Online Advertising Continues to Bolster Newspapers
Preliminary estimates from the Newspaper Association of America show that advertising expenditures for newspaper Web sites increased by 21.1 percent to $773 million in the third quarter versus the same period a year ago. This is the fourteenth consecutive quarter of double digit growth for online newspaper advertising since 2004. The
continued year-over-year gains have demonstrated the importance of newspaper Web site advertising, which now accounts for 7.1 percent of total newspaper ad spending, compared to 5.4 percent in last year's third quarter.
Total advertising expenditures at newspaper companies were $10.9 billion for the third quarter of 2007, a 7.4 percent decrease from the same period a year earlier. Spending for print ads in newspapers totaled $10.1 billion, down nine percent versus the same period a year earlier.
In the third quarter:
• Classified advertising fell 17 percent to $3.4 billion
• Retail declined 4.9 percent to $5.1 billion
• National was down 2.5 percent, coming in at $1.7 billion
Within the classified print category in the third quarter:
• Real estate advertising fell 24.4 percent to $1 billion
• Recruitment dropped 19.7 percent to $882.4 million
• Automotive was down 17.7 percent to $796.6 million
• All other classifieds were up 2.7 percent to $713.3 million
NAA President and CEO, John F. Sturm, concludes that "Newspaper Web sites continue to generate substantial revenue by offering advertisers access to the nation's most desirable group of consumers... (while) broader economic issues are (negatively) impacting... real estate, recruitment and retail advertising..."
Advertising Spending Historical Trends
National Retail Classified Print Total
Year $Mill %Change $Mill %Change $Mill %Change $Mill %change
1950 $518 11.90% $1,175 6.30% $377 9.90% $2,070 8.30%
1960 $778 0.50% $2,100 4.30% $803 8.80% $3,681 4.40%
1971 $972 9.10% $3,565 8.30% $1,630 7.20% $6,167 8.10%
1980 $1,963 10.90% $8,609 9.70% $4,222 -0.60% $14,794 6.70%
1990 $4,122 4.40% $16,652 0.90% $11,506 -3.50% $32,280 -0.30%
2000 $7,653 13.70% $21,409 2.40% $19,608 5.10% $48,670 5.10%
2001 $7,004 -8.50% $20,679 -3.40% $16,622 -15.20% $44,305 -9.00%
2002 $7,210 2.90% $20,994 1.50% $15,898 -4.30% $44,102 -0.50%
2003 $7,797 8.10% $21,341 1.70% $15,801 -0.60% $44,939 1.90%
2004 $8,083 3.70% $22,012 3.10% $16,608 5.10% $46,703 3.90%
2005 $7,910 -2.15% $22,187 0.79% $17,312 4.24% $47,408 1.51%
2006 $7,505 -5.12% $22,121 -0.30% $16,986 -1.88% $46,611 -1.68%
Source: NAA, November 2007
Online and Print Advertising Totals
Online Total Print And Online Total
Year $Mill %change $Mill %Change
2003 $1,216 $46,156
2004 $1,541 26.70% $48,244 4.50%
2005 $2,027 31.48% $49,435 2.47%
2006 $2,664 31.46% $49,275 -0.32%
Source: NAA, November 2007
Read the growth report here, or view quarterly and annual ad spending numbers in their entirety here.
Friday, December 21, 2007
Sunday, November 25, 2007
PQMedia and Word of Mouth marketing
One of few data points showing the enormous potential of online social networking and word of mouth marketing.
3.5 Billion Conversations A Day
Spending on word-of-mouth (WoM) marketing jumped 35.9% in 2006 to $981.0 million and is expected to top $1 billion in 2007, according to findings of an in-depth analysis of the emerging word-of-mouth (WoM) marketing industry, presented in Las Vegas by PQ Media CEO Patrick Quinn.
Driving the growth, says the report, is the continued consumer shift to alternative media and the marketers' need for increased brand engagement and ROI.
Quinn said, "The new media industry axiom, 'only what gets measured gets bought,' has led to a discernible shift in media spending from traditional to alternative advertising and marketing strategies... WoM marketing... is capitalizing on this trend though its ability to provide ROI to brand marketers in a... cost-effective platform."
Spending on WoM marketing is forecast to grow 37.7% in 2007 to $1.35 billion, as brand marketers shift more dollars to WoM as part of cross-platform marketing campaigns, according to the PQ forecast. Total WoM marketing expenditures are projected to climb at a compound annual rate of 30.4% in the 2006-2011 period to $3.70 billion as brand marketers take advantage of dedicated WoM marketing strategies for improved return on investment (ROI).
According to Keller Fay Group, notes the report, there are a projected 3.5 billion brand-related conversations per day in the U.S., with nearly 80% of consumers trusting recommendations from family, friends and "influential" persons over all other forms of advertising and marketing.
Among the key trends driving growth, the Internet has enhanced the ability of consumers to exchange ideas about brands through social networks like Facebook and MySpace and consumer-generated media like blogs. Though Keller Fay Group research, says the release, indicates that 90% of WoM marketing takes place offline, brand marketers have become actively involved in online WoM marketing via new media, metrics and WoM specialists.
"Major brand marketers are moving from just testing word-of-mouth marketing to including it as a growing component of fully-integrated marketing campaigns," Quinn added.
The report says that no breakout is currently available on spending by product categories, but data from various sources suggests that food and beverage, media and entertainment, and sports and recreation are among the heaviest users of WoM strategies.
For more information and the complete press report, please visit PQMedia here.
3.5 Billion Conversations A Day
Spending on word-of-mouth (WoM) marketing jumped 35.9% in 2006 to $981.0 million and is expected to top $1 billion in 2007, according to findings of an in-depth analysis of the emerging word-of-mouth (WoM) marketing industry, presented in Las Vegas by PQ Media CEO Patrick Quinn.
Driving the growth, says the report, is the continued consumer shift to alternative media and the marketers' need for increased brand engagement and ROI.
Quinn said, "The new media industry axiom, 'only what gets measured gets bought,' has led to a discernible shift in media spending from traditional to alternative advertising and marketing strategies... WoM marketing... is capitalizing on this trend though its ability to provide ROI to brand marketers in a... cost-effective platform."
Spending on WoM marketing is forecast to grow 37.7% in 2007 to $1.35 billion, as brand marketers shift more dollars to WoM as part of cross-platform marketing campaigns, according to the PQ forecast. Total WoM marketing expenditures are projected to climb at a compound annual rate of 30.4% in the 2006-2011 period to $3.70 billion as brand marketers take advantage of dedicated WoM marketing strategies for improved return on investment (ROI).
According to Keller Fay Group, notes the report, there are a projected 3.5 billion brand-related conversations per day in the U.S., with nearly 80% of consumers trusting recommendations from family, friends and "influential" persons over all other forms of advertising and marketing.
Among the key trends driving growth, the Internet has enhanced the ability of consumers to exchange ideas about brands through social networks like Facebook and MySpace and consumer-generated media like blogs. Though Keller Fay Group research, says the release, indicates that 90% of WoM marketing takes place offline, brand marketers have become actively involved in online WoM marketing via new media, metrics and WoM specialists.
"Major brand marketers are moving from just testing word-of-mouth marketing to including it as a growing component of fully-integrated marketing campaigns," Quinn added.
The report says that no breakout is currently available on spending by product categories, but data from various sources suggests that food and beverage, media and entertainment, and sports and recreation are among the heaviest users of WoM strategies.
For more information and the complete press report, please visit PQMedia here.
Friday, October 26, 2007
Forrester Report on Interactive Marketing
Just amazing to see the growth here:
All Channels Lead To The Consumer
According to a new Forrester Research report released at the Forrester Consumer Forum 2007 in Chicago, interactive marketing spending in the US will more than triple over the next five years, reaching $61 billion by 2012. The growth in interactive marketing spending represents a 27 percent compound annual growth rate over the next five years, and interactive marketing, 8 percent of all ad spending, will grow to 18 percent of total ad budgets in five years.
Forrester Research Principal Analyst Shar VanBoskirk, said "As firms continue to make customer centricity a higher priority, they will recognize that maintaining separate marketing teams to manage different sets of channels that all target the same customers makes no sense," ... (as) interactive technologies gradually infiltrate... such traditional paragons as television, billboards, and direct mail... the concept of a separate interactive marketing organization will disappear."
Based in part on a survey of 344 interactive marketing professionals and their budget decisions affecting display ads, search, email marketing, online video, and emerging media (social, mobile, and advergaming). Forrester's breakdown of spending includes the following:
Search marketing will triple in five years. Mainstream marketers' aggressive use of search marketing will grow the category at a CAGR of 26 percent to $25 billion by 2012 due to the increasing costs of paid search, additional spending on optimization tools and services, and international expansion
Display advertising will reach $14 billion by 2012. Display ads will be a key factor in the interactive marketing budget by having an essential supporting role for all interactive campaigns
Services and integration will drive email marketing growth. Spending will focus on improving email relevancy with analytics and data management, and will grow to more than $4 billion by 2012
Online video ads will significantly increase. Growing consumer adoption of online video will result in a dramatic 72 percent increase in online video ad spending to $7.1 billion by 2012. More customer-centric online video applications will increase the medium's appeal for consumers and marketers
Social media will drive emerging channels to $10 billion by 2012. Mainstream adoption will boost spending in emerging channels such as social media, mobile, game marketing, widgets, podcasts, and RSS. Spending on social media alone will grow to $6.9 billion.
Mobile marketing will grow to $2.8 billion. As consumers become increasingly tied to personal computing handsets, they'll want to extend their mobile utility to accommodate transactions. This transition will drive mobile marketing to grow to $2.8 billion by 2012.
VanBoskirk adds "These changes will... give interactive marketing professionals a more legitimate seat at the marketing table... with interactive marketing gaining executive visibility.. for its popularity with young consumers (as well as) measurability and cost effectiveness... "
For the complete release, visit here, or the US Interactive Marketing Forecast, 2007 To 2012 is available from Forrester here.
All Channels Lead To The Consumer
According to a new Forrester Research report released at the Forrester Consumer Forum 2007 in Chicago, interactive marketing spending in the US will more than triple over the next five years, reaching $61 billion by 2012. The growth in interactive marketing spending represents a 27 percent compound annual growth rate over the next five years, and interactive marketing, 8 percent of all ad spending, will grow to 18 percent of total ad budgets in five years.
Forrester Research Principal Analyst Shar VanBoskirk, said "As firms continue to make customer centricity a higher priority, they will recognize that maintaining separate marketing teams to manage different sets of channels that all target the same customers makes no sense," ... (as) interactive technologies gradually infiltrate... such traditional paragons as television, billboards, and direct mail... the concept of a separate interactive marketing organization will disappear."
Based in part on a survey of 344 interactive marketing professionals and their budget decisions affecting display ads, search, email marketing, online video, and emerging media (social, mobile, and advergaming). Forrester's breakdown of spending includes the following:
Search marketing will triple in five years. Mainstream marketers' aggressive use of search marketing will grow the category at a CAGR of 26 percent to $25 billion by 2012 due to the increasing costs of paid search, additional spending on optimization tools and services, and international expansion
Display advertising will reach $14 billion by 2012. Display ads will be a key factor in the interactive marketing budget by having an essential supporting role for all interactive campaigns
Services and integration will drive email marketing growth. Spending will focus on improving email relevancy with analytics and data management, and will grow to more than $4 billion by 2012
Online video ads will significantly increase. Growing consumer adoption of online video will result in a dramatic 72 percent increase in online video ad spending to $7.1 billion by 2012. More customer-centric online video applications will increase the medium's appeal for consumers and marketers
Social media will drive emerging channels to $10 billion by 2012. Mainstream adoption will boost spending in emerging channels such as social media, mobile, game marketing, widgets, podcasts, and RSS. Spending on social media alone will grow to $6.9 billion.
