Wednesday, November 14, 2018

Wall St. Journal Validates Our "Business Model as Innovation" Predictions

When we recently evaluated our predictions for 2018, we gave ourselves a C for our prediction that said, "Innovation often will come via business models" (part of our "Key Predictions for Trends in 2018, Part II). 

Our basis for that grade was:  
We expected, for example, that upscale restaurants with a delivery-only business model (relying on mobile-ordering apps) would be a bigger trend than it turned out to be. There was some coverage of that sort of innovation – not so much of technology but in the use of technology – but it wasn’t a top story. 
However, in a Nov. 2, 2018 Wall St. Journal column that was published after we posted our grade, Irving Wladawsky-Berger, a regular contributor who formerly worked at IBM and served as a strategic advisor for Citigroup, HBO and Mastercard, actually supported our prediction about the importance of business models. The column makes the case that "It’s All About Business Model Innovation, not New Technology. New technology, no matter how transformative, is not enough to propel a business into the future." (In the interest of disclosure, I worked with Irving back in the days when IBM was a client at a former agency.)

According to his article,
Surveys show that most executives agree, and in fact, many believe that business model innovation is even more important to their company’s success than product or service innovation. 
Another key quote further validates the point we made in our initial prediction:
New technology alone, no matter how transformative, is not enough to propel a business into the future. Nor, for that matter, can past success justify existing business models. The business model wrapped around the technology is the key to its success or failure, argues Mr. Johnson, senior partner at Innosight, the strategy consulting firm he cofounded with Harvard Business School professor Clayton Christensen. 
Irving also outlines four key attributes of a successful business model:
  1. Customer value proposition.
  2. Profit formula.
  3. Key resources.
  4. Key processes.
He also identifies how tech can enable business models such as through
  1. e-Commerce. (This was something that Irving pioneered at IBM.)
  2. Digital platforms.
  3. Models that turn data into assets.
  4. Automation-enabled services.
You should check out his article to learn more and get more details on the eight bullet points. It's worth reading.

And, for us, while we won't go back in an improve our grade for this prediction, it's nice to get validation. 

Monday, November 12, 2018

Track Record: How We Scored on Ongoing Trends

We identified 18 ongoing trends for 2018, and we think we did well with regard to most of them. 
  1. The news cycle will continue to speed up. People are experiencing news fatigue because so much is happening daily. (By contrast, there were only a few stories — like the rescue of the Thai soccer team — that had the staying power to dominate the news cycle over a period of days. Otherwise, most stories, even some that previously would have dominated for a week or two disappeared, often without having much impact in 2018. This will continue in 2019. Grade: A+.
  2. 2018 will be tough for traditional and online media. Unfortunately, true. Grade: A+.
  3. Fake news won’t fade in 2018. Unfortunately, true. Grade: A+.
  4. Cord cutting will continue but still won't save money: Netflix dominated news coverage and more media companies are offering streaming services but we did see an uptick in coverage that cord cutting is complicated and expensive. Grade. A.
  5. Virtual Reality and Augmented Reality still won’t be everywhere. Both VR and AR are making progress but neither is there yet. Grade: A.
  6. IoT will continue to be victim to cyberattacks. This did not get as much attention as we expected but that may be because IoT and Smart Homes have not been broadly adopted yet. Grade: C.
  7. The future is still looking cloudy. This may be the one tech trend that has yet to experience a backlash. Grade: A.
  8. Driverless cars attract significant coverage. Got lots of coverage in 2018. We think it’s going to take longer than most people think for driverless cars to get wide approval. We also said we think electric cars will generate more media coverage. Tesla certainly got tons of coverage in 2018, not all of it positive. Grade: B+.
  9. There's never enough cybersecurity/privacy. Unfortunately, true. Grade: A+.
  10. NFL ratings will continue to decline. We were right for the 2017-2018 season, because overall, ratings were soft. The 2018-2019 season seems to be rebounding (which we realize is a basketball term). Grade: B-.
  11. Corporate boycotts & consumer boycotts will continue. We saw some high profile boycotts from brands that pulled their advertising from controversial hosts. This will continue in 2019. Grade: B+.
  12. Drug pricing will continue to get a lot of attention. And we said, “But there won’t be an easy solution so don’t expect much except outrage.” Grade: A.
  13. Wearable tech will still not be as mainstream as people in the industry were hoping. True, which is why we did not see much media coverage about wearable in 2018. We still believe wearable is making progress but 2018 was not its year for media coverage. Grade: B.
  14. STEM will continue to be important. STEM is important but isn’t getting the media coverage it used to generate. Grade: C+.
  15. 3-D content, 3-D TV and 3-D printers will still not be as popular as they are cool. Correct (we still think). Grade: A.
  16. Artisanal will still be a hot concept. True as far as we can tell but that doesn’t translate into media coverage. Grade: C.
  17. e-Wallets still will gain traction in 2018 but mostly for Millennials as opposed to their parents. True as far as we can tell but that doesn’t translate into media coverage. Grade: C.
  18. Content management remains king.  True as far as we can tell but that doesn’t translate into media coverage. Grade: C.
Let us know if you agree or disagree with our grading or if we missed an ongoing trend in 2018.

