Tag Archives: Commentary
by Chris Roush
Silas Lyons, the editor of the Redding Record Searchlight in California, writes about the paper’s business writer David Benda and how readers like his writing more now that the economy has turned around.
Lyons writes, “For a while, I don’t think I went a day without someone suggesting David should be fired.
“For his part, David kept his head down, kept his cool, and kept doing his job. It wasn’t flashy bravado, but it took real courage to keep writing fairly and honestly about what was happening.
“That, of course, is what we owe our readers, and our community. Doesn’t mean it’s easy, when you’re under constant attack.
“Well, I have to say David has made a remarkable turnaround.
“Several different times recently, unsolicited, I’ve had people tell me they see a real difference in David’s writing. He’s so much more positive, they say. He really seems to be writing stories that are uplifting, and shine a positive light on the business community, they say.
“What have you been putting in his coffee?
“If only journalists truly had the power attributed to them.
“I’ve worked pretty closely with David for more than five years now, through all the worst of the economy, and now watched as the green shoots of improvement have emerged. You want to know the secret about him? He hasn’t changed one bit.”
Read more here.
by Chris Roush
The society correspondent for Talking Biz News once again attended the Financial Follies, hosted by the New York Financial Writers’ Association, and filed this report:
Thank god 2012 was an election year. And the year of the biggest storm to hit New York City in a really, really, really long time.
For once, the Financial Follies – the annual prom and sketch show for business journalists and PR reps– wasn’t filled to the brim with esoteric jokes about Greek bond yields, China’s hard landing and the Fed’s totally unprecedented quantitative easing measures (!!! OMG, y’all, QE276 is coming).
Instead, the stars aligned and we had a hurricane named for John Travolta’s love interest in Grease. We were fortunate there was a guy who looked like a younger version of Mitt Romney, could sing, and chose to do both for us. How that damned girl (I mean storm!) wreaked havoc on my heart (I mean political aspirations! I mean city?).
Of course, the binders of women made it in!
This stuff was just writing itself this year, and all in the name of a good Follies.
Personally, it only took me four years to get a seat where I could actually see the stage. (Or maybe this was the first year that I took note that there was a stage). One veteran at my table said she’d skipped out on the Follies for the past few years, but believe it or not, she told me, it’d been around since the 1990s, and yes, it was always in that room.
I wonder if 1998 – you know, “Bill Clinton meet Monica Lewinsky” and all the shenanigans that followed — at all compared with 2012’s lineup of sketches? At least they had cigars then, my table mate told me. No, I mean, smoking was allowed in the room. …And yes, that too.
Well, we still had JPMorgan’s Jamie Dimon. And the Sandy-Romney love/hate saga.
If you know anything about the Follies, you know that key to a successful night is your table, its location, its members, and most importantly the number of bottles of wine it holds. I’m not saying the volunteers for the New York Financial Writers’ Association aren’t entertaining and talented, I’m just saying they’re writers by training, and financial writers at that.
So there was a momentary scare for some attendees this year when rumors circulated that their dinner table would not have any – ANY – wine awaiting them when the show began. A Follies without wine?? 2012 definitely wasn’t going to compare to the years before. Turned out to be just one table, and don’t worry, some kind, alcoholic soul who was seated at that table made it happen. They got their wine. We all did.
As in years past, the evening started with $11 drinks for those without connections and heavy-handed bartenders dolling out free whiskeys for those who made it to the USAA pre-dinner cocktail hour. By the way, this year, they’ve caught on. If you don’t actually cover, you know, finance and markets, you can’t get in anymore.
Sorry, political reporters, this is our White House Correspondents’ Association Dinner. You got the Obamas and Kate Upton, we got a tiny suite on the top floor of the Marriott and the same steak dinner as every year before, probably from the same cow. I think you know who wins.
Apparently David Faber made it. Photographic evidence exists, in fact. Everyone loved Pat Kiernan’s presence. Well, everyone on one side of the room, as I actually am not sure if he was at the event or made an appearance on stage or if people just really like Kiernan and were talking about him a lot. He is pretty great, go NY1.
