I was at a meeting a few weeks ago and a lady was asked to address a group of about 25 of us. As she fired up her laptop, a mature gentlemen next to me whispered, “oh no, not a PowerPoint”. She only spoke for a few minutes and was excellent. It fact it took her as much time to get the PowerPoint started as it did for her to present. She really did not need it as she was really on top of her material. After the meeting broke up, the gentlemen and I had a lively exchange about PowerPoints as we went to our cars. I argued that it was merely a tool that is often used badly; he countered, “Power Point was the enemy.” This is a familiar theme from many these days and having sat through thousands of presentations and given many myself, I felt that it is time to weigh in on PowerPoints.
About a dozen years ago, PowerPoints were getting popular but still considered somewhat cutting edge. You could write a presentation at home on a Sunday afternoon, fan it out to staffers for comments and make changes right up until the presentation. When new, they were so novel that even the boss would read them before meetings. ☺
Now, they have become a worn out cliché at best in business, the military, government and academia. At their worst, PowerPoints are a crutch that does a poor job of providing cover for the lazy, the unprepared and the incompetent. Very often the person presenting the PowerPoint did not write it or research its contents. It may be an executive who saw it for the first time an hour before a meeting or a junior staffer who is given a part to play in a big meeting. This often ends badly.
A sales executive who has deep experience and is very shrewd told me that American business is suffering from “PowerPoint fatigue.” People often bore their audiences to tears with thirty plus slides that are very text heavy. I have seen PowerPoints that are 70-80 slides long with dense text that breath life into the wisecrack “death by PowerPoint.”
So, what is needed? A bit of common sense and a bit more work from some people. Some simple rules need to be observed and are often ignored:
1) Cut down on slides.
2) No more than six words per bullet
3) No more than 3-4 bullets per page
4) No more than six bullet slides in a row
5) Always remember that you cannot present complex analyses on bullet points
If you are a CEO, do not use a PowerPoint when addressing your troops or a big customer or client. The reason is that you will likely lose your aura of power. People tend to fixate on the screen and will not listen to you as much even if you ooze charisma. If you want to show a slide or two to illustrate sales or earnings or share price, do so. But, no slides with text, please. You are the star and you need to command everyone’s attention.
Strange things are happening with PowerPoints in academia. Last semester, a student approached me after a long lecture. He smiled, held his hand out, and I shook it. For weeks, he had been peppering me with questions before, after and during class plus sending me long e-mails with more questions or comments. He was the type of student that every professor dreams of teaching. After thanking me for the lecture, I asked if there was anything special about it. He said, “You don’t know how much I appreciate going to school here and to your class. I transferred from XXXXXXXXX University this semester. There, all my teachers used PowerPoints. I swear that there was one class that I could have taught myself. The instructor rarely looked up as she went through the material and almost never deviated from the PowerPoint. If I asked her a question, she would pause and refer back to a bullet point a few slides ago. Another professor handed out printouts of the PowerPoints for each chapter on day one. I rarely went to class, the tests were all multiple choice questions taken directly from the PowerPoint bullets, and I received an A but I learned nothing”.
Something is really wrong if such cases are widespread in our colleges and universities. I do note that every textbook that I have used has detailed PowerPoints for each chapter often with the dreaded text heavy slides.
People are so sick of PowerPoints that many avoid meetings where they will be used. Several years ago, I had regular dealings with a dreadful marketer. She would ask me and everyone she dealt with, “May I have a copy of your PowerPoint. I am really busy today.” Her rudeness inspired me. I trimmed down my PowerPoints to several slides and made them far more spare in prose. After the meeting, I politely but firmly refused to send the PowerPoint to anyone. Instead, I sent a tightly written memorandum, which was 3-4 pages long that not only covered my PowerPoint but what I actually said in the presentation. To date, no one has ever complained. And, when I lecture at a university, I limit PowerPoint usage to once each semester. A few have suggested that this is more work for me. Absolutely! But, it is several times more effective than leaving clients with a hollow PowerPoint that cannot stand on its own or ripping off students and their parents by not teaching an adequate class by hiding behind a PowerPoint.
The late actor, hoofer, and some time singer James Cagney had a great screen presence. He presented himself as perhaps no one else ever did on the Silver Screen. Near the end of his career, a young actress was intimidated when she worked with him and was stunned by his kindness on the set even though director Billy Wilder was giving her fits and sometimes even going after Cagney. As her comfort level with the great man grew, she asked him his secret for performing. He smiled and said, “It is pretty simple. Come in, plant your feet firmly, look the other fella in the eye and tell the truth.”
So take a tip from the great Jimmy Cagney. Cut down on your PowerPoints, and stand and deliver.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, November 19, 2011
Friday, November 11, 2011
Would Keynes Still be a Keynesian?
Recently, I made a discovery that may be pure coincidence but almost seemed to defy the laws of probability. I noticed that with one exception the individuals whom I considered to be the greatest economists of the 20th century all lead long or unusually long lives. Perhaps studying the nuances of the marketplace gives one a reason to keep going!
For example, the two giants of the Austrian (radical free market) School, Ludwig von Mises and Friedrich Hayek both lived to be 92. Milton Friedman, the elfin, ebullient leader of the Chicago School (Monetarists) died at 94. His ideological sparring partner, six feet nine inch Institutionalist John Kenneth Galbraith, hung on to be 97. Financial journalist and economist Henry Hazlitt passed on at 98 and Paul Samuelson, whose Keynesian oriented textbook introduced millions of college student to economics for two generations died at 94. Robert Heilbroner, author of the brilliant tome on history of economic thought, THE WORLDLY PHILOSPHERS, lived to be 85.