Thursday, November 8, 2018

New Prediction: Age of Anxiety to Continue into 2019

We generally wait until all predictions are ready (we predict the list will be ready by early December) but we want to discuss a trend we identified for 2018 that we feel will be a key trend in 2019 and beyond.

Until about mid-2016, we didn't truly understand the apparent (because there's no proven source for it) ancient Chinese curse: May you live in interesting times.

Now, of course, we live in extremely interesting times. 

We've said it before: the news cycle is broken. Once, a major news stories would break and that would be the top story for the next few days, as the country would come to terms with whatever the event/incident was.

Today, major news breaks hourly. We learn about it by notifications on our phones. By what's trending on social media. And then that story is replaced by another story. With no time to process or assess the implications.

Yesterday, for instance, we had five major news stories:
  1. The follow-up from the midterms and sorting out winners, losers, races-to-close-to-be-called and lessons.
  2. Sessions resignation/firing as AG in an undated memo and the naming of an unconfirmed-by-the-Senate acting AG and the implications for the Mueller investigation.
  3. Trump's combative press conference, including the White House's withdrawing of CNN's Jim Acosta press pass and access, along with implications for free speech and the freedom of the press.
  4. The tragic shooting last night in Thousands Oakes that left 12 dead including the shooter and a sheriff's deputy, and trying to ascertain the shooter's motives.
Today, there's more news about the latest shooting and Ruth Bader Ginsburg's fall -- and that was before 11am.

The chaos of our current politics and the impact on our society of a constant stream of news is having an affect on Americans. 

We're seeing news fatigue because we're all overwhelmed by trying to stay on top of the news. (There was a front-page New York Times article,"The Man Who Knew Too Little, The most ignorant man in America knows that Donald Trump is president — but that’s about it. Living a liberal fantasy is complicated," about an Ohio man with a self-imposed news blackout since Trump won the 2016 election; and he seems happier than the rest of us. 

We think the age of anxiety will continue into 2019 and throughout Trump's administration because of his governing style. And that this is not a Democrat or Republican thing. 

The age of anxiety is bipartisan (and we think it will continue past his time in office, unfortunately).

Technology definitely abets our anxiety levels because many of us are now trained to click on the latest notifications. Some of which isn't really news, like the latest celebrity insult or feud, which is designed to make one side or another get upset. 

Social media plays a key role because -- while politics was once something people were told not to discuss (along with salary/wealth/money and religion) -- that's no longer true. People feel the need to express themselves (as we are doing now, so we're part of the problem, too) on social media or in blogs about their perspectives.

And there's great commonality, actually, across political believes, and that is this: we all believe the other side is stupid, short sighted, biased, closed minded, etc. Take your pick (and there's more, we realize). Social media fuels the spread of anger. We read something that we don't like, and then feel compelled to not give the other person the benefit of the doubt -- like their post was intemperate, poorly worded, doesn't really reflect their thinking -- and then post something in opposition; then the other person sees our response, and feels that it is stupid, hateful, condescending, out of touch -- pick your choice -- and posts a snide comment to our snarky post. And so it continues.

We've seen angry, bitter comments to tweets from @RealDonaldTrump and @PressSec as well as to @JakeTapper, @PeterBakerNYT and @Acosta and many others in between. Many are truly nasty and unpleasant, no matter which side you're on. What's worse: you can't always tell what's being posted by real people and what's coming from trolls. (And we're trying to not to provide false equivalencies here.)

The point is this: after the midterms, with a divided congress, the likelihood of continuous dysfunction and internecine battles across the aisles in the Senate and the House, threats of investigations into White House activities and counterthreats of a "warlike posture" against Democrats and retaliations -- we expect that the age of anxiety will continue well past 2019.

The news cycle will continue to hit many times a day; the stories will be supplanted by the next breaking news to grab our attention, and so on. And that social media will continue to fuel anger and incivility so that neither side can talk to the other. The fact that few are able to talk or listen to people with opposing views -- whether in real life or, especially, on social media -- is a real problem that adds to the distrust and fuels anxiety for this other reason: we can't even agree on the same set facts. Was a video that the press secretary posted doctored or not is a question that fuels what the tech industry used to call FUD: fear, uncertainty and doubt. And this is true whether you believe she did just as much as it does for those who believe she did not.

