Common Cents Approaches to Financial Freedom

Those of you in the Associate’s Program will get a personal finance class, but the information below is most likely of interest to anyone trying to save a few dollars in this economy. These links are from a blog I recently discovered called LenPenzo.com. Some very interesting articles… enjoy!

• Why Rechargeable Batteries Are Rarely Cost Effective
• Gas or Charcoal BBQs: Which One Is More Cost Effective?
• Shopping For Low Gas Prices Is A Losing Proposition
• Is the Payback Period on Energy Efficient Bulbs Too Long?

What Will the Return of Steve Jobs Mean for Apple?

In some ways, Steve Jobs hearkened back to the ’80s and ’90s, when corporations were run by celebrity CEOs like Lee Iacocca and Steve Jobs. However, it stands to reason that when your CEO is a household name and something happens to his health, there is bound to be an impact in the markets. It seems that Apple is learning that lesson and trying to adapt to the challenge. While it’s nice to have a public face to your company, you’re also subject to the public’s fickle tastes.

Friday Clean-Up

I found a lot of great info today about public speaking. I’m hoping to either get it up on here over the weekend or use it for discussion points this week.

Email campaign case studies – “A spam campaign feels like a smart idea, but over time, the more you use it, the less your brand is worth. A permission campaign, on the other hand, only grows in value, until it gets big enough that you can build an entire business around it.”

Which comes first, the product or the marketing? – “Marketing is not the same as advertising. Advertising is a tiny slice of what marketing is today, and in fact, it’s pretty clear that the marketing has to come before the product, not after.”

The difference between a show and a story – “The Super Bowl hype is blissfully long gone… The lesson of these ads is simple. Putting on a show is expensive, time-consuming and quite fun. And it rarely works. The Gatorade commercial, or the guy clipping his toenails or someone throwing a rock through a vending machine… it’s all show biz, it’s not marketing.”

Learning all the time – “The #1 habit successful people share with me is this: They read books to learn. They do it often and with joy. It’s cheap (or free, at the library or online) and portable and specific.”

Authenticity – “Authenticity, for me, is doing what you promise, not ‘being who you are’. That’s because ‘being’ is too amorphous and we are notoriously bad at judging that. Internal vision is always blurry. Doing, on the other hand, is an act that can be seen by all.”

Marketing to Moms? Read the Digital Mom Report

Low Cost Ways for Small Businesses to Keep People Motivated

Stolen Wallets, Not Hacks, Cause the Most ID Theft? Debunked

Clues to Massive Hacks Hidden in Plain Sight

Steve Jobs Is Not Dead

Apparently there was an erroneous report that got out earlier in the month that Steve Jobs, the CEO of Apple Corp., had passed away. It had a wildly detrimental effect on the stock price and was later found to be a prank, not an effort to influence trading of Apple’s shares.

Apple shareholders got a scare this morning when an enterprising “journalist” (day trader?) reported on CNN’s citizen journalism site that CEO Steve Jobs had a heart attack. The stock fell as low as $94.65 before Apple rushed forward to deny the report.

Assuming the so-called “citizen journalist” bought shares on the fall, he stood to make at least $6 per share, given that the stock bounced back to the $100 range after the rumors were denied.

Do you believe everything you read on the internet? I guess that Wall Street does.

How Wall Street Lied to Its Computers

People make computers out to be these repositories of knowledge that can do so much in comparison to our small little brains, but in reality, computers are only as smart as we allow them to be.

Most Wall Street computer models radically underestimated the risk of the complex mortgage securities, they said. That is partly because the level of financial distress is “the equivalent of the 100-year flood,” in the words of Leslie Rahl, the president of Capital Market Risk Advisors, a consulting firm.

But she and others say there is more to it: The people who ran the financial firms chose to program their risk-management systems with overly optimistic assumptions and to feed them oversimplified data. This kept them from sounding the alarm early enough.

Top bankers couldn’t simply ignore the computer models, because after the last round of big financial losses, regulators now require them to monitor their risk positions. Indeed, if the models say a firm’s risk has increased, the firm must either reduce its bets or set aside more capital as a cushion in case things go wrong.

“There was a willful designing of the systems to measure the risks in a certain way that would not necessarily pick up all the right risks,” said Gregg Berman, the co-head of the risk-management group at RiskMetrics, a software company spun out of JPMorgan. “They wanted to keep their capital base as stable as possible so that the limits they imposed on their trading desks and portfolio managers would be stable.”

Hackers Rig Stock Prices

This is probably something you don’t want to read about with Wall Street in turmoil:

Here’s the latest way to score big in the stock market. First, hack into dozens of online traders’ brokerage accounts. Next, buy hundreds of thousands of shares of selected stocks using your hacked accounts, a move that largely moves up the stock price. Then sell your own shares of the same stock that you already owned and profit millions.

It’s like stealing candy from a baby. The only problem with the plan — known as a “hack, pump and dump scheme” — is that it’s illegal in so many obvious ways. Just ask Thirugnanam Ramanathan, a 35-year-old man from India who was sentenced Monday to two years in prison by a U.S. judge for undertaking such a scheme after pleading guilty and agreeing to pay restitution and cooperate. Two others have also been indicted in the overseas conspiracy to defraud U.S. investors.

The trio is accused of stock manipulation via hacking into individuals’ accounts held by TD Ameritrade, Fidelity and, among others, E*Trade.

At least 60 online traders using nine brokerage firms were victimized from late 2006 through 2007, the authorities said.

