In the past week I’ve read half a dozen articles on major financial websites urging yield-starved investors to switch from bonds to dividend payers. The pitch? That you can get a higher yield with less risk with dividend-paying stocks than you can with bonds, whose yields are depressed as flight-to-safety investors bid up their prices.
The numbers seem to support that view. The yield on a 3-month Treasury is 0.01 percent. The 10-year yields 1.87 percent, the 30-year a mere 2.85 percent. Savings accounts earn 1 percent at best. At the Vanguard Group, which keeps fees low with a religious fervor, the prime money market fund carries an SEC yield of 0.02 percent. That makes the dividend yield on the S&P 500, now 2.1 percent according to Fortune, look like a windfall.
That’s a great deal, unless you want to preserve your principle, or you’ve forgotten the collapse of both the tech and housing markets. The chance of losing money in a savings or money market account is slim. The chance of losing a significant chunk of your stock fund is much greater. Just look at the performance of the markets in 2011. Writing in USA Today John Waggoner says that the S&P 500 index has lost 1.4 percent this year. It gets worse for the average diversified U.S. stock mutual fund, down 5.9 percent to date, according to Lipper.
Not so for the dividend payers. In 2011 the 100 stocks in the S&P 500 with the highest dividend yields are up an average of 3.7 percent before their dividend payouts are calculated, according to Birinyi Associates (as quoted in the Wall Street Journal). There are two problems with using that analysis to power your portfolio. You can harvest those profits only if you constantly screen for those stocks, a job better left to the professionals. And the numbers disguise higher expenses for managed funds. The average mutual fund charges about 1.3 percent a year. Savings accounts charge nothing.
That so-called stock-market bonus—you can book capital gains as well as dividends—makes for a tantalizing but specious argument. Stocks and stock funds will lose money. Savings won’t. Neither will individual bonds held to maturity. If keeping pace with inflation is an issue, TIPS held to maturity should answer the call.
Comparing stable assets to variable ones does investors a disservice. Financial writers and advisors should compare similar assets and decide which ones offer the best yield in that class. Anything else, as Ecclesiastes wrote, is a striving after wind. Or the latest end-of-the-year investment guide.
BtoB firms plan to follow their BtoC cousins and spend more on social marketing over the next three years, according to a white paper by the American Association of Advertising Agencies.
The study quotes Forrester in predicting that by 2014, BtoB spending in social media will reach $54 million, up from the $11 million spent in 2010. BtoB magazine’s survey, “Emerging Trends in BtoB Social Marketing: Insights from the Field,” found that 93% of B2B marketers are involved to some degree in social media. And in BtoB’s “2011 Outlook” survey, 62.6% of marketers reported plans to increase their spending in social media channels this year.
“Although B2C and B2B companies use social media differently, many of its functions, such as monitoring competition, gaining customer feedback and building brand awareness really do apply to the marketing goals of both types of companies,” the 4As wrote.
“Of particular importance to BtoB marketers is determining if their social media efforts are paying off.” Marketers are tracking leads by looking at click-through rates and number of downloads, among other metrics–although fewer than half measure their efforts, according to a survey by BtoB magazine.
Beauty pays. That’s the conclusion of Daniel Hamermesh, economics professor at the University of Texas in Austin, who measured the economic benefits of looking good.
His conclusions:
Attractive people are likely to earn about 3% to 4% more than a person with below-average appearance.
Better-looking people tend to sell more products or attract more new customers.
White-collar criminals are more successful if they are better-looking.
For us mortals, is plastic surgery the answer? Hamermesh says research doesn’t support that conclusion. “Surgery pays back less than $1 for every $1 spent. But it might make you feel better.”
Today’s guest post is from Amanda Kaiser, one of the fresh young minds on the marketing scene. Amanda has worked with some of the heavyweights in the consumer sector and brings a lot of practical knowledge to the trade. Here’s a sample.
This summer I vacationed with my family in Cape May, N.J. If you’ve never been to Cape May think up-scale, cute, sea-side village with very interesting Victorian architecture. At the end of the day we’d take long walks that always led us past a small inn that was being renovated. Maybe renovated is not the correct term – semi demolished would be more accurate. The historic-inn-renovation company placed its beautiful sign out in front of the property like many construction companies do. But at that time the place couldn’t have looked worse – landscaping had been trampled, paint scraped, windows and doors were missing; it was gutted and looking very sad.
Unwittingly the renovation company was probably sending exactly the opposite message to prospective customers than they intended. Instead of saying “Please hire us, we do fantastic work” the overall feel was more like “Want to go through renovation hell? Call us!” Installing their sign just as things were starting to look really nice could have been far more productive.
Many marketing tactics run on auto-pilot so it’s worth regularly revisiting the things you always do and make sure they say what you need them to say, look how you need them to look, happen at the right time and appeal to your prospective customers.
