Friday, August 28, 2009
Talk about dominoes falling...the TV Upfront
Obviously when companies who advertise face tough times the CFO runs to the president and demands cuts in the ad budget. He runs into one of two types of CEOs....the I need quick bottom lines and the orders go to cut the ad budget as Mr. Shortsight will be out of that position and on to another pretty soon. Or the CFO runs into the other type of CEO who calmly asks the finance guy where does he expect to get the next customer.
Advertising cutbacks are like blood in the water to the opportunistic. So what does this have to do about advertising upfronts? Plenty and there is a wealth of information about the company that can just be gained by a look at the advertising position.
THIS ISN'T INVESTMENT ADVICE. GOD STRIKE ME DEAD IF IT IS.
The upfront is a time of year where agencies register budgets with the networks on behalf of clients. Negotiations ensue and this is the part of the advertising buying and selling time called the "up front" because it is for inventory booked "in front of"the upcoming season that launches usually in the last weeks of the third quarter. Inventory that isn't bought or sold during the upfront becomes "scatter" inventory and is sold on a "scatter shot" basis and usually at a significantly higher rate. Key word here is "usually"
It is the disconnect of understanding of the timing of the fallout of the "upfront" that maybe someone misses here. The article indicates a 9+% decrease in upfront buying. Although NO ONE KNOWS the real number, the 9% generally reported is, like all advertising, probably a bit optimistic.
So let's play a "let's suppose" here. Suppose I have a business in women's hats. I need to keep the family and my local bank happy so I propose a spring sale of next year's collection. I put on a dog and pony show, plenty of food and drink. A nice desk thing giveaway and I schmooze my customers to death. In the end, I find that I've sold almost all my good inventory of hats and my total sales are (gasp!) 10% less than last years which were down as well from the year before that.
My banker tells it to me flat out: You are going to have 10% less to spend in every catagory...from new hats to salaries for your best people. Everyone will have to work 10% harder just to keep your overheads from eating you alive. You'll spend 10% less on your suppliers who will have that much less to spend.
Of particular note your hat shop lives on new creations. You can't "take the chance" on a brilliant but new designer so a good idea goes begging and he/she goes back to work at Starbucks and the trail of havoc is nearly endless.
All this because someone thought that advertising was an overhead that had no effect but more on that next time. Right now the Viacoms of the world will see a pinch (yet again) and you'll see a pinch with bad and cheap programs flooding primetime but if you look closely, development studios who product the pilots will be hurt as will the script writers, costumers, etc., right down to the Foley artists who slam the door you hear.
Advertising cutbacks are like blood in the water to the opportunistic. So what does this have to do about advertising upfronts? Plenty and there is a wealth of information about the company that can just be gained by a look at the advertising position.
THIS ISN'T INVESTMENT ADVICE. GOD STRIKE ME DEAD IF IT IS.
The upfront is a time of year where agencies register budgets with the networks on behalf of clients. Negotiations ensue and this is the part of the advertising buying and selling time called the "up front" because it is for inventory booked "in front of"the upcoming season that launches usually in the last weeks of the third quarter. Inventory that isn't bought or sold during the upfront becomes "scatter" inventory and is sold on a "scatter shot" basis and usually at a significantly higher rate. Key word here is "usually"
It is the disconnect of understanding of the timing of the fallout of the "upfront" that maybe someone misses here. The article indicates a 9+% decrease in upfront buying. Although NO ONE KNOWS the real number, the 9% generally reported is, like all advertising, probably a bit optimistic.
So let's play a "let's suppose" here. Suppose I have a business in women's hats. I need to keep the family and my local bank happy so I propose a spring sale of next year's collection. I put on a dog and pony show, plenty of food and drink. A nice desk thing giveaway and I schmooze my customers to death. In the end, I find that I've sold almost all my good inventory of hats and my total sales are (gasp!) 10% less than last years which were down as well from the year before that.
My banker tells it to me flat out: You are going to have 10% less to spend in every catagory...from new hats to salaries for your best people. Everyone will have to work 10% harder just to keep your overheads from eating you alive. You'll spend 10% less on your suppliers who will have that much less to spend.
Of particular note your hat shop lives on new creations. You can't "take the chance" on a brilliant but new designer so a good idea goes begging and he/she goes back to work at Starbucks and the trail of havoc is nearly endless.
All this because someone thought that advertising was an overhead that had no effect but more on that next time. Right now the Viacoms of the world will see a pinch (yet again) and you'll see a pinch with bad and cheap programs flooding primetime but if you look closely, development studios who product the pilots will be hurt as will the script writers, costumers, etc., right down to the Foley artists who slam the door you hear.
I am in no way endorsing this article on yahoo
In advertising there is a thing about truth in advertising - not that anyone really looks closely anymore (yes they do! it was a tongue in cheek comment honest!!)
There is a parallel in things related to the financial markets as there is a straight up area of hype potential and instead of some bad pasta sauce you'll never buy again in the financial markets you can loose your shirt if the other guy isn't telling the truth about the smallest thing.
When I read an article like the cite about in Yahoo, my first thought is, well it's Yahoo soooo.....not the Encyclopedia Britannica. But then I think about the mix that occurs in between advertising and "news" and financial matters.
I almost went to work for AIG years back writing research and POV papers for management. I didn't. For investment purposes I'm glad that fell through as I would have probably bet the farm on that rock solid company (then) and now would be looking down the abyss. Now I wonder what I would do if I read the article mentioned above.
