Tag Archives: Coverage
Housing begins to rebound
by Liz Hester
Good news for homeowners who have made it through the last several years and were able to hang onto their homes. Prices are going up, giving them more equity for the first time in years.
Here’s the story from Bloomberg:
More American homeowners will be able to use their properties as cash machines again after real estate equity jumped last year by the most in 65 years.
Property owners recaptured $1.6 trillion as home values climbed to the highest levels since 2007. The amount by which the value of the houses exceeds their underlying mortgages rose to $8.2 trillion last year, a gain of 25 percent, according to Federal Reserve data.
An expanding group of homeowners is able to get cash from their properties as banks show more willingness to make home equity loans with the market’s recovery. Originations for the mortgages should rise 10 percent to almost $83 billion this year, from about $75 billion in 2012, said Shaun Richardson, a vice president at Icon Advisory Group, a mortgage analytics firm in Greensboro, North Carolina. About 6 percent of lenders eased equity-mortgage standards at the end of 2012, the most in 18 months, according to the Fed.
“Lenders are starting to come back into the marketplace,” said Greg McBride, a senior financial analyst at Bankrate Inc. “We’re not going back to the wild, Wild West we saw during the real estate boom, but we are going to see more people spending their equity.”
Americans went on a spending spree in the five years before the 2006 peak of the real estate market, tapping about $800 billion of their rising equity to spend on everything from cars and televisions to debt consolidation and college tuition.
At the beginning of the financial crisis in 2008, close to $1 trillion of the loans were outstanding at U.S. banks and credit unions, an all-time high, according to the Fed. In the housing crash that followed, banks wrote off, or declared worthless, about $251 billion of home equity loans, according to the Federal Deposit Insurance Corp.
The year-old real estate recovery is helping to ease defaults. The volume of equity loans 90 days or more overdue dropped 25 percent in the fourth quarter to $3.2 billion from the prior period, according to the FDIC. As a result, banks are beginning to view equity lending as a potential source of income, rather than losses, said Stuart Feldstein, president of SMR Research Corp., a consumer-lending research firm in Hackettstown, New Jersey.
But while banks may be poised to return to an abandoned source of revenue – home equity loans – there’s another potential fee stream that may go away.
According to the Wall Street Journal, regulators are being to look at regulating “forced” home insurance policies and the banks that charge the fees:
A U.S. housing regulator is cracking down on a little-known practice that has hit millions of struggling borrowers with high-price homeowners’ insurance policies arranged by banks that benefit from the costly coverage.
The Federal Housing Finance Agency, which regulates mortgage giants Fannie Mae and Freddie Mac, plans to file a notice Tuesday to ban lucrative fees and commissions paid by insurers to banks on so-called force-placed insurance.
Such “forced” policies are imposed on homeowners whose standard property coverage lapses, typically because the borrower stops making payments. Critics say the fee system has given banks a financial incentive to arrange more expensive homeowners’ policies than necessary.
Banning the fees and commissions could help lower the price of the insurance policies. The housing agency’s move would apply nationwide to all mortgages guaranteed or owned by Fannie and Freddie—about half of the housing market.
Forced policies have boomed in the wake of the housing bust, as many homeowners struggled to keep up with mortgage payments. Some borrowers may try to save money by dropping the original standard coverage, only to be hit by policies with premiums that are typically at least twice as expensive as voluntary insurance, and sometimes cost as much as 10 times more. Nearly six million such policies have been written since 2009, insurance industry data indicate. Consumers are free at any point to replace a force-placed policy with one of their own choosing.
Property insurance generally is required to secure a mortgage and protects not only the homeowner’s investment but also the lender’s.
Regulators say some consumers don’t read warning letters that they will be subject to potentially more-expensive coverage if they don’t restore their original coverage or line up some other homeowners’ policy.
They only realize months into the new arrangement that the amount they are being billed is much higher than they previously paid for coverage.
Rising home prices might be good not only for consumers, but also for the banks that may have another revenue stream. On the other hand, increased regulatory scrutiny could take away another source of income. It seems right to get rid of products that don’t help consumers and return to products that do.
In Buffett’s hometown, newspaper expands business coverage
by Chris Roush
The Omaha World-Herald newspaper in Nebraska, which was purchased by billionaire investor and Omaha resident Warren Buffett in 2011, has been expanding its business news coverage in recent months.
