The BTS period is highly compressed but is a harbinger for the Fall and Holiday seasons.  With 09 comps so challenged as a benchmark but most having improved performance in 1^st and 2^nd quarters this year, many retailers bought product aggressively.  And, of course, orders have already been placed for the balance of the year.  Not surprisingly, we’re seeing pre-season promotions well before prior years.  Check out the Washington Post article about Target, Toys R Us and Sears “Black Friday” sales.

This economy has consumers very nervous and anxious.  What we’re getting is pretty much what we were promised by the Fed a year ago.  Now that the movie has been playing for over two years, the lead actors would still be named, ‘Erratic’ and ‘Volatile’.  ‘Unpredictable’, at least, doesn’t  need top billing.  Even last week, Paul Volcker, economic adviser to President Obama, gave his own unvarnished version:  “This is not a bounce back.  We are suffering from some very large, undermining problems.” (Note that he didn’t say ‘underlying’ which is way too vague.)

US State Budget Shortfalls - Click to Enlarge

Consumer confidence, housing starts are disappointing, but the oil spill and, now, Bush’s tax cuts and more state money-grubbing is grabbing the home and front pages.  Anderson Cooper from CNN is still working the back stories, but economy news stories like these are a drag on people’s perceptions and, no doubt, trickle back into buying behavior. 

Clever promotions are helping to woo parents and kids to open their wallets, but they’re shopping like the predictions said earlier in the year that consumption would be of the necessity variety, with an occasional sprinkling in of a special or luxury item.   Hot teen brands like Abercrombie, Aeropostale, J Crew, Juicy, Delias, Urban Outfitters, Wet Seal and others will release their July numbers soon, so we’ll have a good look inside then.

Regardless of the tea leaves and what actually happens, consumers will remain reluctant spenders.  Intriguing, fresh and new products matched with the right touch of incentives and promotions need intense focus.  And, I think we need accelerated thinking right…about…now.

Disclaimer: I’m not a meteorologist or have any expertise in oil spills or environmental disasters.  But, I can read.  Because the story is still evolving, the truth is clear.  Video doesn’t lie.  Even BP admits to pretty much what the environmentalists say.

Every day, the impact hits me a little bit harder, but it’s cumulative.  It seeps into my daily business thoughts.  I’ve been calling this an economic disaster since the day it happened.  Ground Zero:  April 20, 2010.

Estimated Oil Spill as of 4/22/10

An acquaintance and client, Jerry White from the Landmine Survivor Network (now Survivor Network), calls landmines ‘weapons of mass destruction, one at a time’.  The BP calamity falls into the same category.  Most Americans can’t see it, touch it, watch it, or even imagine it.  Less than 10% of the population has direct access but 100% of us are going to feel it.  It will reverberate and seep into the economy in an insidious way starting with Wall Street and, then, onto Main Street.

Estimated Oil Disaster as of 6/9/10; grey arrows indicate loop and currents leading to the Florida Straits.

Sparing most of the torturous details, the best-case scenarios for the Gulf Coast (Texas, Mississippi, Louisiana, Florida, Alabama) are a sick paradox: 1) the spill gets capped tomorrow morning and the combination of controlled burns, oil capture, no hurricanes, Army Corps of Engineers, BP’s own experts, and luck minimizes the damage; 2) the oil catches the Gulf stream waters and the Loop Current and moves around the Florida panhandle and southern tip of Florida and travels Northeast.  The Gulf gets spared (?) from its worst effects but the Northeast gets its own brute force impact.  Every coastal state would be impacted.  That’s 13 states and 36% of the population.  But, whether the oil slick moves in the direction geologists are considering is irrelevant.  The facts are what they are.  The damage is done.  It’s just a question of degree.

The industries who are already dealing with it and will be confronting it this summer and, potentially for years to come, include the obvious like restaurants, hotels, resort travel, fishing, shipping, hunting, boating, swimming, and even scuba diving.  There’s no doubt that those who sell directly to consumers and business in each of these industries will  see a negative impact due to lost jobs, lack of access, marine life reduction, and danger.  And, I’m just focused on businesses that have ecommerce.

