Follow-up--Advertising Agencies and the Covid 19

Earlier this week, I put up a post on Advertising Agencies and Covid 19. It generated a great many comments from agency principals and senior staffers. Many of the respondents wanted to know why I did not contact them for their opinions, some agreed with the people whom I paraphrased and others weighed in on what was not covered.

So, with a sense of fairness, here are a few issues raised by those whom I did not contact in the first round:

1) “Cole, the pandemic is hitting my business really hard but it is a foreshadowing of what is to come in the workplace. The press is covering the hardship faced by service workers in a variety of fields from food service to uber driving. What they do not seem to grasp is that another shoe will drop months from now. White collars jobs are going to get hit in a big way and many will NEVER come back. My own firm with under 50 employees will survive but will definitely be smaller in 2021. I have found out clearly for the first time who the keepers are in my organization. Some of my employees have surprised me and really “risen to the occasion” and performed very well. Others are not cutting it and complaining to me more than ever about minor issues ignoring that I am trying to live to fight another day. When the smoke clears, we will be leaner, much more efficient and I bet more profitable. My clients are telling me similar things and my network of business contacts echos that sentiment as well.”

2) “Has any good come out of this crisis? Yes, and I did not see it coming. There is very little politics now at the firm. Many are happy to be still drawing a paycheck so there is less bitching about who gets plum assignments. Also, with 80% of the team working at home, I don’t have to listen to the prepubescent B.S. about comparative office square footage or  nice desks or lamps anymore. When we come back, my tolerance for that old nonsense will not be tolerated.”

3) “I see things much more clearly now. To survive, I am going to have to change the inner workings of my shop. That will be a huge challenge. Why? The late Eugene Kleiner, an early player in venture capital in Silicon Valley, once said, “It’s difficult to see the picture when you’re inside the frame”, which is so true. I used to see my team as a family. A lot has come to the surface the last few months. When the new era begins sometime next year (I hope), I will hand pick my team. Each employee will need to be flexible, humble and a team player.”

4) “ I used to float a major media client a lot of money for several years. One year he was in to us for a million dollars and I paid the media as I knew that he was good for it. He asked me to do it again for later this year. I had to say no. He was hurt but I offered to open my books and I did not have the cash cushion to help him and I was not sure that he would ever be able to pay me back. He went to a media buying service and offered a nice fee but wanted them to pay the media first. The buying firm leader called me and I said have the media bill him directly or do not take the business. He passed on the account as he wondered when he would even get his fee. Long standing deals and relationships are unraveling. I am asking for fees upfront and am not wasting time or money on speculative new business pitches at present.

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

Advertising Agencies and the Covid 19

This post is in response to the requests of several MR readers regarding the impact of the Covid 19 pandemic on advertising agencies in the United States. As is often the case, I was surprised at the candor of agency principals and management who agreed to weigh in on this very difficult issue.

Before, we go in to specifics, a few caveats:

1) I did not ask anyone from a major holding company ( WPP, Omnicom, Publicis, or Interpublic ) to participate. The people who responded were from independent mid-sized or small shops.

2) Currently, I reside in Towson, Maryland. I deliberately did not call anyone in the Maryland/DC area or local readers would try to figure out who the players were.

3) To further protect sources, I edited their comments partially to avoid repetitive statements, kept real names out of it, sometimes changed genders, and, as a former altar boy, cleaned up a lot of the language when comments were heated.

4) This does not pretend to be a representative sample of the agency universe. I talked to people who trust me and have known me for a long time or who read MR and frequently contact me directly.

Here are some edited verbatims from my sources:

—Fairly large mid-sized company CEO—“this pandemic amazingly has helped me separate the “wheat from the chaff” among my employees. Some people, even the older ones, are doing a great job working remotely. They stay in touch, are on time with everything, and do not need as much hand holding as I expected. Two have told me that they are terrified of being let go so appear to be more conscientious than ever. On the other hand, a few are big disappointments to me. They appear to be spending more time on Netflix and Amazon Prime Video than working. When we return, our company will be smaller as we have lost some business that is not coming back. My lease on office space runs through October and I had a candid talk with my landlord via FaceTime. He will put us in smaller space and understands my situation. I have problems for sure but over the next few years commercial real estate has to be a nightmare.