Knowing that we're living in interesting times -- aka, the age of anxiety -- is important for marketing and PR functions because we are dealing with a polarized society, where withdrawing advertising from controversial media may spark a counter boycott/protest. (We saw that happen in starting 2017 and continuing in 2018 and beyond, which was another prediction we made.) Consumers are looking for less stress, and we expect articles about unplugging and de-stressing; to the extent that your products or services can help reduce stress, that will be a positive (even if that's not necessarily newsworthy on its own). At the same time, we think consumers will look to purchase from corporations that share their values -- so it will be important to figure out what your values are and how to navigate an increasingly polarized consumer base. We do expect a growing chorus of people asking for more civility in public and online communications.

In the next several weeks, we will post other predictions, hopefully some of those will be more upbeat.

In the meantime, let us know what you think about this. (We just as that you be civil, whether you agree or disagree.)

The Intercept Validates Our Prediction about the Battle over the First Amendment on College Campuses

Each year, we issue a set of predictions for the following year, and at the end of that year, we evaluate the accuracy of our predictions. Our perspective is a very media-centric; since our goal is to advise our clients on how the media will be covering various topics, we judge how successful we've been by looking at the amount of media coverage on each topic.

For 2018, we had predicted that many companies would offer new services and products geared to millennials. We did not see a lot of media coverage of that trend but we continue to believe that millennials will help change how things are being sold and marketed. But without significant media coverage, we considered that prediction to be somewhat of a dud.

One of the other predictions we think turned out to be a dud was about battles about free speech on college campuses.

As background, in 2017, we predicted:

The first amendment becomes a battle-ground issue. Between campus culture wars(regarding who can speak on campus and who can disrupt those who try to speak on campus),varying definitions of hate speech and the more-open expression of bigotry, the fight to protect free speech will generate coverage in 2018. Part of the challenge is a polarize climate is finding the balance between allowing free expression and preventing bigoted express.
In February 2018, we felt this New York Times' article, "Republicans Stuff Education Bill With Conservative Social Agenda," confirmed that as a trend. The article included pullout text that described a "590-page higher education bill working its way through Congress" as "a wish list for those who say their First Amendment rights are being trampled."

But we didn't see significant coverage beyond that so when we graded all our predictions, we graded harshly. We gave ourselves an F.

But in a recent article in the Intercept -- published by Glenn Greenwald, Laura Poitras and Jeremy Scahill to cover "national security, politics, civil liberties, the environment, international affairs, technology, criminal justice, the media, and more" -- that looked at false media equivalencies in the wake of the white supremacist violence of the last 10 days, made the case that free speech on campus has generated significant media coverage this year.

As a false equivalency, the Intercept article points to a "pattern of both-siderism...and false equivalencies  after any of the 18 deaths caused by white supremacists violence in 2017." As an example of false equivalency, the article noted that:
Instead, rivers of ink have been spilled condemning the disruption of Republican dinner plans and neo-Nazi speeches; according to FAIR, the New York Times alone featured 21 columns and articles this year expressing concern for right-wing speech on campus. 

We already issued our grade so we're not going to go back in and boost the grade. But we feel like 21 columns and articles is a fair amount of coverage on the topic, and that we did a good job on that one after all.

Also, earlier this week, the Wall St. Journal reported that "Amazon in Late-Stage Talks With Cities Including Crystal City, Va., Dallas, New York City for HQ2." We had predicted that Boston would not be picked, and unfortunately, we were right about that, too. At least we won the 2018 World Series (in a prediction we did not make).

Two other articles validate predictions we scored low. Both "Making Talk TV for a Post-TV Generation: 'Busy Tonight' and 'Patriot Act with Hasan Minhaj' are two different takes on what the talk show can be in the age of Instagram and Netflix" in the New York Times and "Office Workers Have a Major Hang Up—Their Desk Phones" in the Wall St. Journal, report on the impact that millennials are having on products and services. We gave ourselves a low score because we didn't see a lot of coverage on this topic but it occurs to us, now, after we initially grade our predictions, that some of the millennials-bring-change stories have been more subtle in pointing out the reasons for how and why some products and services are changing.

Monday, November 5, 2018

Track Record for Our Bonus Set of Predictions

Here's what we're calling our Bonus Set of Predictions:

1.  The media landscape will change in 2018. We got some details wrong, very wrong. We expected the AT&T-Time Warner deal would not go through (it did, despite a DOJ lawsuit) and we expected the Sinclair Broadcasting purchase of Tribune Media to get approved (it did not). We got one deal right: Disney’s acquisition of Fox’s TV and movie studios (but not Fox News, Fox Sports and Fox TV channel). The media world changed in another way, thanks to Netflix, which receives a lot of coverage, attention and awards. We expect more consolidation in the media world, more attention to Netflix and other streaming services, and more layoffs and closings among local media. Grade: B-.

