Hasta La Creative!

Best Week Ever

Late last week, Chrysler filed Chapter 11 bankruptcy, and Omnicom’s BBDO Detroit was listed as the second-highest unsecured creditor, with some $58+ million in outstanding invoices. Most of the dollars are believed to be for spot TV buys placed when Chrysler opted to dump it’s national advertising to save money. The Chapter 11 filing gives the carmaker time to restructure under government protection from creditors. So, while Chrysler does NOT have to pay their creditors at the moment, they will still receive cash infusions from Uncle Sam. Now that is what I call the American Dream!
Like a spoiled child whose parents are too weak to say the word, “NO,” Chrysler now finds that they are in great shape: safe from creditors and still receiving their billion dollar allowance. Chrysler, of course, is not celebrating…or are they? The automobile company may not be dancing, but they are acting as if they’ve got America by the short hairs. Sadly, with backing from Obama, they do. Thus it’s no surprise that Chrysler is launching a national, prime-time TV, newspaper, and digital campaign set to hit the public on May 11th, 2009. The tagline for the campaign is, “We’re building a new car company. Come see what we’re building for you.” This move back to the national advertising arena must mean Chrysler does not need to worry about reducing expenses anymore. Whew!

What Do You Mean You Want The Money?

Well, no, that’s not the truth. The real story is that Chrysler does not intend to repay dollars borrowed from private interests prior 
to government intervention. The private “investors” are unlikely sources; the University of Kentucky, Kraft Foods’ retirement fund, the Bill and Melinda Gates Foundation, pension funds, and teachers’ credit unions. The Obama administration is not going to let that happen, and has even berated the companies that were willing to bet on a loser (Chrysler) as “a small group of speculators” who “endanger Chrysler’s future by refusing to sacrifice like everyone else.” This, despite fact that the terms of the agreement state that lenders would be repaid first should bankruptcy became a reality.

The Final Straw

In a last “screw” you from the government and Chrysler, it is now being reported that taxpayers will never see a single dollar of the billions lent to Chrysler. From Monday’s bankruptcy hearings:

“They’re offering financing with a low likelihood of being repaid,” said Robert Manzo, an executive director for Capstone Advisory Group LLC, according to the Associated Press. As part of its Chapter 11 reorganization, Manzo wrote Chrysler expects the U.S. Treasury to forgive a $4 billion bridge loan the automaker received during the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing the Obama administration approved last week to help the company stay afloat while it is in bankruptcy.

CNN did confirm that the Obama Whitehouse stated that it did not expect Chrysler to repay the money. It’s interesting, but Bernie Madhoff went to prison for less than this.

Jeff Louis: Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312..Jeff Louis: Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312.

I have a love/hate relationship with the aggregators that provide the news feeds to my lap top. I’ve been using two…one that is on my desk top that is on pretty much all the time. It works well, but some of the sites that I want feeds from don’t load correctly. So, I also have my feeds set up on iGoogle, and Google Reader. Actually, looking at it new light, it’s not the aggregators; it’s the state of the advertising industry that has my panties bunched up in a wad. Just to give you an idea of what we, as an industry face, I went back in time and pulled some of the juicier headlines from the last couple months:

TV Revs to Decline 21% in Two Years

Media Industry Job Cuts Soar 57%

The number of job cuts in corporate America between January and April was up 9 percent from the same time period last year. In the media industry, job cuts are up 57 percent over last year, according to a survey from consultancy Challenger, Gray & Christmas. Although analyst’s state that it’s not time to panic, what is it time for? Tea & Crumpets? (These statistics are from 5/2/2008)

Media Jobs Disappearing

The job market for U.S. media employment has dropped to it’s lowest point in 15 years. Much of this has to do with the dying throes of newspaper industry, as well as the automotive and housing industry “set-backs”, which were not what would be commonly known as beneficial. However, one bright spot is that the market consultant profession gained the bulk of new jobs last year, according to AdAge. Media positions are low compared to levels in 2000. It’s estimated that newspapers, nationwide, have cut 25% (1 of 4) positions since 1990, when newspapers made up half of the media jobs available in the U.S.