Mobile marketing will grow to $2.8 billion. As consumers become increasingly tied to personal computing handsets, they'll want to extend their mobile utility to accommodate transactions. This transition will drive mobile marketing to grow to $2.8 billion by 2012.
VanBoskirk adds "These changes will... give interactive marketing professionals a more legitimate seat at the marketing table... with interactive marketing gaining executive visibility.. for its popularity with young consumers (as well as) measurability and cost effectiveness... "
For the complete release, visit here, or the US Interactive Marketing Forecast, 2007 To 2012 is available from Forrester here.
Fortune Article on Google Stock Price
Geoff Colvin of Fortune actually did the analysis I was hoping would get done on the Google stock price. EVA analysis does a nice job of breaking down the assumptions that must play out to support a stock price. Then you can determine if the assumptions make sense. At $500, Colvin says it doesn't. This is the same analysis that said CSCO was overpriced at $85 as well as a host of other companies...it was right.
Great for conversation as the google price sits at $675 as of 10/26/07 and price targets are as high as $800.
We'll see what happens over the next 2-3 years.
Don't go gaga over Google
The business is a dynamo. The stock is a pipe dream, says Fortune's Geoff Colvin.
FORTUNE Magazine
By Geoff Colvin, Fortune senior editor-at-large
July 24 2007: 3:59 AM EDT
Great for conversation as the google price sits at $675 as of 10/26/07 and price targets are as high as $800.
We'll see what happens over the next 2-3 years.
Don't go gaga over Google
The business is a dynamo. The stock is a pipe dream, says Fortune's Geoff Colvin.
FORTUNE Magazine
By Geoff Colvin, Fortune senior editor-at-large
July 24 2007: 3:59 AM EDT
Interview with P&G CMO
Great insights about how the largest advertiser in the world is looking at marketing now and into the next few years.
Makes some strong statements about mobile and its potential.
Selling P&G
How do you sell $76 billion of consumer goods? One brand at a time. Fortune's Geoff Colvin talks with Jim Stengel.
FORTUNE Magazine
By Geoff Colvin, Fortune senior editor-at-large
September 18 2007: 9:58 AM EDT
See the interview
Makes some strong statements about mobile and its potential.
Selling P&G
How do you sell $76 billion of consumer goods? One brand at a time. Fortune's Geoff Colvin talks with Jim Stengel.
FORTUNE Magazine
By Geoff Colvin, Fortune senior editor-at-large
September 18 2007: 9:58 AM EDT
See the interview
Friday, October 19, 2007
Wednesday, October 10, 2007
Second Life and Business: IBM making a bet
IBM is making a smart move by figuring out how to use second life and other virtual worlds for business purposes. Would be a killer app for collaboration, etc. Making it an open platform would be amazing if combined with a Skype and some resource/project management/document storage tool such as basecamp.
Reuters Article - Oct. 24, 2006
TechCrunch Posting - Oct. 10, 2007
Second Life and Business - SecondLife.com
Reuters Article - Oct. 24, 2006
TechCrunch Posting - Oct. 10, 2007
Second Life and Business - SecondLife.com
Friday, August 24, 2007
Tap.tv is great local play
Great Chicago business idea. Helps "content owners" such as restaurants and bars start to monetize their communities by providing TV and targeted ads.
See news and postings from their website.
See news and postings from their website.
Tuesday, July 24, 2007
Ariel Sees Value in Newspaper - July 21, Chicago Tribune
A little additional support to my belief in prior posts. Traditional challenge of buying value...Have we really seen the bottom of the valuations? Don't think the major ad budget shifts of automotive and other newspaper heavy industries hasn't played out completely. Maybe an initial entry point.
See the Chicago Trib article here
See the Chicago Trib article here
Friday, July 20, 2007
Tuesday, July 17, 2007
ND Business Magazine - Fading to Gray
Interesting article by Mark Jurkowitz in the Spring/Summer 2007 issue laying out the challenges facing the newspaper industry today. Again, this is another industry that will look very different 10 years from now given the rise of the internet and digital media. I'm a big believer that the bread and butter for papers of classifieds, etc is going away as the internet can much more easily store and deliver that content for less but there is an ad model in this industry somewhere. At some point (if it hasn't happened already) is that the valuation of these assets will go below their true value.
I think that everybody is viewing newspapers in a similar fashion to retail stores early on in the rise of e-commerce. Everyone thought that Amazon would kill everybody and that bricks and mortar companies were dead. As usual, these fears were overdone as retailers adopted e-commerce aggressively and now have an advantage over some pure plays by offering the end customer choices on how they want to interact and purchase a product. I believe the combination of online and offline media has a certain target market and appeal and good journalism and how that writing is organized for people will be valuable. It will take a bit longer for valuations to readjust and ad models to be changes but there will be value here.
See the article here.
I think that everybody is viewing newspapers in a similar fashion to retail stores early on in the rise of e-commerce. Everyone thought that Amazon would kill everybody and that bricks and mortar companies were dead. As usual, these fears were overdone as retailers adopted e-commerce aggressively and now have an advantage over some pure plays by offering the end customer choices on how they want to interact and purchase a product. I believe the combination of online and offline media has a certain target market and appeal and good journalism and how that writing is organized for people will be valuable. It will take a bit longer for valuations to readjust and ad models to be changes but there will be value here.
See the article here.
Center for Media Research - Newspaper usage trends
Interesting report but obviously biased to show some positives in a relatively gloomy industry. Another industry that will look extremely different in 10 years after classified revenue goes to almost nothing due to digital media.
Tuesday, July 17, 2007
Four Out of Five Newspaper Website Readers Also Read the Printed Edition
A new study recently released by the Newspaper National Network LP, conducted by Scarborough Research, found that 81% of newspaper website users also read the printed newspaper in the last 7 days. Crossover users (those who used both print and online newspapers in the past 7 days) have deep affinity with both their printed newspaper and their newspaper website, and 83% say "I love both my printed newspaper and visiting my newspapers website." Crossover users visit their newspaper website to:
Access breaking news (96%),
Find articles seen previously (85%)
Find things to do/places to go (72%)
Jason E. Klein, President and CEO of Newspaper National Network, said "The study shows that the core newspaper reader now accesses his or her local newspaper across multiple formats, print and web, and is deeply engaged with both... 83% of crossover users say their newspaper site will be among their primary destinations 5 years from now."
The study found that newspaper website-only users are 55% female, while crossover users are only 48% female. The main reasons newspaper website-only users cited for using newspaper websites include:
Accessing local news (84%)
Entertainment information (74%)
Food or restaurant information (58%)
Newspaper website-only users are web-savvy group as 52% write or read blogs and 46% have joined a web community.
The two segments differ in the time of day they are using newspapers:
Crossover users are more likely to read their printed newspaper in the morning (63% read the printed newspaper before 10am) and access their newspaper website in the afternoon or evening (46%).
Newspaper website only users are more likely to access the website in the morning (49% of website-only users access the website before 10am vs. 34% of crossover users).
Contrary to some perceptions, the web has not hurt overall newspaper consumption, as 87% of crossover users report that their time spent with newspaper media has increased or remained the same versus only 12% who say time spent has decreased.
Other key Study findings:
The last time you read or looked into any printed copy of the (Newspaper Name):
Read last 7 days: 81%
Read 8-30 days ago: 9%
Read longer than 30 days ago: 7%
Never Read: 3%
Combined Time Spent With Print And Web-Based Newspaper Media Since You Began Using A Newspaper Website
52% remained the same
35% increased
12% decreased
1% Don't Know
For more information, please visit here to find the NNN Newspaper Footprint Study.
Tuesday, July 17, 2007
Four Out of Five Newspaper Website Readers Also Read the Printed Edition
A new study recently released by the Newspaper National Network LP, conducted by Scarborough Research, found that 81% of newspaper website users also read the printed newspaper in the last 7 days. Crossover users (those who used both print and online newspapers in the past 7 days) have deep affinity with both their printed newspaper and their newspaper website, and 83% say "I love both my printed newspaper and visiting my newspapers website." Crossover users visit their newspaper website to:
Access breaking news (96%),
Find articles seen previously (85%)
Find things to do/places to go (72%)
Jason E. Klein, President and CEO of Newspaper National Network, said "The study shows that the core newspaper reader now accesses his or her local newspaper across multiple formats, print and web, and is deeply engaged with both... 83% of crossover users say their newspaper site will be among their primary destinations 5 years from now."
The study found that newspaper website-only users are 55% female, while crossover users are only 48% female. The main reasons newspaper website-only users cited for using newspaper websites include:
Accessing local news (84%)
Entertainment information (74%)
Food or restaurant information (58%)
Newspaper website-only users are web-savvy group as 52% write or read blogs and 46% have joined a web community.
The two segments differ in the time of day they are using newspapers:
Crossover users are more likely to read their printed newspaper in the morning (63% read the printed newspaper before 10am) and access their newspaper website in the afternoon or evening (46%).
Newspaper website only users are more likely to access the website in the morning (49% of website-only users access the website before 10am vs. 34% of crossover users).
Contrary to some perceptions, the web has not hurt overall newspaper consumption, as 87% of crossover users report that their time spent with newspaper media has increased or remained the same versus only 12% who say time spent has decreased.
Other key Study findings:
The last time you read or looked into any printed copy of the (Newspaper Name):
Read last 7 days: 81%
Read 8-30 days ago: 9%
Read longer than 30 days ago: 7%
Never Read: 3%
Combined Time Spent With Print And Web-Based Newspaper Media Since You Began Using A Newspaper Website
52% remained the same
35% increased
12% decreased
1% Don't Know
For more information, please visit here to find the NNN Newspaper Footprint Study.
Monday, July 16, 2007
Steve Job's Greatest Presentation
Two things here:
1. Great overview of how to do a presentation. Good overview of Jobs' presentation and the key elements of delivering a great presentation.
2. Actual presentation by Jobs' on the iPhone. Great example of an innovative product.
1. Great overview of how to do a presentation. Good overview of Jobs' presentation and the key elements of delivering a great presentation.
2. Actual presentation by Jobs' on the iPhone. Great example of an innovative product.
Tuesday, June 12, 2007
Andy Grove Recommendations on Health Care fixes
Good insights from a great thinker. Andy Grove looks at history and determines partial fixes to healthcare are better than trying to fix the whole thing. Think this is a much better approach and trying to find the perfect solution will only get the same results than we've got to date...nothing.
See the full article on Fortune
See the full article on Fortune
Friday, June 1, 2007
You Raised, Now Manage Them - Fortune Article - May 28, 2007
Great article outlining a new generation of employees.
Attracting the twentysomething worker
The baby-boomers' kids are marching into the workplace, and look out: This crop of twentysomethings really is different. Fortune's Nadira Hira presents a field guide to Generation Y.
By Nadira A. Hira, Fortune writer-reporter
May 15 2007: 3:10 PM EDT
(Fortune Magazine) -- Nearly every businessperson over 30 has done it: sat in his office after a staff meeting and - reflecting upon the 25-year-old colleague with two tattoos, a piercing, no watch and a shameless propensity for chatting up the boss - wondered, What is with that guy?!