Depending on your politics, most people would rate Hayek, Friedman, and John Maynard Keynes as the greatest and most influential economists of the 20th century. Unlike the other luminaries Keynes died much younger at age 62. That simple fact has made me consider a number of what if scenarios.
John Maynard Keynes, later Baron Keynes of Tilton, was considered Britain’s foremost intellectual in the 1920’s. Even the arrogant and supremely self-confident philosopher Bertrand Russell, always said he came up short when trying to debate Keynes on any subject. Keynes was a brilliant mathematician and economist.
In the late 1920’s, the two leaders of the Austrian school, von Mises and Hayek began to warn of economic danger in the western world, as credit buildup was excessive. When the U.S. stock market crashed in October 1929 followed by a depression a year or so later, they were seen as seers. When asked what should be done, they essentially said “nothing.” The market would self correct as Adam Smith’s “invisible hand” (outlined in 1776 in his WEALTH OF NATIONS) would usher in a return to a normal environment. In brief, the invisible hand is a theory that states that collectively if all individuals in a society act in his or her self-interest, they would produce all the goods or services that are required by society. The invisible hand did not need government guidance of any kind. This pure laizzez faire approach would produce the greatest good and eventually generate economic growth.
By 1933, much of the Western world was out of patience. In the U.S., unemployment was at 25%. New York Governor Franklin Delano Roosevelt was elected president and was sworn in as our chief executive on March 4, 1933. Although he had run on a platform featuring a balanced budget, Roosevelt ran away from conventional economics shortly after taking office. He abandoned the gold standard, confiscated the gold of private citizens, and engaged in a wide array of government stimuli under the umbrella of “The New Deal.” Among these were the Works Progress Administration (WPA), which gave construction jobs to thousands of unemployed young men, and the Social Security system that was an attempt to supplement the income of older Americans.
While purists howled, Roosevelt pushed on with his experiments. Keynes, observing similar suffering in the United Kingdom, penned his THE GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY (it is a world class boring read, believe me, and is probably the most influential book that has been so rarely read by its supporters) in 1936. With a heavyweight like Keynes endorsing the Roosevelt approach and wrapping some discipline around it, Keynesianism became a mainstream approach and remains so to this day in much of the civilized world. It is amusing to see the GOP presidential hopefuls debate these days. Only the unelectable Ron Paul of Texas is a true free market advocate; he is an Austrian through and through. The others all exhibit varying degrees of Keynesian in their thinking but would deny it vehemently if challenged.
Because so few have read Keynes’ General Theory they feel free to interpret it to suit their needs. Keynes was indeed a champion of government intervention when the market went haywire. He wanted public works projects to kick-start the economy and get people working, spending, and creating demand for products. But he also was in favor of things that politicians choose to forget. After the crisis was averted, Keynes believed that governmental budgets should be balanced over time. What!!! Keynes said deficit spending was fine during the dark days of depression and during World War I and II, but year in and year out you balanced your budgets! So, what would Lord Keynes think of the U.S. with their 47 years of deficits over the last 50. Not much, I would think.
He would certainly have agreed to the TARP bailout of 2008 but what would be have thought of the decades of reckless spending leading up to it?
Like all serious thinkers, he was intellectually honest enough to question his theories. In April 1946 he attended a luncheon at the Bank of England. Everyone else was saying that the US and Europe may fall in to a depression as returning servicemen needed to find jobs at home. Keynes was very upbeat and accurate about the U.S. prospects and felt that it would take more time in Britain, which had serious war damage in major cities. Then he said something fascinating—“I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.”
A few days later Keynes was dead. Had he lived 30 years longer as many of his fellow economic giants did, I am certain that what we call Keynesianism would look very, very different today.
Also, right-wingers often dismiss Keynes as a socialist. This is utter nonsense. The Labor party always wanted Lord Keynes to join their ranks. He stayed with the Liberals, a centrist party, and was very upset when Clement Attlee, a Labor (Socialist) party M.P. became Prime Minister besting Winston Churchill, the Conservative, and Archie Sinclair, the Liberal leader. He was also a fabulously successful speculator who was worth perhaps $40 million dollars just before World War II. His beloved Kings College at Cambridge let him manage their funds and their endowment exploded upward under his guidance. Were he 35 today, he might well be a hedge fund manager. Some socialist!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
For example, the two giants of the Austrian (radical free market) School, Ludwig von Mises and Friedrich Hayek both lived to be 92. Milton Friedman, the elfin, ebullient leader of the Chicago School (Monetarists) died at 94. His ideological sparring partner, six feet nine inch Institutionalist John Kenneth Galbraith, hung on to be 97. Financial journalist and economist Henry Hazlitt passed on at 98 and Paul Samuelson, whose Keynesian oriented textbook introduced millions of college student to economics for two generations died at 94. Robert Heilbroner, author of the brilliant tome on history of economic thought, THE WORLDLY PHILOSPHERS, lived to be 85.
Depending on your politics, most people would rate Hayek, Friedman, and John Maynard Keynes as the greatest and most influential economists of the 20th century. Unlike the other luminaries Keynes died much younger at age 62. That simple fact has made me consider a number of what if scenarios.