—Creative Chief, Mid-Sized—“every year I would hire maybe two new creatives fresh from college or art school. This year, only one. The guy says he will stay with us if he can work 100% remotely. It is insane. He is 23! I am a hands on executive. My team has always learned from one another and a coffee in the break room or poking my head in to someone’s office for a minute or two a few times per day helps our product and brings along the rookies. Yes, the kid is tech savvy compared to my two 50+ team members. But, I do not know his work ethic and he needs supervision and how to become a team player.”

—Principal, Small Agency—“I caught two employees doing freelance and late with our client work. The idiots used company e-mail instead of their personal e-mail. I told everyone I would check in daily and sometimes look at all correspondence. They say I cannot stop them from doing freelance. True, but as long as they draw a salary from me, my work comes first and is on time.”

—President, Mid-Sized—“Some people need the structure that an office setting can provide. One of my stars is really struggling at home. He has small kids and loves spending more time with them but his work is weak these days. I have him come in to our empty office two days a week now and it seems to be helping.”

—Principal. Smaller Mid-Sized—“I have a long term employee who has always been a pain in the ass. He managed one of our larger pieces of business and the client loves him. Well, the client told me that she will close her doors by September 1st. I will say adios to the arrogant jerk at that time. His protector will be gone."

"What some of my staffers do not seem to grasp is that we are in a small city. I will have to lay off several staffers and job opportunities will be VERY scarce. Everyone needs to excel right now.”

—Independent, Successful Graphic Designer—“Some people, not I, have terrible issues with child care right now. Trying to juggle little kids and getting assignments done is hard these days. Also, some people are not emotionally equipped to work solo as I am. CEO’s need to understand this. I have been getting extra business during the pandemic as freelance is my game and my turnaround time is very good. Everyone is not able to do it.”


Everyone is nervous about the long haul picture. Not a single person said that things will ever be “normal” pre-March 2020 again. To a person, all said that the pandemic has sped up the decline of conventional media significantly.


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

1% Television

Surprisingly, in recent months, several people have asked me to comment on what they are calling 1% Television. Most of them were academics although a few are happily ensconced in the private sector in advertising or broadcasting. The term is not used particularly widely in lieu of what I and others in the game for years referred to as “Aspirational Television.” It is programming where the protagonists tend to be in the top 1% of wealth or income and often live life on their terms sometimes operating on the edge of the law or societal norms.

The people often asked me why these shows are popular when most Americans (especially during the Covid 19 pandemic) are struggling. They speak of “Billions”, “Empire”, and “Succession” as examples of such programming. To me, this is all more than a bit of a surprise. They act as if it is something new. If you are 30 or under, I can give you a pass. Those of us longer in the tooth have to remember “Dallas”, “Falcon Crest”, and “Dynasty” where the wealthy cavorted illegally or in dodgy transactions via Primetime soap operas that delivered killer Nielsen ratings. Today’s shows, on HBO or Netflix or Amazon Prime Video are far racier given the times but are similar in many ways.

Want to go back farther and have a look? In the 1930’s at the bottom of the Great Depression, Hollywood studios, particularly MGM and Paramount ,were grinding out countless films that depicted life among the uber-wealthy—perhaps .1% of the population. And the films were very popular. I remember asking my father about why people enjoyed them so much. He said that times were really tough for so many Americans that watching a screwball comedy or elegant drama or Thin Man Mystery let one escape from their precarious existence if only for two hours. Smoothies such as Robert Montgomery, Brian Aherne, and, of course, Cary Grant, were on hand in many such films and, if you could not truly aspire to that lifestyle, you could at least dream about it.

