Ways Google Has Changed Media Consumption Behaviors

I was glancing at Google Fast Flip today and it struck me that they have been successful not only in providing what people want but in some ways changing human media consumption behavior.

We all know that Google has turned the media world upside down with the humble text ad because of it’s ad matching relevance and pay-per-click business model.

They have up-ended the rest of the media world because they have influenced people to stop using it. This may be completely un-intentional, but I think it has happened.

The obvious way is that Google has  gained brand preference as a reference tool and a information source on limitless topics. But there is another behavior that they have changed is not usually talked about.

This change in how people consume information is that they can scan headlines now and glean what has happened in the world without actually viewing the ads around the content. (or visiting the content site, via rss, email, search engine, aggregator or google news) This has been bad for online ad inventory (although some may say we need less inventory to drive up prices, not more) and worse for recouping the cost of producing the content.

I don’t think that Google is stealing anything like copyrighted material by linking headlines from Google News, the search engine or screen shots Google Fast Flip. That would be like saying you are stealing copyrighted material by cutting out an article about a local festival coming up and posting it on the break room bulletin board for your coworkers to see.

I do think there does need to be revenue sharing for content sharing on some level though. How this should come about, I haven’t the slightest clue yet. And it can’t happen in the search engine because it seems to vast to fully comprehend let alone orchestrate.

I do think Google wants to be in the media business without actually producing any content, and they don’t usually ask for exclusivity with that content. Google wants to provide more products for consumer use and consumption of information branded offline. If they offer basic content for free on these product/services and upgraded content for a fee they should share the fee with the content providers. The rates may depend on usage and of course demand, and they will probably always be in flux. (no more rate card anything)

Yet I think it’s important that these shared fees (content payments) should be as low as Adsense revenue share since Adsense revenue is largely regarded as welfare for website owners. It needs to be enough to incentivize content providers to really feel like Google is a partner in their business and devoted to a positive business relationship.

The alternative may be that someday you have to pay a large content creator to crawl its site and republish parts of the content. Yes sharing is good, but if the content borrower doesn’t bring in enough revenue (analytics can tell you if your google news readers view, click or buy things) then is it profitable to be hosting the traffic from that source? (yes, hosting costs a ton of money for large content sites) I guess everyone thought they could replace millions of dollars in branding with a simple search engine relevance project and all their traffic generation problems would be solved. It’s never that easy. You have to own the relationship with your customer, you can’t outsource that to Google or anyone else.

Trust is also one of the BIG hurdles Google has to overcome to really being a star in the B2B space. Google has always believed that any process can be automated by a computer and nobody needs to talk to a human because humans are either too expensive or busy engineering things. This seems to enrage some humans, mostly the ones that run large companies. Also, No customer service and No sales people that can actually answer your questions along with ridiculous inflated PPC rates have actually eroded their text ad client base in the last 2-3 years. (and that whole display thing isn’t really looking great for ROI either when you consider people under 30 don’t respond to them at all)

So, in order for Google to really keep that growth going, they need to compensate content creators when re-publishing their content on/in their branded products in the future or the content creators with the greatest authority won’t be there for very long. Yes, some laid-off journalists are blogging but in 20 years how many will be left doing any journalism at all if it doesn’t pay and very few newspapers exist?

I also think all businesses need to stop every few months and think about the future. We’re too busy overloaded with tasks from laid off coworkers to really do this, but in a profitable world we would make time to consider where things are going in 3,6,12 and 24 months out (not a swat analysis, those take too long and are somewhat cumbersome) and really think about what they think the business should be doing to compete and win and innovate.

Advertisements

Can ordinary people manage the risk in the stock market for their retirement?

I am beginning to think there is no way an average American can invest in the market and make any money for their retirement in a 401K. I was reading this morning that 5 and 10 year returns in the portfolios of most mutual funds are negative now when they calculated in the huge losses from recessions in 2001 and 2008 and the beginning of 2009. (Q1 hasn’t been kind) 

As an investor (for my 401K) I look at that and say: yuck! Why would I put my money in something that has no long term value?

