Connect with us

affilate software business


Risk-Averse Marketers, Your Days Are Numbered



Each year, how many new smartphone models are launched? How many apps are introduced or updated? Each month, how many new must-watch shows and must-hear tunes stream toward your devices? How many times a week, day, hour does “breaking news” interrupt your newsfeed? Geekier readers may feel like firing up a spreadsheet and running some numbers to answer these questions, but for most of us the answer is simple: too many, too much of everything to keep track of.

Now, thinking of those same categories, how many of these new offerings are genuinely innovative and memorably different? Several? A few? One or two? Most are just repackaged ideas that may catch people’s attention fleetingly before everybody moves on to the next slightly modified update of a familiar formula. It speaks volumes that streaming services such as Netflix and WarnerMedia are in bidding wars for the rights to run decades-old stalwarts such as Friends and Seinfeld.

We all have the impression that change is unrelenting, that there’s something new coming out all the time. We have come to expect—even crave—the constant buzz of new this and improved that. When something new(ish) does come along, we may feel a buzz for a while, but only until the next new thing appears. And even if the next new thing really does change everything, that change quickly becomes the new normal. And so it is that change and expectations of change are perpetually accelerating.

In such an environment, can brands and brand marketers innovate fast enough and deeply enough to command attention? It’s possible, but it takes hard work—and guts.

The temptation is to take what worked before and adjust it just enough to make it seem a little fresher. That can seem safer than raising the bar too high—and risking the expectation that you’ll be able to do it again…and again. In truth, yielding to this temptation to endlessly tweak is the low road to mediocrity. Rehashing old campaigns, sticking to “safe,” well-trodden territory and steering clear of the unknown may make life easier in the short run, but it’s a recipe for getting ignored in the marketplace.

Now, as ever, success in marketing is about standing out from the crowd, making a mark and connecting memorably. What’s different now is that the crowd is much bigger and far noisier. So, marketers have to choose between two types of risk/reward strategies. One is the low-risk/low-reward approach: play it safe, make incremental changes and aim for growth in line with the rest of the market. The other is the high-risk/high-reward strategy: dive deep into market insights, applying intuition to spot trends and imagination to disrupt the business-as-usual norms.

If you feel inclined to go for the low-risk/low-reward strategy, bear in mind that there’s a hidden risk of irrelevance for you as a marketer. Implementing this sort of strategy will increasingly be the work of machines running self-learning algorithms. And who needs human marketers if machines can make incremental improvements 24/7? Until machines develop the capacity to come up with high-risk/high-reward marketing ideas, this apparently riskier approach is likely to be the safest way for marketers to stay relevant and avoid being replaced by a bot.


Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


The Charlie Brown Market




In the famous Charles Schultz “Peanuts” comic strip, time and time again Charlie Brown tries to kick the football out of Lucy’s hold. Each time he approaches, Lucy pulls the ball away and Charlie ends up on his back. Still, he tries again based on Lucy’s promise not to pull the ball. She does anyway. The market appears to be reacting to the “trade” file much like Charlie Brown, each time believing comments from the administration that, “A trade deal with China is imminent.” So, far, many false starts, but, no trade deal. Yet, based on that “hope,” U.S. equity indexes are at or near all-time highs.

The New Narrative

Fed Chair Powell and other FOMC members continue to tell markets that the Fed has finished its mid-cycle correction (i.e., now on “pause”) indicating that it has completely unwound the 2018 over-tightening, and now that the “economy is in a good place,” i.e., no recession in sight, not to expect any more built-in interest rate reductions.   

The markets apparently believe this, and those on the sell side now have a “new narrative”: Q4 will be the economy’s low point (no recession) and the industrial economies (U.S. and the world) will reaccelerate.  This new narrative is based on the Fed’s view, as expressed directly by Powell and indirectly by other FOMC members that “The Economy is in a Good Place.” No reason not to believe them, right? Oh, wait! This is the same Fed:

  • That got it completely wrong in 2018 and overtightened (the Fed thinks by 75 bps);
  • Whose FOMC is the most divided on where policy should go at least since Volker was Chairman (1980s);
  • That was completely surprised and caught flatfooted when overnight markets became illiquid and rates soared to 10% during their September meeting set;
  • Who said adding $260 billion (and counting) to bank reserves via a balance sheet expansion wasn’t Quantitative Easing (QE).