John Maynard Keynes, later Baron Keynes of Tilton, was considered Britain’s foremost intellectual in the 1920’s. Even the arrogant and supremely self-confident philosopher Bertrand Russell, always said he came up short when trying to debate Keynes on any subject. Keynes was a brilliant mathematician and economist.
In the late 1920’s, the two leaders of the Austrian school, von Mises and Hayek began to warn of economic danger in the western world, as credit buildup was excessive. When the U.S. stock market crashed in October 1929 followed by a depression a year or so later, they were seen as seers. When asked what should be done, they essentially said “nothing.” The market would self correct as Adam Smith’s “invisible hand” (outlined in 1776 in his WEALTH OF NATIONS) would usher in a return to a normal environment. In brief, the invisible hand is a theory that states that collectively if all individuals in a society act in his or her self-interest, they would produce all the goods or services that are required by society. The invisible hand did not need government guidance of any kind. This pure laizzez faire approach would produce the greatest good and eventually generate economic growth.
By 1933, much of the Western world was out of patience. In the U.S., unemployment was at 25%. New York Governor Franklin Delano Roosevelt was elected president and was sworn in as our chief executive on March 4, 1933. Although he had run on a platform featuring a balanced budget, Roosevelt ran away from conventional economics shortly after taking office. He abandoned the gold standard, confiscated the gold of private citizens, and engaged in a wide array of government stimuli under the umbrella of “The New Deal.” Among these were the Works Progress Administration (WPA), which gave construction jobs to thousands of unemployed young men, and the Social Security system that was an attempt to supplement the income of older Americans.
While purists howled, Roosevelt pushed on with his experiments. Keynes, observing similar suffering in the United Kingdom, penned his THE GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY (it is a world class boring read, believe me, and is probably the most influential book that has been so rarely read by its supporters) in 1936. With a heavyweight like Keynes endorsing the Roosevelt approach and wrapping some discipline around it, Keynesianism became a mainstream approach and remains so to this day in much of the civilized world. It is amusing to see the GOP presidential hopefuls debate these days. Only the unelectable Ron Paul of Texas is a true free market advocate; he is an Austrian through and through. The others all exhibit varying degrees of Keynesian in their thinking but would deny it vehemently if challenged.
Because so few have read Keynes’ General Theory they feel free to interpret it to suit their needs. Keynes was indeed a champion of government intervention when the market went haywire. He wanted public works projects to kick-start the economy and get people working, spending, and creating demand for products. But he also was in favor of things that politicians choose to forget. After the crisis was averted, Keynes believed that governmental budgets should be balanced over time. What!!! Keynes said deficit spending was fine during the dark days of depression and during World War I and II, but year in and year out you balanced your budgets! So, what would Lord Keynes think of the U.S. with their 47 years of deficits over the last 50. Not much, I would think.
He would certainly have agreed to the TARP bailout of 2008 but what would be have thought of the decades of reckless spending leading up to it?
Like all serious thinkers, he was intellectually honest enough to question his theories. In April 1946 he attended a luncheon at the Bank of England. Everyone else was saying that the US and Europe may fall in to a depression as returning servicemen needed to find jobs at home. Keynes was very upbeat and accurate about the U.S. prospects and felt that it would take more time in Britain, which had serious war damage in major cities. Then he said something fascinating—“I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.”
A few days later Keynes was dead. Had he lived 30 years longer as many of his fellow economic giants did, I am certain that what we call Keynesianism would look very, very different today.
Also, right-wingers often dismiss Keynes as a socialist. This is utter nonsense. The Labor party always wanted Lord Keynes to join their ranks. He stayed with the Liberals, a centrist party, and was very upset when Clement Attlee, a Labor (Socialist) party M.P. became Prime Minister besting Winston Churchill, the Conservative, and Archie Sinclair, the Liberal leader. He was also a fabulously successful speculator who was worth perhaps $40 million dollars just before World War II. His beloved Kings College at Cambridge let him manage their funds and their endowment exploded upward under his guidance. Were he 35 today, he might well be a hedge fund manager. Some socialist!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, November 6, 2011
Do You Feel A Little Pinched?
There is an interesting new book out by Don Peck simply called PINCHED. Peck is a features editor at THE ATLANTIC.
I read business and economics books omnivorously but I found this one to be unusually strong. There was little in the book that was new to me but I have never seen all of these issues covered and done so well all in a slim volume of 188 pages.
Peck’s main thesis is that the Great Recession that hit us late in 2008 is no ordinary downturn. Unlike past V-shaped downturns that were rough but short in tenure, this one lingers on. Some 80% of us still believe the economy is in recession even though the Federal Reserve and other august economic sources tell us that we are well on our way to solid though admittedly sluggish growth.
The two things overhanging the economy that Peck keys on are nagging unemployment levels listed at 9% but likely much higher when underemployment is put into the mix plus a real estate market that in some states has yet to touch bottom.
Both of these issues have smashed the American dream in many ways. Virtually all of us have always looked forward to a future in which our children live better or at least the same as we have lived. With unemployment and underemployment among recent college grads at high levels plus many burdened with huge college loans, many seem in a hole with little chance of fast escape. Owing a home has become a fantasy to some 20-somethings despite record low interest rates. No one will give them a mortgage and, a smart banker should not do so.