My fiance sent me this article saying that now 20 and 30 years are the benchmarks for best overall performance in mutual funds and stocks in the market. Yikes! 20-30 years? Who has that much time before retirement? Who can invest for that long anyway?

When you consider that most people’s salary starts dropping when they reach their 50’s (because employers don’t value old employees and can’t spend time/money updating their skills) you really have 25 years max to work with as far as investments for retirement.

You start your first real paying job with a 401K at age 25 and you may not be fully employable by age 50 although you will likely live to the age of 80 or 90.  There’s your 25 years to save and invest for 30-50 years of retirement.

I also think there is something else going on here affecting the 20-30 year market profit numbers. The US Markets benefited from a long term technology/innovation and growth curve from WWII to the 1980s. Personally, I think that was a one time deal and we will never see that kind of long term prosperity again.

Why? 1. Because we don’t understand enough about technology to innovate on that level again to create that much growth. 2. Because the US has higher paid workers than anywhere else in the world and everything gets manufactured and produced (and serviced) somewhere else. 3. Because we’re too complacent and have too much entitlement as a country of workers. Work creates wealth, not shell games with securities.

That brings up another point: We’ve been playing a shell game with our economy since the 1980’s. De-regulate, re-regulate, stimulus, fix, fund, trade, outsource, sell, leverage, whatever… It’s all a shell game to us worker bees and the internet has been the only significant improvement in technology to create new industries and jobs in the last 20 years. We need more than that to survive and prosper as a nation and a world.

I don’t know about you but I can’t stand to take that much risk with my money. I have some in a 401K but mostly my retirement is locked in a 5 year CD IRA at 5.25% that was a promotion this fall when banks wanted more cash reserves. I changed companies in 2006 and rolled over the old 401K to a bank in 2007 because I knew the 10 year recession was coming soon and I didn’t want to risk timing it.

There will always be people who game the market and come out ahead, but those of us without finance degrees, huge money to invest in undervalued markets or inside scoops will never really profit on the whole. Many of us will get out exactly what we put in and maybe less considering our lack of  investment prowess. So, in that level of risky why not just put it in the bank? Positive 3-5% sounds a lot better than negative 40%.

I hate the inflation argument that says that 3-5% isn’t enough to make money after inflation. Guess what? Inflation has been very low and inflation doesn’t stop when you have negative returns either. I’d rather have some money dependably than none at all when prices are higher. 

You may be asking why I want more innovation and less investment in the market? Doesn’t investment in the market lead to more innovation?

NO. Most of the mutual finds and stocks you can buy that are highly rated are in huge old (one trick pony) risk averse companies that have already peaked and can’t figure out how to do anything new. They sell shares to raise cash and then have old people make decisions like the old days. Venture Capital,  new small businesses and Universities are the place where innovation happens. If I could invest in those, I would. But then again I don’t have millions of dollars and apparently I won’t any time soon.

What are the best proven ways to fund your retirement and create wealth then?

1. Have a side job for extra income you can save (part-time weekends or evenings a few nights a week)

2. Own rental property for extra income (you need to live near it for this to work)

3. Have fewer kids if you’re contemplating having a family (ok we don’t always control this, and we love kids, but nobody is going to debate that they are expensive) 

4. Own a smaller home (smaller mortgage = smaller amount in interest paid (lost) to the bank)

5. Don’t go into debt on credit cards or car loans (hello! 25% interest, MONTHLY! on some cards)

6. Live frugally generally, keep your cars 10 years, don’t buy new clothes every month and don’t buy big ticket items like TVs and Computers every few years. Spread out the expenses over the long term.

7. Share what you have with others. Seriously, knowledge, help with projects, donating time and donating items you no longer need, as well as hand me downs between families help kids and neighbors live better within their means and help the community live better too.

8. Take care of your health. Eat less junk, lower fat, lower salt, lower carbs. Exercise daily. Take vitamins. Don’t work in an industry that has a side effect of cancer. Visit the doctor regularly and if something comes up treat it early, it will cost so much less in the long run. Heath issues start in your 30’s and get more frequent in the 40’s, 50’s and 60’s. Expect to pay more every decade for health costs in your life/budget.