We all know the type: He's a sartorial Ryan Seacrest, a developmental Ferris Bueller, a professional Carlton Banks. (Not up on twentysomethings' media icons? That's the "American Idol" host, the truant Matthew Broderick movie hero, and the overeager Will Smith sidekick in "Fresh Prince of Bel-Air.")
At once a hipster and a climber, he is all nonchalance and expectation. He is new, he is annoying, and he and his female counterparts are invading corporate offices across America.
Generation Y: Its members are different in many respects, from their upbringing to their politics. But it might be their effect on the workplace that makes them truly noteworthy - more so than other generations of twentysomethings that writers have been collectively profiling since time immemorial.
They're ambitious, they're demanding and they question everything, so if there isn't a good reason for that long commute or late night, don't expect them to do it. When it comes to loyalty, the companies they work for are last on their list - behind their families, their friends, their communities, their co-workers and, of course, themselves.
But there are a whole lot of them. And as the baby-boomers begin to retire, triggering a ballyhooed worker shortage, businesses are realizing that they may have no choice but to accommodate these curious Gen Y creatures. Especially because if they don't, the creatures will simply go home to their parents, who in all likelihood will welcome them back.
Some 64 million skilled workers will be able to retire by the end of this decade, according to the Conference Board, and companies will need to go the extra mile to replace them, even if it means putting up with some outsized expectations. There is a precedent for this: In April 1969, Fortune wrote, "Because the demand for their services so greatly exceeds the supply, young graduates are in a strong position to dictate terms to their prospective employers. Young employees are demanding that they be given productive tasks to do from the first day of work, and that the people they work for notice and react to their performance."
Those were the early baby-boomers, and - with their '60s sensibility and navel-gazing - they left their mark on just about every institution they passed through. Now come their children, to confound them. The kids - self-absorbed, gregarious, multitasking, loud, optimistic, pierced - are exactly what the boomers raised them to be, and now they're being themselves all over the business world.
It's going to be great.
"This is the most high-maintenance workforce in the history of the world," says Bruce Tulgan, the founder of leading generational-research firm RainmakerThinking. "The good news is they're also going to be the most high-performing workforce in the history of the world. They walk in with more information in their heads, more information at their fingertips - and, sure, they have high expectations, but they have the highest expectations first and foremost for themselves."
So just who is this fair bird?
Plumage
The creature in the wild: Joshua Butler, audit associate, KPMG
With his broad networker's smile, stiff white collar, and polished onyx cuff links, Joshua Butler has the accouterments of an accountant. Even so, he looks a little out of place in a KPMG conference room. At 22, he's 6-foot-2 and 230 pounds, with a body made for gladiator movies. A native of suburban Washington, D.C., Butler chose accounting after graduating from Howard University because he wanted "transferable skills."
At KPMG he's getting them - and more: The firm has let him arrange his schedule to train for a bodybuilding competition, and he's on its tennis team. Even before that, KPMG got his attention when it agreed to move him to New York, his chosen city. "It made me say, 'You know what? This firm has shown a commitment to me. Let me in turn show some commitment to the firm.'" He pauses, a twinkle in his eye. "So this is a merger, if you will - Josh and KPMG."
Boomers, know this: You are outnumbered. There are 78.5 million of you, according to Census Bureau figures, and 79.8 million members of Gen Y (for our purposes, those born between 1977 and 1995). And the new generation shares more than just an age bracket.
While it may be crass to "define" such a group, any Times Square tourist could probably do so with one finger - pointed at the MTV Networks building. Gen Y sometimes seems to share one overstimulated brain, and it's often tuned to something featuring Lindsay Lohan. Add to that the speed with which Yers can find Lindsay Lohan - day or night, video or audio - in these technology-rich times, and it's suddenly not so strange that Gen Y has developed such a distinct profile.
And what a profile it is. As the rest of the nation agonizes over obesity, Gen Yers always seem to be at the gym. More than a third of 18- to 25-year-olds surveyed by the Pew Research Center for the People and the Press have a tattoo, and 30 percent have a piercing somewhere besides their earlobe. But those are considered stylish, not rebellious.
And speaking of fashion, this isn't a group you'll catch in flannel. They're all about quiet kitsch - a funky T-shirt under a blazer, artsy jewelry, silly socks - small statements that won't cause trouble. The most important decorations, though, are electronic - iPods, BlackBerrys, laptops - and they're like extra limbs. Nothing is more hilarious than catching a Gen Yer in public without one of those essentials. Let's just say most wouldn't have lasted long on Walden Pond.
When it comes to Gen Y's intangible characteristics, the lexicon is less than flattering. Try "needy," "entitled." Despite a consensus that they're not slackers, there is a suspicion that they've avoided that moniker only by creating enough commotion to distract from the fact that they're really not that into "work."
Never mind that they often need an entire team - and a couple of cheerleaders - to do anything. For some of them the concept "work ethic" needs rethinking. "I had a conversation with the CFO of a big company in New York," says Tamara Erickson, co-author of the 2006 book "Workforce Crisis," "and he said, 'I can't find anyone to hire who's willing to work 60 hours a week. Can you talk to them?' And I said, 'Why don't I start by talking to you? What they're really telling you is that they're sorry it takes you so long to get your work done.'"
That isn't the only rethinking Gen Yers have done. Their widespread consumption of uniform media has had some positive effects. Girls watch sports and play videogames, and no one thinks twice about it. And boys can admit to loving "The Real World" with impunity.
Race is even less of an issue for Gen Yers, not just because they're generally accustomed to diversity, but because on any given night they can watch successful mainstream shows featuring everyone from the Oscar-winning rap group Three 6 Mafia to wrestler Hulk Hogan. It all makes for a universe where anything - such as, say, being a bodybuilding accountant - seems possible.
Of course, Gen Yers have been told since they were toddlers that they can be anything they can imagine. It's an idea they clung to as they grew up and as their outlook was shaken by the Columbine shootings and 9/11. More than the nuclear threat of their parents' day, those attacks were immediate, potentially personal, and completely unpredictable. And each new clip of Al Gore spreading inconvenient truths or of polar bears drowning from lack of ice told Gen Yers they were not promised a healthy, happy tomorrow. So they're determined to live their best lives now.
Habitat
The creature in the wild: Sheryl Walker, assurance associate, PricewaterhouseCoopers
Growing up, Sheryl Walker says, she could do no wrong. The youngest child of Jamaican immigrants in New Jersey, she majored in accounting because she knew it would make her parents happy: "They're big on saying their children are 'a doctor,' 'a lawyer' -'a something.'"
And now that the 24-year-old is "a something," she continues to make them happy. By living at home. "I don't have any plans to leave," she says, laughing. "My father told me if I did, he would be very upset. And I at least pay a bill, out of courtesy." The electric bill, that is. Considering the cost of living in the New York area, that's quite a bargain. "I think parents want to feel needed," she says, "and it's like, because I'm so independent, they get excited when I ask for a favor."
From the moment Gen Yers were born, long before technology or world events affected their lives, they were dealing with a phenomenon previously unknown to man: the baby-boomer parent. Raised by "traditionalists" after World War II, the boomers, once they had children of their own, did exactly the opposite of what their parents had done, cooing and coddling like crazy.
Couple all that affection with the affluence of the '80s and '90s, throw in working parents' guilt, and boomers' children not only got what they wanted but also became the center of their parents' lives. Self-esteem was in, spanking was out, and coaching - be it for a soccer team or a kindergarten interview - was everywhere.
Affirmation continued as they grew, and when they spoke up, their opinions were not only entertained but celebrated. Overscheduled grade-schoolers became overcommitted teens, with the emphasis on achieving. The goal was to get into a great college, which would lead to a great career and a great life.
But there was a hitch. Upon graduation, it turned out that a lot of Gen Yers hadn't learned much about struggle or sacrifice. As the first of them began to graduate from college in the late 1990s, the average educational debt soared to over $19,000 for new grads, and many Yers went to the only place they knew they'd be safe: home.
Lots haven't left. A survey of college graduates from 2000 to 2006 by Experience Inc. found that 58 percent of those polled had moved home after school and that 32 percent stayed more than a year. Even among those who've managed to stay away, Pew found that 73 percent of 18- to 25-year-olds have received financial assistance from their parents in the past year, and 64 percent have even gotten help with errands.
It's what Jeffrey Jensen Arnett calls "emerging adulthood" in his 2004 book of the same name. "People think very differently about their 20s now," the Clark University research professor says. "It's so volatile and so unfettered and so very unstructured. Nothing has ever existed like it before." For example, in 1960 the median age at marriage was 20 for women and 23 for men. Today it's 26 for women and 28 for men. In sociological terms that's a revolution.
And though Gen Yers will eventually have to grow up - like all of us, they'll lose their parents, face layoffs and suffer insane bosses - they are stretching the transition to adulthood well into their 20s. "If we don't like a job, we quit," says Jason Ryan Dorsey, the 28-year-old author of 2007's "My Reality Check Bounced!," "because the worst thing that can happen is that we move back home. There's no stigma, and many of us grew up with both parents working, so our moms would love nothing more than to cook our favorite meatloaf." It's a position borne out by the numbers; 73 percent of Pew's respondents said they see their parents at least once a week, and half do so daily, a fact that, however sweet, sort of makes you want to download "Rebel Without a Cause."
With this level of parental involvement, it's a miracle that Gen Yers can do anything on their own. "It's difficult to start making decisions when you haven't been making decisions your whole life," says Mitchell Marks, an organizational psychologist and president of consulting firm Joining Forces. He points to one of his recent projects at a software development company. His client, which had one health-care plan, was acquired by a bigger firm that offered five more.
"The twentysomething software developers were up in arms about having to choose," Marks says. "That was their No. 1 issue - not 'Will I lose my job?' or 'Will there be a culture clash?' but this -because they were just so put off that they were put in what they viewed as a very stressful situation." One can't help but wonder how stressed they'd be with no health insurance at all.
But even for the Gen Yers who try in earnest to succeed, Marks says, the way they've been raised can still be detrimental: "They've been made to feel so special, and that is totally counter to the whole concept of corporations."
Courtship
The creature in the wild: Katie Connolly, associate attorney, Halleland Lewis Nilan & Johnson
Unlike most new attorneys, Katie Connolly took a pay cut for her second job. Why? The 28-year-old graduate of the University of Minnesota Law School liked that it wasn't the attorneys but the staff at Halleland, a 53-attorney firm in Minneapolis, who had windows (since they were more often at their desks) and that everyone dressed casually. Her decision paid off. At her old firm she spent all her time researching at her desk; at Halleland she has already tried her first case.
"Lots of firms say, 'Oh, we're 150 years old,'" she says, "and they do things like they did 150 years ago. That's not attractive to me. I want to do good work, not just slog through for years till I get my Persian rug and my 50-gallon fish tank."
What, then, is a Fortune 500 company to do?
Gen Yers still respond most of all to money. There's no fooling them about it; they're so connected that it's not unusual for them to know what every major company in a given field is offering. And they don't want to be given short shrift - hence the frightening tales of 22-year-olds making six-figure salary requests for their first jobs. One could chalk that up to their materialism and party-people mentality, but author Erickson has a different take. "They have to get some money flowing because they have a lot of debt to pay," she says.
To get noticed by Gen Yers, a company also has to have what they call a "vision." They aren't impressed by mission statements, but they are looking for attributes that indicate shared values: affinity groups, flat hierarchies, divestment from the more notorious dictatorial regimes.