So, not much has changed. People want to escape their hum-drum lives and 1% Television can do it and often the programs are very entertaining. There is one area that is lumped with 1% Television by some that I feel is very misplaced. That is programming often shown on PBS. The most famous was “Downton Abbey” which featured the aristocratic Crawley family in the 2nd and 3rd decades of the 20th century. Critics raved when the final episode drew 9.6 million viewers. That was indeed super for PBS but the audience was not not as blue chip as some wanted you to believe. The audience skewed older and certainly intellectually leaning as most PBS “Masterpiece” telecasts do. Yet it did not wildly overachieve against the real 1%, especially the younger upscales. To put it in perspective, “Empire’s” premiere back in 2016 averaged 12.2 viewers and “Billions” premiere scored 6.6 million before hitting its stride as word spread of the exploits of the central character Bobby Axelrod.  

Yes, there have been exceptions. “Roseanne” gave a look at blue collar life in the 1990’s and other sitcoms have followed suit but most, while claiming “everyman” or middle class status, are really upper middle class or top 10%. Do most people want a steady diet of “inequality entertainment”? I do not think so. Americans, especially now, get enough reality in their daily lives. Streaming video provides a much appreciated escape these days.

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

One Challenge Too Many

For a few decades, I have seen data on the death rate of restaurants. A study from The Ohio State University, released in 2019, mirrored the results that I have observed forever. In brief, they found that 60% of restaurants failed in the first year and 80% did not stay open long enough to celebrate their fifth anniversary. Reasons are many but big ones include the owners chasing a dream but not having enough experience in the field and not realizing how hard the job of running a profitable restaurant can be. Also, financial issues dominate led by poor cash flow management.

Today, as the shutdowns of businesses continue due to the Covid 19 pandemic, it appears that many restaurant owners consider this horrible event to be one challenge too many. They have survived previous recessions, blizzards, hurricanes, change in consumer tastes but many much loved dining establishments are closing for good. A restauranteur in the midwest put it to me this way: “Mr. Cole, we tried to do curbside for a few weeks. It went okay, I suppose, but, even with a skeleton staff, we are losing money. Few people are ordering alcohol and that is where are big margins always were. No one wants to hear about my spectacular wine pairings these days when we put  a to-go dinner in their trunk. I am 62 and my wife and I are tired. It is time to go.” Another in the Northeast wrote that most restaurants operate on the edge and, even if you last a while, you are often not super profitable. “Why work 12 hours a day when you will be in a deep hole for at least 18-24 months. My landlord is a decent sort but I have to start paying him soon.”

Others have hinted plus the media has covered that with 25-50% capacity allowed as states “open up” their economies, most restaurants can not make money. Others fear that many regulars (the mainstay of successful independent restaurants) will stay away out of fear of the virus. So, the outlook, always a challenge, is now scary.

Some financial analysts have hit the issue from another angle. There are some very high end restaurants that cater to the wealthy. They have what analysts might call “fortress balance sheets.” They can ride out this unpleasantness not forever but for a long time. The individual restaurants that are unique and perhaps small but part of our lives are really under siege. So some pundits say our choices in dining out in about two years will be the high end who will be a bit bruised but resilient and chain restaurants which have stronger investor backing. Also, it will be harder for dreamers to get funding for a new restaurant as Angel investors will be more gun shy than ever when it comes to funding a dining establishment.

Casualties may also be in places that are not top of mind. The small lunch counters in the backroads of rural America may not reopen. Many faced closure when the talk of a $15 minimum wage was floated a couple of years ago. If such a plan takes hold or something close to it, the little guys in small towns will likely not survive in most cases.

So, there is one thing that we all can do. Each week since the lockdown my family and I have picked a couple of local places that we have always liked. We get a lunch or dinner from them and will continue it for some time to come. These restauranteurs have brightened our lives and survived while most have not. As they face their greatest challenge ever, they deserve our business. So support your favorite local restaurants. If you help them get through this once in a lifetime event, they just may be around when some sense of normality returns.

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

Greedy Landlords?