Peck also raises an issue that has been covered a great deal in the major media in recent weeks but he was on to it months ago when this book went to press. There are pockets of America where there are labor shortages. North and South Dakota, Nebraska and Wyoming top the list. But with 24% of people underwater on their mortgages (the mortgage is higher than the value of the home), many people are stuck in their communities with no hope of moving unless they declare bankruptcy (we touched on this a bit in the Media Realism series, “Mid-Sized Malaise” in October, 2010). Also, many people would not find the cold weather in these states appealing and culturally an unemployed New Yorker might not find people with a similar sense of life in North Dakota.
He touches on the income inequality that everyone is harping on these days but surprisingly, and to his credit, does not offer a simplistic “soak the rich” solution to the issue. He instead is honest and recommends “strong budget discipline and a reduction in the growth of Medicare costs, and somewhat higher taxes for most Americans.” Peck also asks for increased spending on infrastructure and innovation. Whether you agree with this prescription or not, he does not take the unrealistic route of saying that we can easily grow our way out of it or tax our way out of it.
This book is a cool headed assessment of the miserable mess that we are in. If a politician talked this way, he or she would get virtually no traction.
PINCHED will make you think. I highly recommend it.
If you would like to contact Don Cole directly, you may reach him at dcole@doncolemedia.com
I read business and economics books omnivorously but I found this one to be unusually strong. There was little in the book that was new to me but I have never seen all of these issues covered and done so well all in a slim volume of 188 pages.
Peck’s main thesis is that the Great Recession that hit us late in 2008 is no ordinary downturn. Unlike past V-shaped downturns that were rough but short in tenure, this one lingers on. Some 80% of us still believe the economy is in recession even though the Federal Reserve and other august economic sources tell us that we are well on our way to solid though admittedly sluggish growth.
The two things overhanging the economy that Peck keys on are nagging unemployment levels listed at 9% but likely much higher when underemployment is put into the mix plus a real estate market that in some states has yet to touch bottom.
Both of these issues have smashed the American dream in many ways. Virtually all of us have always looked forward to a future in which our children live better or at least the same as we have lived. With unemployment and underemployment among recent college grads at high levels plus many burdened with huge college loans, many seem in a hole with little chance of fast escape. Owing a home has become a fantasy to some 20-somethings despite record low interest rates. No one will give them a mortgage and, a smart banker should not do so.
Peck also raises an issue that has been covered a great deal in the major media in recent weeks but he was on to it months ago when this book went to press. There are pockets of America where there are labor shortages. North and South Dakota, Nebraska and Wyoming top the list. But with 24% of people underwater on their mortgages (the mortgage is higher than the value of the home), many people are stuck in their communities with no hope of moving unless they declare bankruptcy (we touched on this a bit in the Media Realism series, “Mid-Sized Malaise” in October, 2010). Also, many people would not find the cold weather in these states appealing and culturally an unemployed New Yorker might not find people with a similar sense of life in North Dakota.
He touches on the income inequality that everyone is harping on these days but surprisingly, and to his credit, does not offer a simplistic “soak the rich” solution to the issue. He instead is honest and recommends “strong budget discipline and a reduction in the growth of Medicare costs, and somewhat higher taxes for most Americans.” Peck also asks for increased spending on infrastructure and innovation. Whether you agree with this prescription or not, he does not take the unrealistic route of saying that we can easily grow our way out of it or tax our way out of it.
This book is a cool headed assessment of the miserable mess that we are in. If a politician talked this way, he or she would get virtually no traction.
PINCHED will make you think. I highly recommend it.
If you would like to contact Don Cole directly, you may reach him at dcole@doncolemedia.com
Wednesday, October 26, 2011
Seven Billion and Counting
When I was in 5th grade, I remember reading a story during class in My Weekly Reader that stated there were now three billion people on earth. It was passed over quickly as it was just about time for recess. The concept of a billion kept gnawing at me. As recess was ending, I approached a nun who taught at the school and asked her to explain what a billion was. She struggled and could not do it. I said that I did not understand, and she called me impudent and told me to rejoin my class, which was lining up to re-enter the school. She then told my homeroom teacher how disrespectful I was and the rest of the school day was quite unpleasant for me.
When I got home that afternoon, I kept thinking about a billion. As dinner was ending, I asked my parents. The reception that I received was a lot different than that at school. Both parents pulled out a pad and pencil (no calculators in those days!) and patiently took me through the math until I knew it cold. I remember asking them if there were anyone with a billion dollars and my dad thought there was an American oilman living in England who was definitely worth that much. My oldest sibling ran upstairs and returned with a copy of TIME magazine containing a story about J. Paul Getty.
This past week, the memories of the mean spirited and ignorant nun and the kindness and patience of my family came flooding back to me. The United Nations is projecting that by Halloween (October 31st) the world population will pass seven billion. It was only 11 years ago that we hit six billion. Almost all futurists agree that 14 years from now we will add an additional billion to the world’s population. Beyond that things get a little fuzzy. In past years the U.N. and some think tanks felt that with the growth of family planning the world’s population would level off at somewhere around nine billion. Now virtually every organization forecasting population size has revised that calculation and says that by 2100 we will be at least 10 billion. With a huge base of seven billion a modest change in birth rates can have a dramatic increase in population estimates. For example, were the average woman to have simply a half a child more, the population will be at least 16 billion by 2100. Most of us would agree that the planet’s resources would be strained to the breaking point were that to occur.