Let’s look at a simple view of revenues with a low negative 2.5% impact.  As a reasonable estimate, let’s assume $5 Billion in aggregate sales across a variety of companies and 40%, or $2 Billion, in ecommerce sales.

($5B total sales * 40% ecommerce) * – (2.5% economic impact) = $50 million

Breathtaking.  Even if I’m wrong by 50%, that’s still a $25 million in revenue loss in one year.  As marketers, we need to seriously consider our forecasting and anticipate economic wreckage certainly in the Gulf Coast region.  That has already happened.  And, if the worst happens and we have to compound this loss with a worse-case economic scenario that includes damage to the eastern seaboard economy, let’s understand this now.  Retailers’ shipments will still arrive and promotions can still happen.  Paid and natural search efforts will continue and websites will still accept orders.

But let’s not assume it’s not happening just because we can’t see it.

Next up:  What we can do to better understand the potential impact.

Marketing Opportunities vs. Privacy

Suzy Sandberg:  When I first heard the details of Open Graph, I immediately went into Facebook to turn the feature off.  Facebook went with a pre-checked box to enable the Open Graph feature which requires unchecking to opt out.   We’ve seen this before — a Facebook platform change with privacy implications where the user must seek out and select new privacy settings in the application to undo a new feature.

Open Graph is getting buzz for two reasons:  one is its ability to socialize the internet in a new, unique way.  The other is the emergence of new privacy concerns, of which Facebook has already had its share of in the past.  Are the benefits of Open Graph really worth the positive buzz?  And/or how much of the privacy concerns are just noise?

I think it really depends on your point of view.  On the plus side, the Open Graph plug-in will bring socialization to the web in a way that hasn’t been done before.  The “like” button is often used in Facebook, and its familiarity with users could yield high usage rates making its adoption on websites take off quickly.  Large swaths of people are signing on to FourSquare, Gowalla and other location-based networks to share their info with friends, so Open Graph certainly won’t spook users of those applications.  In fact, sharing their likes online could be considered less intrusive than broadcasting personal info by GPS.  The younger demographic is comfortable with sharing online, so this new application may be quite appealing.

On the privacy side, there are four components of the issue.

• Facebook users who see the identities of their friends listed on a website with the Open Graph plug in for “liking” the content on the page probably believe their identity is being disclosed to the masses.  In actuality, the only people who would see someone’s identity are other people in their network.  Assuming someone is ok with sharing their likes to friends, this isn’t an issue at all.  The majority of users, though, who don’t know anything about iframes and how this all works, may be spooked.  Facebook may get a bad rap because it’s too complex for people to understand. If such an objection goes viral and creates mass buzz as we’ve seen in the past, this program may go the way of Beacon.
• If you don’t want your friends seeing which sites you “Like,” you will have legitimate privacy concerns.  You can always opt out, though.
• Having to opt out is troublesome and the process is cumbersome.  Pre-checked boxes went away from reputable websites years ago because of CAN-SPAM, so Facebook is going against the grain here in terms of using the best industry practices.  I understand that Facebook wants wide adoption, but email marketers wanted big lists too – they ultimately understood and accepted that pre-checked boxes can be perceived as deceptive.
• The most troublesome aspect of Open Graph from a privacy standpoint, and I imagine this is what New York Senator Charles Schumer and Moveon.org will latch on to, is that part of Open Graph entails a “small pilot program” with a few big sites (Yelp and Pandora, for example).  The partners in the pilot program do receive personal information on Facebook users including names, friend lists, interests and likes so that they can personalize the experience for users.  Facebook itself describes this information as public in their blog post explaining the program.  A person can opt out by checking a blue bar that appears at the top of the site, but I have to imagine that many users will not understand the purpose of the bar, meaning that these consumers have therefore not willingly agreed to share their personal information with the businesses in question.