The expansion includes adding two new staffers to the business news desk — one experienced reporter, Russell Hubbard, most recently of the Birmingham News, and one new graduate, Paige Yowell, dedicated to helping to feed the section’s online page with breaking news, started in the last two months. It also has a new blog called Money Talks that started at the end of January.
“That gives us a staff of seven business reporters, up from four when I became business editor about two years ago,” said Deb Shanahan, the Money editor at the paper, in an email to Talking Biz News. ”We also have a business editor, a deputy business editor and a designer assigned part-time to the Money section.”
Since the beginning of the year, the department has also gotten back its stand-alone weekend sections. For several years, Money was tucked inside the A section on Saturdays and Sundays — essentially an issue of balancing sections for press runs.
The daily Money sections also are larger – at least six pages combined with classifieds, not the four pages with classifieds sometimes allocated in the past.
“I think the newspaper leaders see business news as local news we can own – news that distinguishes us from area TV, radio and web reports – and we are benefiting from that,” said Shanahan.
And yes, the paper’s business desk has a reporter dedicated to covering all things Buffett. It’s Steve Jordon, who is one of the most senior reporters in the newsroom, having been there 45 years.
Covering the business of health care
by Liz Hester
One of the biggest expenses many people will incur is the cost of a long-term illness or recovery from an accident. It’s no secret that hospital stays are expensive and that’s not likely to change even after the Affordable Care Act. Covering these costs will be an important part of business journalism going forward.
The New York Times had a story about Kaiser Permanente and how it’s just not making enough money despite being held up as a model for what the system could be:
When people talk about the future of health care, Kaiser Permanente is often the model they have in mind.
The organization, which combines a nonprofit insurance plan with its own hospitals and clinics, is the kind of holistic health system that President Obama’s health care law encourages.
Kaiser has sophisticated electronic records and computer systems that — after 10 years and $30 billion in technology spending — have led to better-coordinated patient care, another goal of the president. And because the plan is paid a fixed amount for medical care per member, there is a strong financial incentive to keep people healthy and out of the hospital, the same goal of the hundreds of accountable care organizations now being created.
Yet even with all of its effort, its chairman and chief executive, George C. Halvorson, acknowledges Kaiser has yet to achieve the holy grail of delivering that care at a low enough cost. He says he and other health systems must fundamentally rethink what they do or risk having cost controls imposed on them either by the government or by employers, who are absorbing the bulk of health insurance costs. “We think the future of health care is going to be rationing or re-engineering,” he said.
Mr. Halvorson is convinced that Kaiser’s improvements in the quality of care save money. But he also says that the way to get costs lower is to move care farther and farther from the hospital setting — and even out of doctors’ offices. Kaiser is experimenting with ways to provide care at home or over the Internet, without the need for a physical office visit at all. He also argues that lower costs are going to be about finding ways to get people to take more responsibility for their health — for losing weight, for example, or bringing their blood pressure down.
And there are other concerns, such as whether an all-encompassing system like Kaiser’s can really be replicated and whether the limits it places on where patients can seek care will be accepted by enough people to make a difference. Or whether, as the nation’s flirtation with health maintenance organizations, or H.M.O.’s, in the 1990s showed — people will balk at the concept of not being able to go to any doctor or hospital of their choice.
Besides paying for the care, the increased sophistication of data gathering and computer equipment is making what to do with patient information another big piece of the health care story. The Wall Street Journal had this story about one insurer’s answer to the question.
As it prepares to vie for new business from some of the 30 million additional people entering health exchanges through the Affordable Care Act next year Aetna Inc. is looking to analytics as a means of lowering the cost of some coverage. According to Michael Palmer, head of innovation for the Hartford, Conn.-based insurance company, Aetna is using a new analytic platform to predict which ailments its members are likely to contract over the coming year in order to lower the odds that they will develop cardiovascular disease, one of the more expensive and endemic diseases it has to cover.
This information could help improve health outcomes for patients, dramatically lowering health care costs for themselves, their employers and Aetna itself, says Mr. Palmer. “Better outcomes also lead to better costs. It’s a virtuous cycle,” he told CIO Journal Wednesday after a presentation at the Structure: Data conference in New York. But Mr. Palmer also noted that it’s difficult to get people to act on the information they’re given, even if it’s for their own good.
