The Oscars and the Economy

It seems as if the economy has caught up to Hollywood! 

An article in the January 19 issue of Advertising Age mentioned a bit of a discount for would-be Academy Awards advertisers. Instead of the whopping $1.7 million for a spot last year, advertisers could snag a spot for a mere $1.4 million. Not only were spots cheaper… movie advertisements were accepted for the first time. 

This was a result of big boys like FedEx and General Motors dropping out of the sponsor lineup last year. ABC (and the Academy) seemed to hope allowing film ads would fill the void. 

The advertising rate decrease could have a lot to do with last year’s disappointing ratings, 32 million viewers, compared to the 39.9 million in 2007. Not to mention the great writer’s strike of ‘07/’08, which canceled the Golden Globes. There has been some tension with the Screen Actors Guild as well, so advertisers may have been reluctant to drop their dough on an event that could be canceled as result of a strike. 

Even the stars weren't as bright on Oscar night! Many of the "best dressed" stars were adorned in drab shades (ivory, champagne, grey, black) and minimal jewelry-- albeit their outfits still cost more than most of our homes, and they still looked fabulous!

Thoughts?

Development and Capital Investment in Morgantown

This is what development looks like in the environment of a vibrant economy. The photo at left is the Boathouse Bistro in Morgantown, West Virginia. Sure, one might say, "anyone can build a new restaurant." But if I had turned around and snapped another photo, you would have seen a shot of the new, under-construction Marina Tower office buidling. Connecting all of this is the Morgantown Riverwalk path. It is undeniably cool and convenient to be able to set out on foot from the Waterfront Place Hotel and walk to several appealing destinations, such as the ampitheater, the rail trail, Oliverio's (and several other eating/drinking establishements) and around a dozen office locations. In addition to the capital injection downtown, there's a $1.2 billion capital investment underway in the county with the new Longview Power plant.

Yes, there is traffic to contend with (and they are working on solutions), but Morgantown has energy and momentum. It is envigorating to come here. Part of the success comes from the University's presence here. From my perspective, the other part ... the Morgantown "Tipping Point" was the decision by its leaders to embrace and leverage the power and impact of their river, the Monongalia River. That has spurred capital investment, which fuels development ... and momentum ensues.

My visionary friend, Jeff James and I landed on an outlandish (maybe not, once you ponder it) idea that our state should connect Morgantown and Charleston via light rail. As Jeff said, "They ought to just extend the Personal Rapid Transit system (or PRT) from Morgantown to Charleston." And so what originated as an off-handed remark makes all the sense in the world.

• Saves gas - in a time in which gas prices are only going to rise.
• Improves and enriches the travel experience.
• Adds convenience for the traveler.
• Alleviates traffic congestion.
• Decreases traffic accidents.

Who agrees? Who disagrees? Let us hear from all marketing geniuses on this topic, please!

2007 Holiday Retail Report A Mixed Bag

According to this excellent report by ComScore, the Internet economy (or eCommerce if you will) has been quite robust lately. Internet spending was up 19% for the 2007 holiday season over the previous year. That is incredibly strong! For the record 2006 was up 26% over 2005, but that does not dampen the robust nature of the 2007 holiday e-commerce retail spending data.

But what about traditional commerce? How's the old economy doing? Despite a strong, promising start (Thanksgiving weekend traffic was reportedly very strong - measured at 6.5% increase vs. 2006), bricks-and-mortar retail was weaker this holiday season. According to the New York Times, consumer spending for the 2007 retail season was up only 3.6% from 2006. The comparable year-over-year rates of increase were 6.6% and 8.7% for 2006 and 2005 respectively. [The analysis in the article also adjusts for higher gasoline prices to conclude that the net increase in retail spending for 2007 was more like 2%. Still it was an increase. That's not entirely bad.]

Finally, there's more of the overall holiday retail assessment to be gleaned from the following report from Thomson Financial (via ddi magazine online):

According to a preliminary same-store sales tally by Thomson Financial, 16 retailers missed projections, while seven surpassed forecasts and one met expectations. While weak results were posted across all retail categories,apparel retailers, such as Limited Brands Inc. and Pacific Sunwear of California Inc., were the hardest hit. Limited reported an 8 percent decline in same-store sales--financial analysts had predicted a decline of only 4 percent. However, Wal-Mart Stores Inc. and Costco Wholesale Corp. reported same-store sales increases for December. Wal-Mart's same-store sales rose 2.4 percent, surpassing a forecast of 1.8 percent, while Costco posted a 7 percent increase in same-store sales, above the 5.6 percent prediction.

All in all, the 2007 holiday retail season was a mixed bag: somewhat weak overall, with a few bright spots. The notable exception was online retail, or e-commerce.

Any marketing genius who dares to say that the Internet is becoming increasingly important to business success is absolutely correct!