Kodak drops Olympic Sponsorship After Beijing 2008

The 2008 Beijing Olympics are less than a year away. NBC is shaking in their boots though because so many advertisers are baling out right after and have probably reduced their advertising and commercial media spend on this upcoming 2008 Olympic Games. A few things seem to have changed with the Olympics over the past 10-15 years. They used to be the talk of the town and what everyone was watching each night on television for 2 weeks. Now we are not so sure where the Olympics fall in popularity in the U.S. Today they announced that Kodak along with GM and probably a few more United States companies that aren’t as popular, won’t be advertising in the Olympics after the Bejing 2008 Games. Here are several reasons why I think this evolutionary media and company changeover is happening:

1. The Olympic Mystique is waning. In a world of video games, social networking and texting these big deal once every 4 year Games that an athlete works their entire life for somehow seem disconnected. To work for that long on something and not get paid is somehow against our current consumer culture’s ideals. If you work that long you should surely get a Million dollar contract and a promotional deal with Nike right? The “for the love of the sport and glory of winning to bring peace to the world” idea isn’t really that popular with today’s youth or yuppies. They believe in sell to your neighbor, network with your friends and only work towards one goal: Money. So the Olympics are just not relevant anymore and somehow boring.

2. The evening entertainment options for people now are fragmented and overwhelming. Before you could watch TV (5 channels) or go out to dinner and a movie, listen to the radio, read a book or talk on the phone. An example of a simple 1980’s night. Now in 2007 you could do all those things plus, go online, email, text, IM, blog, twitter, MySpace/Facebook, watch dvds, DVR, Tivo, download something to watch illegally, listen to satellite radio, NPR, Google, read and comment on online news, watch cable’s any number of billions of channels, talk on the cell phone, listen to CDs, your iPod, choose new music on Itunes, go to a virtual world like second life or WoW, play video games on your TV or online, or possibly several of these combined. You can see why kids have such trouble sitting down and studying with a book these days. You can also see why the 1980’s seemed quaint and the 1950’s seemed unthinkable. People have so much selection to choose from, they just switch entertainment as soon as they get bored and which ever gets the excitement going wins. The Olympics haven’t really been able to capture the excitement for a while now.

3. The face of American Business is changing. Companies that manufacture and produce actual products in America are dying. That is just the way it is. Our Japanese competitors were formidable in the 1980’s and Our Chinese competitors in the 90’s and 00’s are killing us softly. Notice that Bank of America will be Advertising in the Olympics and GM and Kodak won’t. No American company can afford to manufacture anything in America anymore and be a world power. We’ve gotten too rich and demanding as employees (especially executives), and it’s too expensive to manufacture here. If a company transfers production to Chinese factories (for cheaper labor to be competitive) by default they teach the Chinese companies how to do their work and run the business. And then they Chinese have been known to start their own company and take over. There is a conscious effort by the Chinese to take US knowledge to build businesses in China and bring greatness and world economic power back to China like it used to have centuries ago. (from the book One Billion Customers) Hosting the Beijing Olympics is part of that Grand Plan to showcase how modern and westernized they are now while they win all the medals. The U.S. on the other hand seems to not really plan for the future, and doesn’t see that we are being put out of business. So, companies like Kodak and GM can’t advertise in the Olympics because they can’t afford to anymore, they are shrinking companies that are being beat out of the market at every turn. It is sad that we will all be driving Japanese and Chinese cars and using Chinese and Japanese cameras made in Singapore, Nepal and Malaysia soon and we won’t have any jobs here because we don’t produce anything. Manufacturing is power and we have given that up for big profits short term manufacturing in China and long term business loss and job loss here in America. The executives and board members that have decided that for this country should be put in Jail. The damage they have done to the U.S. Economy for their own personal gain is disgusting.

Advertising and Economic Growth Dissertation

advertising-and-economic-growth.pdf

Ok, back to the serious stuff again… (ugh) I have been reading this study on advertising on economics, while I am on the train. (it keeps the crazy people away) Advertising and Economic Growth by Maximilien Nayaradou and prepared by the World federation of Advertisers. (I guess there is a federation for everything) It is very interesting, and as always I am looking for clues and insight into my own market and analysis category by way of these theories and research. I am only 1/2 way through it but 2 things have struck me thus far.

1. The consumption trend for the US is crazy high compared with the rest of the world. The people here are really living on thin ice financially. There is very little saftey net if you spend 70% of your income (considered consumption in the chart). The formula is More Advertising $ Spent = More Consumer Consumption. But notice the law of diminishing returns, and how high the spending had to get just to move the needle that little bit between the UK and the US which are already at the highest end.

2. The correlation they talk about between higher advertising rates and higher economic growth rates are not really true in my opinion. I do not think extra advertising raises growth rates, I think it speeds up and condenses a product life cycle in a shorter time. The result is that things get old faster, out of fashion faster and people want new stuff faster. Therefore excessive and mass advertising would condense a product’s lifecycle from 5 years to maybe 2 at best. You train people to want something new every 2 months and your product won’t sell at all in 3. It all leads to a faster churn of companies growing booming and later failing and going under. That’s not new growth, that’s growth that would have happened anyway, you just made it faster, and it will drop off just as fast when people get tired of it and stop buying. No one talks about the downward slide on the other end, or how this creates a turblulent economy where people get laid off from jobs every 2 years and companies have to get bailed out all the time.

Don’t get me wrong, I like advertising in general. I have always been fascinated by it and love it’s news like ability to reach consumers and inform them about new priducts, information and entertainment when it is relevant and benificial. But I HATE over-advertising spammy companies that think that with enough money spent plastering their name on everything that moves, they will be able to keep that upwards growth trend going. You have to realize that people are over sensitized and will block it out after a certain point, and if they have a bad experience with the product they are not going to be very willing to give it another chance. Unless they aren’t that smart, but then as a country we have even bigger problems.