundant water as a basic human right, but more than half of the people currently hospitalized around the world are there because of having ingested bad water. Great strides are being made in water purification but the price for water will go up dramatically in many parts of the world. A water pipeline from Canada to Arizona sounds farfetched today but such a solution will happen somewhere in the world.
Over the next 20 years, we will have an additional two billion people on the planet. As a result, plus the energy, climate and water issues, there are people forecasting massive famines around the world. There may be situations where certain countries will be hurt badly for a brief period but I take the optimistic view that technology will trump geology and weather issues.
Think about this for a minute. Two billion more people actually will translate in to two billion new consumers. Will all of these new people be middle class? Of course not! But right now, some 20 million people in China alone join the middle class each year. Throughout Asia, India and Latin America a similar trend is going on. Imagine a young man from rural China who moves to Shanghai to work in an office. Or consider a young woman from a remote island moves to Manila. Finally, a young fellow from the mountains of Peru settles in Lima. These young people go from being virtual peasants to a modest middle class lifestyle. They purchase soaps, laundry detergent, dishwashing liquid, razor blades used almost daily, shampoo, ties, and business suits. In their leisure hours, they may visit a McDonald’s, knock back the occasional Budweiser, and sadly, smoke a Marlboro. If things go well, they may even buy a Toyota someday.
Two billion new consumers all eager to have some stake in the lifestyle that we take for granted. This translates to explosive growth for brands that are wise enough to build a presence far outside the United States or their home markets. The big multi-nationals have been doing this for decades.
New York may be the hub of the advertising world but for how long? Right now, some 80% of advertising dollars are spent in North America, Western Europe and Japan. That ratio will shift downward and quickly over the next decade.
The future for brands, marketing, promotion and advertising has never been brighter. Just make sure that you make the world your oyster rather than your provincial back yard.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, May 14, 2011
The Two Americas and The Future of Media
Everywhere you turn and at every conference you attend, a few very smart people are willing to make their unhedged forecasts about the future of media. They focus around new platforms, new gadgetry, the speed of transactions and the impact this will have on the future of advertising and marketing.
Virtually all of them are well thought out and quite plausible. But, to me, they all miss something. What they lack is the acknowledgement that all Americans are not as cutting edge as they are. One thing that I have learned over the last four decades is that consumers lag technology. Just because a new platform exists or a new application is available does not mean that most people will embrace it immediately.
A few days ago, I was leaving a meeting and two people who should have known better remarked, “Well, everyone now has Netflix.” I checked and found that in the U.S and Canada combined they are now at about 18% penetration including me, a very satisfied customer. But, that means that 82% do not have the service. Hardly everyone. Way too many pundits look to peers and friends as the benchmark of acceptance instead of the facts.
In his ill fated runs for the presidency disgraced former Senator John Edwards did make a very inspiring stump speech often referred to as “The Two Americas.” He complained that present day America had two tiers of healthcare, education and opportunity. I thought his solution to the dilemma was completely wrong but, if you had a conscience, the speech itself was moving.
Well, in marketing we face the same thing. Virtually all of you reading this will embrace the new technologies and your use of media options will expand and likely become more pleasant. But, just because you, your friends, co-workers, and clients have hopped onto the bandwagon does not mean that everyone has or will.
Did you know that approximately 17% of American adults are functionally illiterate, 25% have no credit card, and 18% are unbanked? They still buy beer, groceries, fast food, and pick-up trucks but they are not comparison shopping with a digital device or ordering stocks on line for a $7 commission.
And, how about the graying of America? People now in their sixties may live 30 more years. I hope to be one of them. ☺ Will we continue to upgrade our technological choices or will be still be paying a cable bill 25 years from now? Many of us will have the money but will we embrace all of the new offerings that will come at us with increasing frequency?
My purpose here is to plea for balance among marketers. Lots of things such as TV, couponing, some radio, and definitely newspaper do not pack the wallop that they once had. But the underclass and the mature, both upscale or not, will definitely not keep up with the changes. This will give conventional media a longer life that some futurists currently think.
So what do I think will happen? A few quick forecasts would be:
1) The data explosion will continue in all forms.
2) New gadgetry will amaze us all and become obsolete relative to newcomers every couple of years.