These are all real tactical changes we can make to save more money monthy and yearly that will get better returns than the stock market and help prepare for inflation. What else do you think can help?

How GM should restructure for a Government Bailout and streamline Brands and Cars

How can GM save itself from Implosion? Which GM brands and cars should bekept and which should be cut?How many jobs can be saved in Detroit? Should GM, Ford and Chrysler be saved at all? Will the consumer demand for vehicles (cars) ever pick back up again? These are all good questions.

Everyone is all a buzz about the American Car companies and their pitch to the Government saying that “bankruptcy isn’t and option” so give us billions in free money that has no strings attached and we can spend on anything we want. Ouch! I think congress was right to send them packing the last time they showed up in private jets and asked for money, and we have learned that in the other bailouts, the banks aren’t spending their money on what it was “proposed” for so more oversight is needed for any government bailouts of companies.

Back to my thoughts on GM specifically, since I am not an expert on Ford or Chrysler.

GM has some opportunities to be successful in the future but much of that opportunity comes at the cost of getting rid of the past, completely and starting over from scratch.

Almost every GM car or truck sold in the last 10 years has been either: inferior in quality, reputation or design. They also tend to make cars for segments that people don’t need and then wonder why people won’t buy them even when pushed. (Hello: SUVs) I read yesterday that the 4 brands that GM intends to keep are Buick (yay!), Cadillac (ok), Chevy (a necessity) and GMC (WTF?). 

I think they should throw all the brands out and come out with 5 new ones with distinctive market segments and niche products. Here are the segments in automobiles that I think will be big in 10 years that GM or any car company needs to invest in, and cut everything else:

1. The new shiny reliable car below $8,999. Developing countries and low income people in developed nations will need this kind of transportation as the cost of transportation increases consistently. (think college kids and retail hourly wage workers) It isn’t sexy or cool or updated every year. It is a 5 year design of an extremely reliable and simple car and only available in 1 color and maybe with 2 seats. If people want variety they can customize on their own. These cars are cheap super basic transportation and low cost is what sells them and fuel efficiency is also important. They have to be more reliable than a used car or this won’t work. Think old VW Beetle, Geo Metro, India’s Tata, China’s Cherry Motors or simpler version of a Honda Civic/fit.

2. Super eco friendly green cars. This segment has a product range from cheap eco friendly basic cars to luxury eco friendly status comfort cars. Performance isn’t really a priority but style and design is. Comfort comes at a price but miles per gallon is always in the 50-75 mpg range for all vehicles. Leather heated seats is an option on the lux ones. Think Toyota Prius and GM Volt. A 5-door option is nice here too. Eco people are practical people. Plug in charging in your garage and solar panels in roof are also great pluses if the cost can still be comparable to a non-eco car. People need to have one of the eco cars start at $15,000.00. Then fancier ones can be higher priced. Pricing people out of the market is bad for business, you loose sales and customers to people who do have the affordable eco cars.

3. Business/Industrial/Delivery Trucks & Vans. No consumer needs a truck unless they live in the mountains of Colorado or live on a ranch, but telling people they needed huge over-sized utility vehicles for their family use has been a strategy used in the past 15 years to re-purpose existing designs to new markets. This era is over and the SUV needs to die except for people who have 5 kids. (relatively few) There is a continued opportunity to sell trucks to businesses that deliver, transport and create large products in the US but it is a far smaller division of the company and of sales. And living in the US and seeing firsthand how people use these vehicles for business should give GM an insight that the Japanese, Chinese and German car companies don’t have and lead to building and innovating better vehicles.