At Halleland, which was founded in 1996 by defectors from a larger firm, offices are all the same size, new associates are encouraged to pass work up the chain and senior partners send out e-mails congratulating junior staffers on career milestones. In 11 years Halleland has lost just five associates to other outfits.
It hasn't hurt that the firm emphasizes work-life balance. While Gen Yers will work a 60-hour week if they have to - and might even do so happily if they're paid enough to make the most of their precious downtime - they don't want that to be a way of life.
Some firms where long hours are the norm have found ways to compensate. At Skadden Arps, new employees are reimbursed up to $3,000 for home-office equipment and $1,000 every year after. And the firm's gyms are a big hit with Gen Yers. "You'd be amazed, when people come by to interview or check out the firm, what a warm response the fitness center gets," says Wallace Schwartz, who leads the firm's New York office.
Watching public accounting firms scout for talent is especially instructive, since they have had to staff up after Sarbanes-Oxley. At Ernst & Young, recruiters hand out flash drives instead of brochures, send text messages to schedule meetings with candidates, and give interns videocameras to create vlogs for the firm's Web site. They also launched the first corporate-sponsored recruiting page on Facebook to meet Gen Yers on their own turf.
"That was a difficult sell," says Dan Black, who heads E&Y's college recruiting for the U.S. and Canada, "to be in a medium where you don't have control and people can post some not-so-nice things and you're going to leave it up there, which we do." It was so far ahead of its time that even the kids got thrown off. At one point Black wanted to quote some vivid comments a junior staffer had posted on the page. He left him a voicemail asking for a call back. The next thing Black knew, the posts had all vanished. "He thought he was in trouble!" Black says, howling. "So they're learning how to work with us too."
But as any worthy suitor knows, in the end the key to courtship lies at home - in wooing Mom and Dad. For Merrill Lynch (Charts, Fortune 500), getting young people to commit wasn't much trouble before. "In the past, if we gave you an offer, you accepted," says Liz Wamai, who heads diversity for Merrill's institutional business.
"It was Merrill Lynch. Now it's sell, sell, sell." The company holds a parents' day for interns' families to tour the trading floor. But it's involving parents in recruiting that's been a real shift. Subha Barry, global head of diversity, recalls running into a colleague having lunch with a potential summer recruit and someone she didn't know. It turned out to be the boy's mother.
"If somebody would have said to me, 'You're interviewing for a job somewhere, and you're going to bring your mother to the closing, decision-making lunch,' I would've said, 'You've got to be crazy,'" she says, wagging a finger. "But I tell you, his mother was sold. And that boy will end up at Merrill next summer. I can guarantee that."
Domestication
The creature in the wild: Johnny Cooper, assistant designer, J.C. Penney
Johnny Cooper has always wanted to be a fashion designer. At first that usually means picking out pins by day and waiting tables by night. So when an offer of real work came from J.C. Penney in Plano, Texas, he took it in a heartbeat. "What 23-year-old can say that they affect a quarter-billion-dollar business on a daily basis?" he asks.
Yes, he actually has affected it, helping to revamp the company's line of men's swimwear. Cooper also organized a major fundraiser for the company after proposing it in an e-mail to the president. "He responded," Cooper says, chuckling. "It took him a week, and it was a one-liner. But it was the most exciting thing to me."
Succeeding quickly does have its challenges: "I sometimes feel like if I'm given so much responsibility and excelling, why can't I have more and more? I have to say, 'Slow down, Johnny. Sure, you want to be design director, but you've only been here two years.'"
Post your thoughts on The Gig
No one joins a company hoping to do the same job forever. But these days even your neighborhood bartender or barista aspires to own the place someday. What's more, the ties that have bound members of this age group to jobs in the past - spouse, kids, mortgage - are today often little more than glimmers in their parents' eyes. So if getting Gen Yers to join a company is a challenge, getting them to stay is even harder.
The key is the same one their parents have used their whole lives - loving, encouraging and rewarding them. What that amounts to in corporate terms is a support network, work that challenges more than it bores, and feedback. "The loyalty of twentysomethings is really based on the relationships they have with those directly above them," says Dorsey, the "Reality Check" author. "There's a perception among management that those relationships shouldn't be too personal, but that's how we know they care about us."
Dorsey - who in true Gen Y style dropped out of college to write an earlier book, "Graduate to Your Perfect Job," without having either graduated or gotten a job - recommends starting small. Business cards are an easy way to make young employees feel valued. Letting them shadow older employees helps, as does inviting them to a management meeting now and then. And marking milestones is major, says Dorsey. No birthday should go uncelebrated, and the first day on the job should be unforgettable.
Dorsey recalls the time the president of an engineering firm called a new employee's mother and asked her to be there when her daughter started work Monday morning. "When her mom walked through the crowd, she was like, 'Oh, my God,' and her mom says to everyone, 'I took her to kindergarten, and now I'm here for her first day of work,'" Dorsey says. "The president took them on a tour of the company and explained to both of them why what new employees were doing was so important to the company. And the mom turns to her daughter and says, 'You are not allowed to quit this job. Real companies are not like this.'"
Skeptics would say Mom had a point. But the idea is simply to make big companies feel small, and even major corporations can do much of that work through mentoring. This no longer means creating a spreadsheet, matching people by gender, race or a shared love of baseball, and hoping for the best. At KPMG, says Jesal Asher, a director in the advisory practice, every junior staffer is expected to have a mentor, every manager a protégé, and those in the middle often have both. There's a Web site to facilitate the formal process, and social activities - happy hours, softball games, group lunches - are organized to encourage informal networking.
With the resources that companies like KPMG have, though, ice-cream socials are just the beginning. This summer KPMG will send 100 new hires to Madrid to train alongside new hires from other countries. The firm also gives employees time off to do community service. Steps like those have helped bring turnover down from 25 percent in 2002 to 18 percent last year, says KPMG's head of campus recruiting, Manny Fernandez.
"Gen Yers are able to do and learn so much more than I could at that stage," he says, "and they're not looking to have a career like I have, with just one company. So we've got to build tools that are not just about retention but about having people develop skills faster, so that they can take on larger opportunities."
While development is a long-term goal, it begins in the short term with harnessing Gen Yers' energy. "They're so vocal that you can almost take an associate to a meeting with the CEO," says Asher, "because something that comes out of her mouth is going to be actually outside the box, something that none of us have ever thought about."
And twentysomethings can thrive when given real responsibility. Mark Meussner, a former Ford manager, remembers one instance when, faced with a serious manufacturing problem and two young engineers begging for the chance to solve it, he took a chance on them. He gave them one more-experienced person as a counselor, and they made what he estimates was a $25 million impact by solving a problem that had proved intractable for a decade. The success spawned a slate of company-sponsored initiatives led by more-junior staffers. Says Meussner: "We need to use 100 percent of an employee - not just their backs and minds, but their innovation, enthusiasm, energy and fresh perspective."
It's 12:45 A.M., this story is due next week, and I'm hard at work. By that I mean I am sitting at a desk. In my house. Wearing yellow ducky slippers, track pants, and the royal-blue Tommy Hilfiger pullover that has been my thinking cap since I started writing papers in high school. Pondering my bookshelf - some Faulkner, Irving, Naipaul, Kerouac, Franzen and, of course, Dr. Seuss and A.A. Milne - for inspiration.
With "The Cosby Show" playing in the background, Google chats going with two friends, and text messages coming from my boyfriend, who's on assignment in Africa. When things really get going, I'll put on "Lord of the Rings: The Two Towers," which has kept me company through every major story of my writing career. In short, I'm ridiculous.
I know this will be alarming to read, particularly for my mother, who cares so much about my image that she began blow-drying my hair when I was 4. But it had to be written, because I've come to realize that the most significant characteristic of the Gen Y bird is that we are unapologetic. From how we look, to how spoiled we are, to what we want - even demand - of work, we do think we are special. And what ultimately makes us different is our willingness to talk about it, without much shame and with the expectation that somebody - our parents, our friends, our managers - will help us figure it all out.
That's why, in retrospect, when I started at Fortune in 2004, I asked then-editorial director John Huey what he thought the magazine needed and how I might contribute to that end. "I don't think you need to worry about that," he said, fixing me with an ever-so-slightly amused gaze. It seemed like a perfectly valid question at the time, but with all the hindsight that three years can offer, thinking about it makes me giddy - with embarrassment, but also a fair amount of awe. Who did I think I was? At 23, I had already had three jobs - one at a startup magazine that folded, a contract gig at the prestigious MTV News and a stint recruiting for Time Inc., which is why I was sitting with Huey in the first place. And Huey was just an office away from becoming top editor of the world's largest publishing empire. Unwise of me, to say the least.
But that's the beauty of Gen Y. Despite the initial smirk, Huey did go on to talk to me about the magazine, his own career, and what he expected of and hoped for me. And that 20-minute conversation set a tone of learning, self-evaluation and growth that I'm glad of now, especially as I've struggled to turn years of Gen Y news, research and hearsay - ranging from the worshipful to the condescending - into some sort of cohesive narrative.
It speaks to a confidence that's been building since our parents clapped at our first steps, right through the moment when - as so many new college graduates are doing now - we walked across the stage at universities throughout the country, straight into America's finest corporate foyers. If that makes us a bit cocky at times, it's forgivable, because I'm willing to bet that in coming years, all that questioning will lead us to some important answers. And in the meantime - sorry, Mom - I'll be out getting a tattoo.
Attracting the twentysomething worker
The baby-boomers' kids are marching into the workplace, and look out: This crop of twentysomethings really is different. Fortune's Nadira Hira presents a field guide to Generation Y.
By Nadira A. Hira, Fortune writer-reporter
May 15 2007: 3:10 PM EDT
(Fortune Magazine) -- Nearly every businessperson over 30 has done it: sat in his office after a staff meeting and - reflecting upon the 25-year-old colleague with two tattoos, a piercing, no watch and a shameless propensity for chatting up the boss - wondered, What is with that guy?!
We all know the type: He's a sartorial Ryan Seacrest, a developmental Ferris Bueller, a professional Carlton Banks. (Not up on twentysomethings' media icons? That's the "American Idol" host, the truant Matthew Broderick movie hero, and the overeager Will Smith sidekick in "Fresh Prince of Bel-Air.")
At once a hipster and a climber, he is all nonchalance and expectation. He is new, he is annoying, and he and his female counterparts are invading corporate offices across America.
Generation Y: Its members are different in many respects, from their upbringing to their politics. But it might be their effect on the workplace that makes them truly noteworthy - more so than other generations of twentysomethings that writers have been collectively profiling since time immemorial.
They're ambitious, they're demanding and they question everything, so if there isn't a good reason for that long commute or late night, don't expect them to do it. When it comes to loyalty, the companies they work for are last on their list - behind their families, their friends, their communities, their co-workers and, of course, themselves.
But there are a whole lot of them. And as the baby-boomers begin to retire, triggering a ballyhooed worker shortage, businesses are realizing that they may have no choice but to accommodate these curious Gen Y creatures. Especially because if they don't, the creatures will simply go home to their parents, who in all likelihood will welcome them back.
Some 64 million skilled workers will be able to retire by the end of this decade, according to the Conference Board, and companies will need to go the extra mile to replace them, even if it means putting up with some outsized expectations. There is a precedent for this: In April 1969, Fortune wrote, "Because the demand for their services so greatly exceeds the supply, young graduates are in a strong position to dictate terms to their prospective employers. Young employees are demanding that they be given productive tasks to do from the first day of work, and that the people they work for notice and react to their performance."
