Sunday, February 04, 2007
Marketers and Blogging, Time and Print, Tax Revenues, More PC Stuff
Their spontaneous, unedited, sometimes emotional "first takes" on new products are substantially impacting business, according to Pete Blackshaw, chief marketing officer of Nielsen BuzzMetrics, a 100-person division which monitors the blogosphere. He calls bloggers "a kind of Fifth Estate or journalism."
Blackshaw says bloggers are everywhere, using laptops, video cameras, and digital recorders to publish their comments, reactions, and criticisms. Nowhere was this more evident than earlier this month when the Detroit Auto Show, the Consumer Electronics Show, and MacWorld were vying for attention.
Wikipedia had an iPhone entry within minutes of Steve Jobs' announcement of the product, and YouTube had more iPhone-related clips than it did for Gucci or the Pope.
"Bloggers have become the ultimate news aggregators," Blackshaw said. Major media reporters monitor blogs for tips as well as informed perspective on product features. A swarm of bloggers posting about new products, often positively, ends up in search engines. "That comes back as search results when consumers do research; the bloggers enthusiasm turns into advertising," Blackshaw said.
Ad agencies and media buyers are trying to gauge what to do about bloggers and other online media. Since bloggers are looking for Web links to include in their reports, marketers are weighing whether to spend all their money in traditional media or to take some to build a fuller Web site for the brand.
Blackshaw cited Apple Computer for coordinating its online assets for the iPhone introduction. Product photos, specifications, and narrative about the product were available immediately at Apple.com. Blackshaw says advertisers in this weekend's Super Bowl should be following the same road, to build interest in their ads.
So it's no accident that Bowl ads for Doritos are already online. Don't waste money on a Super Bowl ad unless you have these other pieces of the mix in place. You can't just buy media in a vacuum, Blackshaw said. "You have to think about how others pieces of the marketing mix reinforce, amplify and ultimately drive more return on that investment."
Please... someone tell Time that the Internet is not affecting print volume
Time Inc. is trying to figure out how to capture readers and ad dollars that are leaving print media for the Web. Time magazine decided last year to shift its publication date from Monday to Friday. The company said earlier this month that it is eliminating 289 jobs, including 172 editorial jobs, bringing its employee head count down to about 11,000. And last week, the company announced the sale of 18 smaller magazines, including Popular Science and Field & Stream, to Bonnier Magazine Group of Sweden.
Interesting point in the article:
In 2006 Sports Illustrated generated about $118 in revenue for every person who paid for the print magazine, compared to $5 per online reader.
This is like comparing Apples and Intels... ummmm, like comparing apples and lawnmowers. The $118 in revenue includes postage, printing, and other distribution costs. The $5 probably has a superb gross margin, but one wonders if it's being charged all of its costs, especially for repurposing print content. Time really needs to increase its online audience for its properties and claims it will not charge for it until the size of its audience grows significantly. One has to marvel at the way Dow Jones structured its Wall Street Journal online business. It charged from the day it started, and has never had to worry about converting from free to paid. Time and its properties do... and I suspect that the change of its businesses will continue to be quite painful and that these layoffs are nothing like what is bound to come 12-18 months from now.
FedEx Kinko's says low margins are just fine for them... good thing they have lots of shipping revenue that goes through the stores to make up for it... all printers should sign up with UPS and DHL, I guess.
Tax revenues are increasing again! According to the 1/29/07 Wall Street Journal quoted Congressional Budget Office data:
Data released last week from the Congressional Budget Office confirm that the tax cuts of 2003 keep soaking the rich, especially on their capital gains. CBO and Congress's Joint Tax Committee originally estimated that reducing the capital gains rate to 15% from 20% would cost the Treasury $5.4 billion from 2003-2006.
Whoops. Actual revenues exceeded expectations by 68%, creating a $133 billion revenue bonanza for the feds. CBO's original forecast for 2006 was for $57 billion in capital gains revenues, but actual receipts were $110 billion. This surprise windfall is one reason the budget deficit is also far lower than CBO predicted.
The problem is that the CBO, by law, cannot assume that tax policy affects people's behavior. "Dynamic scoring" is a no-no as far as the CBO is concerned. Therefore, they would have to assume, that if tax rates were doubled, tax revenues would double, too. If they were tripled, revenues would triple. The last time this happened was with the Clinton tax increases early in his administration, which only delivered half of what the CBO said. But Clinton and Robert Rubin were smart enough to cut the capital gains rate a few years later and created a capital gains windfall, that combined with a Congress that believed in spending restraint, resulted in budget surpluses. Milton Friedman hated surpluses, and he was right... they slow an economy down, and they did. Better to reduce the tax rates... again, until the reduction is at some kind of equilibrium where their reduction can't throw off more yet more revenues. The Laffer Curve (Laffer was a Clinton supporter, and not many people know that for some reason) is a curve, and it looks like a bell curve. The CBO insists that there is no such thing, by law, and that everything is a straight line. This is the reason why "pay-go" or "pay as you go" legislation does not work. Luckily, Congress will be gridlocked over the next year or so. But it is probably the case that at this time that tax rates will be the lowest they will be for quite some time, perhaps a generation. Coolidge, Kennedy, Reagan, Clinton, and Bush43 all knew the power of lower taxes to stimulate investment. Johnson, Nixon, and Bush41, never learned the lessons.
Comcast states that streaming video is boosting its broadband subscriptions
Perhaps Santa can come early... what a cool Linux computer. It's (in round numbers) only 7x7x2" --- you could lose it on your desk!
Microsoft Vista won't allow clean re-installs... ugh!!
Sometimes, you computer needs a totally clean re-install where you reformat the hard drive, etc... and what if your hard drive gets fried? Looks like a real annoyance. The next Ubuntu release is in April... perhaps that's the time I can end my Microsoft ties for most of my work?
There are some people, however, who think Microsoft is evil, just like all corporations, and Vista is a conspiracy against computer users?
Puh...leeeeez.... Last I saw, computing was a competitive market and we have more choices than most people know about. There are two major PC operating systems, of course, Apple and Windows, but even that is changing. Linux is starting to expand from Geekdom (had the DOJ not inserted itself into the market by suing MSFT, I still believe that the uprise in negative MSFT sentiment would have sent millions of dollars into the development of alternatives; instead, the market relied on the DOJ getting MSFT to "play nice" and that took the wind out of any rising OS enmity). Palm, Windows Mobile, and Linux are on PDA's. I think we're on the verge of thin clients that rely on browsers. When Gartner Group said that this was the last major PC OS release, I thought that they were dead on. But some of the anti-MSFT folks are wackos... MSFT has outwitted and outmarketed its competitors... and it plays hardball... so? I just want to get away from buggy software with horrid EULAs.
OpenOffice is the leading free alternative to MSOffice. A blog that has good tips about using the program and its hidden features is at http://www.linuxjournal.com/blog/800902