I'm a marketer...

I was just reading some blog entries this evening and came across one that really hit home with me. You see, I'm a marketer...I love it...it's a fun gig. But what I really love is building companies. Anyone who knows me knows that I've made a career out of building companies and selling them off...it's a wonderful life! Being there from the inception to the development, the maturation and then exiting before it gets old and stale...what a great time!

The other thing about me, however, is that I'm a student of history...I especially admire the Robber Barons of the "Guilded Age"...that period between 1865 and 1900 where many fortunes were made through hard work, ingenuity, and hard business practices (not to mention the absence of personal income taxes). I've had many a debate with people about the "evils" of the Robber Barons (people with names like Gould, Rockefeller, Vanderbilt, Carnegie, Durant, and Harrison) but the one thing that nobody can deny is that these men left something in their wake. A bank, a railroad, a university, a steel mill, oil refineries, etc. These men left a legacy of employment that would serve hundreds of thousands, nay, millions of American families for decades after their deaths. Then comes my burning question...have any of the companies that I've had a hand in building provided for anything more than for those immediately employed..will they be standing 10 or 20 years from now? The answer is most likely, "no." My son asked me one day, "daddy, if you win the lottery what will you do with the money?" I honestly didn't know beyond the typical "pay off the house," "go on vacation," etc. But now I know. I would sink whatever I could into a manufacturing company that would have the best odds of continuing like those manufacturing companies of yesteryear. I would seek to rediscover what our forefathers knew about an honest days work for an honest days pay. I would do all I could in order to create a legacy of employment that would exist long after I'm gone. Perhaps that's already happening with this current company that I run now...perhaps my son will take over the helm one day, employ hundreds of people...then again, perhaps not. But there's just something that tears at my soul when I see "manufacturing," the engine that built the world's greatest super-economy, gone from our American landscape. I'm proud whenever WPM and/or iAdvertizing get to work with a company that actually produces a good, solid, fairly priced product right here in the States. Manufacturing is who we were in the past (right up until recent history), and if that becomes totally lost, marketing won't hold very much luster for me anymore. So I guess I'm here saying (not unlike so man others before me) Let's do all we can to support those who create, craft, build, innovate, and employ...and in so doing continuing a long rich heritage that we can certainly embrace and be proud of. I'm now a "buy local" guy...and I'm not a trendy person..(just ask anyone who works with me)

Best Always,
Dave J.

The DEATH OF CROWDSOURCING?

Heads Up, HuffPo! The Mob Is Turning on Crowdsourcing

By John R. Quain

Published March 08, 2011

FoxNews.com

"Crowdsourcing" powers sites like The Huffington Post and Wikipedia. But not for much longer.

Readers are becoming skeptical, web searches are starting to block them, and now the mob of unpaid folks responsible for much of the work is turning on the hand that fails to feed it, demanding -- shock, horror! -- to be paid.

Imagine that.

Originally hyped using marketing buzzwords like "user generated content" and "crowdsourcing," the basic idea was simple: Convince people online to submit free information (reviews, song listings, citizen journalism reports, etc.), and then collect it all and sell it to advertisers and gullible investors. It was catnip to website developers: virtually no capital investment and pure profit.

It sounds too good to be true, but there have been successes. Music information site Gracenote used to get most of its information for free. It's now owned by Sony. Wikipedia put Microsoft's Encarta out of business, and it reduced the Encyclopedia Britannica to a $100-plus a year online subscription service.

And money is pouring into hip destinations like question-and-answer networking site Quora (if you haven't heard of it yet, you will soon). Even AOL got sucked in, recently paying $315 million for one of the most well-known crowdsourced blogs, The Huffington Post. There are scores of others, of course, ranging from content farms like Demand Media and Seed to niche sites like Yahoo Answers, Stackoverflow and Ask.com.

But there are flies buzzing in the crowdsourcing pool.

Readers increasingly regard such sites as notoriously inaccurate, irrelevant and generally suspect. Restaurant reviews in Yelp may be posted by relatives of restaurateurs -- or competitors. Company profiles in Wikipedia may be written by the business' own PR department. And so-called citizen journalists at The Huffington Post may be publishing material that's actually written by marketing pros spinning "news" stories. Indeed, HuffPo founder Arianna Huffington recently admitted as much, saying that her contributing authors are like those who appear on talk shows simply to promote their own books and movies.