A Boon for Marketers and Consumers Alike

For years and years, catalogers have been sharing data with each other.  (How else did you think that Williams-Sonoma started sending you catalogs after you bought something at Sur La Table?)  And for just as long, there have been marketing databases that essentially profile what kind of marketing you are likely to respond to based on assumptive demographics.  Based on your address and zip code, marketers all over the world can find out tons about you.

So, sharing the kinds of things that you “Like” on Facebook is pretty innocuous. You are clicking on a button that says “Like” and it gets broadcast to your network.  Your assumption of privacy ends at your public declaration of “Like”.

Are there issues with Facebook’s implementation? Sure.  Should it be easier to opt out?  Absolutely.  Should you have to opt in?  Well, I don’t know about that.  You have already made a public declaration of liking something…you are only exposing your data if you engage…the Open Graph isn’t pushed on you.  It doesn’t interrupt you; it only shares information if you actively participate.  Already opted in seems fine here because you must take an explicit action to share.

What is the opportunity?

This is a boon for marketers and consumers alike. Fundamentally, pervasive implementation of social marketing through Facebook’s API gives marketers a wonderful opportunity to personalize and customize their web experience based on explicit declarations of preference. This gives marketers an opportunity to present a unique, personalized experience to customers, even if they’ve never visited before.  This is powerful.

For consumers this is a great opportunity too.  If you have expressed on Facebook that you are a fan of ESPN, College Sports Network, MLB and the NBA, you might see more sports related merchandise when you visit a participating site.  This is great.  It may be a little “Minority Report” for some, but for most folks, allowing merchants and marketers to personalize their pitches to you is highly desirable.  You get to see more of the stuff that you want to see.  The devil is in the details, of course, some marketers will do a better job at this than others. But fundamentally, by allowing marketers a glimpse into what you like before they present to you gives them the opportunity to give you more wheat and less chaff. I think the privacy concerns are overblown.  By engaging with Facebook, you have already made public declarations about your affiliations. And marketers should be able to use information about you that you publicly disclose to serve you better.

For marketers, this is such an amazing opportunity, because you suddenly have deep access to potentially millions of visitors. You will be able to learn more about them, more about how they interact with your brands and how you can deliver them the right offer at the right time.

The big winner here is, of course, Facebook.  If the “Like” button gets deep acceptance across the web, Facebook has harnessed the power of 400 million minds to help them understand the web and how people use it.  That is infinitely more powerful than anything Google can do. Further, with all of these explicit preferences known, Facebook can uniquely target you with salient, relevant ads…this is the real reason for the Open Graph, but the ancillary benefit for marketers to know more about their customers and for customers to get more personalized services from marketers is a real win.

Final Thoughts:  The Importance of Clarity

Chris Paradysz:   The challenge with even the definition of “Privacy” is that its meaning differs for each user.  In Facebook’s case, unlike that other behemoth Google, they are ambiguous and often resort to using industry jargon to describe their practices which users could perceive as arrogant, naïve, or even black hat, the latter of which is what gets privacy advocates and AG’s all cranked up.  They are typically reactive with their policy changes instead of understanding their customer and the legislative rants around them which, unfortunately, is giving them an early and very expensive education.

No one really begrudges Facebook for trying to make money, but they would sure save themselves a lot of headache and goodwill if they’d be more open.  Isn’t shared candor social media’s intent, anyway?

For marketers, Open Graph should be a bonanza.  For consumers who let marketers in on their passions, it should be all good as long as Facebook understands who’s paying their bills and doesn’t corrupt the implicit trust they’ve created with their users.

Just ask MySpace.

Finally, amid the fierce competition in direct marketing, those who create and tell the stories — the imaginative creative voices — are gaining back their seat at the solution table.  And, they should.  Media, marketing, technology.  None of it will spark interest if consumers are not first engaged, then captivated.  It’s the work of the designers, the writers, the artists, that capture that moment.