3) Mobile will boom either via phones, i-pads or new inventions. It will eventually largely replace promotional activities such as printed coupon vehicles and let you negotiate at retail by showing competitive offerings to a salesperson.
4) More and more media will become subscription based and some TV as we know it will go to a paid format and be available on a dozen or more devices.
5) Some video will be global in scope. Google has sat on YouTube for a few years. At some point, they or a competitor will start a network or two that is 100% digital and knows no borders. Actors will love the instant global exposure and marketers can advertise worldwide cost efficiently. The English language may spread faster as a result as well. Sorry, Mandarin.
6) Measurement of the emerging media will get much better but media executives will still struggle to optimize the media mix.
7) Direct response in all forms will grow. Some of that will come from product placement in programming where you can stop a program and order the sofa seen in the sitcom or set up a test drive for the car the star is driving.
I remain very excited about the future of media. Not a day goes by where I do not wish that I could start my career all over again as I ponder the amazing opportunities to come. But, remember, consumers lag technology and there remains a strong minority of Americans who have yet to enter the on-ramp of the information superhighway. Some never will.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Virtually all of them are well thought out and quite plausible. But, to me, they all miss something. What they lack is the acknowledgement that all Americans are not as cutting edge as they are. One thing that I have learned over the last four decades is that consumers lag technology. Just because a new platform exists or a new application is available does not mean that most people will embrace it immediately.
A few days ago, I was leaving a meeting and two people who should have known better remarked, “Well, everyone now has Netflix.” I checked and found that in the U.S and Canada combined they are now at about 18% penetration including me, a very satisfied customer. But, that means that 82% do not have the service. Hardly everyone. Way too many pundits look to peers and friends as the benchmark of acceptance instead of the facts.
In his ill fated runs for the presidency disgraced former Senator John Edwards did make a very inspiring stump speech often referred to as “The Two Americas.” He complained that present day America had two tiers of healthcare, education and opportunity. I thought his solution to the dilemma was completely wrong but, if you had a conscience, the speech itself was moving.
Well, in marketing we face the same thing. Virtually all of you reading this will embrace the new technologies and your use of media options will expand and likely become more pleasant. But, just because you, your friends, co-workers, and clients have hopped onto the bandwagon does not mean that everyone has or will.
Did you know that approximately 17% of American adults are functionally illiterate, 25% have no credit card, and 18% are unbanked? They still buy beer, groceries, fast food, and pick-up trucks but they are not comparison shopping with a digital device or ordering stocks on line for a $7 commission.
And, how about the graying of America? People now in their sixties may live 30 more years. I hope to be one of them. ☺ Will we continue to upgrade our technological choices or will be still be paying a cable bill 25 years from now? Many of us will have the money but will we embrace all of the new offerings that will come at us with increasing frequency?
My purpose here is to plea for balance among marketers. Lots of things such as TV, couponing, some radio, and definitely newspaper do not pack the wallop that they once had. But the underclass and the mature, both upscale or not, will definitely not keep up with the changes. This will give conventional media a longer life that some futurists currently think.
So what do I think will happen? A few quick forecasts would be:
1) The data explosion will continue in all forms.
2) New gadgetry will amaze us all and become obsolete relative to newcomers every couple of years.
3) Mobile will boom either via phones, i-pads or new inventions. It will eventually largely replace promotional activities such as printed coupon vehicles and let you negotiate at retail by showing competitive offerings to a salesperson.
4) More and more media will become subscription based and some TV as we know it will go to a paid format and be available on a dozen or more devices.
5) Some video will be global in scope. Google has sat on YouTube for a few years. At some point, they or a competitor will start a network or two that is 100% digital and knows no borders. Actors will love the instant global exposure and marketers can advertise worldwide cost efficiently. The English language may spread faster as a result as well. Sorry, Mandarin.
6) Measurement of the emerging media will get much better but media executives will still struggle to optimize the media mix.
7) Direct response in all forms will grow. Some of that will come from product placement in programming where you can stop a program and order the sofa seen in the sitcom or set up a test drive for the car the star is driving.
