A study is about to give Madison Avenue a fresh pummeling: McKinsey & Co. is telling a host of major marketers that by 2010, traditional TV advertising will be one-third as effective as it was in 1990.
That shocking statistic, delivered to the company’s Fortune 100 clients in a report on media proliferation, assumes a 15% decrease in buying power driving by cost-per-thousand rate increases; a 23% decline in ads viewed due to switching off; a 9% loss of attention to ads due to increased multitasking and a 37% decrease in message impact due to saturation.
“You’ve also got pronounced changes in consumer behavior while they’re consuming media,” said Tom French, director at McKinsey. “And ad spending is decreasingly reflecting consumer behavior.”
Interesting Discussion of Traditional Magazine Advertising & Web Publications
Car and Driver, Road & Track, Automobile, Motor Trend and the rest of the magazines further down the car mag food chain are all supported by advertising. Unless a magazine is subsidized by a non-profit organization (e.g. Consumer Reports) or charges an exorbitant price per issue, it can’t survive without advertising. Few readers have problems with ads per se; they consider them literally wallpaper. But when the ads outweigh the content, questions begin to arise about who’s calling the editorial shots. Put a one or two-page ad for a new car in the middle of a glowing review of the same and those suspicions can easily turn to full-scale paranoia. Sneak in a multi-page “special advertising section” formatted to look and read like the rest of the magazine and credibility stretches to breaking point.
The Politics of High Fructose Corn Syrup and Does it Make You Fat?
I don’t know whether High Fructose Corn Syrup (HFCS) acts more like fat than does sugar (compare here and here) but it’s worthwhile pointing out that HFCS is a child of the sugar quota. The import quotas raise the US price of sugar well above the world price (~24 cents per pound compared to ~9 cents per pound) and encourage consumption of HFCS. Reflecting this fact, the main defenders of the sugar quota are no longer Florida sugar growers but rather mid-West corn growers.
The HFCS business is a cartel – prices are the same, change quarterly on the same day and enjoy, as Tabarrok points out, subsidies. Years ago, working in the water and juice industry, I sent a letter to the anti-trust division complaining about this. A lawyer deep in the bowels of the justice department phoned me and said that “as long as Bob Dole is active on this issue, nothing will change”. I assume someone has replaced Dole as a friend to the corn processors.
The Case for Geothermal
Geothermal heating and cooling is based on one simple fact: that 6 feet down in the ground the temperature is the same—between 50˚F and 60˚F- the whole year round. This means that it is relatively cool in the summer, and relatively warm in the winter. Geothermal heating is thus quite different from solar heating: solar heating works worst when you most need it–in the cold, cloudy, snowy conditions of winter; the source for geothermal heating and cooling is not affected by the weather.
For geothermal cooling, all one needs to do is to circulate water in a pipe through the ground to cool it, and use this cool water to cool the air pumped through the house in the heating ducts.
Latest Mainstream Media Statistics:
- TV: network TV had its lowest ratings week ever in July.
- Music: weekly album sales set a 10-year low in July. For the year, CD album sales are down 4.2%; although digital single downloads (still less than 10% of the business) are up 77% and are nearly making up the difference in revenue terms.
- Radio: the music radio listening audience is down 8.5% this year alone, continuing a multi-decade decline.
- DVDs: shipments are down 4% so far this year, more than 30 million units behind the same period last year.
- Newspapers: circulation, which peaked in 1987, is declining faster than ever and is down another 2.6% so far this year.
China Blocking Feedburner RSS Feeds
Essentially, the Chinese government is choosing to block some of the most popular RSS feeds in the world. That’s like they decided to block the largest airline from their airspace. It is as close as you will see a nation coming to blocking the entire RSS/podcast transport. This goes beyond blocking blog services like TypePad and is important to watch. This might be a sign of bigger trouble for RSS in China.
Dave correctly notes that we should control our feeds and avoid centralization.
Starwood Enters the Virtual Hotel Business
Steve Rubel jumped the gun on this news so I’ll feel free to blog it too: Starwood Hotels is building out a version of their new Aloft hotel brand in the virtual world of Second Life as a way to attract future customers and presumably get some feedback about the brand’s features before it hits the physical world. (It is not meant to be a functional hotel in SL, I’m told.) The SL project is being constructed by the Electric Sheep Company (sponsors of this blog), who are also blogging the process along with Aloft execs.
I like the idea of virtual hotel rooms being on view in SL. (How great would it be to be able to check out a bunch of rooms in your destination city before you booked a trip?) I’m more excited, though, about the fact that Aloft and the Sheep are blogging the process of building the project. This is something I wanted to do a while back at the Second Life Herald, but found it hard to find a builder who’d put up with being annoyed by my questions while building. The Sheep’s solution is great: get a talented builder who is also an articulate speaker and writer to do the job. Fortunately, they have SL resident Cory Edo (the real world’s Sara Van Gorden), who is both. The SecondCast crew interviewed Cory recently, which is how I know she’s articulate. Her builds speak for themselves.
Monroe Street: 15 Minutes Apart
All City Swim Photos
The Herd Changes Course and Runs Away From SUV’s
THE herd instinct is as powerful in humans as in other animal species.
Anyone who doubts it should rent “What Do You Say to a Naked Lady?”, the 1970 film by Allen Funt, the creator of “Candid Camera.” The money scene portrays a man responding to a help-wanted ad. He is directed to a waiting room occupied by men who appear to be other job seekers but are actually Mr. Funt’s confederates. At no apparent signal, these men stand and begin to disrobe. The hapless job seeker’s dismay is evident. Yet, after a few moments, he, too, stands and disrobes. At scene’s end, the men are standing naked, apparently waiting for whatever comes next.
Clearly, the herd instinct can lead us astray. For the most part, however, the impulse to emulate others serves us well. After all, without drawing on the wisdom and experience of others, it would be almost impossible to cope with the stream of complex decisions we confront.
Frank believes that the SUV craze started when Robert Altman’s “The Player” was released in 1992 (Great Movie). “The film’s lead character, the studio executive Griffin Mill (played by Tim Robbins), could have bought any vehicle he pleased. His choice? A Range Rover with a fax machine in the dashboard.”
Check out Tesla – an electric car startup.