Let us look at the next fourteen years as we march toward eight billion. Some obvious things are going to occur:
1) India will pass China as the most populous place on earth (remember the Chinese one child policy in many locales).
2) On a relative basis, Africa will increase and Europe will decrease.
3) Most of Western Europe as well as China and Japan are below Zero Population Growth (ZPG) meaning they will not be able to replace the current indigenous populations.
4) Much of the population growth will come from poorer countries where most of the newborns will live on less than $2 per day.
What does this mean to us? All gloom and doom? No, there is some obvious growth out there. Right now, approximately half of the people hospitalized around the world are there as a result of drinking impure water. So, a huge growth industry will be developing systems to get water to arid areas and purifying it everywhere. Right now, there is a huge effort going on in China to purify water that gets very little attention.
We also have to find a way to feed all these new people. Agriculture should boom as should companies providing fertilizers although some argue that our dependence on phosphorus rich fertilizers could deplete reserves and cause a bigger squeeze than possible energy shortfalls in the years ahead. Machinery used in agriculture should also see a nice run.
For agriculture you need a lot of water and the lack of that most precious commodity is already a big problem around the world. Also, if you are like me and think that there is something to global warming, rising temperatures in recent years have depressed global corn, soybean, and wheat production. That is great for American agriculture that will profit mightily from global production shortages but we still will have a billion more mouths to feed.
As marketers, do not despair. In Asian and Latin America some 50-60 million people per year will be entering the middle class and will buy high levels of package goods, appliances and automobiles. This bodes well for multi-national marketers, ad agency holding companies and selected media. Consider ESPN. If you watch them closely, they are constantly expanding their international footprint. Sports mania should continue to expand and an increasing global middle class should only fuel their continued growth.
Lack of water and especially clean water, pressure on energy and food production, and the global warming threat are all huge problems. But, think of the growth when we solve some of them. As we move toward eight billion people over the next decade and a half, stay positive. Technology will continue to move forward. The world will look different and economic power will do some shifting. If you are prepared and see what is coming, you may actually improve your situation.
If you would like to contact Don Cole directly, you may contact him at doncolemedia@gmail.com
When I got home that afternoon, I kept thinking about a billion. As dinner was ending, I asked my parents. The reception that I received was a lot different than that at school. Both parents pulled out a pad and pencil (no calculators in those days!) and patiently took me through the math until I knew it cold. I remember asking them if there were anyone with a billion dollars and my dad thought there was an American oilman living in England who was definitely worth that much. My oldest sibling ran upstairs and returned with a copy of TIME magazine containing a story about J. Paul Getty.
This past week, the memories of the mean spirited and ignorant nun and the kindness and patience of my family came flooding back to me. The United Nations is projecting that by Halloween (October 31st) the world population will pass seven billion. It was only 11 years ago that we hit six billion. Almost all futurists agree that 14 years from now we will add an additional billion to the world’s population. Beyond that things get a little fuzzy. In past years the U.N. and some think tanks felt that with the growth of family planning the world’s population would level off at somewhere around nine billion. Now virtually every organization forecasting population size has revised that calculation and says that by 2100 we will be at least 10 billion. With a huge base of seven billion a modest change in birth rates can have a dramatic increase in population estimates. For example, were the average woman to have simply a half a child more, the population will be at least 16 billion by 2100. Most of us would agree that the planet’s resources would be strained to the breaking point were that to occur.
Let us look at the next fourteen years as we march toward eight billion. Some obvious things are going to occur:
1) India will pass China as the most populous place on earth (remember the Chinese one child policy in many locales).
2) On a relative basis, Africa will increase and Europe will decrease.
3) Most of Western Europe as well as China and Japan are below Zero Population Growth (ZPG) meaning they will not be able to replace the current indigenous populations.
4) Much of the population growth will come from poorer countries where most of the newborns will live on less than $2 per day.
What does this mean to us? All gloom and doom? No, there is some obvious growth out there. Right now, approximately half of the people hospitalized around the world are there as a result of drinking impure water. So, a huge growth industry will be developing systems to get water to arid areas and purifying it everywhere. Right now, there is a huge effort going on in China to purify water that gets very little attention.
We also have to find a way to feed all these new people. Agriculture should boom as should companies providing fertilizers although some argue that our dependence on phosphorus rich fertilizers could deplete reserves and cause a bigger squeeze than possible energy shortfalls in the years ahead. Machinery used in agriculture should also see a nice run.
For agriculture you need a lot of water and the lack of that most precious commodity is already a big problem around the world. Also, if you are like me and think that there is something to global warming, rising temperatures in recent years have depressed global corn, soybean, and wheat production. That is great for American agriculture that will profit mightily from global production shortages but we still will have a billion more mouths to feed.
As marketers, do not despair. In Asian and Latin America some 50-60 million people per year will be entering the middle class and will buy high levels of package goods, appliances and automobiles. This bodes well for multi-national marketers, ad agency holding companies and selected media. Consider ESPN. If you watch them closely, they are constantly expanding their international footprint. Sports mania should continue to expand and an increasing global middle class should only fuel their continued growth.
Lack of water and especially clean water, pressure on energy and food production, and the global warming threat are all huge problems. But, think of the growth when we solve some of them. As we move toward eight billion people over the next decade and a half, stay positive. Technology will continue to move forward. The world will look different and economic power will do some shifting. If you are prepared and see what is coming, you may actually improve your situation.