Those were the early baby-boomers, and - with their '60s sensibility and navel-gazing - they left their mark on just about every institution they passed through. Now come their children, to confound them. The kids - self-absorbed, gregarious, multitasking, loud, optimistic, pierced - are exactly what the boomers raised them to be, and now they're being themselves all over the business world.
It's going to be great.
"This is the most high-maintenance workforce in the history of the world," says Bruce Tulgan, the founder of leading generational-research firm RainmakerThinking. "The good news is they're also going to be the most high-performing workforce in the history of the world. They walk in with more information in their heads, more information at their fingertips - and, sure, they have high expectations, but they have the highest expectations first and foremost for themselves."
So just who is this fair bird?
Plumage
The creature in the wild: Joshua Butler, audit associate, KPMG
With his broad networker's smile, stiff white collar, and polished onyx cuff links, Joshua Butler has the accouterments of an accountant. Even so, he looks a little out of place in a KPMG conference room. At 22, he's 6-foot-2 and 230 pounds, with a body made for gladiator movies. A native of suburban Washington, D.C., Butler chose accounting after graduating from Howard University because he wanted "transferable skills."
At KPMG he's getting them - and more: The firm has let him arrange his schedule to train for a bodybuilding competition, and he's on its tennis team. Even before that, KPMG got his attention when it agreed to move him to New York, his chosen city. "It made me say, 'You know what? This firm has shown a commitment to me. Let me in turn show some commitment to the firm.'" He pauses, a twinkle in his eye. "So this is a merger, if you will - Josh and KPMG."
Boomers, know this: You are outnumbered. There are 78.5 million of you, according to Census Bureau figures, and 79.8 million members of Gen Y (for our purposes, those born between 1977 and 1995). And the new generation shares more than just an age bracket.
While it may be crass to "define" such a group, any Times Square tourist could probably do so with one finger - pointed at the MTV Networks building. Gen Y sometimes seems to share one overstimulated brain, and it's often tuned to something featuring Lindsay Lohan. Add to that the speed with which Yers can find Lindsay Lohan - day or night, video or audio - in these technology-rich times, and it's suddenly not so strange that Gen Y has developed such a distinct profile.
And what a profile it is. As the rest of the nation agonizes over obesity, Gen Yers always seem to be at the gym. More than a third of 18- to 25-year-olds surveyed by the Pew Research Center for the People and the Press have a tattoo, and 30 percent have a piercing somewhere besides their earlobe. But those are considered stylish, not rebellious.
And speaking of fashion, this isn't a group you'll catch in flannel. They're all about quiet kitsch - a funky T-shirt under a blazer, artsy jewelry, silly socks - small statements that won't cause trouble. The most important decorations, though, are electronic - iPods, BlackBerrys, laptops - and they're like extra limbs. Nothing is more hilarious than catching a Gen Yer in public without one of those essentials. Let's just say most wouldn't have lasted long on Walden Pond.
When it comes to Gen Y's intangible characteristics, the lexicon is less than flattering. Try "needy," "entitled." Despite a consensus that they're not slackers, there is a suspicion that they've avoided that moniker only by creating enough commotion to distract from the fact that they're really not that into "work."
Never mind that they often need an entire team - and a couple of cheerleaders - to do anything. For some of them the concept "work ethic" needs rethinking. "I had a conversation with the CFO of a big company in New York," says Tamara Erickson, co-author of the 2006 book "Workforce Crisis," "and he said, 'I can't find anyone to hire who's willing to work 60 hours a week. Can you talk to them?' And I said, 'Why don't I start by talking to you? What they're really telling you is that they're sorry it takes you so long to get your work done.'"
That isn't the only rethinking Gen Yers have done. Their widespread consumption of uniform media has had some positive effects. Girls watch sports and play videogames, and no one thinks twice about it. And boys can admit to loving "The Real World" with impunity.
Race is even less of an issue for Gen Yers, not just because they're generally accustomed to diversity, but because on any given night they can watch successful mainstream shows featuring everyone from the Oscar-winning rap group Three 6 Mafia to wrestler Hulk Hogan. It all makes for a universe where anything - such as, say, being a bodybuilding accountant - seems possible.
Of course, Gen Yers have been told since they were toddlers that they can be anything they can imagine. It's an idea they clung to as they grew up and as their outlook was shaken by the Columbine shootings and 9/11. More than the nuclear threat of their parents' day, those attacks were immediate, potentially personal, and completely unpredictable. And each new clip of Al Gore spreading inconvenient truths or of polar bears drowning from lack of ice told Gen Yers they were not promised a healthy, happy tomorrow. So they're determined to live their best lives now.
Habitat
The creature in the wild: Sheryl Walker, assurance associate, PricewaterhouseCoopers
Growing up, Sheryl Walker says, she could do no wrong. The youngest child of Jamaican immigrants in New Jersey, she majored in accounting because she knew it would make her parents happy: "They're big on saying their children are 'a doctor,' 'a lawyer' -'a something.'"
And now that the 24-year-old is "a something," she continues to make them happy. By living at home. "I don't have any plans to leave," she says, laughing. "My father told me if I did, he would be very upset. And I at least pay a bill, out of courtesy." The electric bill, that is. Considering the cost of living in the New York area, that's quite a bargain. "I think parents want to feel needed," she says, "and it's like, because I'm so independent, they get excited when I ask for a favor."
From the moment Gen Yers were born, long before technology or world events affected their lives, they were dealing with a phenomenon previously unknown to man: the baby-boomer parent. Raised by "traditionalists" after World War II, the boomers, once they had children of their own, did exactly the opposite of what their parents had done, cooing and coddling like crazy.
Couple all that affection with the affluence of the '80s and '90s, throw in working parents' guilt, and boomers' children not only got what they wanted but also became the center of their parents' lives. Self-esteem was in, spanking was out, and coaching - be it for a soccer team or a kindergarten interview - was everywhere.
Affirmation continued as they grew, and when they spoke up, their opinions were not only entertained but celebrated. Overscheduled grade-schoolers became overcommitted teens, with the emphasis on achieving. The goal was to get into a great college, which would lead to a great career and a great life.
But there was a hitch. Upon graduation, it turned out that a lot of Gen Yers hadn't learned much about struggle or sacrifice. As the first of them began to graduate from college in the late 1990s, the average educational debt soared to over $19,000 for new grads, and many Yers went to the only place they knew they'd be safe: home.
Lots haven't left. A survey of college graduates from 2000 to 2006 by Experience Inc. found that 58 percent of those polled had moved home after school and that 32 percent stayed more than a year. Even among those who've managed to stay away, Pew found that 73 percent of 18- to 25-year-olds have received financial assistance from their parents in the past year, and 64 percent have even gotten help with errands.
It's what Jeffrey Jensen Arnett calls "emerging adulthood" in his 2004 book of the same name. "People think very differently about their 20s now," the Clark University research professor says. "It's so volatile and so unfettered and so very unstructured. Nothing has ever existed like it before." For example, in 1960 the median age at marriage was 20 for women and 23 for men. Today it's 26 for women and 28 for men. In sociological terms that's a revolution.
And though Gen Yers will eventually have to grow up - like all of us, they'll lose their parents, face layoffs and suffer insane bosses - they are stretching the transition to adulthood well into their 20s. "If we don't like a job, we quit," says Jason Ryan Dorsey, the 28-year-old author of 2007's "My Reality Check Bounced!," "because the worst thing that can happen is that we move back home. There's no stigma, and many of us grew up with both parents working, so our moms would love nothing more than to cook our favorite meatloaf." It's a position borne out by the numbers; 73 percent of Pew's respondents said they see their parents at least once a week, and half do so daily, a fact that, however sweet, sort of makes you want to download "Rebel Without a Cause."
With this level of parental involvement, it's a miracle that Gen Yers can do anything on their own. "It's difficult to start making decisions when you haven't been making decisions your whole life," says Mitchell Marks, an organizational psychologist and president of consulting firm Joining Forces. He points to one of his recent projects at a software development company. His client, which had one health-care plan, was acquired by a bigger firm that offered five more.
"The twentysomething software developers were up in arms about having to choose," Marks says. "That was their No. 1 issue - not 'Will I lose my job?' or 'Will there be a culture clash?' but this -because they were just so put off that they were put in what they viewed as a very stressful situation." One can't help but wonder how stressed they'd be with no health insurance at all.
But even for the Gen Yers who try in earnest to succeed, Marks says, the way they've been raised can still be detrimental: "They've been made to feel so special, and that is totally counter to the whole concept of corporations."
Courtship
The creature in the wild: Katie Connolly, associate attorney, Halleland Lewis Nilan & Johnson
Unlike most new attorneys, Katie Connolly took a pay cut for her second job. Why? The 28-year-old graduate of the University of Minnesota Law School liked that it wasn't the attorneys but the staff at Halleland, a 53-attorney firm in Minneapolis, who had windows (since they were more often at their desks) and that everyone dressed casually. Her decision paid off. At her old firm she spent all her time researching at her desk; at Halleland she has already tried her first case.
"Lots of firms say, 'Oh, we're 150 years old,'" she says, "and they do things like they did 150 years ago. That's not attractive to me. I want to do good work, not just slog through for years till I get my Persian rug and my 50-gallon fish tank."
What, then, is a Fortune 500 company to do?
Gen Yers still respond most of all to money. There's no fooling them about it; they're so connected that it's not unusual for them to know what every major company in a given field is offering. And they don't want to be given short shrift - hence the frightening tales of 22-year-olds making six-figure salary requests for their first jobs. One could chalk that up to their materialism and party-people mentality, but author Erickson has a different take. "They have to get some money flowing because they have a lot of debt to pay," she says.
To get noticed by Gen Yers, a company also has to have what they call a "vision." They aren't impressed by mission statements, but they are looking for attributes that indicate shared values: affinity groups, flat hierarchies, divestment from the more notorious dictatorial regimes.
At Halleland, which was founded in 1996 by defectors from a larger firm, offices are all the same size, new associates are encouraged to pass work up the chain and senior partners send out e-mails congratulating junior staffers on career milestones. In 11 years Halleland has lost just five associates to other outfits.
It hasn't hurt that the firm emphasizes work-life balance. While Gen Yers will work a 60-hour week if they have to - and might even do so happily if they're paid enough to make the most of their precious downtime - they don't want that to be a way of life.
Some firms where long hours are the norm have found ways to compensate. At Skadden Arps, new employees are reimbursed up to $3,000 for home-office equipment and $1,000 every year after. And the firm's gyms are a big hit with Gen Yers. "You'd be amazed, when people come by to interview or check out the firm, what a warm response the fitness center gets," says Wallace Schwartz, who leads the firm's New York office.
Watching public accounting firms scout for talent is especially instructive, since they have had to staff up after Sarbanes-Oxley. At Ernst & Young, recruiters hand out flash drives instead of brochures, send text messages to schedule meetings with candidates, and give interns videocameras to create vlogs for the firm's Web site. They also launched the first corporate-sponsored recruiting page on Facebook to meet Gen Yers on their own turf.
"That was a difficult sell," says Dan Black, who heads E&Y's college recruiting for the U.S. and Canada, "to be in a medium where you don't have control and people can post some not-so-nice things and you're going to leave it up there, which we do." It was so far ahead of its time that even the kids got thrown off. At one point Black wanted to quote some vivid comments a junior staffer had posted on the page. He left him a voicemail asking for a call back. The next thing Black knew, the posts had all vanished. "He thought he was in trouble!" Black says, howling. "So they're learning how to work with us too."