4. And most importantly: The everybody car. I think GM has no way of recapturing a significant part of the 4 door family sedan but there is an opportunity to innovate it. There have been a few cars that are appealing to everybody because they contain multiple category characteristics. (um, crossovers without the truck part plus luxury) The everybody car I am talking about is the 5 door hatchback sedan. Don’t think 1970’s! Think of the Prius and Saab 9-3 when it was a 5 door, think Subaru WRX. More needs to be done in developing practical sexy cars like this because they take over where SUVs left off. You can haul things in them and get good fuel economy at the same time. You can even structure them for performance and luxury and fuel economy at the same time. So, the 5-door sport/luxury/green/family sedan is the everybody car of the future. Will GM make it and market it properly? (it could be the volt if they lux it up a bit)

5. The Luxury Performance car. Lastly, GM needs a super-car or luxury flagship vehicle that basically walks on water and inspires a generation. (more than the Pontiac solstice) These cars aren’t always profitable themselves, but they make the other brands you own more profitable and can make your brand one that people believe in. How Toyota and Honda don’t have one I don’t know, but maybe that is why they do so much racing now?  The Corvette makes Chevy feel cool, the R8 made Audi sought after. Vipers dying off made Chrysler seem even less cool and less reliable. Plus so few people will be able to afford a luxury performance car in the future that this will need to be a niche business with limited production.

And for fun here is what I think of the brands GM currently has:

Keeping Buick: Buick makes an extremely reliable car (yes like Honda/Toyota reliable) so this is a good place to start and they get 25-30 MPG. What Buick needs is a few smaller car options and even better fuel economy without sacrificing the comfort, luxury and quality that people need and love. They do need a new logo though, that doesn’t look like the 3 old 80’s shields.

Keeping Cadillac: Caddy is all about Flagship dream cars and it may share a few parts with Buick so there are manufacturing cost efficiencies there.  Caddy needs to keep innovating on performance, style and (surprise) eco materials and fuel economy.

Keeping Chevrolet: Chevy has been the all American fleet of everything (soup-to-nuts) vehicles for a long time. Many of the other brands aren’t needed because Chevy offers most everything. They cover work trucks, family sedans, performance cars with the Vette and with the Volt an eco car of the future. They should make them less fugly though, because they aren’t selling against other lux GM brands anymore, they are selling against Toyota and Honda’s flagship cars. 

Keeping GMC: Wouldn’t it have better to just sell trucks under one brand as Chevrolet since we need so few trucks? I am at a loss on this one. GMC offers nothing new, interesting or innovative at all. (yuck)

Cutting Saturn: Apparently this is just Opel cars from Europe now.  The Saturn brand name needs to die since it means cheap, flimsy, crappy, cars that break down a lot and are ugly. Re-release Opels under the Opel name? How about Vauxhall in the US? We like them.

Cutting Pontiac: Well Pontiac has been loosing it’s battle to streamline its designs and be a sleeker performance division of GM because of it’s cheap finishes and lack of quality. Plus the dealers don’t really help here either when they don’t look like a performance dealership. I think the concept of performance only exists at the same time with luxury because who will pay all that money and not want to be comfortable in their car? And quality in finishes and reliability is ultra important. As Pontiac is now, it should be cut and their logo scrapped.

Cutting Hummer; Duh! Sell it to the Norwegians or Russians or UAE or something. Wherever it is cold and has mountains or endless oil. The military division of Hummer should be retained and put into Chevy for developing military/industrial products.

Cutting: SAAB Well we saw this coming. They made an over engineered car un-reliable so GM deserves this one. From personal experience I will never buy another Saab again because of the reliability problems and obviously no one else is either. This is typical GM strategy, cut quality, save money, increase profits in the short term, piss off customers, loose customers, wonder why they can’t win customers back after costing them 5K in repair bills. Basically if you screw someone over financially once, they never forget it. This should not have happened because Saab had a lot of potential, but it’s pretty impossible to fix now.

 

Poking fun at technology – Did TIME copy this NAA Ad?

time magazine invention year, naa adI have seen these ads from the national newspaper association of america for a long time now, they poke fun at the web and all its gangly wires when all you really need is a piece of paper for your news. I noticed today that TIME did a very similar photo shoot making fun of how you need all kids of contraptions and wires to do everything that an iPhone does. So does this mean that technology always makes fun of clunky? Or that the newspapers are 2 levels behind (web and mobile) instead of just 1?