If you would like to contact Don Cole directly, you may contact him at doncolemedia@gmail.com
Wednesday, October 19, 2011
A Fresh Look At You Tube
Just over five years ago (October 9, 2006), Google announced that it had agreed to purchase You Tube for $1.65 billion in stock. Patiently, many of us waited to see if this would lead to Google making big inroads into television advertising budgets. But, actually, to date, little has happened. As best as I can determine approximately 40% of total U.S. advertising budgets remain on some form of television (network and spot, network and local cable) and barely 1% on online video. Recent developments indicate that the lopsided ratio of TV to online video advertising revenues may finally begin to shift.
My interest really picked up recently when Google hired Lucas Watson. He had been Procter & Gamble's director of digital business strategy. Now, he is V.P. of Online Video Global Sales at You Tube. When a packaged goods pro is recruited by You Tube it looks as if they want to make a serious run at pulling significant funds from the TV advertising arena.
Interestingly, some media friends of mine at agencies say that they have tried to pull the rest of their shops into You Tube tests but they are meeting stiff resistance, especially from creative chiefs. In a long e-mail thread with an old friend and creative whom I really admire, I found the same answer my media buddies are experiencing. My friend wrote and I quote with his permission, "to sum it all up, I don't want my team's beautiful work running next to some horrible video that a 15 year old boy might have captured on his cell phone".
My friend has a point but I encouraged him to give You Tube another look and meet with a sales rep along with his shop's media team. Not many people have deep experience in an emerging medium such as online video. Things are changing quite quickly and a notion held a year ago might not hold water today.
To date, music, technology and some entertainment advertisers dominate You Tube placement. Other categories should give it a shot. Also, there is a huge local ad window open to them as You Tube serves their videos to one person at a time. Local retailers could benefit if you targeted certain types of videos viewed in specific locales. This window of opportunity is open now but we all know that Comcast and Time Warner have products in development that will be able to send customized commercials to several homes on the same street. Agencies and advertisers comfortable with local cable will go there without blinking if You Tube does not pick some of them off first and develop a track record of success.
Take a hard look at the quality of You Tube videos. Yes, it is largely homespun material. And, some are in questionable taste. But professional videos are growing and you can confidently place commercials around them.
Importantly, You Tube, by definition, allows an advertiser to ask people to become part of the message. Yes, you lose some control with mash-ups of your spots but it really can easily become a new kind of promotional platform if done right. Also, there are some nice promotional opportunities as well.
If you are a major player with multi-national support, do remember that Google has the deepest pockets in media history. If they produce original programming (Google Tube?), it would have a GLOBAL audience overnight. They now attract almost 800 million unique viewers per month. Even 81 year old Warren Buffett admits to watching You Tube for 90 minutes at a stretch to relax. What if you saw a brief promo for their new programming or series when you went to You Tube? The audience could grow as fast as some of their popular viral videos. And Google can fund it forever if it does not turn a profit initially.
An investment newsletter that I recently read says that You Tube is perhaps marginally profitable now and may add close to a billion dollars a year to Google's outsized revenues. So, the upside for You Tube is huge if Google monetizes it properly. Consider You Tube as a small hedge in your 2012-2013 video allocation. Two years from now you may thank me.
If you would like to contact Don Cole directly you may reach him at doncolemedia@gmail.com
My interest really picked up recently when Google hired Lucas Watson. He had been Procter & Gamble's director of digital business strategy. Now, he is V.P. of Online Video Global Sales at You Tube. When a packaged goods pro is recruited by You Tube it looks as if they want to make a serious run at pulling significant funds from the TV advertising arena.
Interestingly, some media friends of mine at agencies say that they have tried to pull the rest of their shops into You Tube tests but they are meeting stiff resistance, especially from creative chiefs. In a long e-mail thread with an old friend and creative whom I really admire, I found the same answer my media buddies are experiencing. My friend wrote and I quote with his permission, "to sum it all up, I don't want my team's beautiful work running next to some horrible video that a 15 year old boy might have captured on his cell phone".
My friend has a point but I encouraged him to give You Tube another look and meet with a sales rep along with his shop's media team. Not many people have deep experience in an emerging medium such as online video. Things are changing quite quickly and a notion held a year ago might not hold water today.
To date, music, technology and some entertainment advertisers dominate You Tube placement. Other categories should give it a shot. Also, there is a huge local ad window open to them as You Tube serves their videos to one person at a time. Local retailers could benefit if you targeted certain types of videos viewed in specific locales. This window of opportunity is open now but we all know that Comcast and Time Warner have products in development that will be able to send customized commercials to several homes on the same street. Agencies and advertisers comfortable with local cable will go there without blinking if You Tube does not pick some of them off first and develop a track record of success.
Take a hard look at the quality of You Tube videos. Yes, it is largely homespun material. And, some are in questionable taste. But professional videos are growing and you can confidently place commercials around them.
Importantly, You Tube, by definition, allows an advertiser to ask people to become part of the message. Yes, you lose some control with mash-ups of your spots but it really can easily become a new kind of promotional platform if done right. Also, there are some nice promotional opportunities as well.