I hate to admit it but 50 years ago this week I was introduced to economics by reading a little book by Henry Hazlitt entitled ECONOMICS IN ONE LESSON.  It set me back 75 cents! The paperback changed my life as I shifted from being a history major to an Economics major and I have never looked back. While Hazlitt, a journalist who is widely respected in libertarian and conservative circles was prolific (he lived to be 98), his little book had a different message. Simply put, the one lesson was that most people think only of the immediate effect of government policy actions in the economy and few, especially politicians, think of how their actions effect the long term. The erudite Thomas Sowell of Amherst and Stanford fame, expanded on the argument in a brilliant but much heavier book entitled APPLIED ECONOMICS. I recommend both highly.

Okay, what does that have to do with our title of greedy landlords? A lot. Our friends in the media continue to do slice of life stories about people suffering horrible economic conditions due to the pandemic. Some are heart wrenching and the stories need to remain front and center to the national dialogue during an election year. To their great credit only CNBC, our leading business cable channel, has effectively expressed how small time real estate operators better known as landlords are also in a terrible bind.

When one hears the term landlord most people conjure up the presence of an older person who is very affluent or wealthy with dozens or hundreds of rental homes or apartments. While they exist and most are fair sized corporations, several million landlords are basically what I would describe as bootstrap entrepreneurs. They may live in a duplex and rent out the upstairs to a tenant who helps them pay for their home. Or, they may have a small apartment building with six to 10 rental units. Almost all are leveraged unless they have held the properties for 15-20 years. So, what is happening to these greedy millionaires? Many are in a spot not dissimilar to many of their tenants. If you have a 10 unit apartment building, you easily may have a million dollar mortgage on it depending on its location.
If your tenants, who have been legally excused from paying rent for a few months, do not pay as many are out of work, you still owe the bank the mortgage payment.

A small player in central California who has read MR for years put it to me this way: “Don, for the moment, I am really lucky. I have 10 tenants. Two are in small bungalows and eight are in my apartment building. Only two have not paid rent the last two months. One honest young woman came to my office and paid her May rent saying that with her $600 weekly bonus in federal unemployment pay, she is more flush than when she is working. She could have not paid for a while but has earned my everlasting respect. Many times, I have vacancies and repainted or repair a place after a tenant leaves so missing two payments for a few months will not kill me. Yet, I still to have pay my real estate taxes at the end of June and, so far, our county has not offered any delay in payment. I have been doing this for 30 years so I know dozens of small real estate players across the state. I even mentor some of the young ones. They are really in a bind. One wonderful 35 year old immigrant has eight properties. All of her tenants have lost their jobs and no one is paying her. She does not have the kind of relationship that I have with my community bank and is getting hassled. She is a complete wreck even though she is the hardest working and most resourceful person that I have ever met.”

There is another shoe to drop as time goes on. Let us say the country opens up and many of these tenants get their old jobs back. Remember, a few years back when the Federal Reserve published the now famous report that more than 40% of American households could not readily pay for a $400 auto repair bill or an emergency room visit? The Fed was telling us that a huge minority of Americans were living on the edge. They were a paycheck or two from being close to homeless. So, assume many of the renters get their jobs back after a four month hiatus from paying rent. They still owe the rent and the landlords still owe the bank for their mortgages and the counties for their real estate taxes. If people were fighting to pay their rent PRIOR to the pandemic, how will they be able to come up with the money to pay the back rent. Most landlords will stretch out the payments to be sure but if you were living hand to mouth before the crisis, can you afford an extra $150-200 per month in rent once work resumes. Am I exaggerating? Well, Fed chair Jay Powell rattled markets a few weeks ago when he stated that 40% of persons earning less than $40,000 per year were currently unemployed. A few will take their extra unemployment compensation and $1200 recovery checks and be very disciplined about using it. Many, not used to such a cash infusion, will likely not plan properly for a “return to normalcy.”

So, I did not post this to defend landlords. I am not one and have never been one. My point is that the media, with few exceptions, have done a poor job to date, of really examining the ripple effect that the pandemic is having on many people whom you may think are sitting pretty.

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

Media in the Era of Coronavirus

Since most of the readers of MR are sitting at home, I thought it best not to comment over the last few weeks about the impact of the Coronavirus on the media world. Now seems as if it is an appropriate time to make a few observations.