The New QE4

In this narrative, there is nary a mention of the of Fed’s balance sheet expansion since mid-September. Looks and acts very much like QE because QE is, by definition, balance sheet expansion. And, while some economists don’t think QE has any influence on equity prices, since the Fed “intervened” in the overnight repo market in mid-September, the S&P 500 rose 4.1% from 2,998 on 9/16 to 3,120 on 11/15. No correlation?

The LCR Excuse

The “excuse” for this QE is the regulation called the Liquidity Coverage Ratio (LCR) required by Dodd-Frank. Under LCR, banks must keep enough liquidity on their balance sheets to survive a net cash demand of a 30-day stress period. Yes, carry enough liquidity on balance sheet – no allowance over that 30-day period to borrow or otherwise raise cash! Since the financial crisis of 2008 and passage of Dodd-Frank (2010), the Fed’s balance sheet has been swollen, and banks have had tons of excess reserves. Apparently, when the Fed was reducing its balance sheet last summer via Quantitative Tightening (QT) (the sale of its balance sheet assets), it wasn’t aware at what reserve level the LCR would begin to bind bank liquidity. This is a poor excuse, and another failure of this Fed. The Fed has had 9 years since Dodd-Frank’s LCR rule went into effect to have banks report those LCR needs.


It also appears that the November employment report (+128,000) has contributed heavily to the growth resurgence narrative. The Establishment Survey that markets have been giddy about is significantly biased by the BLS’s Birth/Death (B/D) model. (Because they don’t survey small business, BLS uses a mathematical algorithm based on history to guess at new small business formations. It always biases the Establishment Survey significantly to the upside when the economy is slowing.) According to economist David Rosenberg, about half of this year’s BLS Establishment Survey employment growth came from the B/D model plug number.

 The fact is, consumer confidence wouldn’t be falling if the labor market were that strong. Markets don’t yet recognize that the low level of the unemployment rate is structural (not enough workers). Look at Japan’s unemployment rate (2.2%) and the fact that there has been no growth there for years! In addition, the JOLTS data (Job Openings and Labor Turnover Survey) which is more comprehensive and detailed than the Establishment or Household Surveys show rising layoffs (+151,000 Sept.), falling job-openings (-277,000), and, always a barometer of job availability, a fall in voluntary quits (-109,000).

The Unrecognized Issue

There are two parts to what is going on in the economy. One is policy based (trade), the other is structural (demographics). The market recognizes the policy based issue(s), but not the structural ones, believing that if the trade deal is consummated, recession will be avoided, and developed world growth will return to “normal” post-WWII levels. Clearly, the trade issue has caused a lot of damage, especially to the business community. 

But, of importance, and what is not priced into markets, is that while the trade war has pulled the world’s economies back below their potential economic growth, demographics are reducing potential GDP growth, itself. These demographic trends are quite significant, quite negative, and extremely long-term.

The Data

The markets continue to reach new highs based on the new narrative that Q4 will be the low point and that the U.S.’s and the world’s economies will reaccelerate in Q1. The data, however, do not bear this out. Industrial Production in the U.S. and in the developed world (Japan, Germany, China) is falling month by month. U.S. construction and capex data continue to weaken. And, while the narrative is that the U.S. consumer is strong, auto sales have been weakening and the sentiment indexes indicate consumer intentions to purchase big ticket items are on the downslope. GDP growth, which was 3% in Q1, has fallen each quarter this year (1.9% (prelim.) for Q3, and all the most watched econometric models are forecasting 1% or less for Q4. Freight movements in the U.S., i.e., the movements of goods by truck, rail or air, as measured by the Cass Freight Index are down -5.9% over year ago levels in October. The containers arriving at the two major So. California ports of Long Beach and LA are down significantly year to date. The OECD’s Composite Leading Indicator Index for the world has fallen for 21 months in a row, and its U.S. sub-index for 17 months in a row. Historically, such long trends have only happened in recessions. Central Banks have been and continue to reduce their administered rates, and inflation data continue to weaken, indicating sluggish demand. The list goes on…


The indications are that we will be seeing significantly lower job growth going forward. It is likely to be more apparent in the ADP data and in JOLTS than in BLS’s Establishment Survey (unless the B/D model bias is adjusted out). Still, even if we do end up with an official “recession,” it is likely that the unemployment rate will be a lot lower than in past recessions because of the demographic make-up of the labor force itself.

As for the financial markets, the record highs for the popular equity indexes are all about the new narrative. The underlying data, however, tell a completely different story. Caution is warranted.