If you are a major player with multi-national support, do remember that Google has the deepest pockets in media history. If they produce original programming (Google Tube?), it would have a GLOBAL audience overnight. They now attract almost 800 million unique viewers per month. Even 81 year old Warren Buffett admits to watching You Tube for 90 minutes at a stretch to relax. What if you saw a brief promo for their new programming or series when you went to You Tube? The audience could grow as fast as some of their popular viral videos. And Google can fund it forever if it does not turn a profit initially.
An investment newsletter that I recently read says that You Tube is perhaps marginally profitable now and may add close to a billion dollars a year to Google's outsized revenues. So, the upside for You Tube is huge if Google monetizes it properly. Consider You Tube as a small hedge in your 2012-2013 video allocation. Two years from now you may thank me.
If you would like to contact Don Cole directly you may reach him at doncolemedia@gmail.com
Tuesday, October 11, 2011
Mises, Galbraith and Bottled Water
For the better part of 50 years a lively debate has taken place in some advertising and marketing circles. Essentially, the battle lines are drawn between Austrian theorist Ludwig von Mises and his concept of Consumer Sovereignty and John Kenneth Galbraith’s The Affluent Society, which tried to refute it very strongly.
In brief, Mises postulated that, in a free market economy, the consumer was king. The consumer made poor men rich and rich men poor. If the public found a product that was comparable and less expensive or of better quality they would vote with their cash and move to the new product. Galbraith took the tact that many of us who could be described as marketers were very manipulative. Due to marketing tactics, particularly advertising, consumers were often persuaded to buy things that they neither wanted nor needed (for a detailed explanation see Media Realism, 9/15/2009).
Over the years given my free market leanings, I have tended to side fairly strongly with Mises. Having worked on several new products that failed in the marketplace (as has any long term ad executive), I always questioned the concept that marketers were so smart and manipulative. Were advertising and marketing tactics so powerful why do most new products continue to fail?
In recent times, one category has sort of made me review my position. The category is that of bottled water. Most of us who are a bit mature in years remember Perrier as the first bottle water of any substance. It basically invaded the U.S. in the early 1970’s. Since then, bottled water has exploded and is often associated with social status and healthy living.
What most people do not realize is that approximately 40% of bottled water sold in the U.S. is really tap water that has been put through an extra filter or perhaps fortified with a mineral or two. The profit to the purveyors is enormous as tap water is very inexpensive. Often when you buy bottled water you are paying up to 1900 times what you pay for tap water. And, is it purer? Well, the bottled water from tap is usually more than okay. But for those claiming that they are selling spring water or mineral water, there is less regulation and supervision than there is for municipal tap water. In the western world, there are few places of size where the water is not safe. In developing countries, caution is a good idea and drinking a brand name bottled water makes great good sense in remote areas.
Interestingly, major beverage companies control bottled water sales in the United States. Coca-Cola owns Dasani and Pepsico sells Aquafina. Global food giant Nestle owns a fistful of brands including: Arrowhead, Deer Park, Ice Mountain, Ozarka, Poland Springs, and Zephyrhills. So these players have hedged their bets beautifully. If government cracks down on sales or raises taxes on sugared sodas, they will pick up much of the resulting shift to water products. Nestle waters website had a compelling argument that if one gave up a cola habit and switched to water you could save 50,000 calories per year. In a country worried about obesity, it is not an empty comparison.
The marketers have succeeded in creating more than an aura of health when you drink bottled water. There is a certain cache to it—have you ever noticed young people carrying a bottle everywhere? It has almost become a fashion accessory to some and is ubiquitous as a mobile device. In some upscale areas and at very fashionable universities, the branded drink has given way to a refillable bottle presumably filled with clean healthy tap water.
Given my strong free market bias, I clearly still believe in Mises concept of Consumer Sovereignty. The case of bottled water, however, has made me think that the Galbraithian notion of consumer manipulation is not always bankrupt.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
In brief, Mises postulated that, in a free market economy, the consumer was king. The consumer made poor men rich and rich men poor. If the public found a product that was comparable and less expensive or of better quality they would vote with their cash and move to the new product. Galbraith took the tact that many of us who could be described as marketers were very manipulative. Due to marketing tactics, particularly advertising, consumers were often persuaded to buy things that they neither wanted nor needed (for a detailed explanation see Media Realism, 9/15/2009).
Over the years given my free market leanings, I have tended to side fairly strongly with Mises. Having worked on several new products that failed in the marketplace (as has any long term ad executive), I always questioned the concept that marketers were so smart and manipulative. Were advertising and marketing tactics so powerful why do most new products continue to fail?
In recent times, one category has sort of made me review my position. The category is that of bottled water. Most of us who are a bit mature in years remember Perrier as the first bottle water of any substance. It basically invaded the U.S. in the early 1970’s. Since then, bottled water has exploded and is often associated with social status and healthy living.
What most people do not realize is that approximately 40% of bottled water sold in the U.S. is really tap water that has been put through an extra filter or perhaps fortified with a mineral or two. The profit to the purveyors is enormous as tap water is very inexpensive. Often when you buy bottled water you are paying up to 1900 times what you pay for tap water. And, is it purer? Well, the bottled water from tap is usually more than okay. But for those claiming that they are selling spring water or mineral water, there is less regulation and supervision than there is for municipal tap water. In the western world, there are few places of size where the water is not safe. In developing countries, caution is a good idea and drinking a brand name bottled water makes great good sense in remote areas.