For example, Aetna can tell its members if they’re likely to develop cardiovascular disease. It does this by tracking data from lab results, pharmacy data and claims data of its 18 million members, looking for data showing that a given individual suffers from three of any of five factors – high cholesterol, high blood pressure, low HDL (so-called good cholesterol), high triglyceride levels, and abdominal girth – all of which are indicative of metabolic syndrome. “We found we can predict at the individual level the probability of their getting metabolic syndrome in the coming year,” Mr. Palmer said.
Combine this information with preventative medicine and it’s likely that our society can lower the cost of health care. It would be nice if people had the information to take steps to better their health and take care of themselves.
As more of the population ages, it will be increasingly important for the business media to cover all angles of healthcare and the companies in the industry. But the most important part will be helping people connect the pieces of information and make the best decisions possible.
Freddie Mac sues the banks
by Liz Hester
In the first government-sponsored litigation to come out of the Libor rigging scandal, Freddie Mac filed suit against the largest banks and the British Bankers’ Association. The lawsuit claims the mortgage company was harmed by “collusive activity.”
Here’s the Wall Street Journal story:
Freddie Mac sued more than a dozen of the world’s biggest banks for alleged manipulation of interest rates, in the first government-backed private litigation over the rate-rigging scandal.
The lawsuit, filed in U.S. District Court for the Eastern District of Virginia, by the mortgage-finance giant joins scores of other suits piling up in U.S. courts, seeking billions of dollars in damages from banks that allegedly manipulated the London interbank offered rate and other crucial financial benchmarks.
Freddie Mac sued the British Bankers’ Association alongside the banks, putting the private association of large British banks for the first time in the cross hairs of a Libor lawsuit.
A probe by U.S. and U.K. regulators has uncovered evidence of widespread rate rigging by some traders. Three banks have agreed to pay penalties totaling about $2.5 billion, and about a dozen companies remain under investigation. The BBA has agreed to transfer its responsibility for overseeing Libor to a new operator.
Regulators leading the investigation haven’t criticized the BBA, but the organization has come under fire from British lawmakers over its alleged failures to spot or prevent the rate rigging.
The Freddie Mac lawsuit alleged the BBA “participated” in a scheme to rig Libor to protect the income it got from the benchmark and “appease” its member banks.
The New York Times analysis of the lawsuit says that Freddie Mac may have a better chance of actually winning in the settlement:
Banks involved with the scandal also face legal action from other plaintiffs. A raft of class-action lawsuits have been filed by a number of parties, including states and local governments that issued bonds and bought interest rate swaps. The cases have been consolidated in the Federal District Court in Manhattan for pretrial proceedings.
The banks have sought to dismiss the claims, arguing that the various plaintiffs cannot show that they were directly harmed by any antitrust violation, if one even occurred. In a brief filed in the case, the banks assert that if merely having economic exposure to the dollar-based Libor, or USD Libor, is enough to be part of suit, then “there is no limit to potential plaintiffs, because anyone, with respect to any transaction, might choose to reference USD Libor.”
Unlike some class-action plaintiffs, Freddie Mac looks to be in a stronger position to survive a motion to dismiss on these grounds. The company dealt directly with many of the banks accused of manipulating Libor by arranging for swaps, including Barclays, UBS and the Royal Bank of Scotland, all of which admitted to violations. The success of its trading in mortgage securities and hedging its risk was usually tied into Libor, the most important benchmark rate for mortgages.
Freddie Mac has taken an even more aggressive position in its lawsuit by naming the British Bankers Association as a defendant. The association was responsible for collecting the data from banks and then issuing the Libor benchmark, marketing it as a valuable tool for setting interest rates across a number of currencies.
It is not clear whether the claim against the association can survive a preliminary motion to dismiss, however. Freddie Mac claims that the organization was aware of the manipulation by the banks but did nothing to stop it. But the fact that one is aware of misconduct by others, and even that their services are being used, is usually not enough to show participation in a conspiracy.
Bloomberg offered these details and context.
The complaint lists 15 banks as defendants as well as the British Bankers’ Association. They include Citigroup Inc. (C), Barclays Plc, Royal Bank of Scotland Group Plc (RBS), the Royal Bank of Canada, Deutsche Bank AG and Credit Suisse Group AG. (CSGN)
Freddie Mac accuses the banks of fraud, violations of antitrust law and breach of contract. The housing financier is seeking unspecified damages for financial harm, as well as punitive damages and treble damages for violations of the Sherman Act.