Amanda Kaiser is the creator of The Smooth Path, a blog of simple marketing ideas for small business owners. She is the director of marketing for a non-profit association and has worked for some of the most well-known brands in the United States. When she’s not doing all-things-marketing she’s traveling, hiking, camping and baking with her husband and son.
You remember that scene in “Minority Report” when the character played by Tom Cruise is on the lam in a shopping center. The video display read his retinas and called him by name as it served individualized ads. Marketers knew who and where he was. So did the police.
Last year the Japanese rolled out sophisticated vending machines with touch screens and cameras that work in a similar but more generalized way. “When a person stands in front of the screen, a camera captures his image and a sensor determines the person’s gender and approximate age,” the Wall Street Journal reported. “Based on that reading, the machine ‘recommends’ drinks that fit the customer’s profile.”
It was only a matter of time before companies in North American began deploying the technology. This week the Los Angeles Times reported that the Venetian resort, hotel and casino in Las Vegas has started using facial-recognition technology on digital displays to tailor suggestions for restaurants, clubs and entertainment. While the screens can’t identify you by name they can determine your gender and age—the same as the vending machines in Japan. Kraft Foods Inc. and Adidas have signed on to experiment with the technology.
A group of bar owners in Chicago has taken the concept to the next level by combining facial recognition with cameras and mobile apps to give potential patrons a read on the ratio of men and women in those places.
“The technology works by digitally measuring the distance between the eyes, the width of the nose, the length of a jawline and other data points,” the Times reports. “Law enforcement agencies that use facial recognition — as was done during the recent London riots — compare the measurements against photos in databases. But for most marketing uses, the measurements are compared to standardized codes that represent features typical of males and females in various age brackets.”
Facebook has deployed similar technology. If you hover your cursor over a photo that you just uploaded Facebook will display the person’s name to you and your friends. (The Los Angeles Times provides an article on how to opt-out of the system.) And while it does not use recognition technology, Google has faced a dust-up in Germany over its deployment of street-level cameras to augment its mapping service.
While the move toward the Big-Brother-is-watching-you dystopia of George Orwell’s Nineteen Eighty-Four is gathering attention, it isn’t creating a lot of protest. Both the Electronic Privacy Information Center and the Electronic Frontier Foundation have severe reservations about whether such information can be used to identify and track individuals, as in this article by EFF on the FBI’s massive database of personal and biometric information called “Next Generation Identification,” or NGI. And Consumer Reports quotes a study by Carnegie Mellon University that suggests that facial-recognition software can reveal a person’s Social Security number. Yet judging by comments of consumers and lawmakers alike, both groups seem steeped in the naive belief that the technology is as benign as the people who use it.
All of this is done in the name of commerce and convenience but that begs the bigger question — when does this kind of surveillance become an invasion of privacy? Once the province of law enforcement, facial-recognition technology is sweeping into the consumer sector as marketers constantly look for the Holy Grail of advertising — serving messages customized for the individual. That requires the tracking of a consumer’s behavior and location, and the storage and comparison of that data.
Given the recent history of online security breaches and warrantless data searches after 9/11, does this type of marketing violate your privacy? Is the information safe? Are you safe?
More Americans own e-book readers than tablet computers, according to a new report from the Pew Internet and American Life Project.
Last year tablets like the iPad had a slight lead over e-readers such as Kindle and Nook. But by May of this year, 12% of U.S. adults said they own an e-reader while 8% own a tablet computer.
“The percent of U.S. adults with an e-book reader doubled from 6% to 12% between November 2010 and May 2011,” Pew reports. “Hispanic adults, adults younger than age 65, college graduates and those living in households with incomes of at least $75,000 are most likely to own e-book readers. Parents are also more likely than non-parents to own these devices.”
Owning one doesn’t mean you can’t own the other. The survey noted an overlap in ownership, with 3% of U.S. adults owning both devices. Nine percent own an e-book reader but not a tablet while 5% own a tablet computer but not an e-reader.
Online retailer Amazon.com said today that it’s selling more electronic books than printed versions. The company says it sells 105 e-books for every 100 physical copies it sells.
Next Tuesday rival Barnes & Noble will ratchet up the competition when it introduces a new generation Nook e-reader to compete with Amazon’s Kindle.
B&N chief executive William Lynch told the Wall Street Journal that despite a late start his company has captured 25% of the digital books market. It has also grabbed a good chunk of the market for electronic magazine subscriptions. “We’ve also sold more than 1.5 million magazine subscription orders and single copy sales on the Nook newsstand.”
The irony of Tuesday’s announcement (or maybe the marketing strategy) is that it happens during the week of BookExpo America (BEA), which bills itself as the largest publishing event in North America. It has traditionally promoted paper copies. This year BEA will co-host a session on electronic publications with the IDPF Digital Book Conference 2011, at the Javits Center in New York City.
Tom Wujec stands before the crowd at this year’s TED conference and talks about a tool that restores balance to the team-building process. As he says on his website, the Marshmallow Challenge is a “fun and instructive design exercise that encourages teams to experience simple but profound lessons in collaboration, innovation and creativity.”
