The world is buzzing with talk of Social Media. Everyone seems to want to bake it into their communications campaigns and many feel that it will be the dominant selling vehicle in the years to come. Ad pros under 35 shake their heads in bemusement if the affable older fellow in the room with the tie and cufflinks (that would be Mr. Cole) suggests that it might not comprise one stop shopping a few years from now. Here are some of my thoughts on social media and, as promised earlier, there will be several more commentaries on the topic over the next year.
Social media is simply user or consumer-generated content. It allows companies to interact with customers and also serves as a platform for people to engage in networking or communication across the world. It comes in many forms most famously Facebook, Twitter, the fading MySpace, Internet Forums, Blogs, Wikis, Podcasts and Microblogging.
Virtually all of us are engaged in Social Media. If you are reading this blog, you are part of it. So, to test the hype, I took my own small, highly unscientific poll of businesses to see what people thought.
Roughly 30% said it moved sales and was so valuable that everyone should be using it. Some said that they could not separate its impact from other advertising and promotional activity. A larger group dismissed it as a waste of time and money and used language that I will not share with you to define the bad experience.
But something is definitely happening out there. You see a mass of bewildering and sometimes inaccurate facts to profile Social Media. But no other medium has reached hundreds of millions of people in such a short of time as Social Media—maybe 9 months? Small company success stories are remarkable when you see people with $10,000-20,000 budgets do nothing else and watch sales jump and inquiries arrive on line from more than 25 countries. Other changes are afoot. My dear school, Boston College,reputedly stopped giving incoming freshman their own e-mail this past year as everyone appeared to have a Facebook page.
Small businesses seem to love it. Dan Simons, a Washington restaurateur, said “Social Media for business is now life or death.” He constantly monitors on line forums, local review sites and thinks that customers sharing their opinions are re-shaping the environment for small business. Adults under 30 repeatedly tell me that they use reviews on the Facebook pages of friends to choose restaurants or current movies. My university students echo that sentiment as well.
Sound too good to be true? Well, that is where is the crusty curmudgeon in me begins to surface. I can see how Social Media can make or break a bistro and the word of mouth it generates can elevate a film’s audience. But, I am a little more skeptical about package goods, for example, across the board.
The Social Media gurus all mouth lines such as the following:
1) Whatever you do, don’t focus on your consumers—engage them!
2) Don’t create a product; rather, create a consumer experience.
3) A brand is not a promise; it is a relationship.
4) Never sell to people, especially young adults—establish a rapport and have two way communications with them.
Some of these comments have elements of truth but give me a break! If I am selling DRANO, do I need to engage someway first via two way communications? I think some of these gurus need DRANO for their clogged minds.
What is going on? One theory that has been stewing in its own juices with me for some time is that smart people of all ages in the business realize that TV is in trouble. It is not as effective as it was several years ago. But, it is still very effective. Too many desire a simple answer to a complex problem. If 15 years ago, you could run some TV spots, have a few nice magazine ads, and drop some coupons, your product could get some traction. Now, it is trickier. You have to look at a few dozen things. Many of the new wave things that you tried from simple internet banners and buttons to early mobile tests failed. So, you are looking for a new silver bullet that will work like television used to for so many of us for so long.
Well, Social Media is not going to be that silver bullet. I am betting that there will be never be another medium like TV. Media teams several years from now will have to look at 50 things and the labor intensity for an ad agency to do the job ethically and well will be enormous. Clients will blink at the requests for sharply increased media planning fees but that will be the stuff of truly sound execution. The mantra will be test, test, never rest as our global merry go round develops and evolves.
So, I stress that I like, even love Social Media and enjoy being a part of it. But, it is not going to be the single or dominant solution that many seem to think it will be for any company or brand of size.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, February 25, 2010
Thursday, February 18, 2010
Misleading Super Bowl Statistics
To those of us who are friendly with and admire beleaguered broadcasters, the strength of the 2010 Super Bowl Nielsen performance was most welcome. According to Nielsen, the game delivered a 46.4 household rating and a 68 share. The 106 million viewers was a U.S. record for an individual telecast.
Since then, the press has picked up on the strength and done some stunningly bad reporting. Also, some media researchers who definitely know better have apparently deliberately distorted the performance.
Here is my beef: There is no question that this Super Bowl reached more people than any other U.S. telecast in history. And, the Doritos spot was the most viewed commercial ever for a one time event. But, creeping in to interviews are comments such as “this is the highest rated program ever.” These people are media researchers or media reporters. They damn well know what the term rating means.
A rating is the percentage of the total household base or specific demographic that is tuned in to a specific program. By that definition, the real one, as strong as this Super Bowl was, it is not anywhere close to the highest rated show in U.S. television history.
It approached the final episode of “Roots” which delivered a 51.1 rating on January 30, 1977. And, it is compared the most to the final episode of MASH, which delivered a 60.2 rating and 77 share way back in 1983. But in 1983, we had a TV household base of 83.3 million. Today, it is 115 million TV households. So, while the Super Bowl delivered more viewers than MASH, and passed the MASH finale as the most viewed program, it was not higher rated by a long shot. It benefited mightily from a household base that has grown 38% since 1983.
Some of you wrote to me asking for comments about the commercials in the game. It was an okay year. I liked the Betty White Snickers spot and the Doritos park bench commercial. Why did several spots feature men with no pants? Perhaps there was a lack of true creativity going on. Also, the hype around the Google spot surprised me. I thought that I had seen it a few months ago on two of my favorite venues—Hulu.com and You Tube. Actually, they added 8 seconds and a new musical bed creating a :60 that gave it a gigantic audience for the big game. But some of us, arguably without lives, saw it or something close to it some time ago.
