News & Blog

• 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.
  
  
  
  

  

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