The problem has also caught the attention of the world's search engine, Google. It launched a counterattack last week, changing its algorithm to kill listings from what it determines are content farms or "low-quality" sites. Bad news indeed for crowdsourced news.

An even more threatening groundswell may be underway. Some of the unpaid, unappreciated volunteers supplying all this free content are going on strike. Many have become disillusioned with others taking credit for their work. Some have simply become bored (witness the decline in the number of volunteer editors working on Wikipedia). Still others have begun to resent the fact that their gratis work is lining the pockets of the owners of sites like The Huffington Post.

Visual Art Source, which had been supplying reprints of some solid art reviews to The Huffington Post, was the first to announce a "strike." It’s a small step, to be sure, but it raises the question, if others withdraw material from the site what did AOL actually pay for?

I don't expect that a great torrent of contributors will immediately abandon the HuffPo, but the trend is ineluctable. No one can sustain a work-for-free lifestyle. As the economy improves and people go back to work, crowdsourced sites will find themselves, well, without crowds of contributors.

Unfortunately, tech folks can't resist applying the same bad idea to every conceivable area of endeavor until it is thoroughly discredited. At the recent TED conference in Long Beach, CA -- the happening de jour for chic techies -- some panelists suggested that teachers (those outmoded educational tools) should turn classes over to crowdsourced videos and online information. Throw out the text books written by wizened professors, they proclaimed, the kids are alright. Just let them watch YouTube!

Of course, teachers have heard of the Internet and many use online videos -- but they vet the material first -- just as they have always suggested what books to read or how to do proper research. They must because most of the "content" online has proven itself over and over again to be, well, garbage. Funny, amusing, sometimes engaging, yes, but also biased, untrustworthy, and usually inaccurate. Not exactly the ideal basis for a formal education.

Ultimately, crowdsourcing underscores the fallacy of free information: It violates the basic principles upon which our entire economy and culture is based. People focus on individual areas of endeavor, excel and become experts in those areas, and ultimately get compensated for those efforts. This applies to everyone from Justin Bieber to your local farmer. We pay truck drivers to bring us food, we pay doctors to heal the sick, we pay comedians to entertain us.

We even still pay musicians for music (you do, right?).

These are basic principles that even technology can't change. Put another way, you can fool some of the people some of the time . . . but only until the next high-tech fashion comes along

The Redistribution of Wealth? It Already Happened

By: Matt Carmichael, Peter Francese

Politically, there's been a lot of talk about the "redistribution of wealth" which seems to be a fancy way of saying "getting the people with money to help pay for the people who don't." We'll leave the politicking to the Colberts, Becks and Maddows, but the demographics of income have profound implications for those of us who want to sell products to the diminishing group who have a pile of disposable income, or the vast majority of consumers who do not. It's probably not coincidental that the golden age of advertising took place in a time when there was a healthy middle class to sell product to. Those days are over. There's no point in arguing about redistributing wealth. It already happened.
Last spring (2010) the Census Bureau found that 42% of American households had an income between $50,000 and $150,000 a year. That's a pretty good proxy for middle class. Those 49 million households earned an average of about $85,000 a year. Above them on the income scale were the 8% of U.S. households that had an annual income of $150,000 a year or more. Their average income was about $243,000 a year. Below them on the income scale (income under $50,000/year) were the not-well-off half, 50% of U.S. households. Their average income was just $25,000 a year.

Over the past 10 years, the middle class, as defined above, shrank from 44% of all households to 42%, while the percentage of households earning under $50,000 a year rose from 48% to 50%. The numbers of the affluent have been less volatile. Despite a drop of 1.2 million households earning $100,000 or more between 2008 and 2009, the highest-earning households -- those earning $150,000 or more annually -- stayed at the same 8% level since 2000. All these comparisons are in inflation-adjusted constant dollars.

Had the American middle class maintained its 44% share of households, there would be an additional 2.6 million households (at an average of 2.5 people/household, that equates to 6.5 million people) in the middle class. Since the share of households earning more than $150,000 per year has remained the same, some middle-class households may have joined those households earning under $50,000 per year. In any case, we estimate that since 2000, the middle class has shrunk by 2.6 million households and it may have given up an average of $60,000 per household, totaling to an aggregate of $155 billion in consumer income.
During the past 10 years, average household income in constant dollars for all U.S. households dropped about $2,500 -- a 4% loss which indicated a $292 billion drop in total consumer income. So the middle class loss was only responsible for about half (53%) of the total loss of consumer income. The other 47% was lost almost entirely by those households earning less than $25,000. Middle-class incomes have dropped slightly since 1988 in inflation-adjusted dollars. The median household income in the U.S. has been fairly stagnant for the last half century.