Finally, I tried to find out what was truly the highest rated TV show of all time. Several claimants are out there but the one that intrigued me the most was the Ed Sullivan Show on September 9, 1956. It was Elvis Presley’s first appearance on that show. I was only a little fellow but I remember it vividly and especially my father’s reaction. Some accounts say that the bumbling Ed Sullivan did not introduce Elvis but rather it was Academy Award winning British actor Charles Laughton. That had to be surreal. The account of early Nielsen data that I found said that Elvis delivered an 82.6 rating that night. If it is true it only goes to underscore that while nearly 54 years have passed, Elvis remains the King.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Since then, the press has picked up on the strength and done some stunningly bad reporting. Also, some media researchers who definitely know better have apparently deliberately distorted the performance.
Here is my beef: There is no question that this Super Bowl reached more people than any other U.S. telecast in history. And, the Doritos spot was the most viewed commercial ever for a one time event. But, creeping in to interviews are comments such as “this is the highest rated program ever.” These people are media researchers or media reporters. They damn well know what the term rating means.
A rating is the percentage of the total household base or specific demographic that is tuned in to a specific program. By that definition, the real one, as strong as this Super Bowl was, it is not anywhere close to the highest rated show in U.S. television history.
It approached the final episode of “Roots” which delivered a 51.1 rating on January 30, 1977. And, it is compared the most to the final episode of MASH, which delivered a 60.2 rating and 77 share way back in 1983. But in 1983, we had a TV household base of 83.3 million. Today, it is 115 million TV households. So, while the Super Bowl delivered more viewers than MASH, and passed the MASH finale as the most viewed program, it was not higher rated by a long shot. It benefited mightily from a household base that has grown 38% since 1983.
Some of you wrote to me asking for comments about the commercials in the game. It was an okay year. I liked the Betty White Snickers spot and the Doritos park bench commercial. Why did several spots feature men with no pants? Perhaps there was a lack of true creativity going on. Also, the hype around the Google spot surprised me. I thought that I had seen it a few months ago on two of my favorite venues—Hulu.com and You Tube. Actually, they added 8 seconds and a new musical bed creating a :60 that gave it a gigantic audience for the big game. But some of us, arguably without lives, saw it or something close to it some time ago.
Finally, I tried to find out what was truly the highest rated TV show of all time. Several claimants are out there but the one that intrigued me the most was the Ed Sullivan Show on September 9, 1956. It was Elvis Presley’s first appearance on that show. I was only a little fellow but I remember it vividly and especially my father’s reaction. Some accounts say that the bumbling Ed Sullivan did not introduce Elvis but rather it was Academy Award winning British actor Charles Laughton. That had to be surreal. The account of early Nielsen data that I found said that Elvis delivered an 82.6 rating that night. If it is true it only goes to underscore that while nearly 54 years have passed, Elvis remains the King.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, February 8, 2010
Nobody Knows Anything
William Goldman is a marvelously gifted screenwriter. He copped Oscars for his original screenplay of “Butch Cassidy and the Sundance Kid” and for his adaptation to the screen of Woodward and Bernstein’s “All the President’s Men.” A number of years ago when summing up the entire entertainment industry he wrote “Nobody knows anything.” People took this as an indictment of all Hollywood moguls but he said his real point was that Hollywood has no real idea of how well a film will do.
“Rocky” was a low budget film that captured America’s imagination although film buffs said the editing was so bad that it looked as if it had been cut in a butcher shop. Yet, it won the Oscar for Best Picture. Our world will have similar surprises in the years to come.
Forecasting is tough yet there is no shortage of pundits out there who speak ex cathedra on just about any topic. Ever watch CNBC? I confess that I love it. The problem is that guests who should know better will predict the movement of the Dow Jones Industrial Average for the next week or even the next day. No one really knows. The great John Bogle took the opposite approach. Noting that most financial advisers cannot beat the market consistently, he created index funds with unusually low fees that simply mirror the market or a segment as a whole. One never does better than the market but never does worse and you tend to do well over long periods as high fees do not weigh down returns. Most of us, however, still think that we can forecast.
Taking some newsletters that I subscribe to and reading the latest books on energy, consumer behavior and the financial crisis, I cobbled together the following wildly hypothetical forecast:
“It is February, 2016. In Milwaukee, an 85 year old widow sits shivering in her small apartment. Her heating bill now exceeds the $925 Social Security payment that she receives each month and is the bulk of her income. She has to decide between heat, rent, prescription drugs, and food. Before the winter is out, several thousand Americans in similar situations will die horrible deaths.
“We finally hit the end of the 65 year period of continuing credit expansion in the U.S. It was largely based on using the U.S. dollar as the reserve currency. By 2014, the rest of the world became increasingly unwilling to accumulate dollars as our budget and trade deficits ran up trillion after trillion with no end in sight. Oil was no longer quoted in dollars and interest rates shot up quickly making our budget deficit far more acute. Finally, a new reserve currency emerges that is a basket containing the Chinese Yuan, Canadian and Australian dollars, Swiss Franc, and gold. The DJIA does not do much year to year but the volatility is wild and keeps the everyman “Peter Panics” from the market.
“India and China were doing fairly well and they and other developing nations bid up the price of gasoline to about $5 a gallon at the pump. The industry could not simply replace oil reserves fast enough. The American middle class was shattered as some could no longer afford to drive to work. Used car lots were bloated with gas guzzlers that most were reluctant to drive or unable to afford anymore.
“Newspapers and magazines folded by the hundreds and people stubbornly did not wish to pay for online content. So, the spiral continued as online versions died. The trend grew worse and worse.
“TV stations had a much looser relationship with their struggling networks. The networks produced fewer hours of programming and locally stations often killed their local news and ran syndicated versions of “2 and ½ Men” and other past network fare. The tight economy prompted many consumers to drop satellite and cable grimly held its own although it too suffered some subscription losses. The internet continued to grow as an advertising medium and Social Media gained nicely each year especially for well known brands as well as small, local retailers with affluent niche audiences.
“Some radio groups could not handle their debt service and went under. A few local players swooped in and bought properties for 25 cents on the dollar. They were not coining money but they had viable businesses with strong local community involvement. You Tube’s webisodes gained traction especially with young adults who loved the 5-7 minute series episodes that they could watch whenever they wished with only one commercial as a lead in.