But as any worthy suitor knows, in the end the key to courtship lies at home - in wooing Mom and Dad. For Merrill Lynch (Charts, Fortune 500), getting young people to commit wasn't much trouble before. "In the past, if we gave you an offer, you accepted," says Liz Wamai, who heads diversity for Merrill's institutional business.
"It was Merrill Lynch. Now it's sell, sell, sell." The company holds a parents' day for interns' families to tour the trading floor. But it's involving parents in recruiting that's been a real shift. Subha Barry, global head of diversity, recalls running into a colleague having lunch with a potential summer recruit and someone she didn't know. It turned out to be the boy's mother.
"If somebody would have said to me, 'You're interviewing for a job somewhere, and you're going to bring your mother to the closing, decision-making lunch,' I would've said, 'You've got to be crazy,'" she says, wagging a finger. "But I tell you, his mother was sold. And that boy will end up at Merrill next summer. I can guarantee that."
Domestication
The creature in the wild: Johnny Cooper, assistant designer, J.C. Penney
Johnny Cooper has always wanted to be a fashion designer. At first that usually means picking out pins by day and waiting tables by night. So when an offer of real work came from J.C. Penney in Plano, Texas, he took it in a heartbeat. "What 23-year-old can say that they affect a quarter-billion-dollar business on a daily basis?" he asks.
Yes, he actually has affected it, helping to revamp the company's line of men's swimwear. Cooper also organized a major fundraiser for the company after proposing it in an e-mail to the president. "He responded," Cooper says, chuckling. "It took him a week, and it was a one-liner. But it was the most exciting thing to me."
Succeeding quickly does have its challenges: "I sometimes feel like if I'm given so much responsibility and excelling, why can't I have more and more? I have to say, 'Slow down, Johnny. Sure, you want to be design director, but you've only been here two years.'"
Post your thoughts on The Gig
No one joins a company hoping to do the same job forever. But these days even your neighborhood bartender or barista aspires to own the place someday. What's more, the ties that have bound members of this age group to jobs in the past - spouse, kids, mortgage - are today often little more than glimmers in their parents' eyes. So if getting Gen Yers to join a company is a challenge, getting them to stay is even harder.
The key is the same one their parents have used their whole lives - loving, encouraging and rewarding them. What that amounts to in corporate terms is a support network, work that challenges more than it bores, and feedback. "The loyalty of twentysomethings is really based on the relationships they have with those directly above them," says Dorsey, the "Reality Check" author. "There's a perception among management that those relationships shouldn't be too personal, but that's how we know they care about us."
Dorsey - who in true Gen Y style dropped out of college to write an earlier book, "Graduate to Your Perfect Job," without having either graduated or gotten a job - recommends starting small. Business cards are an easy way to make young employees feel valued. Letting them shadow older employees helps, as does inviting them to a management meeting now and then. And marking milestones is major, says Dorsey. No birthday should go uncelebrated, and the first day on the job should be unforgettable.
Dorsey recalls the time the president of an engineering firm called a new employee's mother and asked her to be there when her daughter started work Monday morning. "When her mom walked through the crowd, she was like, 'Oh, my God,' and her mom says to everyone, 'I took her to kindergarten, and now I'm here for her first day of work,'" Dorsey says. "The president took them on a tour of the company and explained to both of them why what new employees were doing was so important to the company. And the mom turns to her daughter and says, 'You are not allowed to quit this job. Real companies are not like this.'"
Skeptics would say Mom had a point. But the idea is simply to make big companies feel small, and even major corporations can do much of that work through mentoring. This no longer means creating a spreadsheet, matching people by gender, race or a shared love of baseball, and hoping for the best. At KPMG, says Jesal Asher, a director in the advisory practice, every junior staffer is expected to have a mentor, every manager a protégé, and those in the middle often have both. There's a Web site to facilitate the formal process, and social activities - happy hours, softball games, group lunches - are organized to encourage informal networking.
With the resources that companies like KPMG have, though, ice-cream socials are just the beginning. This summer KPMG will send 100 new hires to Madrid to train alongside new hires from other countries. The firm also gives employees time off to do community service. Steps like those have helped bring turnover down from 25 percent in 2002 to 18 percent last year, says KPMG's head of campus recruiting, Manny Fernandez.
"Gen Yers are able to do and learn so much more than I could at that stage," he says, "and they're not looking to have a career like I have, with just one company. So we've got to build tools that are not just about retention but about having people develop skills faster, so that they can take on larger opportunities."
While development is a long-term goal, it begins in the short term with harnessing Gen Yers' energy. "They're so vocal that you can almost take an associate to a meeting with the CEO," says Asher, "because something that comes out of her mouth is going to be actually outside the box, something that none of us have ever thought about."
And twentysomethings can thrive when given real responsibility. Mark Meussner, a former Ford manager, remembers one instance when, faced with a serious manufacturing problem and two young engineers begging for the chance to solve it, he took a chance on them. He gave them one more-experienced person as a counselor, and they made what he estimates was a $25 million impact by solving a problem that had proved intractable for a decade. The success spawned a slate of company-sponsored initiatives led by more-junior staffers. Says Meussner: "We need to use 100 percent of an employee - not just their backs and minds, but their innovation, enthusiasm, energy and fresh perspective."
It's 12:45 A.M., this story is due next week, and I'm hard at work. By that I mean I am sitting at a desk. In my house. Wearing yellow ducky slippers, track pants, and the royal-blue Tommy Hilfiger pullover that has been my thinking cap since I started writing papers in high school. Pondering my bookshelf - some Faulkner, Irving, Naipaul, Kerouac, Franzen and, of course, Dr. Seuss and A.A. Milne - for inspiration.
With "The Cosby Show" playing in the background, Google chats going with two friends, and text messages coming from my boyfriend, who's on assignment in Africa. When things really get going, I'll put on "Lord of the Rings: The Two Towers," which has kept me company through every major story of my writing career. In short, I'm ridiculous.
I know this will be alarming to read, particularly for my mother, who cares so much about my image that she began blow-drying my hair when I was 4. But it had to be written, because I've come to realize that the most significant characteristic of the Gen Y bird is that we are unapologetic. From how we look, to how spoiled we are, to what we want - even demand - of work, we do think we are special. And what ultimately makes us different is our willingness to talk about it, without much shame and with the expectation that somebody - our parents, our friends, our managers - will help us figure it all out.
That's why, in retrospect, when I started at Fortune in 2004, I asked then-editorial director John Huey what he thought the magazine needed and how I might contribute to that end. "I don't think you need to worry about that," he said, fixing me with an ever-so-slightly amused gaze. It seemed like a perfectly valid question at the time, but with all the hindsight that three years can offer, thinking about it makes me giddy - with embarrassment, but also a fair amount of awe. Who did I think I was? At 23, I had already had three jobs - one at a startup magazine that folded, a contract gig at the prestigious MTV News and a stint recruiting for Time Inc., which is why I was sitting with Huey in the first place. And Huey was just an office away from becoming top editor of the world's largest publishing empire. Unwise of me, to say the least.
But that's the beauty of Gen Y. Despite the initial smirk, Huey did go on to talk to me about the magazine, his own career, and what he expected of and hoped for me. And that 20-minute conversation set a tone of learning, self-evaluation and growth that I'm glad of now, especially as I've struggled to turn years of Gen Y news, research and hearsay - ranging from the worshipful to the condescending - into some sort of cohesive narrative.
It speaks to a confidence that's been building since our parents clapped at our first steps, right through the moment when - as so many new college graduates are doing now - we walked across the stage at universities throughout the country, straight into America's finest corporate foyers. If that makes us a bit cocky at times, it's forgivable, because I'm willing to bet that in coming years, all that questioning will lead us to some important answers. And in the meantime - sorry, Mom - I'll be out getting a tattoo.
Wednesday, May 30, 2007
Surface Computing - Future opportunity for Digital Ads
Microsoft announces new computer. This is good insight into how we'll be able to interact with computers in the future.
One application that this doesn't highlight is the ability to interact with different types of potential ads and measure the level of interaction between the user and the ad.
This video provides a good overview.
You can see Jeff Hans presentation when he presented this software on TED talks in August 2006.
>
I came across this awhile back and thought it was impressive. Was interesting to see him appear in the video above and that Microsoft is marketing hardware with some (all?) of his software.
One application that this doesn't highlight is the ability to interact with different types of potential ads and measure the level of interaction between the user and the ad.
This video provides a good overview.
You can see Jeff Hans presentation when he presented this software on TED talks in August 2006.
>
I came across this awhile back and thought it was impressive. Was interesting to see him appear in the video above and that Microsoft is marketing hardware with some (all?) of his software.
Thursday, May 10, 2007
Alternative Out-Of-Home Media Spending Accelerates - May 9, 2007
Alternative out-of-home media spending in Video Advertising Networks, Digital Billboards and Ambient Advertising surged 27.0% to $1.69 billion in 2006 and is projected to grow at an accelerated 27.7% rate in 2007. According to the PQ Media Alternative Out-of-Home Media Forecast 2007-2011, alternative out-of-home advertising is one of the fastest-growing segments of the media industry, expanding at double-digit rates every year from 2001 to 2006 and posting compound annual growth of 22.6%.
These out-of-home media are distinguished by the use of innovative technology and concepts, such as video advertising networks and digital billboards, to connect with more elusive consumers in captive environments, including retail, transit, cinema and office locations.
Patrick Quinn, President and CEO of PQ Media, said "Ironically, the trends impeding traditional media: consumer fragmentation and control, advertising accountability and the emergence of digital technology, are the very catalysts stimulating the tremendous growth in alternative out-of-home advertising. Unlike its mass media peers, alternative out-of-home advertising is impervious to channel or web surfing and is immune to audience fragmentation."
The growth of alternative out-of-home media far outpaced that of the overall advertising industry as well as the total out-of-home media sector, which was one of the fastest-growing advertising sectors in the 2001-2006 period. The overall advertising industry expanded 6.4% in 2006, while total out-of-home advertising increased 10.6%, amplified by the 27.0% growth in alternative out-of-home media, according to the report.
Among the key trends PQ Media cites as driving the rapid expansion of alternative out-of-home media are:
- The perception among advertisers that these media provide high engagement, targeting options, proximity to point-of-sale, measurable impact and cost effectiveness
- Exposure to and recall of these media growing as Americans spend more time commuting to work, walking in urban areas, waiting in transit hubs, and shopping at retail outlets
- Research suggesting that the vast majority of consumers view alternative out-of-home media as favorable and educational
- New technology enabling companies to launch digital advertising platforms that generate higher revenues than the conventional formats they replace
The PQ Media Alternative Out-of-Home Media Forecast 2007-2011, says the video advertising networks is the largest subsegment of out-of-home media, accounting for 60% of total spending, led by companies like National CineMedia, Premiere Retail Networks and Captivate Network. Spending on video advertising networks & screens grew 28.0% in 2006 to $1.01 billion, with high double-digit growth in all four markets: in-theater, in-office, in-store and in-transit.
Digital billboards & displays is the fastest-growing subsegment, as spending soared 55.4% in 2006 to $233.2 million, the report says. Each of the four markets; at-road, at-retail, at-transit and at-events, expanded at accelerated rates and is fueled by companies such as Lamar Advertising, Clear Channel Outdoor, and Reactrix Systems.