Analysts Expect More Major Media Company Cuts to Come

The U.S. Labor Department reported that some 530,000 jobs were lost in November of 2008 which, at the time, brought the unemployment rate to 6.7%. The media industry did it’s best ensuring the numbers were high, as Viacom and NBC combined to chop 1400 postions.

Viacom and NBC both cut jobs last week. Viacom dumped 850 workers, while NBC cut jobs at its NBC News and broadcast ops in an ongoing effort to hack a total of 500 jobs. And those cuts are just the tip of the iceberg, says Barclays Capital analyst Anthony DiClemente (via Mediaweek). “Further work-force reduction announcements should be expected from the other large-cap media companies,” he says.

WPP to Trim Thousands, Ogilvy Already Feeling the Knife

WPP announced that they would be cutting around 7,000 jobs worldwide. The media giant employs approximately 100,000 people. The U.S., Britain, France, Germany, Italy and Spain were cited by the company as markets under pressure, writes Reuters. The cuts have already begun. Adweek reports that WPP’s Ogilvy Group reduced 10% of its staff today. The cuts affected Ogilvy & Mather, OgilvyOne, Ogilvy Interactive and OgilvyAction. 

Omnicom Group is bracing for cut-backs, estimating that 3,500 of its 70,000 workers will get tossed.

Conclusions

The competition is fierce, to say the least. Right now, even receiving a phone interview is a victory. There is a lot of demand, and zero supply. The bright light at the end of the tunnel is that advertising and media professionals tend to be extremely flexible, strategically creative, and work well under pressure–all huge assets. Think progressively, and be bold; after all, what is the worst that could happen?

Jeff Louis: Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312

Introduction

Is it good business practice to reduce or eliminate marketing expenditures during a recession? The logical answer would be “yes,” as the revenue stream reduces to a trickle. History, however, has shown this practice to be counterproductive, even detrimental, to long-term success. Weathering the storm is certainly a priority, but the objective is to get back to port safely after the storm abates. History, with nothing but facts on her side, has never been proven incorrect. One thing is certain: Making decisions based upon awareness is good practice; basing them on fear is not.

A Tale Of Two Cereals

In the early twenties, both Kellogg and Post Cereals were not sure that they would overcome cream of wheat or oatmeal to the popular breakfast foods of the day: a hearty cooked breakfast, cream of wheat, or oatmeal. The two companies fought one another for market share dominance until the depression hit.

Each company took a different path. One braced for the economic storm, cutting marketing budgets, reining in expenses, and laying off workers. The other stepped into the storm, doubled advertising expenditures, aggressively took advantage of radio advertising, and focused all their strength behind a single product. By the early 1930s, the economy had fallen to it’s lowest point, yet one company showed a 30% rise in profits. Which cereal company came out ahead?

The answer: Kellogg Cereal, with their top-selling product, Rice Krispies. A bold decision made during crisis defined Kellogg Cereal’s future, and they’ve maintained industry dominance for the past seventy-five years.

But That’s Just One Case Study…

Okay, so that’s a single success story. A fluke. An anomaly. Fortunately, there are numerous examples: In February 1930, four months after the historic market crash, Henry Luce launched an expensive, “irreverent, and vibrantly-colored arsenal of human interest stories.” At $1.00 per copy, it was more than many could afford, and it kicked off with 30,000 subscribers. Seven years later, Fortune’s circulation was at a half million, and the company was in the black. Kraft Foods is another example. Kraft realized that consumers were downtrodden and needed something to help them through the depression, not to mention that Kraft’s mayonnaise sales were plummeting. So, Kraft decided to launch a new product called Miracle Whip (a dressing/mayonnaise) at the Chicago World’s Fair in 1933. “A sandwich just isn’t a sandwich with out the TANGY ZIP of Miracle Whip,” was the tagline for the new product, and six months after launch, Miracle Whip was outselling every single brand of dressing and mayonnaise available.