“Stations and network players were excited about the 2016 elections and the record shattering amount of advertising revenues for the fall, although the campaigns were dirtier than any in memory. Some were embarrassed by the commercial content of many candidates but legally they had to take it and they really needed the money.”
Is this possible? After all, it is nothing more than a shrewd assemblage of today’s headlines with some friendly exaggeration piled on. And, it is not dissimilar to forecasts mailed to me by readers or seen in newsletters that I subscribe to or people send me.
The answer is almost surely NO. Some of the above will likely happen but in softer terms than what I imagined above. People are resilient and will adapt although some pain appears inevitable.
The only certainty that I ever take to the bank in business is DEMOGRAPHIC CERTAINTY. For example, I am one of the early baby boomers. More children were born between 1948 and 1953 than in the previous 30 years. By 2016, this group will largely be drawing Social Security and many will be on Medicare. They will put an incredible strain on government expenditures and they will be contributing far less toward taxes than they do now. Demographics are an unstoppable tidal wave. The only way to tame, not cure these entitlements is to raise taxes and/or cut benefits. Understandably, politicians loathe to do that as some seniors are virtually helpless and all too many of us soon to be geezers will vote and, usually, our pocketbooks.
So, panic is not a good idea. My advice is stay optimistic (but be realistic),be current with industry trends, flexible, and realize that anything can happen and often does. Humility, an oft forgotten virtue, will likely serve us all very well over the next several years if we embrace it. If 15 years ago, anyone explained Google to you, you would say that he or she was crazy. Social media? You have got to be kidding! Network TV erosion? Of course, but not so much! So, similar surprises will hit the media world and the United States of America.
Management guru Peter Drucker, who died a few years ago at 95, said in his old age, “The only thing that I know about the future is that it will be different.” I consider those wise and timely words from one of our most astute observers.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
“Rocky” was a low budget film that captured America’s imagination although film buffs said the editing was so bad that it looked as if it had been cut in a butcher shop. Yet, it won the Oscar for Best Picture. Our world will have similar surprises in the years to come.
Forecasting is tough yet there is no shortage of pundits out there who speak ex cathedra on just about any topic. Ever watch CNBC? I confess that I love it. The problem is that guests who should know better will predict the movement of the Dow Jones Industrial Average for the next week or even the next day. No one really knows. The great John Bogle took the opposite approach. Noting that most financial advisers cannot beat the market consistently, he created index funds with unusually low fees that simply mirror the market or a segment as a whole. One never does better than the market but never does worse and you tend to do well over long periods as high fees do not weigh down returns. Most of us, however, still think that we can forecast.
Taking some newsletters that I subscribe to and reading the latest books on energy, consumer behavior and the financial crisis, I cobbled together the following wildly hypothetical forecast:
“It is February, 2016. In Milwaukee, an 85 year old widow sits shivering in her small apartment. Her heating bill now exceeds the $925 Social Security payment that she receives each month and is the bulk of her income. She has to decide between heat, rent, prescription drugs, and food. Before the winter is out, several thousand Americans in similar situations will die horrible deaths.
“We finally hit the end of the 65 year period of continuing credit expansion in the U.S. It was largely based on using the U.S. dollar as the reserve currency. By 2014, the rest of the world became increasingly unwilling to accumulate dollars as our budget and trade deficits ran up trillion after trillion with no end in sight. Oil was no longer quoted in dollars and interest rates shot up quickly making our budget deficit far more acute. Finally, a new reserve currency emerges that is a basket containing the Chinese Yuan, Canadian and Australian dollars, Swiss Franc, and gold. The DJIA does not do much year to year but the volatility is wild and keeps the everyman “Peter Panics” from the market.
“India and China were doing fairly well and they and other developing nations bid up the price of gasoline to about $5 a gallon at the pump. The industry could not simply replace oil reserves fast enough. The American middle class was shattered as some could no longer afford to drive to work. Used car lots were bloated with gas guzzlers that most were reluctant to drive or unable to afford anymore.
“Newspapers and magazines folded by the hundreds and people stubbornly did not wish to pay for online content. So, the spiral continued as online versions died. The trend grew worse and worse.
“TV stations had a much looser relationship with their struggling networks. The networks produced fewer hours of programming and locally stations often killed their local news and ran syndicated versions of “2 and ½ Men” and other past network fare. The tight economy prompted many consumers to drop satellite and cable grimly held its own although it too suffered some subscription losses. The internet continued to grow as an advertising medium and Social Media gained nicely each year especially for well known brands as well as small, local retailers with affluent niche audiences.
“Some radio groups could not handle their debt service and went under. A few local players swooped in and bought properties for 25 cents on the dollar. They were not coining money but they had viable businesses with strong local community involvement. You Tube’s webisodes gained traction especially with young adults who loved the 5-7 minute series episodes that they could watch whenever they wished with only one commercial as a lead in.
“Stations and network players were excited about the 2016 elections and the record shattering amount of advertising revenues for the fall, although the campaigns were dirtier than any in memory. Some were embarrassed by the commercial content of many candidates but legally they had to take it and they really needed the money.”
Is this possible? After all, it is nothing more than a shrewd assemblage of today’s headlines with some friendly exaggeration piled on. And, it is not dissimilar to forecasts mailed to me by readers or seen in newsletters that I subscribe to or people send me.
The answer is almost surely NO. Some of the above will likely happen but in softer terms than what I imagined above. People are resilient and will adapt although some pain appears inevitable.
The only certainty that I ever take to the bank in business is DEMOGRAPHIC CERTAINTY. For example, I am one of the early baby boomers. More children were born between 1948 and 1953 than in the previous 30 years. By 2016, this group will largely be drawing Social Security and many will be on Medicare. They will put an incredible strain on government expenditures and they will be contributing far less toward taxes than they do now. Demographics are an unstoppable tidal wave. The only way to tame, not cure these entitlements is to raise taxes and/or cut benefits. Understandably, politicians loathe to do that as some seniors are virtually helpless and all too many of us soon to be geezers will vote and, usually, our pocketbooks.