Interestingly, major beverage companies control bottled water sales in the United States. Coca-Cola owns Dasani and Pepsico sells Aquafina. Global food giant Nestle owns a fistful of brands including: Arrowhead, Deer Park, Ice Mountain, Ozarka, Poland Springs, and Zephyrhills. So these players have hedged their bets beautifully. If government cracks down on sales or raises taxes on sugared sodas, they will pick up much of the resulting shift to water products. Nestle waters website had a compelling argument that if one gave up a cola habit and switched to water you could save 50,000 calories per year. In a country worried about obesity, it is not an empty comparison.
The marketers have succeeded in creating more than an aura of health when you drink bottled water. There is a certain cache to it—have you ever noticed young people carrying a bottle everywhere? It has almost become a fashion accessory to some and is ubiquitous as a mobile device. In some upscale areas and at very fashionable universities, the branded drink has given way to a refillable bottle presumably filled with clean healthy tap water.
Given my strong free market bias, I clearly still believe in Mises concept of Consumer Sovereignty. The case of bottled water, however, has made me think that the Galbraithian notion of consumer manipulation is not always bankrupt.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, September 30, 2011
Sizzling Singapore
If you follow world business at all, you are hearing and reading a great deal more about Singapore. This tiny city-state on the southern tip of the Malay Peninsula has been growing rapidly for decades. It covers a scant 253 square miles but packs an increasing financial wallop around the world.
There are 5 million people in Singapore with the great majority being of Chinese, Malay, or Indian descent. English is an official language but the majority also speak a Chinese dialect. It is something of a dream for entrepreneurs and businesses. There is no place in Asia where there is such ease of business registration, governmental support, plus all important favorable tax rates and incentives. And, perennially, the World Bank usually ranks Singapore as the easiest place in the world to do business.
Often referred to as the Switzerland of Asia, it is a pulsating financial center that holds it own with Tokyo and the increasingly powerful Shanghai. The savings rate is among the highest in the world so there has been extraordinary capital formation. After independence from Britain, lead governmental minister Lee Kuan Yew arranged for compulsory contributions in the 25% of income range to government controlled pension funds. While unappealing to American spending tendencies it was a big contributor in making the tiny nation rich.
With a shift away from the U.S. and U.K. in terms of media billing, I believe that in a decade or so Singapore may well become the world’s advertising hub.
Consider these facts—
Singapore is centrally located in Asia and as global billing tilts toward the east, they will literally be perfectly positioned.
Westerners are more comfortable in Singapore than anywhere else in Asia. Part of it is the ubiquity of English but also the appearance counts. The place is crammed with people but immaculate. It took Wrigley decades to get the government to allow them to sell chewing gum there! Senior management of holding companies would be comfortable here as the adjustment to Asia would be far easier than other choices.
Unlike other Asian powerhouses such as China or Korea there are no exchange controls. You may easily move capital in and out of Singapore or repatriate profits.
Advertising has made strides in Singapore. Arguably it is the Asian leader in outdoor, mobile and digital advertising. As the world moves to digital, the existing talent pool can help.
Many Singaporeans are of Chinese descent. As China grows, it might be easier for Singaporeans to deal with China than those from other nations.
So, we forecast confidently that Singaporean agencies will not remain as branch offices for the mega-shops much longer. By 2020-2025 they will be in the epicenter of global advertising and a few of the world’s top 10 holding companies will be headquartered there.
If you want to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
There are 5 million people in Singapore with the great majority being of Chinese, Malay, or Indian descent. English is an official language but the majority also speak a Chinese dialect. It is something of a dream for entrepreneurs and businesses. There is no place in Asia where there is such ease of business registration, governmental support, plus all important favorable tax rates and incentives. And, perennially, the World Bank usually ranks Singapore as the easiest place in the world to do business.
Often referred to as the Switzerland of Asia, it is a pulsating financial center that holds it own with Tokyo and the increasingly powerful Shanghai. The savings rate is among the highest in the world so there has been extraordinary capital formation. After independence from Britain, lead governmental minister Lee Kuan Yew arranged for compulsory contributions in the 25% of income range to government controlled pension funds. While unappealing to American spending tendencies it was a big contributor in making the tiny nation rich.
With a shift away from the U.S. and U.K. in terms of media billing, I believe that in a decade or so Singapore may well become the world’s advertising hub.
Consider these facts—
Singapore is centrally located in Asia and as global billing tilts toward the east, they will literally be perfectly positioned.
Westerners are more comfortable in Singapore than anywhere else in Asia. Part of it is the ubiquity of English but also the appearance counts. The place is crammed with people but immaculate. It took Wrigley decades to get the government to allow them to sell chewing gum there! Senior management of holding companies would be comfortable here as the adjustment to Asia would be far easier than other choices.
Unlike other Asian powerhouses such as China or Korea there are no exchange controls. You may easily move capital in and out of Singapore or repatriate profits.
Advertising has made strides in Singapore. Arguably it is the Asian leader in outdoor, mobile and digital advertising. As the world moves to digital, the existing talent pool can help.
Many Singaporeans are of Chinese descent. As China grows, it might be easier for Singaporeans to deal with China than those from other nations.
So, we forecast confidently that Singaporean agencies will not remain as branch offices for the mega-shops much longer. By 2020-2025 they will be in the epicenter of global advertising and a few of the world’s top 10 holding companies will be headquartered there.
If you want to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Subscribe to:
Posts (Atom)