The lack of financial focus this year I think made us all feel a bit cooler. There were jokes I could take home to the outside world. Granted, I don’t remember any of them, but I promise I laughed at them! And I would again today! Maybe.
But the one that got a ton of laughs was still as nerdy as they come — “No more Goldman Sachs means no more Bloomberg snacks.”
Aren’t you witty, Financial Follies. It’s true, and it rhymes.
by Liz Hester
The Federal Trade Commission is still looking for charges that will stick to Google, according to Quartz. But Sunday’s New York Times had an interesting story pointing out the problems businesses can face when Google changes its search algorithm or traffic funneled from the search engine drops.
The story profiles online retailer Nextag, which earlier this year saw traffic to its site dropping. From the story:
In a geeky fire drill, engineers and outside consultants at Nextag scrambled to see if the problem was its own fault. Maybe some inadvertent change had prompted Google’s algorithm to demote Nextag when a person typed in shopping-related search terms like “kitchen table” or “lawn mower.”
But no, the engineers determined. And traffic from Google’s search engine continued to decline, by half.
Nextag’s response? It doubled its spending on Google paid search advertising in the last five months.
The move was costly but necessary to retain shoppers, Mr. Katz says, because an estimated 60 percent of Nextag’s traffic comes from Google, both from free search and paid search ads, which are ads that are related to search results and appear next to them. “We had to do it,” says Mr. Katz, chief executive of Wize Commerce, owner of Nextag. “We’re living in Google’s world.”
Controlling searches like these obviously has a huge impact on the bottom lines of many different businesses. The story also points out that it affects how people get information about local retailers and restaurants.
The relationship between Google and Web sites, publishers and advertisers often seems lopsided, if not unfair. Yet Google has also provided and nurtured a landscape of opportunity. Its ecosystem generates $80 billion a year in revenue for 1.8 million businesses, Web sites and nonprofit organizations in the United States alone, it estimates.
The government’s scrutiny of Google is the most exhaustive investigation of a major corporation since the pursuit of Microsoft in the late 1990s.
The staff of the Federal Trade Commission has recommended preparing an antitrust suit against Google, according to people briefed on the inquiry, who spoke on the condition they not be identified. But the commissioners must vote to proceed. Even if they do, the government and Google could settle.
Google has drawn the attention of antitrust officials as it has moved aggressively beyond its dominant product — search and search advertising — into fields like online commerce and local reviews. The antitrust issue is whether Google uses its search engine to favor its offerings like Google Shopping and Google Plus Local over rivals.
Columnist David Carr also writes about Google News and some of the issues they’re facing in various countries around content usage.
It’s a little counterintuitive, but large newspapers believed that Google was hurting them by generating a page of links — with headlines and a short summary — to articles that the newspapers had paid to create. Publishers said that what was supposed to be an index of the news had become the news, and was a disincentive for people to click through to the source.
American publishers eventually decided that the only thing worse than being aggregated by Google News was not being aggregated at all, but the fight has been joined anew in other countries by publishers who argue that the giant American search company is picking their pockets every time it links to articles.
There’s a large boycott under way in Brazil, punishing legislation is gaining momentum in Germany, and there is talk of a similar effort in France.
So, the giant on the Internet that you can’t live without has pretty steadfast rules on what they’ll pay for. And the bigger they get, the more leverage they have to promote businesses and content. As Carr points out:
There are a few reasons Google remains calm amid a storm of push back. According to Google, its search engine delivers 4 billion clicks a month to news media outlets, 1 billion of which come from Google News. That’s a lot of leverage.
In an age where interns are rarely paid, local news and newspapers are struggling and journalism jobs are shrinking it’s hard to argue with someone pushing traffic to your site and content. What’s hard to swallow is the ability to add, drop and change the traffic without any notice.
It will be interesting to see how the U.S. handles these issues compared with some of the other countries looking into them. No matter what, the face of the Internet and access to its information could look different this time next year.
by Chris Roush
Eric Laursen writes Wednesday for The Huffington Post about how the sports media’s lack of critical coverage of Lance Armstrong until recently compares with the business media’s coverage of the economic crisis of the past five years.