So, panic is not a good idea. My advice is stay optimistic (but be realistic),be current with industry trends, flexible, and realize that anything can happen and often does. Humility, an oft forgotten virtue, will likely serve us all very well over the next several years if we embrace it. If 15 years ago, anyone explained Google to you, you would say that he or she was crazy. Social media? You have got to be kidding! Network TV erosion? Of course, but not so much! So, similar surprises will hit the media world and the United States of America.
Management guru Peter Drucker, who died a few years ago at 95, said in his old age, “The only thing that I know about the future is that it will be different.” I consider those wise and timely words from one of our most astute observers.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, January 29, 2010
Brand Musings
There is a tremendous amount of literature out today about brands. You read about passionate brands, brands with integrity, and brands with active belief. Sometimes it is more than a bit difficult to cut through the fog and discern what is real and what is ridiculous exaggeration.
I have studied this for some time and discussed it at length with colleagues and friends. Here are a few points that we all agreed on that differentiate certain brands from the mundane:
1) They have something significant to say about contemporary life.
2) Focus group findings from last week do not determine their DNA; rather they have beliefs that took time to develop.
3) They are effective at something that is positive for people and they stay the course. (Chapstick might be a modest example. It is effective, has no good imitators, and I cannot remember when I did not have one in my pocket)
4) Their image is one of integrity be it service, fair pricing, good value, and durability.
5) Solid brands may do simple things but they are not dull.
Google fits the bill with their oft quoted mantra of “Make it easy. Make it fast. Make it work. And attack everything that gets in the way of perfection.” Management has described themselves as “relaxed zealots.” This is a deep passion tempered by humility given the breathtaking scope of what they are trying to do and generally succeeding at.
In recent weeks, I looked at a number of lists that people have tabulated of winning brands that arouse zealotry in consumers. Below are some winners listed in multiple places plus a few that made it through my quirky screens. Although hardly a comprehensive list, it is interesting if you think about them. We find:
Absolut Vodka
Adidas
Apple
Ben & Jerry’s
BMW
Clinique
Coca-Cola
Dove
ESPN
Fidelity Investments
Harley Davidson
Ikea
Mercedes-Benz
MTV
New Balance
Nike
Nokia
Singapore Airlines
Sony
Starbucks
Trader Joe’s
Whole Foods
What do these stars have in common? While different in product offerings, there is a common thread if you snorkel under the surface a little. Here is what I found with some help from a few friends and panel members:
1) They seem to have better customer relationships than most brands and this over time builds deeper loyalty.
2) The staffs who work for them seem more motivated. (Not true of Starbucks lately and they could cause them to start disappearing from lists!)
3) They adapt to our rapidly changing world faster than their competitors.
4) Because of their competence, they appear more confident and flexible.
5) They seem to be able to grow market share in any environment.
6) Pricing is not a problem. They command a premium and we consumers do not seem to mind.
7) They tend to lead consumers rather than be consumer led but recognize consumer sovereignty and anticipate trends well.
8) If brand magnetism is a real thing, they have it.
Finally, in world that is often hostile to big business, they seem insulated from protesters most of the time as they exude integrity across the board. It reminds of that line in the documentary “Super Size Me” where the PR consultant said “The ultimate answer is for companies to clean up their acts.”
As a huge middle class develops in South America, Asia, and India, great brands will grow even bigger and stronger much helped by upwardly mobile people embracing the standouts of Western pop culture.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
I have studied this for some time and discussed it at length with colleagues and friends. Here are a few points that we all agreed on that differentiate certain brands from the mundane:
1) They have something significant to say about contemporary life.
2) Focus group findings from last week do not determine their DNA; rather they have beliefs that took time to develop.
3) They are effective at something that is positive for people and they stay the course. (Chapstick might be a modest example. It is effective, has no good imitators, and I cannot remember when I did not have one in my pocket)
4) Their image is one of integrity be it service, fair pricing, good value, and durability.
5) Solid brands may do simple things but they are not dull.
Google fits the bill with their oft quoted mantra of “Make it easy. Make it fast. Make it work. And attack everything that gets in the way of perfection.” Management has described themselves as “relaxed zealots.” This is a deep passion tempered by humility given the breathtaking scope of what they are trying to do and generally succeeding at.
In recent weeks, I looked at a number of lists that people have tabulated of winning brands that arouse zealotry in consumers. Below are some winners listed in multiple places plus a few that made it through my quirky screens. Although hardly a comprehensive list, it is interesting if you think about them. We find:
Absolut Vodka
Adidas
Apple
Ben & Jerry’s
BMW
Clinique
Coca-Cola
Dove
ESPN
Fidelity Investments
Harley Davidson
Ikea
Mercedes-Benz
MTV
New Balance
Nike
Nokia
Singapore Airlines
Sony
Starbucks
Trader Joe’s
Whole Foods
What do these stars have in common? While different in product offerings, there is a common thread if you snorkel under the surface a little. Here is what I found with some help from a few friends and panel members:
1) They seem to have better customer relationships than most brands and this over time builds deeper loyalty.
2) The staffs who work for them seem more motivated. (Not true of Starbucks lately and they could cause them to start disappearing from lists!)
3) They adapt to our rapidly changing world faster than their competitors.
4) Because of their competence, they appear more confident and flexible.
5) They seem to be able to grow market share in any environment.
6) Pricing is not a problem. They command a premium and we consumers do not seem to mind.
7) They tend to lead consumers rather than be consumer led but recognize consumer sovereignty and anticipate trends well.
8) If brand magnetism is a real thing, they have it.
Finally, in world that is often hostile to big business, they seem insulated from protesters most of the time as they exude integrity across the board. It reminds of that line in the documentary “Super Size Me” where the PR consultant said “The ultimate answer is for companies to clean up their acts.”