It’s Innovation, Stupid!

Innovation is the key. Kellogg Cereal focused on one product and doubled their marketing expenditures. Fortune filled a niche that was missing from The Wall Street Journal. Kraft introduced a new product. Other examples: Revlon,a start-up cosmetic company, introduced a classy polish for fingernails. Within years, they were the most well-known cosmetic company in the world. Two brothers began a company that marketed the first car radio successfully, and began a company later named Motorola. In England, a man came up with books that were affordable for the masses by making them entirely out of paper (no hardcovers). The man became the founder of became Penguin books, and “paperbacks” sold exclusively through Woolworths. Texas Instruments, Hewlett-Packard, basketball, The Pittsburgh Steelers, Allstate Insurance: all rooted in the depression. Studies completed during recessionary periods show that this was not a fluke; the same results are seen for companies that innovate and stay on course through the tough times: they emerge stronger and more profitable than those that remained static.

In a study of 600 business-to-business companies, McGraw-Hill Research found that businesses that maintained or increased their advertising expenditures during the 1981-1982 recession, averaged higher sales growth during the recession and in the three years following. By 1985, sales of aggressive recession advertisers (those that either maintained or increased spending) had risen 256% over those that cut-back on advertising. (Innovating Through Recession)

A few years ago, a small book came out; “Whatever You Think, Think The Opposite,” written by a former Saatchi and Saatchi Creative Director named Paul Arden. The book is a guide that points out that one of the most dangerous practices in life is playing it safe.

The first page is emblazoned with this quote: “It’s the wrong way to think, but the right way to win.”  That leaves two paths from which to choose: the safe, well-traveled path, or the road less taken. The latter may be treacherous, but it will certainly be more fun: afterall, how often does a company get a chance to reinvent themselves?

Jeff Louis: Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312.

I’m part of a great movement, a swelling tide of humanity that Like-it-or-Not has become un-engaged with that thing called work. Another unwashed, unkempt food line patron, or the bearded man begging for change. I’ve been labeled by the media: UN-EM-PLOYED.

I am not complaining, rather, explaining an “awakening” (whatev!).

Unemployment is humbling and life altering, one day a contributor, the next, not so much. In between panhandling, emailing resumes that no one sees, calling people that cannot help you, and begging those that will not, there is actually some time to think. What could I have done better, how should I have positioned myself, and why didn’t I take that job last year at that other agency? I have also started reading more.

Occasionally, a book will come along and floor me with it’s brilliance, shake me out of my stupor. Like icy water. Well, guess what? That book has not come out yet. However, I did read a fantastic article on how to brand yourself so that you can avoid getting laid off…a little too late for me. The article is short; the writer part of my LinkedIn “circle.” From brief “run-ins” with him via email or in seedy chatrooms, he seems to walk the walk. His name is Dan Scwabel, and you can follow him on LinkedIn, Twitter, VisualCV, and JobFox (I am actually proud of myself—I am part of all four, although only two have been finalized).

Here are Dan’s Top Ten Suggestions:

1. Become an invaluable asset to your colleagues, professional
network & clients
2. Position yourself as the go-to-person for a specific skill
3. Gain self-confidence and rise to the occasion
4. Focus on social equity, not just monetary equity
5. Build contact lists before you need them
6. Go on a branding spree by advertising it everywhere
7. Make your brand so visible that people can’t avoid seeing you
8. Become so remarkable that complete strangers talk about you
my favorite
9. Be a content producer, not just a consumer
10. Have an “endorsement mindset”

Last but not least, and possibly one of the most important things to keep in mind, is the power of positive endorsements. Collect endorsements throughout your life like you would collect baseball cards. You are the chief marketing officer for the brand called you, but what others say about your brand is more impactful than what you say about yourself.

I am better for reading it…additionally, now I know who I am going to pester all week…

Jeff Louis is a Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis, or twitter.com/jlo0312.