Strategy and creative are twins and need to live side-by-side, breathing life into ideas. With communication as complicated as it is today, the message must be seamless and integrated.  That can’t happen without intimacy, and intimacy happens best when there is a shared sense of purpose and priority.

Since the onset of Google’s rapid rise, creative work has fallen with a thud to a distant second place.  Making multi-channel messages clear and compelling is certainly not for technologists or marketers. Consumers know a strained or out-of-context creative, instantly.  It’s partly behind why I think some social media, like YouTube and MySpace, haven’t caught on as commercial venues.

Although some argue that advertisers want deeply specialized agencies, we are beholden first to consumer’s needs.  That connective tissue is what delivers an optimal experience and result.

The creative voice has to be at the table from concept inception, having a vested interest in the outcome and ensuring that design execution and artful writing are integral to the appeal. I believe that creative talent on-staff, employed by marketing services companies and agencies, delivers better product and is a good investment in delivering what matters, most: performance.

Chris Paradysz is CEO of PM Digital.

OS4 Will Make the iPad Truly “Magical and Revolutionary”

Chris Paradysz:  OS4 will have multi-tasking capabilities.  Now, I love the iPad.  I can be excited about any great technology, but it should fulfill the hope I had back when I blogged about it earlier in the year that it will create an intimacy bond between content and users.

Music, video, words, pictures should no longer be disconnected from touch and feel.  The iPod and iPhone didn’t transform this connection with people (consumers).  With the portability, size and weight of the iPad well-suited to most people’s hands and laps, it can easily move from one position to another and from one person to another.

From a marketing pov, this creates a new experience sensation and viral ability that prior e-readers have failed to deliver.  Within an app or the internet, an advertiser can deliver a rich brand or offer experience, not just ink on “paper”.   With the iAd and technology infrastructure to support it, I have two questions:  1) how soon will it be before Apple starts up an advertising agency; 2) will a new SNL Apple skit be on this Saturday night?

A Must-Have Device You Didn’t Know You Needed

Suzy Sandberg: Just to get this out of the way, YES, the iPad does look like a giant iPod Touch. (iPad owners, I feel your pain on this relentless comment).  And since I can’t strap the iPad to my arm when I go running, I do still need my iPod Touch. And I still need my laptop since the iPad has limitations (no USB for one). I also have/need a cell phone until/unless Verizon ever actually does get the iPhone.

So with four devices (ok, I actually just lied about that…I have a Blackberry, too), where does this newest one, the iPad, fit in my life?

First is that it gets me online quickly, and the speed is lightning fast. Research has shown that the majority of time spent on the mobile web is done in the home, on the couch. I am one of those. The experience of being online on an iPad can’t compare to that of an iPhone or iPod Touch, particularly if you are consuming media. Just because you CAN download a movie or book on an iPhone, does that mean you should?

If you have an iPad you should do your downloads on that device. Some media is so breathtakingly beautiful and awe inspiring that even though I’ve had the iPad just for one week, I couldn’t go back to the small screen for certain things.

In the app department, the current choice is somewhat limited, but I’m optimistic that here is where the iPad is going to hit a home run. There are many apps to be enamored with for the iPhone, though many were developed as workarounds for a clunky web experience on a tiny screen. Since that is definitely not a factor with the iPad, I predict incredible creativity coming out of the app store to serve entertainment needs and many other things I can’t yet visualize.

The iPad fits in my life, so far, because it’s a highly enjoyable experience and perfectly meets the needs of my digital life. Especially when paired with my other four devices.

You and Your Customers Just Got a Whole Lot Closer

Tim Kilroy:  I am a big Apple fan. I use an iPhone. I am writing this on a MacBook Air.  I have never purchased a PC in my life, and I have bought 7 Macs.  And I wasn’t first in line for an iPad!  So what gives?

For me, it was just a failure of imagination.  I didn’t, frankly, understand why I would want an iPad.  It was an iPhone that I could use without my glasses.  Great.  It is a laptop that I can’t do real work on.  Super…that is exactly what I need.  And then, I used it…the magic hit me.