Ambient advertising, also called place-based media, increased 14.1% in 2006 to $446.4 million, according to the PQ Media Alternative Out-of-Home Media Forecast 2007-2011. The double-digit growth in alternative ambient advertising was driven by leaders like Floor Graphics, Montage Billboards, and Alloy Media + Marketing.
| Alternative Out-of-Home Media Spend, 2001-2006 ($ Millions) | |||||||
| Segment | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | CAGR |
| Overall % Growth | $607.5 | $719.6 | $874.1 | $1,057.4 | $1,327.5 | $1,685.5 |
|
|
| 18.5% | 21.5% | 21.0% | 25.5% | 27.0% | 22.6% | |
| Video Ad Networks/Screens % Growth | $324.5 | $396.9 | $498.3 | $612.5 | $786.1 | $1,005.9 |
|
|
|
22.3% |
25.5% |
22.9% |
28.3% |
28.0% |
25.4% | |
| Digital Billboards/Displays % Growth | $43.9 | $56.7 | $74.9 | $102.0 | $150.1 | $233.2 |
|
|
|
29.2% |
32.1% |
36.2% |
47.2% |
55.4% |
39.7% | |
| Alternative Ambient Ads % Growth | $239.1 | $266.0 | $300.9 | $342.9 | $391.3 | $446.4 |
|
|
|
11.3% |
13.1% |
14.0% |
14.1% |
14.1% |
13.3% | |
| Source: PQ Media | |||||||
Quinn concluded that, "Americans spend twice as much time outside their homes and workplaces today than they did just a few decades ago... Digital technology and creative positioning enable alternative out-of-home media to stay in tune with today's fragmented and fast-paced consumer market"
Special Note:
The Alternative Out-of-Home Media (AOOH) sector includes advertising vehicles developed or upgraded over the past decade through new technology and methods in an effort to target more mobile and captive demographics in less cluttered locations outside the home. The AOOH media sector is composed of three major segments: video advertising networks & screens, digital billboards & displays, and alternative ambient advertising, also known as placed-based media. The AOOH segment does not include traditional static billboards, posters, furniture, point-of-purchase displays, sampling, coupons, business-to-business promotional products, event marketing, sponsorships, word-of-mouth marketing, guerilla marketing, broadcast radio, satellite radio, or consumer digital and wireless media devices.
For more information, please visit PQMedia here.Monday, April 23, 2007
Ronin Wireless Tech
Came across this company in the April 2nd Fortune Article. Recommended buy at $7 and at $10 as of 4/23/07.
Provides a network and hardware for serving ads on digital signs. Interesting upcoming industry in the world of digital advertising.
A couple links:
Ronin Wireless
Digital Retailing Expo - Navy Pier, May 16 & 17
Burkhart Advertising - Billboard and Digital Signage company - South Bend, IN
Convergent Technologies - tech and services company around digital media
Provides a network and hardware for serving ads on digital signs. Interesting upcoming industry in the world of digital advertising.
A couple links:
Ronin Wireless
Digital Retailing Expo - Navy Pier, May 16 & 17
Burkhart Advertising - Billboard and Digital Signage company - South Bend, IN
Convergent Technologies - tech and services company around digital media
Wednesday, April 18, 2007
Industries in a Great Transformation & Macro trends
With great change comes great opportunity:
The following industries will continue to go through great transformations:
Residential Real Estate - data becoming much more available - agent model will continue to shift as buyers and sellers get more informed
Media and Advertising - rise of digital media continues and the consumer taking more control of who can advertise to him/her and when
Trends within this space include - digital media at the local level, video, mobile and the new marketing opportunities that arise with a new medium
Health Care - major reform on the horizon could change the landscape of how people ascertain services and doctors and specialist market themselves for these services. Baby boom population also starts to hit at the sweet spot in this industry
Other major macro trends:
Going Green - all companies are buying into this movement as there are now financial incentives to save money as well as new businesses to start up to provide green services and products.
Growth of Small Business - the number of small companies will continue to grow and represent an even larger portion of GDP (current word of mouth estimates are 2/3rds of GDP "small" businesses). Drop in the cost of software and other systems that used to only be available to large corporations (ex Saleforce & CRM) allows individuals and small businesses to leverage similar benefits. Advancement in the net and communication breaks down barriers and improves collaboration efforts and decentralized business efforts
Outsourcing - leveraging smart, less expensive resources around the globe. Again, advancement in communication and collaboration tools allow this to become a driving force in balancing out the standard of living across the globe.
The following industries will continue to go through great transformations:
Residential Real Estate - data becoming much more available - agent model will continue to shift as buyers and sellers get more informed
Media and Advertising - rise of digital media continues and the consumer taking more control of who can advertise to him/her and when
Trends within this space include - digital media at the local level, video, mobile and the new marketing opportunities that arise with a new medium
Health Care - major reform on the horizon could change the landscape of how people ascertain services and doctors and specialist market themselves for these services. Baby boom population also starts to hit at the sweet spot in this industry
Other major macro trends:
Going Green - all companies are buying into this movement as there are now financial incentives to save money as well as new businesses to start up to provide green services and products.
Growth of Small Business - the number of small companies will continue to grow and represent an even larger portion of GDP (current word of mouth estimates are 2/3rds of GDP "small" businesses). Drop in the cost of software and other systems that used to only be available to large corporations (ex Saleforce & CRM) allows individuals and small businesses to leverage similar benefits. Advancement in the net and communication breaks down barriers and improves collaboration efforts and decentralized business efforts
Outsourcing - leveraging smart, less expensive resources around the globe. Again, advancement in communication and collaboration tools allow this to become a driving force in balancing out the standard of living across the globe.
How do you fix health care - Fortune aricle 3/19/07
Fix the health care system: Raise taxes
Sometimes, raising taxes just makes sense. Even to conservatives. Fortune's Matt Miller explains why.
Full article can be found here.I've seen this idea a couple times about how a tax increase can be used to relieve corporations of supporting the health care system in america.
Have seen additional articles around using the VAT tax to support this increase. Good for corporations, requires more discipline from the insured and can incorporate the current uninsured.
Tuesday, April 17, 2007
Home Building going Green - Fortune article 3/19/07
The first certifiably green mansion
Earth-friendly no longer equals Space Age design. Welcome to EcoManor, built in Atlanta by Ted Turner's daughter. Fortune's Patricia Sellers takes the tour.
See full article hereGreat example of how incoporating evironmentally sound ideas in home building can save costs. Interesting opportunity to provides services and solutions to home-building market around this concept
Here are some follow on links to some of the suppliers and resellers that made this project possible
Interior Media - Atlanta company that does mid to high end electronics installation for audio, energy mangagement, lighting, etc. Here is a summary of the EcoManor project.
Crestron - supplier of the energy management system that Interior Media used for EcoManor. Work through a dealer network to distribute products
Niles Audio - audio solutions for the EcoManor project
Apple Retailer Powerhouse - Fortune 3/19/07
Apple: America's best retailer
The high-tech wundercompany has landed - not only on our street corners and in our malls, but also for the first time, on the top 10 of Fortune's Most Admired Companies.
Full article can be found hereAnother way that Apple went against conventional wisdom and used creativity and strong brand to create new retail experience.
End of Garbage - Fortune Article 3/19/07
The end of garbage
Can you imagine a world of zero waste? Cities and towns across the world - and a surprising number of companies - have adopted that goal, says Fortune's Marc Gunther
See the full article hereInteresting approach to our garbage and environmental challenges.
Wednesday, March 21, 2007
Piper Jaffray Report - The User Revolution: The New Advertising Ecosystem and the Rise of the Internet as a Mass Medium
The User Revolution: The New Advertising Ecosystem and the Rise of the Internet as a Mass Medium
(Piper Jaffray, February 2007)
This 425-page PDF from Piper Jaffray takes a deep and wide look at the state of the online world. Among the highlights:
- We expect global online advertising revenue to reach $81.1 billion by 2011, representing a 21% CAGR (2006-2011).
- The advertising world is going through a revolution, one that we call the “User Revolution” as it is happening primarily with the consumers, who are taking control of content consumption and branding.
- The Internet has increasingly become a principal medium for community, communication, and entertainment—three areas that have collided together and are impacting each other’s growth—generating a new type of activity that we call communitainment.
- The Internet has become a mainstream media outlet that is now rivaling traditional media such as radio, television, newspapers, and magazines for reach and advertising dollars.
- The proliferation of online and offline media outlets has resulted in shrinking television audiences and an increasingly fragmented media landscape.
- Search is the second most commonly used application on the Web with 550 million searches daily in the
- We believe Google's wide variety of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume.
- We believe Internet video ads could become a game changer for large brand advertisers, who are used to the 15 or 30 second TV commercial.
- Portals maintain the highest reach, but the fastest growing category of destinations is communitainment sites such as MySpace and Facebook.
- Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding, and increased site visibility.
- Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.
- We expect companies such as Google (and YouTube), Yahoo!, Disney, News Corp., Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix , Wikipedia, MobiTV, Digg, and Hakia to be the most important players to watch.
Hans Rosling - gapminder.org
Great video of Hans Rosling who leads gapminder.org.
http://www.ted.com/tedtalks/tedtalksplayer.cfm?key=hans_rosling
They developed trendalyzer which is software that makes data much more visual. As the amount of data continues to grow at a ridiculous rate, tools and people that can make it easily digestible for decision making will be very valuable.
This is why Google bought them on March 21, 2007
See their tool in action
http://www.ted.com/tedtalks/tedtalksplayer.cfm?key=hans_rosling
They developed trendalyzer which is software that makes data much more visual. As the amount of data continues to grow at a ridiculous rate, tools and people that can make it easily digestible for decision making will be very valuable.
This is why Google bought them on March 21, 2007
See their tool in action
Sunday, March 18, 2007
Sir Ken Robinson - Excerpt of Speech
Sir Ken has a great message about the needs for education to be reformed to be more focused on creativity. Our current education system is still focused on educating for the industrial revolution.
Click here for a short video.
He spoke at the Performics client summit as well as MSN's AdSummit. Great stuff.
Click here for a short video.
He spoke at the Performics client summit as well as MSN's AdSummit. Great stuff.
Monday, March 12, 2007
Turn Customer Input into Innovation -The Customer Knows Best? Better Think Again
3/4/2002
Few customers are well versed in any given industry's emerging technologies, materials, or processes. That's why whole departments are dedicated to R&D. Yet many companies allow customers to drive the innovations in product development and leave little room for creativity among the experts in the organization. It's important to listen to what your customers say, but how you listen can make or break the success of new products. The following excerpt from Harvard Business Review describes a methodology for listening, and understanding the customer's desired outcome.
Real Estate Sites - Chicago Tribune, March 9, 2007
Came across a few sites talking about and taking advantage of the transformation of real estate marketing in the digital era
www.wellcomemat.com - provide more high quality video vs. YouTube and allowing agents to embed into their own sites
www.futureofrealestatemarketing.com - blog on all things marketing for the residential real estate industry
www.wellcomemat.com - provide more high quality video vs. YouTube and allowing agents to embed into their own sites
www.futureofrealestatemarketing.com - blog on all things marketing for the residential real estate industry
Tuesday, March 6, 2007
MediaPost - Center for Media Research - March 6, 2007
Newspapers Outsell TV Broadcasters With Local Online Video Ads
According to a new report from Borrell Associates, local online video advertising, worth about $161 million in 2006, is expected to grow to $371 million this year, or 5% of all local online advertising, and to exceed $5 billion in next five years.
In 2006 the market for locally targeted online video ads became a legitimate market in Chicago , New York and Los Angeles (the three largest markets) worth more than $5 million each. The next 37 largest markets each saw more than $1 million in revenue from online video, according to Borrell. The study claims that "infomercials" are said to drive the increase in the advertising market, not traditional 15-second commercials
In 2006 newspapers sold approximately $81 million in local online video commercials in comparison to $32 million sold by TV broadcasters. And, according to a report from the Television Bureau of Advertising, online TV revenues were up 41% in 2006.