2.  Artificial Intelligence and robotics, now interconnected, will continue to be “hot.” We got this right. A.I. and robotics got a lot of attention in 2018, and we expect that to continue in 2019 and beyond, including scare stories about a “robocalypse” in which A.I.-enabled robots replace human workers as well as more-reasoned articles that debunk the scare stories. We’re not as worried because there we think it will open other types of jobs, and that implementing A.I. seems inevitable because the potential benefits could be so significant. Grade: A.

3.  Innovation often will come via business models. We expected, for example, that upscale restaurants with a delivery-only business model (relying on mobile-ordering apps) would be a bigger trend than it turned out to be. There was some coverage of that sort of innovation – not so much of technology but in the use of technology – but it wasn’t a top story. Grade: C.

4.  Bitcoin and blockchain is hitting it big time. This was our surest best of any of our 2018 predictions. We do expect more bumps in the road for bitcoin and blockchain, but overall, it will continue in 2019. Grade: A.

5.  Is the internet dying? There have been articles about the internet dying, including in the October issue of Wired. But it really wasn’t a “thing” in 2018. Grade: C-.

6.  The first amendment becomes a battle-ground issue. We got this wrong. Grade: F.

7.  Millennials’ impact will change how companies market products and services. Millennials are having an impact on products and services but there wasn’t as much coverage of it as we had expected. The layouts of newly built homes is changing, for example, but it’s not entirely clear that the reason is due to millennials (it could be because of boomers, too). Overall we overstated the amount of news coverage this would generate in 2018. Grade: C-.

8.  Smart-Home automation will gain acceptance but still a niche offering. We said the biggest aspect would be intelligent personal assistants like Amazon Alexa and Google Home. Overall, we were on target for this. Grade: B+.

9.  The ranks of unicorn startups will grow but expect a backlash because unicorns are difficult to sustain. We didn’t see the term “unicorn” as much as we expected but in October, there was a big splash that Uber’s bankers value the company at $120 billion. We did see more articles about unrest in Silicon Valley between employees at startups and regular people who live there — so that’s something of a backlash. We continue to see the challenge as stated by New York Times tech columnist Farhad Manjoo is right when he said, a continued threat for startups is that just “fewer than 1 percent … end up as $1 billion companies” and that the Frightful Five (Amazon, Apple, Google, Facebook and Microsoft) can out-pay key employees (an issue in the A.I. space), out maneuver or just invest in startups and co-opt them. Grade: C.

10. Religious nonprofits will be able to publicly make political endorsements, but doing so will change how they are perceived. We got this wrong for 2018. However, it may be a problem down the road, particularly with people who oppose the political endorsements made by a particular religious nonprofit.

Monday, October 29, 2018

Track Record of Our Predictions for 2018

Each year, before issuing a set for predictions for the upcoming year, we evaluate how we did with regard to the predictions we made for the current year. Without further ado, here are the results for our 2018 predictions.
  1. Expect to hear about “the retailpocalypse" as a key consumer sector tries to fight Amazonification. Retailpocalypse probably was included in more headlines in 2018 than Amaxonification but pretty much any news story about the retail sector mentioned Amazon. It was a tough year for the sector, with two to three thousand locations closing, and 125-year-old Sears declaring bankruptcy in Q3. Unfortunately, we expect the brick-and-mortar stores to continue to have a tough time of it even as Amazon opens more retail locations. While the bad news for retail has been covered, did not capture the attention of consumers as much as we had expected. We expect that Amazonification will capture more attention in 2019, and the downward cycle continues, and expect calls for “doing something” to protect failing retail. Grade: A.
  2. People will be more anxious and angry. We called this era the Age of Anxiety and Anger, and we got this right. In 2018, we saw lots of anger, much of it political, and lots of anxiety. There were many more references to people needing to take a break from their devices’ notifications. As of Oct., we expect more anger after the midterms — however things turn out — that will carry over into 2019 and people start focusing on the 2020 election cycle. We also expect that people will continue to be more anxious — whether due to politics or not — and that there will be more articles about how to de-stress. From a marketing perspective, look for some consumer brands to try to tap into the need to de-stress.  Grade: A.
  3. There will be a debate about whether or not and how to regulate Facebook, Google and Twitter. We got this totally right, particularly when we said, “Expect Congress to continue to hold hearings on the subject – just don’t expect any agreement on the answers before 2018’s midterm elections.” With concerns about disinformation campaigns and data breaches, and claims of censorship-by-algorithm, expect this debate to continue past the 2020 election cycle. Grade: A+.
  4. The labor shortage and the gig economy will spark think-pieces about the nature of work. The labor shortage and the gig economy did get some coverage but we didn’t see as many think-pieces as we expected. However, there were think-pieces about the potential impact on jobs that robots will have on the nature of work. We expect more coverage of the impact of robots on jobs in 2019, along with calls to better track and understand the gig economy’s impact on the economy at large. Because we expected more essays about the labor shortage than we saw, we will reflect that in our grade. Grade: B+.
  5. Conversations about gender, sexuality and sexual harassment have changed – at least in the media. This was definitely true in 2018. We continued to see a big divide, and lots of anger, and unfortunately, both will continue next year. Grade: A.
Look for our predictions for 2019 before Christmas.