This is truly personal computing that allows for immersive engagement.  Web, mail, video are all at the tip of a finger.  So why is it magic?  Because the computer disappears.  It is just you and whatever you are doing.

What does this mean for marketers?  It means that your presentation layer just got cooler, and more transparent.  The opportunity to create impact and engagement just increased.  Imagine that your interaction with consumers on a computer is like you yelling across 6^th Avenue at your target audience.  They can hear you, and some will even listen closely.  But few will ignore everything else happening in NY to follow you.  With the iPad, you have the opportunity to walk across 6^th Avenue, and sit down with your customer at a Starbucks. It is still noisy, but you can sit across the table from each other and listen.

And that is magic.

More Touch, More Emotion, More Measurement Challenges

 Anthony Avolio: Based on my experience with the iPad thus far, I have three key impact areas for marketers to consider moving forward.

Touch usability.  Marketers must actively consider touch interfaces when planning their designs. Designs with small click targets, extensive use of hovers/rollovers or requiring browser plug-ins don’t create a positive user experience on the iPad. This applies to all online media, including websites, banners and emails. While the iPad is just one device, it’s likely the start of a new mainstream push for touch interfaces. Marketers must insist that their creations function and resonate with consumers on as many screens as possible.

More emotion.  The iPad’s touch interface and minimal design can create a more immersive experience for consumers.  Upon launching an app, the iPad disappears and becomes that app.  Upon opening an email, the iPad becomes that email message. Keyboard and mouse peripherals that typically separate the consumer from content are absent on the iPad, allowing the experience to be more direct, more one-on-one.  Skilled marketers will use this more direct opportunity to delight, enthrall and connect.

Increased splintering of online browsing will continue to create challenges for measurement. In the old days, consumers’ online activity was typically split between two web browsers — one at home and one at work.  Smart phones and now iPads add to the number of devices that a single consumer actively uses to access the Internet, making measurement more challenging. Consumers can now learn about a new product on their work computers, research further on their phones before purchasing it on their tablets while at home.  With online browsing spread across devices and apps, conversion measurement and campaign attribution become increasingly more complicated.

Suitable for Framing

Glenn Lalich:  My first few days of playing around with the iPad were largely app-focused, as I figured that was where the biggest wow factor would be.  And the few retail apps available did not disappoint.  The Gilt for iPad app is elegant, and I found my fingers naturally tapping up beautiful super-sized product photos.  The Gap 1969 Stream app is even more revolutionary, with the iPad acting as a window on some infinite universe of Gap photos, merchandise, stories, videos and social media links. Pretty amazing stuff.

But from a retail perspective, my favorite iPad surprise didn’t come from a download.  It came when I stopped playing around with my apps for a second to check my email.  That’s when I noticed that the retail emails in my inbox looked gorgeous. The size of the iPad display, the hand-held proximity and the glossy screen made many emails akin to high-quality print ads or catalog pages.  Freed from a traditional computer, they were vibrant and alive in my hand.

Not every email I saw was a winner, mind you.  Product grids with a lot of white space can look like meagerly stocked store shelves.  In portrait mode, top-heavy layouts designed for standard preview windows do not fill the entire iPad screen, allowing below-the-fold disclaimers and legalese to move up and steal a bit of the spotlight.  But these are relatively modest adjustments to make, and relatively inexpensive as well.

The iPad just gave email creative a dazzling shot in the arm.  And it didn’t cost marketers a cent.  As much as I hope to see killer retail apps and touch-centric websites in the near future, it’s exciting that the iPad’s “magical” display and interactivity already offers fresh advantages to retailers as is, right out of the box.