“To the extent that defendants used false and dishonest USD LIBOR submissions to bolster their respective reputations, they artificially increased their ability to charge higher underwriting fees and obtain higher offering prices for financial products to the detriment of Freddie Mac and other consumers,” the U.S.-owned company said in the complaint.
I thought the NYT summed up the story best, so I’ll leave you with their last paragraph:
For the banks, Freddie Mac is the type of plaintiff that can be expected put up a tough fight because, now that it is controlled by the federal government, the real beneficiaries of its lawsuit are taxpayers. Add to that the prospect of a similar claim by Fannie Mae, and the banks involved in Libor manipulation will be dealing with this issue for quite a while.
Biz journalism organization receives non-profit status
by Chris Roush
Ben Steelman of the Wilmington Star-News in North Carolina reports that the Southern Investigative Reporting Foundation, which is researching and writing investigative business journalism stories, has achieved non-profit status.
Steelman writes, “As a result, SIRF will function entirely on donations, with funds being funneled through Independent News Network. Boyd — who specializes in detailed, document-driven investigations of corporations and investments, thinks that’s important to ensure the independence and integrity of his reporting.
“A former business writer for Fortune and The New York Post, Boyd earned an M.A. in history from the University of North Carolinw Wilmington. His former website, The Financial Investigator, gained a following amont individual investors, according to the American Journalism Review. Huffington Post once called him one of the 25 “most feared” financial reporters in America.
“SIRF boasts an impressive board of directors, including Christopher Roush, director of the business journalism program at UNC-Chapel Hill, Bloomberg News columnist William D. Cohan (“House of Cards”) and former Fortune editor Bethany McLean (“Enron: The Smartest Guys in the Room”). At the moment, though, the staff consists primarily of Boyd, along with some freelance researchers.
“Since forming late last year, SIRF has completed two long, detailed reports, one on the weight-loss and nutrition network ViSalus and one, posted March 11, on Toronto-based Brookfield Asset Management. Both are filed under Boyd’s byline.”
Read more here.
Phoenix biz weekly starts online daily health care section
by Chris Roush
The Phoenix Business Journal has launched Health Care Daily, a section on its website designed to be a destination for health care news in Arizona.
Digital editor Adam Kress writes, “Health Care Daily, which went live today, will provide breaking news and in-depth reporting on the Arizona health care sector, with an eye toward the national issues that affect businesses and consumers in the Valley. It also will be the section where health care stories from the print edition can be accessed online every Friday.
“Business Journal Senior Reporter Angela Gonzales will anchor the reporting for Health Care Daily, as she’s been covering the local health care sector for more than 25 years — longer than anyone else in Arizona. Other Business Journal reporters and editors also will contribute.
“‘This is a great example of how our news operations are evolving,’ said Don Henninger, publisher of the Phoenix Business Journal. ‘We write stories for our print publications and other stories that we post on our website, and many of our digital stories are not included in print. So this is a one-stop destination where readers can access all coverage that we do on the health care industry, including up-to-the-minute news as it breaks.’”
Read more here.
Illinois pension charged by SEC
by Liz Hester
The Securities and Exchange Commission said Illinois didn’t put enough into its state pension and charged the state with securities fraud. It’s most noteworthy because it’s only the second time the agency has gone after a state.
Here are the details from the Wall Street Journal”
For years, Illinois officials misled investors and shortchanged the state pension system, leaving future generations of taxpayers to foot the bill, U.S. securities regulators allege.
The Securities and Exchange Commission on Monday charged Illinois with securities fraud, marking only the second time the agency has filed civil-fraud charges against a state.
But the agency and the state also announced that a settlement had already been reached in which Illinois won’t pay a penalty or admit wrongdoing.
The action was part of a broader push by the SEC to bring greater transparency and accountability to the municipal-bond market, as the agency alleged the state failed to adequately disclose to investors the risks of its underfunded pensions systems.
The action also shows in detail how political decisions left the state with only 40 cents of assets for every dollar of pension liabilities—a financial hole Illinois officials are now scrambling to fill.
Yet no matter how harmful the pension practices were to the state’s finances, SEC officials say they could only pursue charges against Illinois for what it failed to tell bond investors, who bought bonds worth $2.2 billion.
The New York Times explains how the SEC is able to come after the state for not funding its retirement plan:
In announcing a settlement with the state on Monday, the Securities and Exchange Commission accused Illinois of claiming that it had been properly funding public workers’ retirement plans when it had not. In particular, it cited the period from 2005 to 2009, when Illinois also issued $2.2 billion in bonds.