The growth has all happened at the top, according to a CNN/Money.com analysis that showed the explosive income burst for the top 5% of earners since World War I. The top 1% has seen income grow 33%. The top 0.01% now earns nine times what the rest of the top 0.1% earn and 875 times what the bottom 90% of Americans earn, according to University of California-Berkeley research cited in Mother Jones. While it's bounced around a lot from year to year, the share of income taken in by the top 1% of earners has grown significantly as other demographics have steadily lost ground.


There is plenty more to say on the subject, but it all adds up to a radically different picture of the American household than Ogilvy, Burnett, Rubicam and others faced.

$50 BILLOIN IN ONLINE ADVERTISING - The L.A. Times

Online advertising to balloon to $50 billion, Morgan Stanley's Mary Meeker says

November 16, 2010 | 10:54 am

Mary Meeker, whose reputation came under fire in the fallout from the dot-com boom, is once again one of the top analysts influencing investors.
A managing director who leads Morgan Stanley's technology research, Meeker came up with 10 questions that Internet executives should ask themselves. She reeled off thoughts, statistics and predictions for the Internet industry during a presentation at the Web 2.0 Summit in San Francisco on Tuesday.

Among the most eye-popping: a $50-billion online advertising boom. Meeker pointed out that people spend 28% of their time on the Internet but that only 13% of advertising is there.
She also said that Facebook has "one of most under monetized classes of advertising on the web" and that "Twitter is in a similar situation."

Meeker returned again and again in her talk to the dramatic growth of the mobile Web. She predicted that in 2012, smart-phone shipments will overtake those of personal computers. A new wave of companies, such as Dave Morin's Path, are building on that prediction, focusing on mobile apps rather than on websites.

-- Jessica Guynn

Don't Track, Don't Tell...

Reprinted from AdAge:

Federal Trade Commission Proposes 'Do Not Track' for Internet Advertising

 by:  Edmund Lee

NEW YORK (AdAge.com) -- The stakes for online privacy just got a little higher.
The Federal Trade Commission revealed its proposal for a universal "do not track" mechanism on Wednesday that would allow people to choose whether they want internet companies to collect information on their browsing habits. On Thursday, a House subcommittee is holding a separate hearing on the matter. Online publishers and advertisers have come to rely on such data, and any significant alteration of current practices would have deep implications for the internet industry.
The FTC's report stated that despite numerous attempts at self-regulation, the industry has not done enough to protect consumers' privacy online, and that they need to work faster and improve their efforts.
"We're sending a clear message that self-regulation of privacy has not worked accurately," FTC Chairman Jon Leibowitz said in a call with reporters Wednesday. "The industry as a whole needs to do a far better job."
A coalition of advertising industry trade groups calling itself the Digital Advertising Alliance initiated a self-regulatory effort a few weeks ago that would allow consumers to choose to prohibit marketers from targeting them with advertising. The DAA, which is comprised of the 4As, the American Advertising Federation (AAF), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB), represent more than 5,000 corporations.
This initiative had been met with some praise from officials at the FTC when first launched, but it has not progressed quickly enough, according to Chairman Leibowitz.
"I think the people who are doing that are very well-intentioned," he said, "but it has been in pre-beta development for quite some time -- I think for more than two years. We'd like to see them move faster." Chairman Leibowitz did indicate, however, that the industry group appears to be taking proper steps and that its efforts could lead to a "more comprehensive" system.
Stuart P. Ingis, partner at Washington law firm Venable and counsel for the DAA, said that the online ad industry has delivered the kind of choice the Commission has asked for, and that the business community is in the best position to execute these plans. "We've built a very good framework," he said of their consumer opt-out program, which launched a few weeks ago. A significant component of the industry's program includes an icon that will appear on ads, which will lead consumers to an opt-out page. "In the next months, this will be ubiquitous," Mr. Ingis said.
Stopping collection, not just targeting
The Commission had expressed concern that the industry program does not allow people to keep online marketers from collecting data on their surfing habits, but only prevents marketers from serving, or targeting users with more relevant advertising. "We support the opt-out of collection not just targeting," Chairman Leibowitz clarified.
But according to Mr. Ingis, the industry program does stop marketers from collecting data once they choose to opt out, underscoring a larger question over what purposes the Commission defines beyond the scope of advertising. "We've had dialogue with them on this issue before, and we've met that goal," he said, "but if they want to extend the opt outs to include collecting data for purposes other than marketing, I don't know how that will work." He pointed out that third parties collect data for purposes other than advertising, such as email log-in authentication, as well as traffic data such as Google Analytics, which is widely employed across the web.
"That's why 'Do Not Track' is such a misnomer," he said.
The Commission's guidelines are preliminary, and it underscores the FTC's limited authority. A Do Not Track law could only be enacted by Congress, suggesting that this report is an appeal to whichever party -- industry or Congress -- will act more quickly. A subcommittee is holding a hearing called "Do-Not-Track Legislation: Is Now the Right Time?" on Thursday.
How it would work
A sticking point is how exactly a Do Not Track feature would work. The Commission's report spells out a specific example whereby a web browser, such as Firefox, would install a piece of software such as a cookie onto the user's browser that would signal to online marketers whether that consumer has chosen to make available his or her browsing habits in return for targeted advertising. But such a mechanism would only be specific to that browser and not to the specific person, as the Do Not Call legislation offers.
A browser-enabled Do Not Track feature would also have to differentiate between data collected for marketing purposes, or other reasons, whether for traffic data or log-in authentication, such as online banking.
But privacy advocates have largely approved of the Commission's report, and argue that a Do Not Track program is technically feasible. "The browser-based mechanism is simple and very generalize-able," said Peter Eckersley, senior staff technologist at the Electronic Frontier Foundation. "It could apply to mobile platforms without changing much. There is some flexibility on this proposal."
Chairman Leibowitz also said that despite the specific Do Not Track example outlined in the report, "it's not the only way, and that's why we're seeking comment. We're big believers in transparency and process, and if someone has a better idea, we want to hear it."