Like the Robinson’s robot from Lost In Space, someone has obviously been warning “The Suits” at MySpace “Danger! Danger! You are losing users!”  To MySpace’s credit, they listened, and have introduced new user features (Profile 2.0), revised their music section, and launched a “connect” feature. They also announced that they had ousted their CEO to bring in a former Facebook exec, Owen Van Natta. (No one is quite sure what happened to ever-friendly Tom…)  Additionally, MySpace is offering a beta version of MySpace Local which provides some of the functionality of Twitter, like; “Where can I get a great Tuna Sandwich in Kansas City?”

To be honest, other than the music search on MySpace, it’s been dead to me. And the music portion, until lately, wasn’t the simplest to use: if you sift through enough crap, you could find a among the shattered glass: One listen to A Fine Frenzy and you’ll know what I mean. However, the newly revamped music features on MySpace are far better than what they had, and leagues beyond anything Facebook has to offer.

Yet is it too little, too late? Should MySpace have made these changes mid-year 2008 when they knew Facebook was coming on hard? Facebook overtook MySpace as the largest Social Network in existence, and it’s not showing any sign of slowing down. (My mother, in her 60s, recently added a Facebook account to keep up with the “kids;” we are all over thirty.)  So, Facebook’s growth, in addition to the growth rate of Twitter (1300 percent from 2008 to 2009) leaves MySpace with difficult challenges to overcome. (See the graph, below, courtesy of Compete.)

Will MySpace Lose Their Space?

It’s doubtful in the near term, but it will depend on Van Natta’s leadership, innovation, and speed. MySpace will also need to rollout MySpace II carefully, not offending current users but also regaining previous members. The other huge benefit for MySpace: it’s owned by NewsCorp, the same company that owns Fox News, The Wall Street Journal, and The New York Post. With that kind of breaking-news potential backing the site, it’s possible that MySpace may emerge as a combination between Digg and Facebook, with an awesome music application, online dating services, and the Twitter-like MySpace Local application.

Another hurdle for MySpace is to overcome its “ghetto” feel when compared to Facebook. Facebook is branded thoroughly on every page of the site whereas MySpace has multiple skins that can be utilized; some from third party vendors that cause the pages not to load correctly or even hang your browser. Additionally, MySpace is not positioned like Facebook in regard to the “employment” factor. Facebook is setup to “brand” yourself to potential employers…which means that tend to keep it clean of profanity in the headings, as well as use actual names rather than online IDs. But, then again, maybe that is part of its charm. Facebook has experienced their share of problems; they’ve disenchanted some of their members with sweeping changes to their privacy policies (although later rescinded), and have changed the user interface, much to the chagrin of many. In fact, many demand that the “old” Facebook be brought back. Finally, Facebook CEO, Mark Zuckerberg, seems to be a wild card that holds the future of the site in his hands, as evidenced by the mysterious departure of Chief Financial Officer, Gideon Yu. Yu’s departure was the latest change of several in the upper ranks at Facebook, “whose employees and investors are anxious about Chief Executive Mark Zuckerberg’s plans for the social-networking site.”

MySpace’s biggest challenge is to implement their changes quickly; not only to maintain their 130 million current members, but to also reel in former users that broke rank. MySpace and Flixter were the only two Social Networking platforms to lose users from 2008 to 2009.

Jeff Louis is a Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312.

The Chicago Tribune reduced its news staff once again on Wednesday, due to restructuring and

…the economic downturn and changes in the media business that Editor Gerould Kern said “will focus us more clearly on our core mission” going forward.

Nationally, newspaper circulation has been in freefall since 1987, and the parachute never deployed. The industry has been victimized by lifestyle changes, emerging technologies (cable TV, satellite TV, and the Internet), and other news sources, such as online TV and radio sites, and social media outlets. In an attempt to evolve, newspapers produced less news, adding gimmicky special sections to help reel in more revenue. Yet, simple economics kept advertisers from biting: as circulation declined and advertising costs rose, newspapers became the least-efficient choice. Additionally, the twenty-plus year struggle to add pages was counterproductive, as one of the largest causes for the industry’s decline was bulkiness (some Sunday papers weighed up to seven pounds).