I remain very excited about the future of media. Not a day goes by where I do not wish that I could start my career all over again as I ponder the amazing opportunities to come. But, remember, consumers lag technology and there remains a strong minority of Americans who have yet to enter the on-ramp of the information superhighway. Some never will.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, May 7, 2011
Political Talk Radio
This past week with the elimination of Osama Bin Laden talk radio probably had a nice audience spike. Virtually all of us were relieved after nearly ten years and were justifiably proud of our military specialists, our intelligence community and our president.
The whole area surrounding political talk radio is very interesting to me. It is not new at all. Radio historians tell me that evangelist and huckster Aimee Semple McPherson had a talk radio show way back in 1924 and eventually bought a station. Detroit clergyman, Father Charles Coughlin, had a program that reached millions in the 1930’s. During the 1932 presidential campaign Coughlin endorsed Governor Roosevelt over President Hoover by proclaiming “Roosevelt or ruin”. A little while later he turned against Roosevelt and the New Deal and became increasingly strident. His superiors silenced him and he was banned from broadcast for life.
Political talk radio, as we know it became to get traction in the 1980’s and 1990’s. Many of us who are media analysts feel that it saved AM radio during that time period. Music was no longer viable on the AM dial when people could get the high fidelity sound of FM.
Other than sports talk which we covered recently (Media Realism, February 4, 2011) talk radio tends to focus on conservative talk, hot talk and liberal talk. Hot talk tends to be targeted at Men 18-49 and is devoted to pop culture although it sometimes veers into politics.
When most of us think of talk radio, conservative talk comes to mind first. The leading personalities in that arena tend to be Rush Limbaugh, Sean Hannity, Glenn Beck, Mark Levin, and Michael Savage. Limbaugh is an interesting character to me. When I first heard him around 1990, he was different, even refreshing. Whatever your politics were you had to admit that he was one heck of a broadcaster. What impressed me at the time was how he played things straight. He was conservative for sure but not in a knee jerk fashion. And, for a guy who had been a sportscaster a few years earlier and had struggled a lot, he appeared to have a philosophical base to his comments. I remember vividly him giving a young caller a primer on what books to read if one were interested in the conservative viewpoint. The list off the top of my head included “The Conservative Mind” by Russell Kirk, “Capitalism and Freedom” by Milton Friedman, and the very heavy “Human Action” by Ludwig von Mises. It was stunning to hear that on talk radio. He fired bullets at both parties and was tough on Republicans who appeared inconsistent.
Then something happened. As his audience grew, he became more strident and his comments were not as fact based as they had been. George H.W. Bush invited him to stay at the White House and after a night in the Lincoln bedroom, he suddenly seemed to become a complete apologist for the Bush 41’s administration. Soon he was a leading spokesperson for the Republican Party whether the leadership liked it or not.
Many other conservative talk show hosts came on the scene and did quite well. The audience tends to be male, middle aged plus, and very conservative. Why has it worked? Well, many people say that they have an ability to tap into the anger of many of their listeners. Some view them as an outlet for those who are bitter or angry or scared.
There are some talk radio players on the liberal side of the ledger as well. Air America was launched a number of years ago as a counterpoint to conservative talk. It has not fared nearly as well. One of the stronger players, comedian Al Franken, left his talk show seat and won a seat in the U.S. Senate from Minnesota. But, generally, liberal talk has not caught on. Why? A brilliant young political analyst and a real progressive says that she feels liberals want to solve problems. They offer up complicated solutions and are policy wonks. That does not play well on talk radio where sound bites and clever interactions with callers reign.
One could also argue that liberals see government as the solution while conservatives see government as the problem. Whatever the reason, there is not a liberal talk show host on radio with a huge national constituency.
To me, the long haul picture for political talk radio is not very bright. In many markets stations simulcast on AM and FM and some have gone to FM alone. As a radio expert put it “many people under 40 have never listened to AM so they have to move to FM.” Structurally, there is a strong media problem. Simply put, the older you are, the more TV you tend to watch. As the talk audience gets older and retires or works part time, they are going to find outlets on TV that can give them what they want. On the left, MSNBC has many programs that are great substitutes for talk radio and Bill O’Reilly and Sean Hannity on Fox News fulfill many of the right’s needs. It is not clear but it is likely that part of the decline in political radio talk has been due to cable news/talk offerings and the trend should only accelerate.