The study also found that print media is using the Internet as a new medium to reach TV advertisers, while TV broadcasters have been utilizing the Internet to reach traditional print advertisers. The trend has led to most local TV websites hosting classified ads, and nearly half of the newspaper websites offering video content. This shift in website advertising is changing local advertising with banners and paid listings decreasing, and video ads and paid search increasing.
Broadcasters, are expected to bounce back this year, though. With an increasing number of video streams available on TV Websites, 80% of broadcasters surveyed expect to sell streaming video ads this year, up from 72% who did last year.
According to the study, online competition with newspapers and broadcast TV stations is expected to increase with both sides continuing to develop video products for the Web. Automotive advertisers will be key in the competition, along with real estate, health and employment.
Borrell concludes that the online video advertising market is expected to increasingly revolve around the strength of Websites' video content.
15 sites for Local Search
Good summary of some sites focused on the local opportunity
http://uncommented-business.blogspot.com/2007/03/15-sites-for-promoting-your-local.html
http://uncommented-business.blogspot.com/2007/03/15-sites-for-promoting-your-local.html
Sunday, March 4, 2007
Entreprenuer of the Year - Inc. December 2006
Great article on how an entrepreneur is making a difference and using business to revitalize a small midwestern town.
See full article here
Create Jobs, Eliminate Waste, Preserve Value
By: Leigh Buchanan
PAGE 1 of 7
Those six words explain a lot: Why Ken Hendricks is worth $2.6 billion, how he came to be a walking textbook on identifying and exploiting business opportunities, how he manages to make (relatively) few enemies while treating Beloit, Wisconsin, like one vast fixer-upper--and why he is our Entrepreneur of the Year.
See full article here
Monday, February 26, 2007
New York Times article on Quigo 2-26-07
Great overview of the contextual/remnant advertising marketplace. Also shows how transparency and leveraging media companies existing relationships with advertisers are challenging Google.
http://www.nytimes.com/2007/02/26/business/media/26adco.html?_r=1&oref=slogin
http://www.nytimes.com/2007/02/26/business/media/26adco.html?_r=1&oref=slogin
February 26, 2007
Advertising
An Ad Upstart Forces Google to Open Up a Little
By LOUISE STORY
Google and Yahoo have been fighting it out over which company will dominate the online advertising business, with Google maintaining the upper hand so far.
But in the competition for contextual text ads — those small sponsored links that run adjacent to related articles online — both companies are facing a challenge from a tiny but growing adversary named Quigo Technologies, a New York-based ad service that bills itself as an alternative to the giants.
In the last year and a half, a trickle of large media sites like ESPN.com, FoxNews.com and Cox Newspapers’ 17 sites have stopped using Google and Yahoo and instead signed up with Quigo.
What Quigo offers is transparency and control in what can often be an opaque business: advertisers pay Yahoo and Google for contextual ad placement on a wide variety of Web pages, but get little say over where those ads run or even a list of sites where they do appear.
Quigo, by contrast, gives advertisers not only the list of specific sites where their ads have appeared but also the opportunity to buy only on specific Web sites or particular pages on those sites. It also allows media company sites like ESPN.com and FoxNews.com a chance to manage their own relationships with advertisers.
Although Quigo remains a small competitor, with less than 10 percent of the contextual ad business, its growing success has apparently persuaded Google, which is accustomed to calling the shots in all aspects of its business, that it has to change the way it sells the sponsored link ads in the future.
At stake is a growing portion of the online ad business, as traditional media companies try to monetize every corner of their Web sites. Contextual ads generated about $2 billion in revenue last year, or 13 percent of online ad spending, according to eMarketer, an Internet advertising research firm. About 60 percent of that money went to Google, David Hallerman, a senior analyst at eMarketer, said.
A central point in Quigo’s pitch to publishers is that it will let them keep control of their relationships with advertisers.
“We are gaining a lot of share,” said Michael Yavonditte, the chief executive of Quigo. “This has become a multibillion-dollar industry with no clear second-place company. There’s a lot of opportunity for other companies to put their own stamp on it.”
Here is how this contextual advertising has traditionally worked: Google and Yahoo post ads on hundreds of thousands of Web sites, but both operate as blind networks — they do not tell advertisers which sites their contextual ads run on. Instead, the advertisers buy keywords for ads across Google and Yahoo’s vast networks of Web sites, including the home pages of big media companies and the smallest of bloggers.
It would be akin to an advertiser buying space on 100 national television programs, but not being told when the ads ran. Google and Yahoo argue that because advertisers only pay when the ads are clicked on, that more specific information is irrelevant.
Nor has Google allowed advertisers to bid for keyword ads on specific Web sites — say, ESPN.com. Quigo says blind network buying lowers the prices that premier Web publishers receive because advertisers bid expecting an average site rather than a well-known, desirable one.
“Google, Yahoo and most other blind networks sit in the middle and own the advertiser relationships,” said Henry Vogel, the chief revenue officer of Quigo, which was founded in
Both Yahoo and Google play down Quigo’s inroads into the business. Emily Fox, a spokeswoman for Yahoo, said her company was not aware of losing any contextual text ad clients to Quigo other than ESPN. Kim Malone, director of online sales and operations for Google AdSense, said Google did not worry about Quigo.
“The David-and-Goliath story is always a great account,” Ms. Malone said, “but I think in this case, it’s just not accurate . We have a number of large publishers who have tried out other solutions, and they always come back.”
In response to further questions about Quigo, though, Google said it was prepared to make changes to its AdSense service that mimicked Quigo’s approach, an unusual step for a company accustomed to mapping the terrain in every aspect of its business.
In the next few months, Google’s advertiser reports will begin listing the sites where each ad runs, Ms. Malone said. She added that advertisers on the Google networks would soon be able to bid on contextual ads on particular Web sites rather than simply buying keywords that appeared across Google’s entire network.
Still, Ms. Malone said she did not see much of consequence coming from the changes. “We don’t expect a lot of demand for that placement targeting,” she said. “It’s the brand, the display advertisers who care where they run.”
But ad executives have another view.
Jason Clement, associate director of search engine management at Carat Fusion, an agency in the Aegis Group that buys online ads for large advertisers, says the lack of transparency has kept some large advertisers from spending heavily on contextual ads.
In a contextual advertising test on Yahoo and Google, some clients report bad experiences with their ads’ showing up in odd places. For example, Mr. Clement said a large client of his saw an ad run late last year alongside an article that said soy milk might be linked to homosexuality.
Mr. Clement said he frequently received calls from clients about odd placements, and, he said, they worried about click fraud — a practice in which people click on ads solely to make money for the sites that carry them.
“Last year was really the year of testing these contextual networks,” Mr. Clement said. “We had essentially pulled all of those big advertisers off of the ad networks by the end of the year.”
ESPN switched to Quigo from Yahoo last fall, in part, because of Quigo’s transparency, said Ed Erhardt, the network’s president of customer marketing and sales.
“When it’s blind advertising, you know, it’s just a different kind of buy,” Mr. Erhardt said.
Advertisers will often pay more for ads on sites like ESPN.com than they will for ads on little-known blogs, executives said. Quigo’s transparency about where ads run encourages advertisers to spend more for each click than they would on Google or Yahoo, said Jason Klein, co-chief executive of Special Ops Media, an interactive ad agency.
“Because traditional networks are blind, I’ve always assumed that many of the places where your ads come up are on B- and C-level sites,” Mr. Klein said. “With Quigo, you know it’s on ESPN.com, not Joe Schmo’s sports blog. It’s a premium site, and you’re willing to spend more money.”
For the big media companies, Quigo offers another advantage: it allows them to sell their own contextual ads and run the ads under their own brands rather than Quigo’s. In many cases, ads placed by Google run under a header that says “Ads By Google.” More important than the label, though, is that media companies can sell their advertisers Quigo contextual ads, whereas Google handles all of the sales for its publishers. That lets media companies, where advertiser relationships have long been important, keep control over those ties.
Cox Newspapers used Google AdSense for about two years, but in July, all Cox sites were shifted to Quigo for the text ads.
Cox wanted to sell its own contextual ads and have its brand, rather than Google’s, be the one advertisers see, said Tonya Echols, director of business intelligence at COXnet, the Internet division of Cox Newspapers, a part of Cox Enterprises.
“We’re already talking to advertisers,” Ms. Echols said. “We already have those relationships. We’ve been in our markets for decades.”
While Quigo sells the ads for some media companies, like the Martha Stewart Weddings site, others are selling their own ads. Newsday.com, which began working exclusively with Quigo in 2004, has brought more than 600 advertisers into the Quigo system, Mr. Vogel said.
The contextual ad business is still a small part of large publishers’ revenue from their Web sites. Display and video ads tend to be more lucrative, but this does not mean that media companies ignore the contextual business.
Mr. Vogel said he was not worried about Google’s coming changes to make its system more transparent. He said Quigo would remain distinct because of the priority it placed on giving publishers control and information about advertiser budgets, and its proprietary formulas that select the best ad placement and designs.
Forbes.com, which is Quigo’s most recent convert, was an early participant in Google’s AdSense program, and then switched to another third-party provider called IndustryBrains before coming to Quigo this month. Jim Spanfeller, chief executive of Forbes.com, said switching from Google was “a dollar-and-cent thing.”
“We could make more money with somebody else,” he said.
At the newspaper chain McClatchy, contextual ads are just shy of 2 percent of the company’s online sales, said Christian Hendricks, the vice president for interactive media.
McClatchy is currently testing Quigo’s ads at four of its papers, including The Fresno Bee, to compare it with Yahoo and Google. Mr. Hendricks said McClatchy was attracted to Quigo because it sells ads specifically for the individual newspapers, rather than using a blind network.
“What we’re trying to do is maximize revenues,” Mr. Hendricks said. “At this point, it looks like Quigo is performing better, but it doesn’t mean it will stay that way. All the other networks have to do is start selling our brands.”
Sunday, February 25, 2007
US Tax Rates Relatively Low
I'm all for paying less taxes but I think it is always good to keep in mind how low our tax rates are in the US compared to the rest of the world. Interesting to see that the burden is much less here but we live in the best country in the world from an infrastructure and opportunistic standpoint.
To see some statistics on this topic see below:
Forbes Global Tax Misery Index 2006
Overall Tax Burden & Government Spending - Forbes, May 2006
To see some statistics on this topic see below:
Forbes Global Tax Misery Index 2006
Overall Tax Burden & Government Spending - Forbes, May 2006
Thursday, February 22, 2007
The Entreprenurial Movement - Fortune SB 2-1-07
Everyone wants to start a business
Last year a record number of Americans started companies. Here's why becoming your own boss has become a national obsession.
Fortune article on Newt Gingrich 1-22-07
The new Newt thing
Draft me! Draft me! Newt Gingrich has a big idea and thinks you'll like it so much he'll just have to run for president, says Fortune's Nina Easton.
Zillow.com in Fortune 2-15-07
What's your house really worth?
How Zillow is turning online voyeurism into a real estate revolution. Fortune's Jeffrey M. O'Brien reports.
Companies in the Real Estate Revolution
Given the growth and pervasiveness of the Internet, few industries are undergoing as much transition as the residential real estate industry.
Couple interesting names in the space
RedFin.com
Zillow.com
Couple interesting names in the space
RedFin.com
Zillow.com
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