Laursen writes, “In a not dissimilar manner did the business press tout the story of the ‘new economy’ and turn hacks like Enron CEO Ken Lay into ‘maverick’ symbols of American success.
“Rather than learn their lesson, the business press fell into the same trap less than a decade later. Prominent reporters largely bought the line that there either was no housing bubble, or that (take your pick!) detecting the existence of one was too hard and therefore shouldn’t be attempted. They failed to comprehend the dangerous levels of risk being spread by complex mortgage-backed securities, preferring to believe what their most highly-placed sources told them: that spreading risk around the investor universe would somehow lower the level of risk for everyone. In fact, it created a contagion.
“Perhaps the most delicious example of this refusal to grapple with reality was a column that the bestselling and much-lauded Michael Lewis wrote for Bloomberg.com in January 2007, reporting from the annual World Economic Forum junket in Davos, Switzerland. Scoffing at the idea that the markets may be mispricing some forms of risk, or that financial derivatives might have inherent dangers, Lewis blandly concluded, “The most striking thing about the growing derivatives markets is the stability that has come with them.”
“Lewis was just coming off the success of his inspirational football book, The Blind Side. Rather than being taken down a peg as a result of his embarrassing Bloomberg column, however, he parlayed the subsequent crash of the housing markets and much of Wall Street into another inspirational bestseller, The Big Short, which celebrated a group of short-sellers who had managed to profit from the disaster. The book also helped Lewis to cover his own tracks, implying strongly at every turn that predicting a crash took sheer genius of the kind only his subjects possessed. In fact, plenty of economists — Dean Baker at the Center for Economic and Policy Research, for one — had been warning for years and as loudly as possible about the overextended housing market. The business press, perhaps for the reasons Carr enumerates, simply weren’t listening.”
Read more here.
by Liz Hester
With the economy the central issue in this year’s election, it’s not surprising that many companies have been mentioned by name on the campaign trail and in ads. But none have actually had to set the record straight themselves, until now.
Chrysler, which received government support and money to get through bankruptcy during the financial crisis, had to send an email to employees today after Republican presidential candidate Mitt Romney said it was planning to move Jeep manufacturing jobs to China.
From the New York Times Caucus Blog:
Chrysler’s chief executive on Tuesday strongly refuted claims that production of Jeeps would shift to China, an insistence that cast further doubt on the Romney campaign’s recent efforts to undercut President Obama’s support for the auto industry as it fights for Ohio’s 18 electoral votes.
In an e-mail to employees, the chief executive, Sergio Marchionne, said that Jeep’s commitment to the United States was unequivocal. “I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China,” he wrote. “It is inaccurate to suggest anything different.”
Mr. Marchionne’s response — an unusually forceful gesture from the chief executive of a major American corporation a week before Election Day — came as the politics of the auto bailout took center stage in the presidential campaign.
The Romney campaign has come under considerable criticism in recent days for taking liberties with the facts in a new television commercial that suggests Jeep, a recipient of federal bailout money, will soon outsource American jobs to China. Chrysler, Jeep’s parent company, does not in fact have plans to cut its American work force but is considering opening a facility in China where it would produce Jeeps for sale locally.
The Chrysler head decided to speak out after Romney made remarks at a political event in Ohio. From the Wall Street Journal:
Chrysler, like Detroit rival General Motors Co. has tried to keep its distance from the presidential contest, even as President Barack Obama has used their comebacks from federally financed bankruptcies as a prime selling point in his effort to win votes in the U.S. auto industry heartland of Ohio and Michigan. Chrysler on Monday reported an 80% increase in third-quarter net income.
Mr. Romney’s campaign launched an ad in Ohio last week aimed at blunting the Obama campaign’s effort to take credit for the auto industry recovery. In the ad, an announcer states that Mr. Obama “sold Chrysler to Italians who are going to build Jeeps in China.” The line is accompanied by images of cars being crushed at a junkyard. The Romney campaign has defended the ad as factual. The Obama campaign on Monday shot back with an ad characterizing the ad and Mr. Romney’s statement as false.