Whether it’s the realization that expense cutting won’t grow profits, or investor pressure — private equity, venture capital or otherwise – for valuation and distributable cash increases, it’s all good for marketing.  Depending on which group you’re listening to, private equity and venture capital investing is back in vogue and 4Q 2009 trends showed more deals than in the prior nine months.  And, early stage venture capital is, again, finding its way into web 2.0 and 3.0 technologies which are early bellweather indications for the durability and sustainability of the investments.

Based on last month’s eTail show, Shop.org, this week’s SES conference and a recent technology summit I slipped into while staying in a NYC hotel, the number of exhibit hall booths from new companies is surging.  Most won’t survive, but they’re pushing the status quo even at Google where new offerings are accelerating at an astonishing rate.  Do check out the beta of Google’s new Search Funnels that allows advertisers to see through brand-assist keywords’ connection to trademark terms.

Although not an exhibitor anywhere, a new fave and current fascination is Polyvore, a voyeur’s fashion website birthed in 2007 with Matrix Partners, Benchmark Capital and Harrison Metal venture capital.  While The New Yorker calls it “The world of virtual Anna Wintours”, I prefer Polyvore’s VP of product management’s description: “Our mission is to democratize fashion. To empower people on the street to think about their sense of style and share it with the world.”  It’s passion, in a category that’s anything but casual, a user-generated content engine, on a social media platform, with easy-to-use tools where users can buy what they create (or, a look someone else designed), right now.

Equipped with clipping (“clipper”) and dressing tools for the 6.6 million people who visit PV each month, I can build my own looks (“sets”) swiped from designer websites, other user’s sets in their closets, and create what my mind wants to see.  I’m no fashionista, but I’ve often said that there’s no excuse for bad shoes.

While the company is pointedly focused on building and installing a passionate user group, 2010 looks like the year they’ll accelerate their model.  There’s little doubt in my mind that designers are going to rush their own sponsored sets and contests online for Polyvore’s customers. But turning this growing revenue base and user passion (people import 1.2 million products per month into their closets and sets) into a commerce destination is the tough financial question.

That Badgley Mischka cocktail dress with Jimmy Choo heels and Alex Sepkus arm candy is dead-on.  Professionally, I’m rooting for them.  It’s a game-changer for retailers.  It has the easy-buying features of fashion auction sites but the American Idol intrigue that’s making aspiration appealing to the masses.  Personally, it’s just good fun.

Somewhere out there, someone has to be cooking up a men’s version.

Chris Paradysz is CEO of PM Digital.

Today, with a digital marketing industry that’s grabbing new and existing ad dollars, these words carry a truth that could solve the dominant online advertising challenge, that is how to bring the economics of targeting precision to display media.  With the SEM and SEO industries maturing and their ability to grow sales naturally constrained by the limitation of consumer demand, this could be the old-guard display advertising’s missing ingredient.  

Led by Google, Yahoo and Bing on their respective exchange platforms, advertisers can pinpoint consumer interest as it’s happening.  Instantly, literally, ads are served based on what was just learned about what someone was looking for and doing.  And you can know how many ads they’ve already seen and when. 

Imagine you’re the Martin Guitar Company trying to reach people looking to buy a guitar that’s perfect for Eric Clapton’s style of acoustic blues.  If you could be in front of a prospect at the precise moment they left a Guitar Player Magazine article about Eric Clapton’s 1992 “Unplugged” album and his use of 3 Martin guitars¹ and who, 10 minutes earlier had already clicked on The Guitar Center and looked at acoustic guitars, you’d pay a premium for that.  It’s like being part of a Facebook exchange as people are buzzing about exactly what you’re selling and you can show and tell it, right at that moment. 

Technology like what AppNexus has built makes it possible to not only target these ad exchanges but, also, to bid manage and optimize in real time.  And, it’s a bidding model that squeezes out cost inefficiency, not a circa-1995 cpm pricing model.  While publishers may hate the thought of further price deterioration of their old model, radically improved performance is already driving higher prices.  Marketers need the scale and audience growth potential of display media.  In fact, they crave it. Performance pays, and that’s where the money is. 