Is That iPhone In Your Pocket Just Location-Based Ad Bait?

In other words, if you had an iPhone (or really, any smartphone) and advertisers could find you and tell you what deals or events were going in that particular area, would you want to know? Heck, if you want to get into the base models, they could just monitor your location and send you text messages.

With the iPhone’s new app store making it easier for third parties to tap into the phone’s GPS capabilities, it was only a matter of time before advertisers jumped on board. Today, online event tracker Eventful announced plans to work with geotargeting ad network 1020 Placecast to send targeted, location-based ads to its users.

Eventful’s iPhone app locates the user and informs them of events happening nearby. Now Placecast can use the technology to send localized advertising to Eventful users. Placecast will also be sending tailored advertising to users according to zip code searches and other entered data, but it’s the mobile aspect that presents the most potential for advertisers.

Stranded smartphone users are a strangely captive audience. Ads that would go unnoticed online — local restaurants or hardware stores — are exponentially more useful to a person looking for food or a hammer while standing on a street corner.

When advertisers figure out the details, they could score a windfall in mobile by minimizing the intrusion and providing people with something they actually want — useful information.

The Fickle Online Advertising Business

I mentioned a couple of weeks ago about how online advertising is robbing revenue from newspapers and hastening their demise. Yet, for all the popularity of advertising on the internet, it seems that target markets on the internet are more elusive than ever.

YouTube is watched by millions of people, yet its owner Google has difficulty selling advertising on the site. However, they are trying different home page formats to accomodate more general advertising. MySpace is trying the same tactic for its large viewer base.

Online advertising is a small portion of the overall advertising done in the United States. The $505 million spent on online advertising represents 2% of the entire advertising expenditure.

Online video watchers are a slippery bunch for programmers and advertisers: Not only are they reluctant to pay for anything — they expect to download everything for free, and they also skip commercials on free, ad-supported sites.

Jerry Buhlmann, CEO of Aegis Media, says that the growth in online spending has less to do with additional consumers using online media than a shift in the industry towards ad buys that deliver measurable returns. This is in line with a study by Google that found that relevant ads are more profitable for advertisers, and here’s a look at how targeted online advertising works.

Then again, all this discussion may be for naught. Advertising expenditures are down right now with all these dips in the economy. Also people still don’t really know much advertisers are spending online, nor do they really know how effective the advertising is.

Making Sense of Reorgs

Reorganizations are a popular way of saying, “We’re going to streamline our business activities in order to attain or sustain financial growth,” and a less frightening way of saying, “We’re going to dump some underperforming divisions and fire a bunch of people.” And, in this business climate, it’s probably going to be a buzzword for the next couple of years. So, how do you survive one? Better yet, how should you implement one?

1. Reorganize as infrequently as possible and make it count when you do (surprisingly, many executives just don’t get this)
2. Develop a complete reorganization plan and timeline; execute it crisply and in a timely manner
3. Give appropriate level executives some advance notice and train them in what to communicate to their people (see #6 below) at the appropriate time
4. Timing is everything–too little notice to key managers and they’ll feel cut out of the loop, too much notice and news will leak into the organization
5. In the case of public companies, material information must be communicated to all shareholders simultaneously, so the staging of an external release followed by internal communication must occur as rapidly as possible to minimize disruption
6. Have a complete communication plan for managers and employees, including the strategic or operating reason for the move and the new organizational structure
7. The goal is to have all employee questions adequately answered–in person–by appropriate levels of management at the time of the announcement

For executives: To be effective, reorganizations must be undertaken with the utmost consideration and respect for managers and employees. Timing is everything, planning is critical, and the devil’s in the details.

For employees: Under the right conditions, reorganizations are necessary and critical to any company’s continued growth and success. That said, if your company suffers from frivolous and disruptive reorg-du-jour, you might consider a change of venue.

Face-Based Advertising, Coming Soon to Store Near You

If you’ve ever seen the movie Minority Report, there’s a few scenes where advertising is directly marketed to specific people by name based on retinal scans that identify people when they walk into stores or go through the subway. Apparently, that technology may not be far away.

Out-of-home advertising, often referred to as “place-based media,” is seeing a surge in sales and popularity due to innovations in the sector, some of which hold the promise of turning place-based media into face-based sales.

Advertisements out of the home at the cash register, on the road, and in the common area of malls target consumers at point of sale, getting their attention when they have their wallets out or are trying to find a place to spend their dollars.

New innovations in the sector are allowing retailers to update digital tools to reflect changes in the time of day and the company’s sales objectives. Today the Wall Street Journal focuses on companies like Dunkin’ Donuts — which now updates promotional messages in two Buffalo stores between the morning and afternoon rush hours.

Soon advertisers will be able to tailor their messages to the person standing in front of a sign for their products: “The company powering the screens for Dunkin’, YCD Multimedia, is in the midst of deploying facial-recognition technologies that can classify people into certain demographic groups by identifying their approximate age and their sex.”

Security companies have been using these tools for some time, comparing the image of a person’s face against a database of face information. At the 2001 Super Bowl, officials apparently used the technology to scan for terrorists in the crowd.

While the process sounds rather invasive, companies are hoping to avoid privacy complaints by not storing information about consumers that interact with the displays, but a bigger issue seems to be one of vanity. How soon until someone sues for being mistaken for a member of the opposite sex?

What do you think of this? Is this technology furthering marketing or Big Brother watching us? We may find this disconcerting, but I’m sure that there’s a generation of kids growing up now that will think this is cool, and by the time they are in charge, it will become second nature to them.