Here goes:

1) Clearly, conventional over the air TV is generating higher ratings. Some broadcasters, invariably in smaller Designate Market Areas (DMA) have written to me with a certain amount of breathless excitement. They think that the newly acquired viewing that they have over the last month will be “sticky.” People will enjoy local news and weather and come back to over the air TV. I try to be kind in my replies but I just do not see it. A big problem many local stations face these days is the lack of car sales. With millions out of work and more millions sittingat home, car sales at a standstill and dealers are not advertising. In some DMA’s, it is not unusual for car dealers to be 40% of a station’s revenue in a given month. Yes, broadcasters in certain markets will get a nice boost in the second half of the year from political spending, but things will still be tough.

2) The streaming services are getting great usage and trial. Netflix reported an eight figure jump in global subscriptions in figures released early this week regarding first quarter performance. Many have e-mailed me saying that they are binge watching series after series that were on their “to do list.” A lady in Spain wrote to me that she felt guilty about letting her children watch so much video but it kept peace in the family.  Speaking of Spain, Disney + had an impressive launch in several Western European countries in late March. On day one, some five million people downloaded the Disney + app. Clearly, Disney as a company is taking it on the chin with movie theaters empty, theme parks and cruise ships closed, and ESPN now posing as ESPN Classic 24/7. Long term, Disney + should gain faster traction than projected earlier due to the global lockdown. Corporate earnings of Disney may be down for a couple of years, however.

3) The pipeline of program content is getting empty as production is shut down around the world. Disney and Netflix with their extensive libraries have something to offer. Rumor has it that some smaller movie producers have approached Netflix to offer their new films to them as they do not know when they could get theatrical release. Amazon Prime could buy the rights to certain series and films as they have deep pockets.

4) Quibi TV—this mobile only service has gotten off to a hot start with 750,000 subscribers in the first few days. They may have a severe pipeline problem as their content tends to be in 10-12 minute segments. We wish then well.

5)) What about sports?  This is a big one and not just in North America. Sports starved readers have been emailing me from all over the globe. One fellow told me it was fun to watch the Golf Channel cover tournaments from many years ago for several days. Now, many people crave some live action. Baseball fans have lamented that it was not April without opening day and I agree. A few people have told me that sports will not do as well when societies open up as people will have found new outlets to spend their time. I do not see that happening. Pent up demand with be great. Fans may not visit their favorite event or hometown stadium for a year or so but they will be glued to the tube across the world.

6) Newspaper—as critics mount about the ham handed approach of some politicians toward the crisis, major papers such as The New York Times, Washington Post and The Wall Street Journal have for sure generated more readership. Whether this sticks and lasts into 2021 is iffy at best.

7) Radio—probably getting a bit hurt as millions more people are at home and using video for their media preference. Little in car listening these days.

In future weeks, I will fulfill reader requests that I address what might happen as the economy in North America opens again.

Until then, stay safe, my friends.

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

Update on the Global 1%

As markets are in turmoil with the spread of the coronavirus, many of us have a bit a time to put things in perspective.

The World Inequality Database recently released data on what it takes to be in the top 1% of annual income in many countries around the world. The results were a bit surprising and here is how things fall in a number of countries:


NATION INCOME NEEDED TO BE IN TOP 1%*


India $77k
Italy                                 169
Canada                             201
France                              221
United Kingdom              248
Bahrain                            485
UAE                                 922
China.                               107
Brazil.                               176
South Africa.                    188
Australia.                          246
Germany.                          277
United States.                   488
Singapore.                        722

Source: World Inequality Database, 2020

*all figures in US dollars

In the U.S., the top .1 (one tenth of one percent) earned approximately $2 million while the .001 earned an eye-popping figure close to $10 million

Surprised by these numbers? I thought that Canada and Germany would be somewhat higher but was not surprised by low population countries in the Middle East nor Singapore, long a high growth country in Asia.

As we have often written, there will always be some measure of inequality in free market nations but it seems to be cresting right now. When I can get clear data on median income for these nations plus wait for the fallout to settle from the pandemic, I will update this information and provide more detailed comments.

Meanwhile, stay safe my friends.

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