Not only counter-productive, newspapers have been notoriously difficult to work with; high rates and confusing rate structures, accompanied with an unwillingness to negotiate have led many advertiser’s to steer clear of running ads in their local paper. One option, never implemented, was to move newspapers in the opposite direction, cutting down non-news items, reducing the size of the paper, and selling papers to a business-based demographic. However, no one took the road less traveled.

In AdAge today, Jason Klein, president-CEO of the Newspaper National Network (NNN, a partnership of 25 major newspaper companies) published his view on the state of the industry. The major point: airlines have survived tough times, and so will newspapers. Mr. Klein also partially blamed the industry’s woes on President Nixon’s Newspaper Preservation Act, which allowed Joint Operating Agreements between competing papers in large markets. He also stated that there are too many newspapers in existence today, and consolidation = survival. His final point brought up paying for online subscriptions.

What he did not address is the fact that online newspapers are currently free (with a few exceptions), and there may not be enough readers willing to pay for subscriptions. Consumers have come to expect free online information, and once papers begin to charge, many users will simply change sources.

Newspaper companies have enjoyed a long and profitable run; they’ve also known for years that this day was coming. If consolidation is the answer, as Mr. Klein states, it should have happened ten-years ago. Online opportunities should already be in operation, and streamlined papers are over a decade late.

Although the NNN states that it’s “time for a comeback,” newspapers close or declare bankruptcy weekly. Several papers have moved online, while others have simply ceased operation. Award-winning journalists have been sacked, but the skeletons of their papers remain. Much like the skeletons of dinosaurs.

Jeff Louis is a Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: www.linkedin.com/in/jefflouis or on twitter @jlo0312.

No more free coffee, cut-backs on car service, showing up on time, working eight hour days. Instituting a client-centric focus. The economy has been especially tough on agencies and media companies–industries known for creative problem-solving and critical foresight–causing them to remove perks associated with working in the industry.

Condé Nast has stopped tuition reimbursement. MPG asked their employees to work the same amount of hours as their clients. Summer hours are a thing of the past at Arnold. The emphasis on work-life benefits has ended in the face of dismal economic forecasts, according to AdAge.

“Employers are asking employees to step up and be flexible in order to preserve their jobs and maintain the company’s ability to continue,” said Fred Crandall, senior consultant at Watson Wyatt in Chicago. “This type of belt-tightening is taking place across corporate America.”

MPG even believes that showing up to work earlier, “…could give MPG an edge over media-agency peers.” Hmm.

This undoubtedly leaves many to wonder: “Was I laid off so that (insert company name here) could maintain free coffee and half-day Fridays?”

Jeff Louis is a Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: www.linkedin.com/in/jefflouis or on twitter @jlo0312.

Not only known for making disturbingly bad movies and playing in, “That 70s Show,” Ashton Kutcher’s current goal in life is to gain one million followers on Twitter. Apparently, Ashton does not realize that social media is not something that we need ‘to achieve,’ but actually serves a purpose to us “littler folk.”

CNN has the highest number of followers as of 9am CST, at just over 900,000. Ashton has about 850,000 followers. It’s funny, but I thought that social media’s purpose was for people to ENGAGE with one another based on common interests, professions, passions, or just plain ol’ curiosity…not to COLLECT followers as if they were chattel. Mr. Kutcher seems to think that followers=(insert needed quality here) and will somehow get him somewhere. I personally have nothing against the man, and have even found humor is some of his Punks. BUT, this is merely a publicity stunt that simply mocks social media. Nothing more.

There among us that have something to offer. Then, there are those who just beg to be in the spotlight, limelight, and under the bright lights . Which type would you rather hang out with?

Jeff Louis is an experienced Senior Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: www.linkedin/in/jefflouis or www.twitter.com@jlo0312.

Google and Twitter, rumored to be meeting late last week, were huddling to discuss: a) new applications, b) mergers, c) acquisition, d) monetizing strategies, or, e) “We didn’t huddle, we didn’t even talk!”
The answer, much to our curiosity’s disappointment, was “none of the above,” and we were left, yearning, with no juicy story. Until that is, we looked a little deeper: There it was, a story, neatly nestled inside the rumor…our dusky jewel, ripe for choosing.