As a huge middle class develops in South America, Asia, and India, great brands will grow even bigger and stronger much helped by upwardly mobile people embracing the standouts of Western pop culture.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, January 21, 2010
The Gini Coefficient and The Future
Way back in 1912, Italian statistician Corrado Gini published a research paper called “Variability and Mutability.” From it came a method of measuring inequality in income or wealth that is today known as the Gini Coefficient.
The math behind the Coefficient is not for the faint of heart but I will admit that I worked my way through it. Very simply put, it is a ratio that has ranges between 0 and 1. So, a Gini Coefficient of 0 means everyone has the same income and a score of 1 means that one individual has all the income and everyone else has none.
The United Nations Habitat and Monitoring Division calls a Gini Coefficient of .40 or higher an “international alert line.” Historically, they claim that a prolonged score over .40 could eventually lead to protests and riots.
Well, I am not the biggest fan of the United Nations. But, honest statistics, and these appear to be, are a wake up call to me as I plan my future.
A separate study from the Organization for Economic Co-operation and Development (OECD) told a similar tale using the Gini Coefficient. The OECD analysis showed that with the exception of Mexico and Turkey, the U.S. had the highest Gini score in the developed world. If you looked at per capita Gross Domestic Product we were close to Switzerland and Sweden but on the Gini scale we played tag with Sri Lanka, Mali, and Russia.
Here is a quick snapshot of the U.S. Gini Coefficient since they have tracked it:
1929—45.0
1947—37.6
1968—38.6
1980—40.3
1990—42.8
2000—46.2
2006—47.6 The European Union was 31.0 at this time
2008—46.6
What does all this mean? Very simply, it tells us that the middle class in the U.S. is shrinking. Why did it happen? Some blame George W. Bush. Look at the data. The Gini Coefficient grew more under Bill Clinton (1993-2001) than it did under Bush 43. No, there are likely several reasons—unions got weaker since the late 1960’s, U.S. manufacturers were inept and a lot of jobs gravitated overseas where cheap labor helped them a lot. Also, consumerism really took hold and excessive borrowing masked the impact of the eroding middle class and the rising Gini Coefficient. Even when times got a bit tough, people just borrowed more and more to sustain their lifestyle even as housing, healthcare, and education costs skyrocketed. From several sources, I have found that a stunning 78% of U.S. households are ill prepared to muddle through our current woes. Even if these households cut spending by 25%, they would not be able to be jobless for more than three months. As unemployment remains stubbornly high, Americans continue to live paycheck to paycheck. Yes, savings have gone from zero to about 5% and many people are paying down debt some. But, defaults on credit cards are at record highs and a quarter of homeowners with mortgages are underwater (mortgage greater than home value).
To those of you who know me well this does not mean that libertarian leaning, passionate free trader and free market lover Don Cole has become a collectivist. No way! Nor do I see a European style provider society as a solution to our ills.
But, clearly things are out of whack. When bankers at institutions deemed “too big to fail” get huge seven figure bonuses when their speculations succeed and are bailed out by taxpayers when they fail, there will be growing resentment by the struggling and dwindling middle class.
The great financier J.P. Morgan had a rule when he ran his investment bank in the 1880-1914 period. He never took out of the bank in a given year more than 25 times what his lowest mailroom employee made (certainly, he had other wealth and income from passive investments not affiliated with the bank). Today, CEO’s make hundreds of times what their lower level employees do and stooges on corporate boards (often doing the same thing at their own companies) approve even greater compensation sometimes in poor years. Morgan was an autocrat and aristocrat but he had a sense of proportion that people lack today.
Income gains continue to go to the Americans who are the highest earners. Many of them deserve to be rewarded but some do not and not by so much. In the past 30 years, median income has only increased 13 percent in the U.S. while the top 1 percent has seen a 90 % increase in median income. Get set for more middle class anger and we may see it as early as the fall 2010 elections.
For the media business, this has several implications. If you sell to McDonald’s, Wal-Mart, Target, or Dollar Stores things may be good. The shrinking middle class will still use these stores or maybe even increase frequency of purchase as they trade down from other options. Tiffany may still advertise aggressively in your glossy magazine and appeal to the top 5%. But people will be buying fewer cars (except used), taking fewer trips, even going to the movies less often. It took us a long time to get in to this mess and there will be no slow route out of it.
I offer no solutions today. But, democracies need a vibrant middle class to succeed and sustain themselves. Those of us who have done well in recent decades need to remember that point. I grew up in rural Rhode Island in the 1950’s. Over the years, I had a few breaks, worked very hard, had no huge bad habits, was disciplined about saving, and most importantly, I married the right woman. Today, I know that I am living the American Dream. Will the next generation be as lucky or have the opportunity?
When he called for tax cuts in 1962, Jack Kennedy said it would stimulate the economy and that “a rising tide lifts all boats.” Since then, if you are honest, you realize that what has happened is that a rising tide has lifted all yachts.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The math behind the Coefficient is not for the faint of heart but I will admit that I worked my way through it. Very simply put, it is a ratio that has ranges between 0 and 1. So, a Gini Coefficient of 0 means everyone has the same income and a score of 1 means that one individual has all the income and everyone else has none.
The United Nations Habitat and Monitoring Division calls a Gini Coefficient of .40 or higher an “international alert line.” Historically, they claim that a prolonged score over .40 could eventually lead to protests and riots.
Well, I am not the biggest fan of the United Nations. But, honest statistics, and these appear to be, are a wake up call to me as I plan my future.
A separate study from the Organization for Economic Co-operation and Development (OECD) told a similar tale using the Gini Coefficient. The OECD analysis showed that with the exception of Mexico and Turkey, the U.S. had the highest Gini score in the developed world. If you looked at per capita Gross Domestic Product we were close to Switzerland and Sweden but on the Gini scale we played tag with Sri Lanka, Mali, and Russia.