Chrysler hadn’t issued a statement on the issue since a blog post from the company’s chief spokesman, Gualberto Ranieri, which was posted prior to Mr. Romney’s remarks in Ohio. That post dismissed as false the speculation on some blogs that Chrysler was considering sending U.S. Jeep production jobs to China.
In his email to employees, Mr. Marchionne said the company plans to invest $500 million in the Toledo factory that builds the Jeep Liberty model and plans to add 1,100 jobs at the factory by 2013.
What makes this story interesting isn’t the back and forth of politics, but the obvious public relations and brand protection strategy Chrysler was forced to implement. It’s rare for any corporation to weigh in on politics.
After the 2010 Supreme Court ruling that allows unmitigated corporate contributions to candidates, many feared companies would own the election with their deep pockets. But as Bloomberg Businessweek reported in August, many corporations are putting limits on how they back candidates to avoid public relations nightmares.
Chrysler is looking to avoid the label of a company that moves jobs overseas, hence the quick move to respond to political statements. So what is clear from all of this is that companies haven’t forgotten the bottom line and that protecting their images remains of the utmost importance.
by Liz Hester
Lance Armstrong’s decision to step down as chairman of his cancer-fighting Livestrong foundation in the wake of doping allegations isn’t just a blow to the man himself; it’s a blow to an organization with a beneficial mission and a powerful brand.
From Juliet Macur’s story in the New York Times:
“I have had the great honor of serving as this foundation’s chairman for the last five years and its mission and success are my top priorities,” Armstrong said in a statement. “Today therefore, to spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship.”
Armstrong, the seven-time Tour winner who denies ever doping, founded the organization in 1997 after he survived testicular cancer and it sold millions of yellow Livestrong wristbands and went on to partner with Nike to sell millions of dollars of Livestrong gear. Jeff Garvey, the vice chairman of the organization, will become chairman, while Armstrong will remain on the foundation’s board.
Livestrong funds programs that support cancer survivors through diagnosis to life after the treatment. Each year, they spend around $35 million, with $30 million of that going to programming, according to their website.
The foundation, which will celebrate its 15th year in 2012, has raised more than $470 million with 81 percent of those funds going to programs, according to the Livestrong web site. That’s an incredible amount of money, no doubt enabled in part from Armstrong’s celebrity.
How else could you sell 80 million of those ubiquitous yellow silicone bracelets? That’s right, 80 million people shelled out a $1 each to wear their support on their wrists, according to USA Today. And it was the first of what is now a cultural phenomenon.
Livestrong might not be one of the Forbes top 200 U.S. charities, but it’s a well-known brand that’s seeped into the broader culture beyond cycling and cancer charities. The foundation and its founder are intertwined as brands.
This connection complicates Armstrong’s personal legacy (or lifts it despite the doping scandal) and it makes it hard for the foundation. People like to give money to causes that make them feel good and have the potential to elevate their social status. Why else would so many people wear those yellow bands?
At least that’s what I thought, until I read this CNN story. Here are the important lines (some parts have been omitted, so click the link for the full story.)
The organization, which had strongly defended Armstrong’s role as recently as last week, did not ask him to step aside, Livestrong spokeswoman Katherine McLane said.
Armstrong founded the charity in 1997 after his own successful treatment for testicular cancer that had spread to his brain and lungs. He came back from the disease seemingly stronger than ever, winning the first of his seven Tour de France titles three years after he was diagnosed with cancer.
McLane also noted the day of the report’s release that donations to the charity had boomed since August, when Armstrong announced he was ending his legal fight to stop USADA’s investigation.
McClane said Wednesday that Livestrong’s audience — cancer patients and their families — aren’t troubled by Armstrong’s woes.
“The last thing that’s going to enter your mind is news from the cycling world,” she said.
Donations to the charity are up. I think this shows that celebrity can only go so far to help/hurt a brand. People are smart enough to separate the works of the charity from the actions of the founder. It might dilute the story, but the doping doesn’t change the fact the man’s a cancer survivor and started a foundation to help others.
I’m not a fan of cheaters. And this post should in no way be read as a defense of Armstrong’s actions. But I do think it interesting that for all the money spent on brand and research, that it takes more than a founder’s fall from grace to stop people from giving to charity.