Whether Google buys Twitter, doesn’t buy Twitter, or marries them is not news…it’s a forgone conclusion. Some company, (probably Google), is going to purchase Twitter. But, it could also turn out to be MSN, Yahoo!, AOL, NewsCorp, or even Verizon.  The real content, the actual tale to be told is this: Whenever Google acts, we, the denizens of the Internet, pay attention. We sit up, sign in, and search for news. Once found, like kids with secrets, we repeat it. Discuss it. Argue about it.  Text it. Blog it. E-mail it. Tweet it. Opine it. Feed it. Post it. Which leads us to face it: Google is more respected than Bill Gates, Jack Welch, Bono, and Perez Hilton, combined. Google is the Internet’s darling, the sweet Lindsay Lohan before she was arrested. Twice. Google is young and beautiful, the little girl from Disney that won our hearts. Google is the online business’ shining star. In December 2007, FastCompany had this to say about Google:  

“… Its performance is the envy of executives and engineers around the world … For techno-evangelists, Google is a marvel of Web brilliance … For Wall Street, it may be the IPO that changes everything (again) … But Google is also a case study in savvy management — a company filled with cutting-edge ideas, rigorous accountability, and relentless attention to detail … Here’s a search for the growth secrets of one of the world’s most exciting young companies — a company from which every company can learn.”

Which is not to say that Google is perfect, or has not made mistakes; they just don’t make many. As a highly respected company, with the starlet flair, Google is in the spotlight, the subject of speculation, rumor, innuendo, and gossip. So, as in the case  of the Twitter reporting last week, online and traditional media sources, thirsty for being credited with announcing Google’s next venture, often print rumors before the facts are known. Although it’s shoddy journalism, many of the online sources probably don’t care about being wrong, as long as they’re first. Headlines and copy can be changed in seconds. The take-away is simple: Not only does Google play an important part in our lives, but we spend a lot of time and energy making Google important to society.

Google’s other major foray into Social Media, YouTube, is expected to lose $470 million dollars in 2009. But, it’s not all bad news: Revenues are expected to increase by 20% YOY (Google will only lose 80% of what they could have). Not asking for government handouts as of yet, YouTube’s major challenge is no different from that of  Twitter and other Social Media sites: Monetization. In the short-term, Google has signed a deal with Disney-ABC Television Group and ESPN to provide “professional” content, driving advertiser demand “through standardization of ad formats and improved ad effectiveness.”  Or, to restate it clearly, YouTube will provide better videos to reel in bigger advertisers. It remains to be seen if having Disney on YouTube will provide the revenue needed for YouTube, but the main question is how the users will react to the site “incorporation.”

Yesterday I began to blog about the auto industry, and how pissed off I was that these “Captains of Manufacturing” were upset that the White House was taking a tough stance on the industry. As GM’s head rolled, the other auto execs actually had the gall to be upset about it! Well boo-friggin-hoo. Chafed, I changed topics.

When I woke today, they were still there…painfully stuck in my throat like uncoated aspirin…slowly burning as they dissolved. A caustic memory lingered in my mouth.

These men are our best and brightest, leaders of America’s most famous (now infamous) industry! Sheperds of commerce. Corporate front-runners. Thus far, there’s been little action from them, other than begging.

So, when Ford’s promotional think-tank announced a plan to pay for your car in the event you’re canned, I thought; “Wow! You copied off of Hyundai. What a great plan!”

Their Pitch: The Ford Advantage Plan is different (ho hum). We’ll pay for a year’s worth of payments vs. Hyundai’s three months (yawn). We’ll offer zero percent financing (whoopee). And, we’ll pay your $700/month car payment (what Ford is worth that?). 

That’s when the smell hit me, reeking of mortgage industry…just in a different place, at a different time. A promise to the masses that the unaffordable can be affordable. For a while.