As if the NYT and WSJ pieces didn’t already cinch it, EyeBlaster’s IPO filing lit the match:  the rage is about to begin.  I won’t be a bore over the privacy issues, but they are real and being heavily debated on the Hill.  Could this be more consumer-friendly?

Right in that millisecond between a blink and a-h-aa is the money moment. 

¹ EC played a 1939 Martin 000-42, serial #73234, which sold for $ 791,500 US at the Crossroads Guitar Auction 2004; a 1966 Martin 000-28 (converted to Style 000-45 pearl inlay by Mike Longworth), serial #208511, which sold for $186,700 US at the Crossroads Guitar Auction 2004; and, a Martin D-12-20 12 string guitar which I’m assuming he still has.

Chris Paradysz is CEO of PM Digital.

Take the Lupus Research Institute’s Shady Ladies gala last Saturday night in Wellington, Florida.  The goal was to stir awareness for a deadly disease that mostly affects young women.  The evening event included dinner and good fun but, also, had silent and live auctions for celebrity sunglasses (Bruce Springsteen and Patti Scalfia, the Kardashians, Tom Bergeron of Dancing with the Stars fame, Beyonce etc.), as well as a few fashion pieces.

The organizers buzzed about the event on Facebook to sell tickets and raffles. Initially there was lots of intrigue but few buyers.  It projected only 70% attendance with 24 hours to go.  But 12 hours pre-event, the event sold out and was SRO.  Why?  It became a fascination. On a smaller scale, but with similar intensity, momentum for the Shady Ladies event was akin to Lance Armstrong tweeting his 2,400,000+ Twitter followers to see who wanted to ‘go for a bike ride’.

Single Play

The auction hit big and made great money, but the show-stopper was Badgley Mischka.  Designers Mark Badgley and James Mischka were in attendance and personally sold a custom-fitted dress and accessories, plus two tickets to their upcoming fashion show.

Double Play

The dress was a fantastic item but what dramatically changed the energy was their decision to showcase a size 10 dress, not the size 0 that many expected (for perspective, the Olsen twins are two of Badgley Mischka’s most infamous models).  This was a brilliant move. The mostly 30+ crowd bid up the deal to thrilling levels.  The after-party Facebook buzz caught on.  ‘Badgley Mischka makes a size-10 dress?!’ I would expect the Badgley Mischka store in Palm Beach to be very busy these days.

Triple Play

Not a bit of the resulting financial performance is measurable, but the upstream and downstream demand impact of analog and digital social media is bursting the seams of that size 10!

Chris Paradysz is CEO of PM Digital.

Tomorrow is a huge day in our lives as marketers.  I’m taking a not-so-wild shot at this not because I love Apple products (I don’t) but because their ability to transform entire industries by re-thinking how people want to live their lives is stunning.  Apple’s new tablet product will be launched and, with it, the typical hype and expectations are at a fever pitch.  And, they should be.  Although the Kindle from Amazon was a game-changer for the content industry, it hasn’t really changed the lives of marketers as Apple’s launch will.

The new Apple product will be far more than a device.  It will integrate multiple forms of content into a single destination and do what all of us have wished for since we started buying cellphones and computers for personal use. Voice, music, video, print, data, calendars and phone are all going to be experienced through this technology.

What does this mean for PM Digital clients and marketers overall?  It most definitely is going to accelerate the opportunities and challenges for the content business, and not just the printed word.  Communicating and consuming and shopping are going to change as well.  Paying for a “subscription” or content in any form will be far easier to actually do and to understand its benefits.  I anticipate the role of the search engines is going to be significantly altered as well, especially if Bing becomes the primary search partner, not Google.

But it also means that marketers’ direct relationship with consumers is changing.  Who collects the money is one thing.  Who is responsible for the cultivation and nurturing of customers – and how marketers will leverage new and existing media to reach those customers — is changing as well.

There’s much more to speculate about, but let’s see what happens tomorrow.  We’ll have lots to figure out once this gets released and marketed. More to come.