And no matter what you think of Armstrong or cycling, cancer survivors and their families deserve all the help they can get.
by Adam Levy
Jack Welch, the storied former CEO of General Electric, went out on a limb last week and insinuated that the Obama Administration somehow manipulated the U.S. employment data for his political benefit.
He wrote a tweet to that effect and then on Wednesday wrote an op-ed in the Wall Street Journal, defending the “stink” he made and refusing to “pipe down.”
“I Was Right About that Strange Jobs Report,” Welch wrote.
Throw me in the camp of those who would like him to pipe down — or maybe come clean with how he knows. Maybe Neutron Jack knows what he’s talking about, but he’s not telling us.
Just about the same time that Welch was doubting the authenticity of the Department of Labor report, I read a couple of articles that a team of academics were questioning the veracity of U.S. corporate earnings reports. The study found that one of five U.S. companies – yep, 20 percent of U.S. firms – cook the books when they release their earnings.
Finance professors at Duke University and Emory University found that a not insignificant number of companies “manage” earnings and use aggressive accounting maneuvers to tweak the numbers — legally, of course! These companies can tap into reserves, or deploy some other sleight of hand to make sure the numbers hit or exceed targets, enabling, of course, the CEO to get his or her bonus, the stock to stay up, and so forth.
Is it too much of a leap to think that maybe somewhere in his corporate background Welch encountered such a phenomenon, and that’s influencing his certainty about the government fiddling with its report?
I’m not suggesting that Welch and/or GE cooked its books (never!). But it seems like there is a one-in-five shot that a company does that – so maybe Welch has some personal experience.
I realize it’s bad form to take a cheap shot and insinuate some malfeasance regarding a CEO considered a legend by many. But why should I pipe down? Welch won’t.
by Liz Hester
Last week’s drop in the unemployment rate to 7.8 percent from 8.1 percent seemed like good news no matter which side of the political spectrum you’re on. Or was it? Several influential business leaders – think Jack Welch – and financial blogs accused the government of changing the numbers to benefit President Obama.
Many in the business media were quick to jump into the fray, while others worked to dispute the claims. But more importantly, what does this say about the media?
Welch’s tweet – “Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers” – generated pretty strong reaction from some leading journalists, according to the Huffington Post. The Wall Street Journal even devoted a video segment to it.
In his most recent op-ed for the New York Times, revered business journalist Joe Nocera broke it down into three points that it was impossible to change the numbers. The first was that it didn’t make any sense for a non-partisan bureau to manipulate the numbers since their jobs remained secure no matter who was in office. The second was this:
Hence, Point No. 2: there is, indeed, something a little strange about the way the country derives its employment statistics. It turns out that the statistics the bureau releases each month are generated by two different reports. One, called the establishment report, is a survey of businesses. That’s where the 114,000 additional jobs comes from.
The second is a survey of 55,000 households, where people are asked about their employment status. Extrapolating from the survey, the bureau concluded that an additional 873,000 people had found work in September. It is that number that brought the unemployment rate from 8.1 percent to 7.8 percent.
When I asked a bureau spokeswoman why there was such divergence between the two numbers, she said she had no idea. “The reports are totally separate,” she said.
His third point was that the presidential race shouldn’t hinge on one set of numbers, especially those that were volatile and constantly readjusted.
But that didn’t keep the media from piling into the debate or Rep. Allan West from agreeing publicly with Welch. Politico reported that West wrote this:
“I agree with former GE CEO Jack Welch, Chicago style politics is at work here,” West wrote on his Facebook page Friday. “Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the Presidential election. This is Orwellian to say the least and representative of Saul Alinsky tactics from the book ‘Rules for Radicals’ – a must read for all who want to know how the left strategize.”
In the same story, they also pointed out:
Labor Secretary Hilda Solis, whose agency releases the jobs figures every month, responded that charges of a conspiracy theory are “ludicrous.”
“I’m insulted when I hear that because we have a very professional civil service,” she said on CNBC. “I have the highest regard for our professionals that do the calculations at the [Bureau of Labor Statistics]. They are trained economists.”