In a free society, freedom of expression is important. Political talk all but bailed out AM radio. Its future is strong but it may take on other forms via cable or Internet options going forward.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The whole area surrounding political talk radio is very interesting to me. It is not new at all. Radio historians tell me that evangelist and huckster Aimee Semple McPherson had a talk radio show way back in 1924 and eventually bought a station. Detroit clergyman, Father Charles Coughlin, had a program that reached millions in the 1930’s. During the 1932 presidential campaign Coughlin endorsed Governor Roosevelt over President Hoover by proclaiming “Roosevelt or ruin”. A little while later he turned against Roosevelt and the New Deal and became increasingly strident. His superiors silenced him and he was banned from broadcast for life.
Political talk radio, as we know it became to get traction in the 1980’s and 1990’s. Many of us who are media analysts feel that it saved AM radio during that time period. Music was no longer viable on the AM dial when people could get the high fidelity sound of FM.
Other than sports talk which we covered recently (Media Realism, February 4, 2011) talk radio tends to focus on conservative talk, hot talk and liberal talk. Hot talk tends to be targeted at Men 18-49 and is devoted to pop culture although it sometimes veers into politics.
When most of us think of talk radio, conservative talk comes to mind first. The leading personalities in that arena tend to be Rush Limbaugh, Sean Hannity, Glenn Beck, Mark Levin, and Michael Savage. Limbaugh is an interesting character to me. When I first heard him around 1990, he was different, even refreshing. Whatever your politics were you had to admit that he was one heck of a broadcaster. What impressed me at the time was how he played things straight. He was conservative for sure but not in a knee jerk fashion. And, for a guy who had been a sportscaster a few years earlier and had struggled a lot, he appeared to have a philosophical base to his comments. I remember vividly him giving a young caller a primer on what books to read if one were interested in the conservative viewpoint. The list off the top of my head included “The Conservative Mind” by Russell Kirk, “Capitalism and Freedom” by Milton Friedman, and the very heavy “Human Action” by Ludwig von Mises. It was stunning to hear that on talk radio. He fired bullets at both parties and was tough on Republicans who appeared inconsistent.
Then something happened. As his audience grew, he became more strident and his comments were not as fact based as they had been. George H.W. Bush invited him to stay at the White House and after a night in the Lincoln bedroom, he suddenly seemed to become a complete apologist for the Bush 41’s administration. Soon he was a leading spokesperson for the Republican Party whether the leadership liked it or not.
Many other conservative talk show hosts came on the scene and did quite well. The audience tends to be male, middle aged plus, and very conservative. Why has it worked? Well, many people say that they have an ability to tap into the anger of many of their listeners. Some view them as an outlet for those who are bitter or angry or scared.
There are some talk radio players on the liberal side of the ledger as well. Air America was launched a number of years ago as a counterpoint to conservative talk. It has not fared nearly as well. One of the stronger players, comedian Al Franken, left his talk show seat and won a seat in the U.S. Senate from Minnesota. But, generally, liberal talk has not caught on. Why? A brilliant young political analyst and a real progressive says that she feels liberals want to solve problems. They offer up complicated solutions and are policy wonks. That does not play well on talk radio where sound bites and clever interactions with callers reign.
One could also argue that liberals see government as the solution while conservatives see government as the problem. Whatever the reason, there is not a liberal talk show host on radio with a huge national constituency.
To me, the long haul picture for political talk radio is not very bright. In many markets stations simulcast on AM and FM and some have gone to FM alone. As a radio expert put it “many people under 40 have never listened to AM so they have to move to FM.” Structurally, there is a strong media problem. Simply put, the older you are, the more TV you tend to watch. As the talk audience gets older and retires or works part time, they are going to find outlets on TV that can give them what they want. On the left, MSNBC has many programs that are great substitutes for talk radio and Bill O’Reilly and Sean Hannity on Fox News fulfill many of the right’s needs. It is not clear but it is likely that part of the decline in political radio talk has been due to cable news/talk offerings and the trend should only accelerate.
In a free society, freedom of expression is important. Political talk all but bailed out AM radio. Its future is strong but it may take on other forms via cable or Internet options going forward.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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