Here is a quick snapshot of the U.S. Gini Coefficient since they have tracked it:
1929—45.0
1947—37.6
1968—38.6
1980—40.3
1990—42.8
2000—46.2
2006—47.6 The European Union was 31.0 at this time
2008—46.6
What does all this mean? Very simply, it tells us that the middle class in the U.S. is shrinking. Why did it happen? Some blame George W. Bush. Look at the data. The Gini Coefficient grew more under Bill Clinton (1993-2001) than it did under Bush 43. No, there are likely several reasons—unions got weaker since the late 1960’s, U.S. manufacturers were inept and a lot of jobs gravitated overseas where cheap labor helped them a lot. Also, consumerism really took hold and excessive borrowing masked the impact of the eroding middle class and the rising Gini Coefficient. Even when times got a bit tough, people just borrowed more and more to sustain their lifestyle even as housing, healthcare, and education costs skyrocketed. From several sources, I have found that a stunning 78% of U.S. households are ill prepared to muddle through our current woes. Even if these households cut spending by 25%, they would not be able to be jobless for more than three months. As unemployment remains stubbornly high, Americans continue to live paycheck to paycheck. Yes, savings have gone from zero to about 5% and many people are paying down debt some. But, defaults on credit cards are at record highs and a quarter of homeowners with mortgages are underwater (mortgage greater than home value).
To those of you who know me well this does not mean that libertarian leaning, passionate free trader and free market lover Don Cole has become a collectivist. No way! Nor do I see a European style provider society as a solution to our ills.
But, clearly things are out of whack. When bankers at institutions deemed “too big to fail” get huge seven figure bonuses when their speculations succeed and are bailed out by taxpayers when they fail, there will be growing resentment by the struggling and dwindling middle class.
The great financier J.P. Morgan had a rule when he ran his investment bank in the 1880-1914 period. He never took out of the bank in a given year more than 25 times what his lowest mailroom employee made (certainly, he had other wealth and income from passive investments not affiliated with the bank). Today, CEO’s make hundreds of times what their lower level employees do and stooges on corporate boards (often doing the same thing at their own companies) approve even greater compensation sometimes in poor years. Morgan was an autocrat and aristocrat but he had a sense of proportion that people lack today.
Income gains continue to go to the Americans who are the highest earners. Many of them deserve to be rewarded but some do not and not by so much. In the past 30 years, median income has only increased 13 percent in the U.S. while the top 1 percent has seen a 90 % increase in median income. Get set for more middle class anger and we may see it as early as the fall 2010 elections.
For the media business, this has several implications. If you sell to McDonald’s, Wal-Mart, Target, or Dollar Stores things may be good. The shrinking middle class will still use these stores or maybe even increase frequency of purchase as they trade down from other options. Tiffany may still advertise aggressively in your glossy magazine and appeal to the top 5%. But people will be buying fewer cars (except used), taking fewer trips, even going to the movies less often. It took us a long time to get in to this mess and there will be no slow route out of it.
I offer no solutions today. But, democracies need a vibrant middle class to succeed and sustain themselves. Those of us who have done well in recent decades need to remember that point. I grew up in rural Rhode Island in the 1950’s. Over the years, I had a few breaks, worked very hard, had no huge bad habits, was disciplined about saving, and most importantly, I married the right woman. Today, I know that I am living the American Dream. Will the next generation be as lucky or have the opportunity?
When he called for tax cuts in 1962, Jack Kennedy said it would stimulate the economy and that “a rising tide lifts all boats.” Since then, if you are honest, you realize that what has happened is that a rising tide has lifted all yachts.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, January 13, 2010
Set Top Box Data
Talk with any media researcher today and inevitably the conversation will come around to a general agreement that current TV measurement via Nielsen is antiquated. Some people despise Nielsen for their quasi-monopoly status; others such as I look at the daunting task they face in the world of 2010 and wish they would move faster to come closer to capturing our rapidly changing viewing patterns.
Also, in the same conversation there will be a mention of Set Top Box Data. People have a wide variety of opinions about what is going on and everyone has an idea of what they would like to see.
What is a Set Top Box? Strip away the jargon and STBs, as they are called, are really nothing more than computerized devices that process digital signals. There are several out there sponsored by different companies such as cable operators, satellite providers, and TiVo. And, it being 2010, Google is entering the fray as well. What do they do differently than a Nielsen meter? Plenty. It can be summed up in the new worn-out cliché that we hear with the mention on any STB—granular data.
Want minute by minute ratings? Would you like to have near perfect targeting by knowing how many of your audience buys a certain type of product? Would you like to know commercial viewing by second vs. programming data by quarter hour? Various versions of set top box data should be able to give you this. This has caused some to enthusiastically say that Nielsen is finished and will soon be swept away. Not so fast, my friends, some major hurdles remain.
Like many things that have taken place in the last decade with the digital revolution, there is a wild west aspect to what is going on. There are several types of STB out there and they are providing vast and fascinating data to clients and the media but there is no uniformity. Right now, from a consistency perspective, it is almost a Tower of Babel situation.
There are five providers of data—Rentrak, TiVo, TRA, TNS Media Intelligence, and Nielsen. A group called the Coalition for Innovative Media Measurement (CIMM) has a desire to come up with a single source measurement system to analyze TV and video consumption across all media platforms. CIMM, whose members include the major networks, four largest buying entities, and mega marketers Procter & Gamble, AT&T, and Unilever, seems to be a stronger group than the toothless tigers that we have seen in media research over the years. Perhaps they can get some collegial action from the five players although when the smoke clears in a few years, there should only be one player standing. And, like it or not, it could be a vastly changed Nielsen.
What is to like about Set Top Box (STB) data? Compared to the present, the sample sizes can be huge compared to what Nielsen provides today. This can seriously reduce sampling error and help smaller cable channels in particular which struggle especially in local DMA's where there may only be 330-400 meters even in a Local People Meter (LPM) market.