But why is this even news? This story from ABC News quotes a fund manager who nails why this even warranted the debate:
Guy La Bas, a managing director, fixed income strategy, at Janney Montgomery Scott, a Philadelphia brokerage firm, agreed. “I don’t want to simply blast Welch since he’s a very respected manager,” he told ABC News in an email. “In this instance, he issued an off-the-cuff remark which I highly doubt is true, but that doesn’t negate the value of his business opinions.”
But, he added, “The Bureau of Labor Statistics, which conducts the monthly jobs survey is a non-partisan group of hard-working people that have the public trust. Considering this trust and the controls imposed on their processes, the chances that the BLS actively “manipulated” data are extremely low, even if some of the numbers underlying today’s jobs report appear surprising. In my discussions with statistical organizations, political officials receive information about economic releases only after the numbers have been calculated, so there’s no opportunity for the White House–or anyone else–to alter the results.”
There are a couple of points for the media to actually be commended on in covering this story. Ignoring a controversial tweet/statement from someone of Welch’s mystique would have been doing a disservice to the general public. Stories, like this one from McClatchy’s Kevin G. Hall, that discredit the remarks are important.
But it does seem that the election and the country in general are moving in a dangerous direction when business leaders and elected officials are questioning the truth in statements from non-partisan government bureaus. And that is the worst commentary of all – that politics and personal beliefs are enough to spark a nation-wide debate over something that’s considered fact.
It’s important the media continues to try and discredit these statements, but also sad commentary that this even got the coverage it did.
by Liz Hester
It’s Advertising Week 2012! Ok, so no one’s actually jumping out of a chair to run to New York, but Tanzina Vega and Stuart Elliot do have an interesting story in the New York Times about the five-day event.
As the world relies more on digital, companies are trying to figure out the best way to reach more segmented audiences, sometimes with shrinking budgets. This year’s conferences are increasingly focused on social, mobile and digital media – a far cry from the “Mad Men” days of beautiful print ads.
It was also a chance for social media companies like Facebook and Twitter to help advertisers better understand the value of advertising on social networking sites. From the story:
Facebook took the opportunity of a session at the Mixx conference to answer questions about the efficacy of buying advertising on its site — questions that were widespread even before the company’s disappointing initial public offering.
Brad Smallwood, director of pricing and measurement at Facebook, discussed the findings of a study the company hoped would change advertisers’ minds about depending on measurements like clicks to determine the success of campaigns on facebook.com. The goal is to have them perceive the social network more as a medium akin to television for branded advertising.
“If you ran a campaign in the last five years, you focused on clicks,” Mr. Smallwood said, but “demand fulfillment is only one piece of the marketing puzzle.”
“We have to provide a solution for the brand marketers of the world,” he added.
The study was conducted with a new Facebook partner, Datalogix, a company that measures in-store purchases. Fifty campaigns on Facebook were measured, for brands from giant marketers like Nestlé, Procter & Gamble and Unilever. When purchase data from stores was combined with data about ad impressions on Facebook, the study found that 70 percent of the campaigns enjoyed three times greater return on their budgets, and 99 percent of the sales came from consumers who did not interact with the Facebook ads.
I’m not sure that last part proves the point (unless it’s an error), but needless to say, advertisers are definitely looking for more engagement and better ways to measure their success.
I’m bringing this up since the topic of advertisers was discussed by one of the more interesting panels at last week’s Society of American Business Editors and Writers conference last week. The person with some of the most radical ideas: Bloomberg Businessweek editor Josh Tyrangiel.
Web advertisers are struggling and seem to be constantly chasing two-year-old trends, Tyrangiel said. For example, right now the hot buy is video and video pre-roll, but adding a 30-second advertisement to the beginning of every video is bad for advertisers and creates a terrible user experience, he said.
Tyrangiel said he’d like to see advertisers spend more money and not just slap the same banner ad up on every site. Companies who spend more to create a custom ad experience on different sites will “nail it on engagement.” With the rise in specialized content and people willing to pay for the information they want to receive, advertisers will have to consider a different approach to their online and mobile campaigns, Tyrangiel said.