Thank You AdAge!

Today an article was posted in AdAge about new agency pricing models changing the game for the industry and for clients, alike. This is something we here at iAdvertizing.com have known since our inception. We're thankful that others are realizing the benefit of "transparency" also. Please read the article below from Today's AdAge.com
Best Always,
Dave J.

Nontraditional Firms Can Lead Way to Better Pricing Structures
We Have a Pendulum Swing When What We Need Is a Paradigm Shift
by Bill Boris-Schacter
Published: July 08, 2010

The value-based pricing debate is just the latest chapter in the history of client-agency haggling over compensation.

Everyone is frustrated. But arguably, different kinds of agencies have different reasons for frustration. Nontraditional agencies (like the one I work for), which never engaged in the pricing methodology that led to today's value-based pricing, are suffering alongside our traditional brethren paying the price for bad pricing.

I'm not here to complain about unfairness but rather to suggest that nontraditional agencies have a pricing approach that offers a better solution.

First, some history. Today's value-based pricing represents the full arc of the pendulum swing from decades ago when agency fees were simply a mark-up on media spend -- an elegant, yet incredibly self-serving approach, because agencies were motivated to spend more for their clients, whether or not it was the right strategy. The important point is that price had nothing to do with the cost to the agency to manage the campaign.

Sound familiar? That's basically the situation we're in with value-based pricing, only now it's the clients establishing the price with little regard for the cost to agencies. With value-based pricing, cost is explicitly excluded from the discussion. Clients openly don't care what the cost to the agency is; they decide, based on historical data, what they're willing to pay, with a potential for upside only if key success measures are met. The eventual upside may merely cover overhead, if that, and may never lead to profit for the agency. Is anyone surprised that less than 1% of agencies are willing to accept value-based pricing?

Once agencies were guilty of pricing with seemingly arbitrary connection to costs; now it's clients. Quite the pendulum swing.

I believe what is needed is a paradigm shift, not this pendulum swing. The paradigm shift can be modeled by those of us at nontraditional agencies (in my case, a brand-experience agency), which have never charged based on media. We have historically been more project-based than our advertising brethren. We make tangible creative products -- brand experiences you can feel and touch, live events, things that have real, hard costs and require extraordinary expertise and talent. We used to regard this as a weakness -- it meant we were "tactical" -- but in pricing, it's actually a strength.

Because we have had to present our pricing to our clients on a much more regular basis, we have had to explain and defend our pricing over and over again. We've perfected a simple approach to pricing our services that works with any client, be they marketers or procurement personnel. It can be summed up in one word: "transparency."