Meanwhile, tell us what you think. 

Thursday, October 25, 2018

Bloomberg Validates Our Concerns That Store Closings Have on Real Estate

For the past year, we've been saying that the retail sector is in trouble, and that the potential impact of Amazonification and the retailpocalypse will be felt in other sectors. 

Our primary concern is that as big box retailers often support local newspaper through ads. So that as an expected 2,500 retail locations shut down through early 2019, there will also be a cut in ad buys in local newspapers. 

That downturn in ad revenue will likely hurt smaller local newspapers.

And that may lead to local newspapers either laying off staff, shifting from a daily to a weekly, or from a weekly to twice-a-month, or shutting down completely.

That could lead to an increase in what are being called new deserts -- communities that don't have access to local news. 

All of that has an impact on PR and marketing because there would be fewer outlets with which to reach key audiences.

But we've also been concerned that the number of store closings will also impact real estate, both at malls and in towns. At malls, we've felt the problem is that if an anchor location remains empty, the entire mail will be written off by consumers. And that precipitates more closings, which becomes a self-fulfilling prophecy that leads to a downward spiral.

In a Bloomberg News article yesterday that was syndicated into a number of papers, including the Boston Globe, "Struggling malls at crossroads as Sears makes exit," reporters Patrick Clark and Justina Vasquez made that same point:

"As Sears shutters stores, landlords will have to overcome the perception that the entire property is failing or risk losing other tenants, said Burt Flickinger, managing director of Strategic Resource Group, a retail-advisory firm."
“You’re going to see an epic hollowing out of the retail malls in America, especially the malls that are co-anchored by Sears” and another struggling large retailer, Flickinger said. “It’s creating an accelerating retail ice age and an economic Armageddon of unprecedented proportions in the US.” 
That's got us worried.

Retail is an important sector for the U.S., and not just to buy things. Retail can a communal activity whereas shopping online is not. And Bloomberg has reported on the negative impact on local towns in the U.K., when shops have closed on main street, and residents then have to drive thirty minutes or more to buy things they once could in their home town. Those towns suffer because there's literarily nothing holding people there.

So, a lot of doom and gloom -- and you don't have to be a big shopper to see that this can affect you. We don't necessarily have a solution. But we feel that raising the issue is important, that discussing this can help lead to awareness. If we ignore the retailopaclypse, it's not going to go away. 

Wednesday, October 17, 2018

6 Cues to Tell Fake News on Social Media from Real News

Hiawatha Bray, the long-time Tech Lab columnist at the Boston Globe, has an interesting article about fake news. Entitled, "Can computers tell if an Internet news story is mostly true or mostly false," Bray's article notes these common features of fake news on the Internet:
  1. Lots of capitalized words or exclamation points.
  2. Use of words denote extreme certainty such as “absolutely” and “always.”
  3. Sentences that tend to be shorter and simpler. (Which makes them easier to read and forward.)
  4. Fewer "love" or "laughter" icon clicks on Facebook. (Real news doesn't usually generate such emotion, apparently.)
  5. The media sites where these articles originated don’t have Wikipedia entries about them. 
  6. These sites, which may be similar to real news sites, have URLs that are long and filled with unusual characters. (Many reliable news sites are much cleaner.)
These are not all 100% accurate; after all the URL for the Globe's article's URL had a lot of unusual characters in it:

We can't wait or rely on algorithms to determine fake news, just as algorithms aren't 100% effective on spam. What we need is for people to take responsibility for what they share. This is important since new reports from the New York Times and others indicate that there will be more disinformation ahead of the midterms next month and ahead of the 2020 campaign. 

Disinformation campaigns at this level (perhaps any level) are anti-democratic, and we need all concerned citizens to take responsibility for what they share. So it's important to be aware of the six indicators for possible fake news.

Monday, October 15, 2018

More Doom & Gloom from the Retailpocalypse

We've been focused on the "Retailpocalypse" for about a year now because we feel so many sectors are affected, including real estate (when stores close and locations may or may not find new tenants), hiring (when tens or hundreds of employees lose their jobs), and local media (who had been relying on ads from those local retailers). 

We came to this topic by way of the impact on local media, which is directly relevant to our business.