But it’s more than that.
The task looks simple: in 18 minutes, teams must build the tallest free-standing structure out of 20 sticks of spaghetti, one yard of tape, one yard of string and one marshmallow. The marshmallow needs to be on top. And after 18 minutes, it needs to stay there.
The real lesson has as much to do with creativity as with collaboration, as Wujec shows when he reveals who does well and who doesn’t during the challenge. The worst performers are recent graduates of business schools. The best performers are architects and engineers — no upset there. The surprise is that after that group, the best performers are kindergarten students.
Wujec is a fellow at Autodesk, which makes software for the design and engineering community, so he should know about visual collaboration and teamwork. So when he says that B-school grads do poorly because “they are trained to find the single right plan,” it’s time to re-examine the model. Kindergarteners do well because they build prototypes. They experiment. They have fun without latching onto a single solution at the beginning.
No right or wrong, at least not at first. Just an openness to explore the possibilities. Then we turn it over to the engineers. After all, we want whatever we’re creating to work.
Marketers are boldly going where no advertisers have gone before — subtly into the minds of viewers.
With an explosion of media and devices designed to bypass commercials, marketers are integrating their products into the fabric of movies, TV shows and social media sites. That’s not news. It’s the escalation and arrogance that’s taken this contemporary version of the 1960′s subliminal advertising to new heights.
A few examples: In February “American Idol” became the top TV show ranked by product placements when it delivered 102 instances of product appearances over the month, according to Advertising Age. Rounding out the top five are “The Biggest Loser,” “Gossip Girl,” “The Academy Awards” and “Extreme Makeover: Home Edition.” “The Academy Awards” squeezed in 57 brand appearances. Top brands for all TV placements included Chevrolet, Coca-Cola, Microsoft, Cybex exercise equipment and Apple.
There are several variations of product placement. There’s generic product integration, where characters smoke whether the act is germane to the plot or not. There’s product placement, where the product is a prop, like the case of Canadian Club, where the whiskey received hands on and on-screen exposure in at least four scenes of a recent episode of “Mad Men,” from characters handling a bottle to shots of the product sitting on a counter.
Then there intrusive product integration, such as the time when “Monk” character Adrian Monk told a squad room full of police not to worry about tracking a suspect because “I have a Dell and it’s fully loaded.”
Sports programs are famous for integration, from scoreboards branded by Gatorade to NASCAR racers covered with logos to commercial placements in EA Sports video games. The trend is spreading to social media, where product placement has come to Farmville among other games and sites.
It seems film has always included products as secondary characters. BrandChannel counted placements by 64 unique brands in “Iron Man 2.” It’s a marketing strategy that works, sometimes in reverse: the engagement ring worn by Bella in “Twilight: Eclipse” has become a real product.
You can see a montage of films with prominent product placement on YouTube.
And the winner for the most ubiquitous brand? Apple Computer, which won BrandChannel’s “2010 Award for Overall Product Placement” in its annual Brandcameo Product Placement Awards. (Runners up included Nike, Chevrolet and — no surprise to “Idol” viewers — Ford.) Apple products appeared in more number-one films in 2010 than any other brand — 10 of the top 33 films by box office receipts. In the past decade Apple products have starred in one third of all number-one movies — 112 of the 334 top-grossing films in the United States.
More people say they get their news from the Internet than from newspapers, according to a survey by the Poynter Institute and other organizations. Some 41% of readers say they get most of their news online, besting newspapers as primary sources by more than 10%.
Ad dollars are following the eyes. “Last year marked the first time online advertising outpaced newspaper advertising,” Jolie O’Dell reports at Mashable.
The numbers come from the State of the News Media 2011, the eighth edition of an annual report on the health and status of American journalism. The survey results are drawn from a sampling of more than 2,000 adults in January 2010. The report was produced by the Project for Excellence in Journalism and funded by the Pew Research Center.
The study finds the state of newspapers, and journalism by proxy, is more problematic than other media. In an essay based on study results a trio of writers — Rick Edmonds of the Poynter Institute and Emily Guskin and Tom Rosenstiel of the Project for Excellence in Journalism — predict cultural and economic shifts will continue to batter the medium.
Last year, as other media rallied, advertising revenues at newspaper organizations fell by more than 6% — that after a recession-led drop of 26% in 2009. Print circulation declined by 5% daily. That means more job cuts in newsrooms, which the study estimates have shrunk by 30% in the last 10 years. Despite the declines profit margins remain around 5%.
Unfortunately for those organizations, the survey found newspapers still haven’t discovered how to generate revenue from digital initiatives. Ad revenue increasingly comes from independent networks, aggregators such as Google and social networks such as Facebook. Newspapers also have little control over content and access to reader metrics when companies like Apple deliver their product.
“The clock,” the report concludes, “continues to tick on finding strong supplementary revenue streams as print seems certain to stagnate or decline further.”