The growing hole in the state pension system put increasing pressure on Illinois’ own finances during that time, raising the risk that at some point the state would not be able to pay for everything, and retirees and bond buyers would be competing for the same limited money. The risk grew greater every year, the S.E.C. said, but investors could not see it by looking at Illinois’ disclosures.
In effect, that meant investors overpaid for bonds of a lower value than they were made out to have, although the S.E.C. did not measure any loss in dollars, and it did not impose fines or penalties in Monday’s settlement. Illinois agreed to a cease-and-desist order without admitting or denying the accusations.
The charges put the state’s pension system, generally thought to be the weakest of any state, back in the national spotlight. In his budget address last week, Gov. Pat Quinn, a Democrat, issued a clear warning that the system had to be fixed.
“Without pension reform, within two years, Illinois will be spending more on public pensions than on education,” said Mr. Quinn. “As I said to you a year ago, our state cannot continue on this path.”
Many states, counties and cities are struggling with shortfalls in their pension systems, and because large numbers of people now qualify to draw benefits, the expense is wreaking havoc with budgets. Still, securities lawyers are not predicting a wave of S.E.C. pension enforcement actions. The states are legal sovereigns, and federal securities regulators have much more power to police corporate wrongdoing than potential violations by the states and municipalities.
The S.E.C. does have the power to step in when it believes that there has been a fraud, but that means meeting a tough standard of proof. Many of today’s troubled public pension funds got that way through missteps that, while harmful, do not necessarily constitute fraud: overly rosy investment assumptions, failure to take into account that Americans are living longer, and bad calls about how much benefits actually cost.
Reuters provided these details on how Illinois was able to skip out on its payments:
In official statements accompanying bond offerings Illinois explained that factors such as market performance had contributed to the increase in its unfunded pension liability, but it “misleadingly omitted to disclose the primary driver of the increase – the insufficient contributions,” the SEC said.
In order to keep its contributions low, Illinois had developed a complicated system that included “ramp-ups” and “pension holidays,” the SEC said.
Instead of paying to pension funds what actuaries had determined to be the annual contributions, Illinois followed a funding plan approved by the legislature that deferred the payment of pension obligations, compounding its pension burden.
The legislature phased in the state’s contribution over a fifteen-year “ramp” period, where the amount Illinois put in gradually grew until in 2011 it made the full amount. It then had to put in a level amount so the pension system was funded by 2045.
The state went further, amortizing pension costs over 50 years, instead of the typical 30, which gave it a longer window to pay off the liability. Then, it lowered the contributions in 2006 by 56 percent and in 2007 by 45 percent in “pension holidays.”
The Times said that the state has taken some measures to correct the problems, but significant pension reform hasn’t been undertaken. Seems like it’s time to get started.
Student loans: Only investors seem to want them
by Liz Hester
Nearly everyone I know has student loan debt. Those who don’t are lucky and already paid it off. I can maybe name the people on one hand who have not owed money for the privilege of earning a degree.
It seems that now investors are also more willing than ever to get in on the act. The Wall Street Journal had this story on Monday:
Student loans are souring at a growing rate—and investors can’t seem to get enough.
SLM Corp., the largest U.S. student lender, last week sold $1.1 billion of securities backed by private student loans. Demand for the riskiest bunch—those that will lose money first if the loans go bad—was 15 times greater than the supply, people familiar with the deal said.
Meanwhile, SecondMarket Holdings Inc., a New York-based trading platform best known for private stock shares, said it would roll out on Monday a platform to allow lenders to issue student-loan securities directly to investors.
“The catalyst for this new suite of services is investor demand,” said Barry Silbert, founder and chief executive of SecondMarket.
But while investors are piling into student loans, borrowers are falling behind on their payments at a faster clip. According to a Thursday report by the Federal Reserve Bank of New York, 31% of people paying back student loans were at least 90 days late at the end of the fourth quarter, up from 24% in the fourth quarter of 2008. The figures include federal student loans and those issued by private lenders.
Investors’ hunger for risky loans shows the lengths they are willing to go to generate returns in a period when interest rates are hovering near record lows.
So now investors can cut out the middle man – the bankers – and put their money into the student loan market directly. As Businessweek points out, the opportunities are growing:
that 35 percent of those of us under age 30 simply won’t—or can’t—make their loan payments anymore, according to a new report from the Federal Reserve Bank of New York.