Unfortunately, while there are new stores launching each year, and other retailers may be expanding, there seem to be more retailers shutting down locations or declaring bankruptcy. The latest is Sears, the 125-year-old retail pioneer, which on Monday filed for bankruptcy and said it will close 142 more stores. That's on top of the 46 locations it announced it was closing back in August.

The company, which also owns Kmart, will have 687 Sears and Kmart locations remaining. The company owed $134 million of debt that it could not pay.

At its height, Sears was the known as the "the everything store" and was the largest retailer in the U.S. In 2006, it had 355,000 employees; today, it has fewer than 140,000 employees.

One reason Sears is failing is because of Amazon. It's ironic that Sears, which started as a catalog business, has lost out to Amazon. Amazon is now "the everything store."

For more on Sears' legacy, check out this NPR story.

The retailpocalypse is not ending anytime soon, and will continue to have a significant trickle-down impact on a range of sectors in the U.S. economy. We don't know if there's a solution exactly, and certainly don't see how government could step in (other than to break up Amazon, which isn't necessarily a good idea). But the health of the retail sector is one that needs to attention paid to it. As we prepare our predictions for trends in 2019, the retailpocalypse will continue to be on our list.

Tuesday, September 4, 2018

Maher's "New Rule: Avatar America" Isn't Political As Much As It Points To How Most Of Us Hide Behind Avatars

We don't usually post anything political on this blog but we thought this "New Rule" by Bill Maher about avatars isn't really political and points out an essential truth about most of us on social media.

The segment about everyone is inauthentic because we hide behind avatars starts at 1:58 in the video but please note: Some of the language and part of the video is NSFW. But the essential point starts at 3:58:
Everyone's social media persona now is like a candidate running for office, holding babies, doing photo ops, making sure every statement is carefully sanded down so as not to upset anybody. Facebook should be called twoFacebook. 
His point: avatars are less interesting, less authentic than the real person. We thought it worth sharing because we've all done the photo op thing, the liking of something to show we're good people if what we actually do is limited to what we "like" or don't like (i.e., the anger emoji) on Facebook.

Not saying we should go out and seek to offend others. Trolling seems like a strange, ineffective waste of time (it never persuades people with opposing views). But we think it's worth looking at how some of us present ourselves over social media because most of us need to find a more effective way to be authentic on social media.

And that includes blog writers who hide behind the "editorial we" such as in this post.

Monday, August 20, 2018

Three Factors Affecting Retail That Should Concern Marketers -- Even Those Outside the Sector

(This article originally appeared in

Amid news coverage about the latest U.S. economic growth and unemployment figures -- both, coincidentally, at 4.1% -- there's a story that hasn't been mentioned. It's not the potential impact of tariffs and trade wars. It's not about whether the coal sector should (or can) be revived.

It's about retail, which contributes $2.6 trillion annually to U.S. GDP, according to the National Retail Federation, approximately 15% of the total economy. That includes retailing companies along with other companies that support the retail industry, such as logistics, including trucking and shipping; warehousing; construction and maintenance; agriculture; manufacturing; technology; and health care. 

Unfortunately, the retail sector has an opposite story to tell: Traditional retailers are not only not growing or hiring, many -- including Macy's, Sears, Gymboree, Lord & Taylor, Foot Locker, Gap, Starbucks, Subways, GNC and at least another dozen -- have announced plans to close more than 2,500 stores over the next year. Worse, Toys R Us (735 stores), Teavana (365) and Bon-Ton (256), among others, are shutting down completely.