Continue Reading


UK funds still paying IFA  commissions stand at £184bn




Close to £184bn of UK investor money is languishing in expensive funds that still pay commissions to financial advisers, despite efforts by the financial regulator to stamp out conflicts of interest and overcharging.

Reforms to the UK financial advice market in 2013 banned funds from charging commissions, but research from Fitz Partners shows that seven years on many investors are sitting in legacy fund share classes that apply the charges.

According to the consultancy, 23 per cent of retail fund assets in the UK are held in these funds, which on average cost 59 basis points more than commission-free equivalent funds.

“The difference in price is higher than what an investor would pay in platform fees should they move on to a platform and invest into a ‘clean’ share class,” said Hugues Gillibert, chief executive of Fitz. “Unless they have a current discount agreement with the asset manager, retail investors in these funds would be better off moving into a commission-free fund.”

The huge amount held in commission-paying funds casts doubt on the effectiveness of attempts by the Financial Conduct Authority to ensure that investors are not overpaying for funds.

Legacy share classes were one of the barriers to improve price competition in the fund market identified by the FCA in its landmark asset management study in 2017. The regulator uncovered that funds charged £1.4bn in commissions in 2015, two years on from the ban, “[raising] questions about the extent to which investors are aware that alternative share classes may be available”.

Last year, the FCA sought to accelerate the process of investors moving to cheaper share classes by waiving the requirement for fund managers to obtain their consent before switching them.

Mr Gillibert said the FCA’s intervention had worked to some extent — the amount of assets in legacy share classes has fallen from 33 per cent to 23 per cent since the move — but “not as much as expected”. He said the process of moving clients remained administratively and legally complex, especially in the case of investors using a financial adviser.

Fund managers cannot automatically switch advised investors into new funds, and these individuals may be reluctant to move, for example if they have advantageous arrangement with their intermediary or if they cannot afford to pay upfront fees for advice.

One way to get around this is for fund managers to offer a discount on the management fee that effectively cancels out the commission. But this option will not appeal to all fund groups, since it requires them to take a financial hit, said Mr Gillibert.

He said that the value reporting process that all UK asset managers will shortly have to undertake will shine an unforgiving light on any discrepancies between what investors are being charged and force fund groups to take more drastic steps.

“When fund managers compare the cost of share classes during the value assessment process, legacy share classes will stand out as a problem,” he said. “This will probably prompt fund boards to demand action to tackle it.”

One fund manager going through this process is Royal London Asset Management, the £130bn group. “The preparation for the value assessments has led us to look at how we’re treating various different client groups and ensure we’re treating them fairly. That means moving investors into cheaper share classes or reducing the fees on those share classes,” said Rob Williams, chief distribution officer at Royal London.


Continue Reading


2 groups push to get more minority business owners involved in Illinois’ recreational marijuana industry




Two social equity groups are pushing to get minority business owners involved in recreational marijuana sales in Illinois.

Neffer Oduntun-Kerr is one of 30 people chosen Sunday as part of a monthslong training process sponsored by two organizations aiming to add diversity to the upcoming Illinois’ marijuana industry.

Oduntun-Kerr is a single mother currently working multiple jobs while attending school. She said this new path was one she never thought she could afford.

“This has changed the trajectory of where my life can go,” Oduntun-Kerr said.

Organization 4thMVMT combined with Chicago-based group Majority-Minority have established a training and mentorship diversity program.

“Right now, it’s a $10 billion industry across the country and black and brown people have less than 1% in it,” said Karim Webb, CEO of 4thMVMT.

“When we look at the medical cannabis industry and the makeup of it, there’s no secret that there’s no diversity,” said Kareem Kenyatta, managing partner of Majority-Minority.

Ron Holmes of Majority-Minority said, “Our communities have been ravished by the ‘War on Drugs’ for decades, right? And we want to make sure that people this impacted most have a shot to get in this industry.”

Now, Oduntun-Kerr said she hopes this opportunity will help inspire others like her.

“It could be me being able to show other young mothers that you can be a success. You are not your circumstances or situation,” she said.

The dozen chosen on Sunday will now move on to the competitive process to apply for state-issued adult-use licenses, with both 4th MVMT and Majority-Minority helping them along the way.

Copyright © 2019 WLS-TV. All Rights Reserved.


Continue Reading


We use cookies to best represent our site. By continuing to use this site, you agree to the use of cookies.