A seasoned media researcher put his finger on the biggest current problem with STB data: “At this point, set top box data can tell you what channel the HH was tuned to but does not have the ability to tell you who in the household was watching. This is a key obstacle that will need to be resolved before the “set top box” players will have the ability to seriously compete with Nielsen as the currency for the TV business.” He goes on to say that “the set top box data does not account for the ever increasing alternative screens such as PC and hand held device viewing which Nielsen is feverishly attempting to address today”.
From a practical standpoint, I received a few interesting comments. One old friend and still an active media researcher had reservations about the next few years when no one player emerges. “It will lead to time consuming analytics just like our online team spends their time cranking out. …….It is going to lead to a lot of extra time for our buyers. Still, I wish CIMM well. Nielsen needs a competitor.”
A thoughtful sales executive says, “All I know is that the mere mention of the more saleable aspects this technology has promised, is like nip to the sales-cats around here. It starts with the request for information possibilities that we will soon have as well as the myriad telescoping attributes to come. …We are all in love with the concept, if only because we recognize the need to move away from fossilized spot sales.”
Also, agencies and the media are squeezed. Look at how layoffs continue and most look at 2011 as a realistic comeback year. Data released in the Wall Street Journal this week indicates that in the last two years radio and TV broadcasting has lost 29,000 jobs which translate to 12.2% of their workforce. Advertising agencies were hit even harder with 27,400 or 14.2% of positions eliminated. Can people afford two services? Nielsen remains the currency and you have to stick with it for the next few years. I remember in 1986 when AGB came out of Europe and tried to take NTI on. Only CBS bought it as I recall, and a year later they went home. This will not happen here as people will demand significant improvement and the relentless march of technology will keep Nielsen off balance. And, Google is flirting with launching their own branded TV. One theory is that their web-enabled product may bypass broadcast and cable altogether. Unlikely, but intriguing! And, their set top box data would be fascinating and state of the art. (Separately, Google TV has been testing an auction market TV sales scheme with Dish Network and a few smaller players)
A few quick points about STB:
1) Do not confuse a huge sample with census data. Nielsen tries to draw a sample that truly reflects the population. For example, 10% of us still do not have cable or satellite. STB will not do this and by definition cannot.
2) STB homes have more TV’s, watch more, and have more money. This is great for certain products but it is not a microcosm of society.
3) We, as yet, do not know who is watching but this is one issue that CIMM will likely work with all players to overcome.
4) Five players in STB are too many. Agencies are stretched now, some severely, but if big clients demand more analysis, they will have to do some of it. A shakeout is inevitable with a merger or two a possibility.
A few issues that few are talking about—
1) STB gets at attentiveness. Imagine second by second ratings within a commercial. I have seen some of the early data and it is amazing stuff.
2) Pricing of TV will still be ruled by the law of supply and demand. STB data will not cause an overnight revolution. If the data works, money will pour in to certain properties. Habits of 60 years will not evaporate but will evolve sometimes swiftly; sometimes not.
3) The privacy factor—we are not talking extreme ACLU’s positions here. Your provider will know more about you than ever. How will an individual’s privacy be safeguarded in our new world?
Can Nielsen just pre-empt everyone and stay on top? It is possible and it is tough to bet against them. But, the stakes are bigger now and the changes much swifter than in the past.
This will be the most interesting change in media over the next five years.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Also, in the same conversation there will be a mention of Set Top Box Data. People have a wide variety of opinions about what is going on and everyone has an idea of what they would like to see.
What is a Set Top Box? Strip away the jargon and STBs, as they are called, are really nothing more than computerized devices that process digital signals. There are several out there sponsored by different companies such as cable operators, satellite providers, and TiVo. And, it being 2010, Google is entering the fray as well. What do they do differently than a Nielsen meter? Plenty. It can be summed up in the new worn-out cliché that we hear with the mention on any STB—granular data.
Want minute by minute ratings? Would you like to have near perfect targeting by knowing how many of your audience buys a certain type of product? Would you like to know commercial viewing by second vs. programming data by quarter hour? Various versions of set top box data should be able to give you this. This has caused some to enthusiastically say that Nielsen is finished and will soon be swept away. Not so fast, my friends, some major hurdles remain.
Like many things that have taken place in the last decade with the digital revolution, there is a wild west aspect to what is going on. There are several types of STB out there and they are providing vast and fascinating data to clients and the media but there is no uniformity. Right now, from a consistency perspective, it is almost a Tower of Babel situation.
There are five providers of data—Rentrak, TiVo, TRA, TNS Media Intelligence, and Nielsen. A group called the Coalition for Innovative Media Measurement (CIMM) has a desire to come up with a single source measurement system to analyze TV and video consumption across all media platforms. CIMM, whose members include the major networks, four largest buying entities, and mega marketers Procter & Gamble, AT&T, and Unilever, seems to be a stronger group than the toothless tigers that we have seen in media research over the years. Perhaps they can get some collegial action from the five players although when the smoke clears in a few years, there should only be one player standing. And, like it or not, it could be a vastly changed Nielsen.
What is to like about Set Top Box (STB) data? Compared to the present, the sample sizes can be huge compared to what Nielsen provides today. This can seriously reduce sampling error and help smaller cable channels in particular which struggle especially in local DMA's where there may only be 330-400 meters even in a Local People Meter (LPM) market.
A seasoned media researcher put his finger on the biggest current problem with STB data: “At this point, set top box data can tell you what channel the HH was tuned to but does not have the ability to tell you who in the household was watching. This is a key obstacle that will need to be resolved before the “set top box” players will have the ability to seriously compete with Nielsen as the currency for the TV business.” He goes on to say that “the set top box data does not account for the ever increasing alternative screens such as PC and hand held device viewing which Nielsen is feverishly attempting to address today”.
From a practical standpoint, I received a few interesting comments. One old friend and still an active media researcher had reservations about the next few years when no one player emerges. “It will lead to time consuming analytics just like our online team spends their time cranking out. …….It is going to lead to a lot of extra time for our buyers. Still, I wish CIMM well. Nielsen needs a competitor.”