Since 2004, educational debt has nearly tripled, to $966 billion, surpassing credit-card debt, auto loans, and home equity lines of credit to take second place behind mortgage debt, with a total balance moving steadily toward $1 trillion. Even through the recession, student debt showed no signs of stopping.
“Student loan debt is the only kind of household debt that continued to rise during the Great Recession and has now the second-largest balance after mortgage debt,” write Donghoon Lee, an economist at the New York Fed, according to Bloomberg News. “With delinquent student debt, mortgage origination is very difficult. The mortgage origination gap across the size of student debt has declined between 2005 and 2012.”
Much has been written about the deferred purchasing as people pay off loans. But with investors demanding more of the private debt, will that push lenders to offer more loans? One thing is for sure, the government sequester is going to hurt those looking for federal funding, according to ABC News.
While Republicans and Democrats fight over how to deal with the automatic budget cuts that start tomorrow, the sequester will almost certainly mean cuts to programs for college students.
That includes cuts to some federal work-study programs and reductions in payments to millions of student loan borrowers, although the exact detail and timeline remain unclear.
During the White House briefing Wednesday, Secretary of Education Arne Duncan warned of the dire effects sequestration could have on federal higher education funding.
“That ($86 million cut) would mean for the fall as many as 70,000 students would lose access to grants and to work-study opportunities,” Duncan said during the briefing. “And if young people lose access to grants and lose access to work study, my fear … is many of them would not be able to enroll in college, would not be able to go back. And, again, do we want a less-educated workforce?”
Though funding for federal Pell Grants are protected from sequestration, funding for federal work study grants would be cut by $49 million and supplemental educational opportunity grants by $37 million, according to the Department of Education.
That’s a lot more people turning to the private sector, making the timing of the SecondMarket offering perfect for investors.
Massachusetts paper expanding biz coverage
by Chris Roush
Aaron Nicodemus of the Worcester Telegram & Gazette writes Sunday about the paper’s plans to expand its business coverage.
Nicodemus writes, “Business Matters is adding new content online that will be available on Saturdays, and we are revamping content in the Monday print edition of the Telegram & Gazette. The Monday page will be redesigned and themed as Business Matters.
“Since Business Matters was launched in October 2011, Peter Cohan‘s Wall & Main column has appeared in the Sunday print edition of Business Matters, as well as on telegram.com. Starting tomorrow, his Monday column will appear in the print edition of the Telegram & Gazette as well. (His Wednesday column will continue to appear only online).
“Tomorrow we launch a new feature, called Business Monday. It is a story that looks ahead, examines business trends and generally gives readers something to think about at the start of the business week. Look for reporter Lisa Eckelbecker‘s Business Monday story tomorrow, about a local retail trend, in the Telegram & Gazette.
“Mitch Lipka‘s Consumer Alert column, which had appeared on the Monday business page, has been moved into the Living section of today’s Sunday Telegram. His column is paired with consumer news. It will now appear on Sundays.
“The comic strip Dilbert will remain on the Monday business page.
“In addition to the changes in print, we’ve made some changes online as well.
“We have launched a new Business Matters eEdition and cellphone/tablet application, or app. The browser version of the eEdition is available at telegram.com/businessmatters. If you have an iPhone or iPad, you can download the free Business Matters app at the Apple Store, under Worcester T&G.”
Read more here.
British daily cuts business news desk
by Chris Roush
Nathan Lane of The Drum in England reports that the Manchester Evening News in that country is eliminating its business news desk.
Lane writes, “The wisdom of this move will be seen over the coming months. But, before you resign the local paper to the annals of history, take a minute to think about the importance of local reporting.
“Local reporting gives local businesses a platform to reach out to their markets. It often champions the issues of readers and provides a valueable conduit to the national media, as stories are picked up and reported.
“Where will businesses outside the FTSE 100 and the M25 have a voice when local papers are gone? National media continue to pull back on their regional resource and even the BBC is looking at a more centralised delivery of news.
“Marketing dogma would suggest that every business is able to become a self-publishing, content marketing engine that attracts an engaged audience to serve as a pool of prospective customers. It doesn’t happen like that in the real world. Small businesses often lack the resources to plan and sustain a content led digital campaign.
“There is no easy solution to this problem. Companies have shifted spend to digital platforms and many traditional media brands have failed to commercialise their digital offers. There are notable exceptions, such as thebusinessdesk.com, which has grown through tough times.”
Read more here.