And if customization is the key for online advertisers, then companies need to figure out how to better use social media tools to engage customers. From the Times story:
At another Mixx presentation, Joel Lunenfeld, vice president for global brand strategy at Twitter, shared data about the relationships people have with brands on twitter.com.
Nine out of 10 people on Twitter follow at least one brand, Mr. Lunenfeld said. Although most said they did so for promotions, coupons and free products, he said that 87 percent said they followed brands for fun and entertainment and 80 percent said they did so for access to exclusive content.
Among the examples presented by Mr. Lunenfeld were how brands like Panasonic and Procter & Gamble use Twitter. Perhaps most interesting was Mr. Lunenfeld’s connection between Twitter posts and television commercials.
“Twitter is the EKG of action for television,” he said, adding that 50 percent of people who use Twitter do so while watching TV.”
I find this factoid about TV and Twitter staggering. Smart companies don’t just slap a Twitter icon on the bottom of advertisements; they’re finding a way to engage the audience. And another key question for companies is how to integrate all these platforms to create a cohesive experience.
Forbes.com contributor Rhonda Hurwitz wrote in a recent post that companies typically fail with social media in one of three ways. They either outsource too much, put the department responsible for social media off to the side or don’t engage employees in the process.
As companies spend more on social advertising – it’s expected to more than double during the next five years to 18.8 percent of total marketing spend, Hurwitz said citing CMOsurvey.org.
That’s a lot of people throwing money as something not fully a part of the business. And for those who write about advertising and marketing, it’s important to pay attention.
by Liz Hester
With the looming fiscal cliff, not a lot of news organizations have been paying attention to the payroll tax cuts, set to expire at the end of the year. The New York Times’ Annie Lowrey wrote Monday that no matter who wins the election in November, it’s unlikely this particular tax cut will survive.
That means a tax hike starting Jan. 1 for about 160 million U.S. workers. Both Republicans and Democrats are more interested in focusing on the broader Bush-era tax cuts that are also set to expire and some independent economists said the economy could handle the increase despite continued weakness, Lowrey writes.
From her story:
Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.
But there is still little desire to make an extension part of the negotiations that are under way to avert the huge tax increases and across-the-board spending cuts, known as the fiscal cliff, that will start in January without a deal. For example, without any action, the Bush-era tax cuts will expire and the military and other domestic spending programs will be reduced.
Despite this, it’s easy to see why the media are focusing on the fiscal cliff. Lori Montgomery wrote in the Washington Post that if Congress allows the nation to go over the fiscal cliff then 90 percent of Americans would have higher taxes.
A study published Monday by the nonpartisan Tax Policy Center finds that taxes would go up by a collective $536 billion next year, or about $3,500 per household, reducing after-tax income by about 6.2 percent.
But the impact would vary significantly by income level, the study found, ranging from a $412 jump for the lowest earners (a reduction of 3.7 percent in after-tax income) to $120,000 for the top 1 percent (a bite of 10.5 percent). Middle-income households — those earning between $40,000 and $65,000 a year — would see their taxes go up by an average of $2,000, the study found, leaving families with 4.4 percent less money to spend.
For most taxpayers, the bulk of the increase would be triggered by the scheduled expiration of tax cuts enacted in 2001 and 2003 during the George W. Bush administration. The expiration of President Obama’s payroll tax holiday, which shaves 2 percentage points off payments to Social Security, comes in a close second.
But the lowest earners would be hardest hit by the expiration of tax breaks enacted as part of Obama’s 2009 economic stimulus package, the study found. Those losses would include an expansion of the earned income tax credit and the child tax credit for working families, as well as a $2,500 credit for college tuition, which would shrink to $1,800 and be available for only two years instead of the current four.
The Associated Press reported the government could see a $500 billion in new revenue if all the cuts expired. That’s good news for government, especially as the federal deficit continues to climb.
But is it really the best policy to cut consumer’s income at a time of rising costs of living, increased inflation and wavering consumer confidence? It feels as if the economy is on the brink of either getting better or taking another downturn. If millions of Americans see a noticeable drop in income, it adds yet another strain.
No one likes higher taxes and obviously the country needs to be more fiscally responsible, but seems as if a combination of cuts and higher taxes would better serve the current state.