TV ads are a good barometer

An interesting report came out in Mediaweek this week talking about Discovery Communications advertising sales up 5% and the article further notes Rainbow (that's WEtv, Sundance, AMC etc.) was up 18+% .  How good news is this and what does it tell.

First Discovery Channel is and has always been a premium niche  outlet.  They, like A&E, Food, HGTV decided on programming that was consistent in genre and therefore audience.  Discovery never put out a blockbuster series but had a nice mix of specials and regular programs that produced a well defined audience. Reading their media kit, their best performance is for middle to slightly older men, high household income, professional, educated and, if you look at the economy, these are the folks that have a chance to dance through the economic mess.

Media buyers used to refer to Discovery as the Mercedes and Volvo channel as that is exactly the audience/product fit.  Now cars haven't faired well in this recession so that's a bad example.  However if ad sales are up then higher end advertisers are coming back in the game and that is the point of this blog.

Watch advertising on TV and see who and where ads are being bought by and the networks they are being placed on. It is a very good indication about where there is sufficient corporate recovery that enables advertsing spending.

Just a queston or two about "percentage job cuts"

J&J announced today that they were cutting jobs about 7%.  I know buisness is business and all that but here is the issue:  7% seems like an arbitrary number - what we in advertising call a "funny number".

If you took J&J's 118,000 workforce and you went through it job by job to see who could go, who is going to go into retirement, etc., and came up with 8,260 employees that they can do without that is one thing. if they found that since revenues were down 5% and that 5% equaled 7%  of jobs that is quite another.

My conundrum is that management slip ups, bad calls, wrong decisions, etc., that lead to a drop in revenue is reveresed by firing someone at Christmas time or the Holidays or whatever. It still doesn't absolve the management errors that started things.

Nokia also noted a 5,700 job cut. This comes as a result of a 21% decline in sales.  So let me get this straight.  All kinds of people will loose their jobs because marketing screwed up?

That is the point of this writing.  The simple thing to do is to cut jobs and no matter how you sugar coat it, people will hit the street at the worst possible time.  That happens of course as business is business but how do you say "I screwed up in my forecasting so you are fired"?

Another day, a few bankruptcy filings and a few more bank failures

Ah yes its a wonderful life.  We quietly heard about another 9 or so closings Friday putting the year at about 100 or so with two full months to push the totals. In case you need to know the ariel view is of the bank in Lamont, Illinois that closed Friday.  If you go to the FDIC site and read about the latest goings on one thing that might strike you is the number of smaller banks that are going belly up. I mean real small and not so big that they can't fail...just little community banks.  I'm sure there is some bad practices here and there. Probably has to be some loans that perhaps shouldn't have been made and no depositors lost a penny.... but the toll on a small community is enormous as now their local bank is a bigger bank from another city or state perhaps and the "It's a Wonderful Life" doesn't have an angel it can loan out to some people with good intentions that ran afoul of the economy.

Adventures of a Youth in Michigan

Net history resourcing is an interesting thing.  My father was alive and remembers Oct. 29, 1929 when the wheels really fell off the cart but he remembered them getting dicey a year or so before the bad day.

He had a job at Ford Motor in Dearborn, MI sorting the five lugg nuts that were used in all Ford  cars.  There was only a 16th of an inch difference one to another and barrels of these things were dumpted on a centeral sorting table with a bunch of guys counting and sorting them in to little trays for the assembly line.  I guess no one ever thought to sort them to begin with so my father made that suggestion.  He cut holes into a long piece of wood that was mounted on something like a coin sorter contraption and he just fed the bolts down  and they dropped into the right bin below.  It worked like crazy. So Ford management came over, gave him a citation and promptly fired the other 9 guys working with him.  He had armed guards take him off the premises at the end of the shift for his protection. and the death threats made it impossible for him to go backi to work.  So he took a railroad job that his dad got him on the run from Detroit to Grand Rapids just in time for the October 29 Black Tuesday, where he no doubt read this paper                                                                                                                                                                                                                                                                                                                                                                                                                                                 

A can't loose bet in an email

A year or so agao I got an email from a "financial advisor".  This one was in English and not marked from Nigeria so I opened it and read it.  Fascinating proposition.  The author pitched me thus:

"I'm going to send you an email a month with a market prediction for the next month - up or down. I'm willing to bet you that I can get this right for 6 straight months and as proof of my ability I'll give you a half a year's worth of predictions.  If I am ever wrong you  get a course in financial planning for free. If I am right 6times in a row you agree to buy my course for $xx" .

I've seen other propositions like this and really had to think it through...I mean how could anyone pick 6 things in a row and then it came to me...its the law of large numbers at work. No one responds to these things anyway and I didn't but in my email each month like clockwork I got the prognostication sure enough I got 6 for 6.

Here is how he did it.   He started with a purchased email list of 50,000 (about a $300 investment).  The first letter out he sent to 25,000 with an "market up" forecast and 25,000 with a market down.  He got 25,000 wrong and didn't send to them again.  The next month he split the 25,000 into an "up 12,500 and down 12,500". The third month he split the 12500 again and so on.

I got this amazing tally of 6 straight months of him being right as did about 80 people. Probably enough were impressed to buy his offering. 

Numbers are interesting.

How can there be such a diversity of opinion on the economy?

I heard a joke on CNBC this morning about a guy jumping out of a window and as he is falling down 50 floors, he passes a window and a guy shouts out "hey...wow how's it going?" to which the fallee replies "good so far". 

Around this little joke is a one guy who says that the sky is falling and things are going to get bad once more and another who is convinced the dark clouds are behing and we are bouncing up all over.  I wonder how this can be...how two market/economy figures can look at the same data and concluded 180 degrees from each other.

This kind of thing drives laymen like me crazy.  Its like investment broker types when the market goes south for a week saying its a good time to buy and when it is surging north its also a good time...so there is never a bad time?  How about saying its a good time to sell once in a while...although buy v. sell recommendations are about 8:1.   It must have been a good time to sell when the market was 14000 and everyone on the street knew there was trouble on the horizon.

I can't figure it out.

Letters from Nigeria

NPR ran a short segment on those famous Email Letters from Nigeria commonly called Cash Upfront letters that spring up in our email boxes ever so often.  I've gotten more than my share and when I do I usually respond with a suggestion of where the author "can put it" but was advised this morning on NPR just simply to delete the emails.  Don't be smart and respond as your email addresss simply gets sold to others and then the real spam starts (I'm talking 100 spams a day.

Also, in case you are wondering why Nigeria doesn't do anything about this cottage industry.....well it brings millions of US dollars into the economy there so why interrupt a good thing.

Oh my.