I've never been a big shopper but the death of traditional retail -- what some are calling "the retailpocalypse" is bad news for marketers for the following reasons:
  1. Laid-off workers may cut back purchases, ignore marketing messages: There are employees at 3,868 stores who will lose their jobs and benefits and will need new jobs. Even if no other store closes -- and after I originally wrote this, Brookstone announced it would close 100 mall store -- retailers have been cutting jobs even while maintaining the same number of stores. According to the Wall St. Journal, Macy's has shed 52,000 jobs since 2008; and according to the National Retail Federation, the sector employed 29 million people in 2012, but that number was down to 15,836,200 as of May 2017 -- almost a 50% decline in just five years. With reports that businesses are having trouble finding good employees, there may be good news for laid off retail staff. But those open positions may not be nearby and almost certainly will require convincing recruiters that non-traditional employees (since former retail employees may not have the necessary experience or skill sets) should not get screened out. Making a career transition is difficult, and we know that some may be unwilling or unable to secure full-time work in another sector. The implications for marketers: when people are out of work, they may not be receptive to marketing, promotions, etc. 
  2. Store closings affects malls, local communities: By April 2018, announced store closings projected the loss of 77 million square feet of real U.S. real estate, on pace to surpass last year's record of 105 million square feet, the previously highest loss reported since 2008. These closings have affected prime locations like New York's SoHo neighborhood, malls and small towns. The problem for marketers: is the potential impact on communities and social patterns. According to a Time article, "The Death and Life of the Shopping Mall," from 2017, "The shopping mall has been where a hug swath of middle-class America went for far more than shopping. It was the home of first jobs and blind dates, the place for family photos and ear piercing, where goths and grandmothers could somehow walk through the same doors and find something they all liked." So when malls lose retail tenants, people stop hanging out. According to Bloomberg Businessweek, the shift to e-commerce "has devastated" Britain's main streets or central shopping districts. The result: marketers may lose another touchpoint with consumers such as branded in-store merchandising and displays.
  3. Loss of local retailers hits local media: Retailers, once an important source for local advertising, have cut back on advertising. Local newspapers have seen a decline in advertising that may be attributable to the drop in retailers' ads, and we continue to see local papers fire staffs and shrink the size of their papers. The problem for marketers: If newspapers -- both print and online -- shut down, marketers will lose important vehicles to reach consumers, whether with paid communications (such as circulars, coupons, and ads) or earned (such as mentions, articles, etc. via PR). 
(Burslem’s Queen Street, where a third of the shops are boarded up. Photographer: Lola Paprocka and Pani Paul for Bloomberg Businessweek)

Unfortunately, we're seeing a potential downward spiral. As more people get laid off from retail jobs, they may spend less so that more stores close. As more stores close, those businesses that support retail -- including, for example, toy makers who used to sell exclusively through Toys R Us -- may also close. Too many shuttered locations sends a negative message to other potential companies, disrupting the local economy as residents either order online or must drive further and further to buy the things they used to be able to find in town. And local media continues to fade away.

Traditional retailers need to know how to compete to offer what customers want, which includes selection, low cost, ease of returns. It takes more than Wal-Mart dropping "Stores" from its official name to show it's an e-commerce player. In the U.K., which has the highest rate of online purchasing according to Bloomberg Businessweek, there have been calls from people like the Chancellor of the Exchequer to "find a better way of taxing the digital economy."

It's important to note that Amazonification -- the dominance by Amazon, which is an often-cited reason for traditional retail's woes -- may not be inevitable. According to the Wall St. Journal's Christopher Mims "Even Amazon, a Colossus, Has Its Limits," part of where Amazon is most successful is in driving down prices of commodity items, not in developing premium devices like an iPhone (its success with Alexa notwithstanding). 

The bottom line: whether or not marketers operate in the retail sector, they need to be aware of the challenges facing retail. Marketers must look to make suggestions how their clients (whether they work in house or for an outside agency) can function during this period of disruption because some of the issues may also impact other sectors.

Monday, July 23, 2018

Five Challenges Affecting Local TV News

A couple of years ago, the demand for hyperlocal information as well as the recognition of marketers that were willing to pay to reach a hyperlocal audience  was seen to be a boon for local media. The trend indicated hyperlocal media would generated more eyeballs and receive more marketing dollars.

Unfortunately, while there's still strong demand for hyperlocal news, local print and broadcast news outlets are facing challenges. 

For local papers, one previously unanticipated problem was the dependence on advertising from local retailers. The retailpocalypse, which describes the sector's meltdown resulting in the shuttering of hundreds of stores (likes Sears, K-Mart) or the bankruptcies of entire chains (Toys R Us, Bon-Tons), has also resulted in a significant drop in local newspaper  advertising. So we've seen local newspapers shrink in size or close. 

It's gotten to the point that Dr. Michelle Ferrier at Scripps College of Communication at Ohio University has developed an interactive map called The Media Deserts Project to "identify areas that lack access to fresh, local news and information. We map layers of daily newspaper circulation, hyperlocal online news sites and other emerging media to identify underserved and underrepresented communities." The vast majority of the country, according to the research, has 0-2 daily newspapers -- and this incudes large cities. New Jersey (is) poised to invest $5 million into local journalism to shore up local reporting.

So local newspapers have to find new ways to get the money necessary to sustain their local journalism. That may mean experimenting with new business models.

Meanwhile, while local TV news may not have been as vulnerable to the loss of retail advertising. they face a different set of challenges. Unlike local news, one of the fundamental challenges to local TV news is the product itself.
  1. Local TV news programs compete not only with other local TV news but also with social media. Competition for local broadcast used to be between ABC, CBS, FOX and NBC. Now it's from Twitter and Facebook. So news departments are very well aware their competition has expanded significantly. It also means that local TV news is more inclined to broadcast clickbait stories that are quick and easy to tell, rather than more meaningful news that may have more impact on the community.