Transparency in pricing shows the buyer, in clear and straightforward terms, exactly what it costs us to deliver what we promised, and exactly where we are making money. We detail how our fees are calculated based on roles, hours and rates. We specify by line-item what we anticipate our third party costs to be (which for a live brand experience may be as much as 80% of the total price). We specify what costs are fixed and what costs may vary (and we limit those variable costs). We walk our clients through all of this and then discuss opportunities for potential savings or potential rewards through the attainment of mutually agreed-upon performance goals.

Ultimately, we set a foundation for an open conversation where cost and price are inextricably linked. Both sides are clear about where we make money and where we are spending money, and both sides are confident that we're doing so in a way that's responsible.

Transparency leads to understanding. Understanding leads to trust. Trust speeds agreement. And transparency has the added benefit of compliance with all the mandates required under the Sarbanes-Oxley Act.

Just as clients have looked to nontraditional agencies for new approaches to their marketing, they can look to us for new approaches to their pricing. And then, hopefully, we can all stop paying the price for bad pricing.

ABOUT THE AUTHOR
Bill Boris-Schacter is exec VP of operations and client finance at global brand experience agency Jack Morton Worldwide.

My Type of Politician

By nature I'm not a political being (I'm in advertising) but it occurred to me just the other day that our politicians could use a little creative thinking (like our designers provide us) when it comes to their jobs and the performance of their required duties. Hypothetically speaking, if I ran for office, I'd use a lot more common sense than I'm seeing exhibited by our current gang of elected officials. Now, before I tell you what I'd do to correct the situation let's begin with some basic assumptions:

1. That our elected officials are there to represent US as citizens. That's their job description, period.

2. That our elected officials are citizens of the United States, just like those they are chosen to represent (again, US common folk).

Now, as I told my wife the other day if I ran for elected office in Washington I'd go for one term and do two things. The first thing that I'd do is run on a platform of COMPLETE REPRESENTATION. Meaning that my political views would be, should be, and are otherwise irrelevant. What I think or believe would not matter in the least. My understanding of representative government is that I'm NOT being put in place to further my own personal or ideological agenda, and therefore, what I believe should NOT count. Instead of staffers manning phones and taking down messages that our current representatives never see and/or pay attention to, I'd set up a website that would contain the following:

a. Every bill on which I would be voting

b. The official language of that bill

c. Lay person language/interpretation of that bill (for those non-lawyers out there)

d. What that bill means to the people I represent (both upside and down)

e. A set of buttons: vote - [] yes [] no

With this straight forward (and very easy to implement) approach every voter's voice could and would be heard. We have the technology to do this now, unlike even a mere decade ago. Oh, and for those of you saying "what about those without computers?" Guess what, Internet Cafe's, Public Libraries,etc... all have computers with Internet access for the public. Access is not an issue. And as a representative I would then cast my official vote "yes" or "no" based off of the direct response from the people in my district. No middle man so to speak...just the unbridled will of the people being conveyed directly and unfiltered to their chosen representative. And yet another benefit...there's a record so I could be held accountable. Did the number of yes or no votes from the website log correspond with my voting record? Holy cow...you mean my constituents could hold me "ACCOUNTABLE?" Say it ain't so! (Oh and by the way, there would be another staffer or two to verify the addresses of the people responding so no "stuffing the ballot box" so to speak). Politicians who employed this would NEVER have to defend their decisions on voting. It would be a simple matter of votes, one way or the other...very binary!

Secondly...I would go to Washington to officially bring to the membership a motion for the 28th Amendment of the Constitution. This amendment would read something like this:

The Congressional and Executive Branches of the United States government shall pass no law, binding upon the citizenry of the United States, that shall not be equally binding to all members and staff of Congressional, Executive, and Judicial branches of the United States government.

It would pass folks...I'd love to see the politician face his or her district voters and try to explain WHY they did not vote for a Constitutional Amendment that made them equal to us. It simply would not happen.

Now I've mentioned these two items to several dozen people over the past few weeks...both Democrat and Republican alike, and not one of them said "that's a bad idea Dave...as a matter of fact most of them said, "Run Dave...I'd vote for you on those platforms." Now if someone as mentally challenged as I am can come up with a solid idea for both absolute representation and equality between government and citizens why aren't others? Have you heard one politician espouse either of these ideas...if so, please let me know. I want to support him or her.

Best Always,
Dave J.