Chris Paradysz is CEO of PM Digital.

A Slow Recovery

There will be continued slow recovery in US consumer spending, especially for large purchases due to a lack of discretionary cash (not income, per se), increased savings rates and a general adjustment to this new “now”.  2008 changed buying behavior to a “no”-first shopping mindset and 2009 cemented a value-only, thrifty approach.  2010 won’t change this.  Unemployment, under-employment and slow-growth for the private sector are the engines that are choking back substantive improvements in consumer confidence.  While there are certain job sectors re-igniting hiring, most industries will only begin to replace the attrition they forced during the lean 2008 and 2009.

Pent-Up Demand from the Jet-Set

For the super-wealthy demographic, expect that luxury items will be back in vogue as pent-up demand for jewelry, cars, homes, boats, fashion, at today’s reduced costs, increases.  Unfortunately, this is unlikely to offset the dramatic fall-off seen from the much larger affluent group that accounted for much of the demand growth during the run-up to the recession.

Personal Fulfillment for the Rest of Us

The definition of discretionary has changed relative to consumer purchases and buying behavior.  Where, pre-recession, this meant items people didn’t need but wanted, the recession and its epic duration have people focused on their hobbies and passions to relieve stress and to add back pleasure in their lives.  No longer considered discretionary, these hobbies and their related items and services have become part of the indispensable.  I anticipate revenues from home improvement, home-based interests like gardening and exercise, and passion hobbies like crafts, music, fishing, etc. stay in vogue and continue to capture wallet share.

Just the Basics for the Apparel Market

Recovery in this sector will likely take all of 2010, and I remain suspect of any predictions that buyers will return to their pre-recession buying behaviors.  I believe we’ll see minimal increased spending except for wardrobe maintenance and accessories.  In other words, “yes” to blouses, shirts, jackets, slacks and low-cost accessories, but “no” to high-end designer fashion unless it also has a high perceived value.  That said, this recession has instigated new opportunities for designers…Jimmy Choo and its line of clothes for H&M, Norma Kamali and her Walmart business are fascinating experiments.  I do think it’s going to be an exciting time for the fashion industry but certainly not in terms of their business economics.

The Mature Market Will Keep Booming

I expect the mature market — including insurance, financial services, healthcare products and domestic travel — to see revenue growth throughout the year.  The aging baby boomer continues to age and there are ongoing decisions this audience will need to make that younger generations can save for another day.

Paid Content Will Test Its Limits

2010 will be the year of publishers testing paid content business models.  Led by Murdoch and others, lean advertising has forced publishers to develop new revenue streams without significant cash outlays.  Existing readers and registered users are going to have their interests tested.  Where the line between paid and free exists, and whether the fundamental shift in technology and the internet’s jarring redirect of consumer’s reading behavior has made getting paid moot, will be tested.

Newspapers Will Leverage Strong Regional Brands and Databases

The national and large regional newspaper businesses are rallying together to create their own ad networks and will test bypassing Google and other low-cpm advertising outlets to create higher value advertising relationships that result in higher ad rates.  The only way to deliver this and meet the expectation will be to offer refined demographic targeting of their databases.  For their ad clients and agency media buyers to embrace this, advertising performance is all that matters.

Social Media Will Grow Up

2010, and especially Holiday, will be the year that social media loses its innocent charm and crosses over into the demand requirements of traditional ROI-based search, display and email campaigns.  Social media is not a campaign, and that’s the biggest threat to its purity and ability to drive high-quality traffic for retailers.  Particularly for brands with significant recognition, fans are growing at the rate organic search traffic was growing back in 2005.  We expect this level of growth to continue through 2010 especially if brands do not compromise the relationships they’ve built with over-zealous marketing, but that’s unlikely as companies are spending real money on people and talent.  As marketers, we know audience measurement and impact need to be brought into the calculation but figuring out just how to measure it and what we want to measure will require a different set of analytics since there’s a bit of a land grab happening for which department owns it.