A thoughtful sales executive says, “All I know is that the mere mention of the more saleable aspects this technology has promised, is like nip to the sales-cats around here. It starts with the request for information possibilities that we will soon have as well as the myriad telescoping attributes to come. …We are all in love with the concept, if only because we recognize the need to move away from fossilized spot sales.”
Also, agencies and the media are squeezed. Look at how layoffs continue and most look at 2011 as a realistic comeback year. Data released in the Wall Street Journal this week indicates that in the last two years radio and TV broadcasting has lost 29,000 jobs which translate to 12.2% of their workforce. Advertising agencies were hit even harder with 27,400 or 14.2% of positions eliminated. Can people afford two services? Nielsen remains the currency and you have to stick with it for the next few years. I remember in 1986 when AGB came out of Europe and tried to take NTI on. Only CBS bought it as I recall, and a year later they went home. This will not happen here as people will demand significant improvement and the relentless march of technology will keep Nielsen off balance. And, Google is flirting with launching their own branded TV. One theory is that their web-enabled product may bypass broadcast and cable altogether. Unlikely, but intriguing! And, their set top box data would be fascinating and state of the art. (Separately, Google TV has been testing an auction market TV sales scheme with Dish Network and a few smaller players)
A few quick points about STB:
1) Do not confuse a huge sample with census data. Nielsen tries to draw a sample that truly reflects the population. For example, 10% of us still do not have cable or satellite. STB will not do this and by definition cannot.
2) STB homes have more TV’s, watch more, and have more money. This is great for certain products but it is not a microcosm of society.
3) We, as yet, do not know who is watching but this is one issue that CIMM will likely work with all players to overcome.
4) Five players in STB are too many. Agencies are stretched now, some severely, but if big clients demand more analysis, they will have to do some of it. A shakeout is inevitable with a merger or two a possibility.
A few issues that few are talking about—
1) STB gets at attentiveness. Imagine second by second ratings within a commercial. I have seen some of the early data and it is amazing stuff.
2) Pricing of TV will still be ruled by the law of supply and demand. STB data will not cause an overnight revolution. If the data works, money will pour in to certain properties. Habits of 60 years will not evaporate but will evolve sometimes swiftly; sometimes not.
3) The privacy factor—we are not talking extreme ACLU’s positions here. Your provider will know more about you than ever. How will an individual’s privacy be safeguarded in our new world?
Can Nielsen just pre-empt everyone and stay on top? It is possible and it is tough to bet against them. But, the stakes are bigger now and the changes much swifter than in the past.
This will be the most interesting change in media over the next five years.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, January 4, 2010
Media Realism at One
A year ago today, I launched Media Realism. What started as a way to stay in touch with a group of friends and former colleagues has mushroomed in to something much larger and more gratifying.
Here are some highlights and observations:
1) Everyone talks of the web as being global but when it hits you personally the concept really comes alive. Over the last 12 months, I have heard from readers in Canada, Ireland, Britain, France, Turkey, Singapore, Korea, India, Argentina, and New Zealand. Their comments are very insightful and give me a fresh look at things that I take for granted.
2) 99% of you prefer to write to me directly rather than post on the site which I fully understand in the nervous world of 2010. Everyone knows the comments stop with me and your positive remarks encourage me and your criticisms make me more careful and the posts better.
3) How big is the readership? It floats from 1200-3600 depending on the topic and how many of you pass it on.
4) To my panel, thank you. Your willingness to be a sounding board on dozens of issues is a great help. And, your candor is very refreshing.
5) We will branch out some in 2010. I will tackle Social Media across the year with a little help from a variety of friends. Also, we may creep into economics and politics a bit more as they are very intertwined with certain communications issues and have to be included in a balanced portfolio of posts.
6) Imitation has been said to be the greatest form of flattery. I continue to get reports that people quote Media Realism more and more and some clients mysteriously see passages from posts popping up in media plans without a citation. Not a good idea. And, a big Bronx cheer to the handful of creeps out there who sometimes copy a post and e-mail it to many others implying that it is their work. Media Realism will always be free and believe me--I do not want your job(s). So, send it everywhere but be decent enough to give Media Realism a byline.
7) I am always open to ideas on topics for posts and have used them from several of you. Just remember, that I will always call it as I see it.
Thanks again for your support and good humor. Let’s make it a great year.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Here are some highlights and observations:
1) Everyone talks of the web as being global but when it hits you personally the concept really comes alive. Over the last 12 months, I have heard from readers in Canada, Ireland, Britain, France, Turkey, Singapore, Korea, India, Argentina, and New Zealand. Their comments are very insightful and give me a fresh look at things that I take for granted.
2) 99% of you prefer to write to me directly rather than post on the site which I fully understand in the nervous world of 2010. Everyone knows the comments stop with me and your positive remarks encourage me and your criticisms make me more careful and the posts better.
3) How big is the readership? It floats from 1200-3600 depending on the topic and how many of you pass it on.
4) To my panel, thank you. Your willingness to be a sounding board on dozens of issues is a great help. And, your candor is very refreshing.
5) We will branch out some in 2010. I will tackle Social Media across the year with a little help from a variety of friends. Also, we may creep into economics and politics a bit more as they are very intertwined with certain communications issues and have to be included in a balanced portfolio of posts.
6) Imitation has been said to be the greatest form of flattery. I continue to get reports that people quote Media Realism more and more and some clients mysteriously see passages from posts popping up in media plans without a citation. Not a good idea. And, a big Bronx cheer to the handful of creeps out there who sometimes copy a post and e-mail it to many others implying that it is their work. Media Realism will always be free and believe me--I do not want your job(s). So, send it everywhere but be decent enough to give Media Realism a byline.
7) I am always open to ideas on topics for posts and have used them from several of you. Just remember, that I will always call it as I see it.
Thanks again for your support and good humor. Let’s make it a great year.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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