  2. They typically have more hours to fill but not more resources. A generation ago, the local news had two broadcasts at 6pm and 10pm or 11pm. These days, local news may air at 4pm, 5pm, and 6pm plus 10pm or 11pm. Unfortunately, news departments haven't gotten larger to help cover more news. So reporters have to repeat the news on different programs, producing a segment at 5pm and another segment offering a different take on the same story at 6pm. Or they have to find two stories, one to tell at 4pm and another at 6pm -- which means they don't have much time to develop either story.

  3. Reporters are pushed to post their stories on social media, too. Sometimes the people who are scooping the 6pm News are the reporters themselves who are incentivized to push content out via social media. (Station bosses look at the number of followers for each reporter, the amount of engagement, etc.) So you can see behind-the-scenes aspects of the day's story on their Twitter or Facebook feeds. (These posts often include links back to the station's website.) So while they're putting together a package to be broadcast, reporters also have to keep in mind how to tell the story effectively via social. 

  4. Broadcast reporters must be multimedia-friendly. They produce their package, then Tweet about it, then write up a text article for the website,  and then also produce a video that has photos and captions but perhaps no actual footage of the reporter. That last format is ideal for commuters who want to watch video but don't necessarily want audio to accompany it because it's noisy on the subway or commuter rail.

  5. The tail wagging the dog is views, likes and clicks, not policy stories. The slogan for local news used to be "If it bleeds, it leads" the broadcast. While that's still the case, story selection is often based on what will get the most viewership, not necessarily what news will affect the community. This result: the further clickbait-as-news that is shorter, cuter, fluffier -- which many reporters don't like but must follow. The more significant kind of news takes more time to research, develop and tell -- and reporters don't have much time; they've got overwhelming and competing demands placed on them. 
There are structural issues facing local print and TV news, and local outlets have to evolve with the times -- and this has been going on, in one form or another since the early 1980s, setting up 1987's "Broadcast News." But this post is in no way trying to blame reporters, producers or assignment staffs. Their jobs have gotten tougher -- no question. 
The intent is provide consumers of local TV news with a sense of what's driving the type of coverage being produced, and to keep that in mind when they watch, read or "like" a segment. It's also to help businesses think about how they approach local TV news if they want to get coverage. 

Let us know if you think we got this wrong or if you have insights into how local media can address the challenges they're facing.

Wednesday, June 6, 2018

More Problems for Retail

The retail sector is vital to the health of the U.S. economy, and we felt the myriad of problems plaguing the sector would generate more attention in 2018, and unfortunately, we've been see more of those problems in the media.

One of the key issues not getting attention in prior years, we felt, was the impact that store closing would have on the real estate sector. Back in April, Bloomberg Business validated our prediction with an article titled, "The Retail Real Estate Glut Is Getting Worse:  Stores have announced the closing of 77 million square feet of shopping space so far this year."

The article included a chart of the combined square footage lost from store closings going back to 2008, and the trend is bad. In just four months (when the article was published), 2018 has eclipsed full-year results for every year except 2017 and 2008. Keep in mind: 2008 saw a financial collapse of Lehman Brothers and other big finance -- so a significant year. 

And yet. the difference between a full year in 2008 and four months in 2018 us less than 11 million square feet. We're certainly on track to surpass 2008's total and could eclipse 2017, which is only 2.8 million higher than April's losses.

The idea that all stores are going to go away, due to Amazonification, is not likely to happen in the near term. After all, even Amazon, Warby Parker and others have been opening brick-and-mortar store locations. 

That said, the premise that the underlying value of real estate holdings may be more valuable than the retail chain itself may no longer be true -- or no longer true to the same extent, in an era of so-called zombie malls.

The reason: lease values, which are dropping to keep current clients or to entice new ones, are having a downward pressure on the valuation of retail's real estate portfolios. That serves as a disincentive for investors to put less pressure on retail stores to shut shutter more stores.

Another problem, according to the Wall St. Journal: "Retail’s Other Problem: Too Few Clerks in the StoreMacy’s, J.C. Penney and others have cut jobs even more than they have closed stores" Even while operating the same number of stores, Macy's has, according to the Journal, "shed 52,000 workers since 2008."

What that means is if you thought service at retail locations has dropped over the past 10 years, you're actually right! While some of that may reflect new ways consumers shop as well as new store concepts, which are typically smaller or operate with more layers of tech, lower headcount will make it difficult for customers to find a level of service they expect.

“If brick-and-mortar retailers can’t compete on price in an online environment, the only thing that allows them to survive is to provide a positive in-store experience,” said Stuart Appelbaum, president of a retail union.

And that may cause more people to abandon other bricks-and-mortar locations, furthering the downward spiral of one of the largest U.S. industries. 

We certainly hope that this doesn't come to pass.  Let us know what you think.