I know enough now to know that if you are buying into AIG or the gov. mortagage companys you have to have rocks in your head and that some people are buying...well my opinion is that there are two kinds of buyers right now. One buyer is the "me type" who thinks this phoenix will gain rise from the ashes and the other buyer is probably the guy who thinks that if he keeps this stock alive some guy like me will come along and buy (from him).
Open House at Prism
A very nice evening to be sure. Part of you feels like the Pastor on Sunday morning hoping there won't be rain or snow to dampen attendance. An equal part is much like a parent throwing a party for the childen and hoping the clown or the pony shows up on time. Open house events are long on the "hope" word.
In the end it all went well. Food was great. People were very interesting to talk with and there were no frowns that I could see. I would go again but then again I was working the party so to speak. But I would still go again.
You should too.
In the end it all went well. Food was great. People were very interesting to talk with and there were no frowns that I could see. I would go again but then again I was working the party so to speak. But I would still go again.
You should too.
Thursday, August 27, 2009
Little things that make me crazy
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So, I'm in advertising. We usually denote "self advertising" or "astroturfing" with "special advertising supplement" which is jargon for an advertorial...something that is shaped like an editorial or "content" but is a trojan horse...just yap from the company.
Let's call it for what it is. If a company, a big established company, has to use this silly form of trickery, then what gives? Can you believe anything is real or is this just more crap...like the "fine print" commercial stuff you see on those banking ads...the ones with the kid trying to ride a bike in a little square or the cardboard cutout truck....
Why do people do that?
Hedge Funds for the Average Investor
Standard equity and fixed-income investments should make up the bulk of your nest egg, but if you're looking for added diversity, here are some alternative options.» View More Stories...
Sponsored by: Fidelity
So, I'm in advertising. We usually denote "self advertising" or "astroturfing" with "special advertising supplement" which is jargon for an advertorial...something that is shaped like an editorial or "content" but is a trojan horse...just yap from the company.
Let's call it for what it is. If a company, a big established company, has to use this silly form of trickery, then what gives? Can you believe anything is real or is this just more crap...like the "fine print" commercial stuff you see on those banking ads...the ones with the kid trying to ride a bike in a little square or the cardboard cutout truck....
Why do people do that?
Wednesday, August 26, 2009
Poker
We sponsored an event in Jupiter Florida last saturday. Thankfully it was only about 110 in shade and the thundershowers were moderately severe. What a break.
I play some card games very well as advertising and marketing are all deception and tomfollery but poker seems very different. It appears to have something to do with risk management; e.g. not betting too much, understanding what is going on around you, that type of thing. The traders tell me there is a lot alike in both groups.
What I found really intriguing is when you ask a real deal poker player if he is a gambler he will deny it (not the denial type either) and retort that he only bets as much as prudent to realistically maximize his upside (or words to that effect) and gets out immediately if things turn against him. Hmmmm. The traders say pretty much the same thing.
For the time being I'll stay with advertising where I can lie/cheat/steal.
I play some card games very well as advertising and marketing are all deception and tomfollery but poker seems very different. It appears to have something to do with risk management; e.g. not betting too much, understanding what is going on around you, that type of thing. The traders tell me there is a lot alike in both groups.
What I found really intriguing is when you ask a real deal poker player if he is a gambler he will deny it (not the denial type either) and retort that he only bets as much as prudent to realistically maximize his upside (or words to that effect) and gets out immediately if things turn against him. Hmmmm. The traders say pretty much the same thing.
For the time being I'll stay with advertising where I can lie/cheat/steal.
Shameful Sell Promotion - NOT
You understand that a decent :30 second television commercial runs $250k plus and that really doesn't include the deli lunch. Some friends of mine from the school put this little master piece together in an hour and with a budget of about $0.05. Maybe less. But let's do the math here.
As of today these folks spent a nickle and their "commercial" has 134 views or some such number. If we got silly, we would find that if they spent a dollar they would be up around 2600 views (totally absurd math but humor me)...so for production costs of say $200,000 (a dirt cheap 30 second commercial) we are talking 50 million plus views if all things stayed the same.
All this is claptrap you understand but the cost:reward ratios are so out of wack today someone might believe this.
As of today these folks spent a nickle and their "commercial" has 134 views or some such number. If we got silly, we would find that if they spent a dollar they would be up around 2600 views (totally absurd math but humor me)...so for production costs of say $200,000 (a dirt cheap 30 second commercial) we are talking 50 million plus views if all things stayed the same.
All this is claptrap you understand but the cost:reward ratios are so out of wack today someone might believe this.
Nice people to be around
There is a certain magic space created by 4 viewing screens. You should try it sometime. After 4, you feel like a piker with just your laptop.
I suppose that you can learn anything over time. I'm smart and I think I can do this. I'm not ruthless and I also think I can do this. The common belief is that if one person wins big in the trading room then one person will loose bigtime to compensate...the butterfly effect in the money pits...but not true. Are there bad guys out there? Hey, this is Boca Raton and memories of Bernie M. abound so yes there are some really ratty people. Not so here which makes it very pleasant to be around. Nice makes nice.
Gotta concentrate on that.
The OPUS ONE post
I come from a world of advertising and marketing where it takes forever to get things right and even then "right" is in the eye of the beholder. I'm surrounded daily by 40+ traders (the number grows all the time) and the culture and environment changes significantly in a very contrary way.
More people doing the same thing for me is chaos. More traders following risk management rules and their own varying degrees of discipline and concentration just bring order to an otherwise troubled universe.
There is something very satisfying about concentration.
More people doing the same thing for me is chaos. More traders following risk management rules and their own varying degrees of discipline and concentration just bring order to an otherwise troubled universe.
There is something very satisfying about concentration.
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