Seeking Stability: Consumers

With many economies still struggling to find a foothold toward recovery, Americans are looking for increased stability and security in their lives — even if they have to make it up. One recent study conducted by Zillow discovered that as many as 42 percent of prospective home buyers believe that homes typically appreciate by seven percent a year.

Historically, home values in a normal market appreciate by 2-5 percent a year. And during the last five years, home prices have been extremely volatile with many homeowners having upside-down mortgages, owing more on the house than its current valuation.

Zillow uncovers where homebuyers are confused. 

• 41 percent think they are required to buy private mortgage insurance (PMI) regardless of their down payment. PMI is typically required only when buyers put down less than 20 percent.

• 56 percent confuse appraisals and inspections, with most believing that appraisals determine whether or not a home is in good condition.

• 37 percent believe that homeowner's insurance is optional and do not budget it into their monthly payments. In reality, lenders require that borrowers purchase homeowner's insurance that protects the lender more than the home buyer.

"It's troubling that we're still in the midst of one of the worst housing recessions in history," said Dr. Stan Humphries, chief economist at Zillow. "And yet, prospective buyers continue to have such high expectations for home value appreciation."

Upbeat about home appreciation, but downbeat on the economy.

According to another poll, this one conducted by Harris Interactive, 67 percent of Americans rate the job market as bad in their region of the nation. Only nine percent would rate it as good.

Currently, Southerners seem to be more optimistic (62 percent say the economy is bad) and Westerners less optimistic (74 percent say the economy is bad). When asked what would help increase jobs in the United States, 44 percent said cutting government spending and 40 percent said cutting taxes for Americans.

Only 12 percent believe more government spending would increase jobs. While Harris noted some partisan differences, only 29 percent of Democrats believe that more government spending will increase jobs. Almost 22 percent of respondents said nothing will increase jobs.

Retailers are not convinced there will be an economic recovery either. The Journal of Commerce/PIERS reported that toy imports were cut nine percent, which indicates that retailers are being especially cautious. Most toy imports (82 percent) come from China.

What marketers and employers could do to step up. 

A few weeks ago, we alluded that the best economic recovery could be spurred by a new concept of economy. Customers are looking for more meaningful purchases (quality over quantity) and stable working conditions (protective sentiment). This may require companies to consider strategies that strengthen internal communication (employee morale) and honest, up front communication and customer service (external communication).

The worst moves that companies can make are sweeping changes or over promising and under delivering. Consumers and employees are not in the mood, and their level of frustration is likely to materialize in national protests or public relations nightmares for companies that raise fees or implement sweeping service changes (unless they are truly looking out for the consumer).

Rediscovering Influence: The Butterfly Effect

A few months ago, I was introduced to one of my favorite websites ever. It's a site loaded with ideas.

It represents the best of what the Internet can do. It brings people together — those with great ideas and those who want to see great ideas succeed. They are great ideas. Not all of them; enough of them.

In fact, I reviewed it on Liquid [Hip]. And while Kickstarter wasn't rated because we ran the review as a Good Will pick, I would have rated it a perfect 10. I've only ever done that one other time since we started.

It seems to me that Kickstarter represents the best of what the Internet can do. Almost every day, someone pitches an idea that influences and inspires others to share their story, dream, and project. The artists who submit their side projects are influential, even those who have no presence on the Internet (today).

So are the people who support them. In fact, the people who support these artists are more influential than they will ever know. The project they help fund today can launch a company, a career, a revolution.

The truth is we just don't know. A small change at one place in a nonlinear system can result in large differences at a later state. It's called the butterfly effect, and taken from a greater chaos theory.

The Quest For Tangible Online Influence. 

In much the same way, DonorsChoose is like Kickstarter. It brings people together too.

In this case, teachers submit requests based on the needs of their students. Supporters donate funds, which are then used to purchase the necessary supplies.

One recent example was a teacher who had an idea that he could do a better job teaching his students science and how to grow food if only they could test the soil for optimal growth. Once they had the soil test kits, they would have a better understanding of how to grow plants like tomatoes and squash.

The project was funded. And while there is no way to really know, any number of those students might translate what they learn from this project into lifelong skill sets, inspiring them to become teachers, scientists, agricultural engineers, or maybe something that we can't imagine today — professions that could make their communities, states, or even the world a better place to live.

The Distraction Of Online Vanity. 

The nemesis of both projects, it seems, strikes in the opposite direction. Rajesh Setty wrote a brilliant piece, called 7 Reasons For The Rise Of Mediocrity (hat tip: Valeria Maltoni). In it, he shares how many people obtain attention without any foundation of ability, accomplishment, or credibility.

It seems to me that he is right, even if I might temper my assessment because I believe insight can come from even the least likely of places. But where I agree with Setty is that I'm no longer convinced enough people are seeking insight. They are seeking mediocrity, wrapped in vanity, a distraction.

And if there is any service that delivers this distraction in an overdosed-sized serving, it has to be Klout. I am not going to dwell on Klout too long. Danny Brown has covered recent events already — from the recent embarrassment of people who believed the original scoring system was something more than make believe to one of the greatest abuses of privacy on the Internet.

I tend to take a broader brush approach to the topic, usually filed under perception or popularity. And while neither of those articles are directly about Klout, they may as well be. The entirety and enormity of the system proposed by that company aims to rob people of real influence by catering to their vanity.

As much as I would like to laugh about it, casting Joe Fernandez as Sylvester McMonkey McBean (and maybe I will again some other day), Klout is becoming dangerous. For every article that laughs at it, there are five more than suggest Klout for resumes (Adweek),  Klout for perks and power (Business Grow), and Klout for university grades (Wall Street Journal, about 3 minutes into the video). 

Yes, Scott Galloway, clinical professor of marketing at New York University, threatens students with public humiliation if their Klout scores falter. He says high Klout scores make students winners. In reality, it asks them to disconnect from people that it considers losers, making them the biggest losers of all and everything Andrew Keen said about the future of social media right on the money.

What We Need To Ask About Influence. 

In determining influence in terms of measurable action, we have to ask ourselves whether the action of inventing, investing, donating, creating, inspiring, or producing goes further than the action of liking, sharing, retweeting, and investing time in the primping of a vanity score for a hand full of hair gel.

And then we have to ask ourselves if pursuing those scores does anything beyond distracting us from activities that might do or might produce a tangible outcome — a small change that leads to large differences in a later state. Or, to use the classic theoretical example, we would have to know that a butterfly flapping its wings several weeks ago didn't in fact form a hurricane today, or not. Do something.

Anti-Advertising Campaigns: The Christmas Creep

The Consumerist has decided enough is enough. After years of watching companies and businesses roll back holiday shopping, a phenomenon they call "Christmas Creep," they are launching DIY craft project.

Dubbed the "Christmas Creep," the Consumerist has created an ornamental character to bring what it calls the Christmas Creep to life. The consumer advocacy group suggests consumers print the image and then photograph themselves (with the image) next to any prematurely stocked shelves (and presumably sharing it).*

"It seems that every year retailers put out Christmas decorations earlier and earlier, sometimes in the middle of the summer," said Meghann Marco, executive editor of the Consumerist.com "We've created the 'Christmas Creep' as a device for consumers to stand up to retailers and take back summer, fall and all the holidays with seasons."

We love The Consumerist but Christmas Creep is dangerous.

While the idea is clever and has some merit, one has to wonder if the whole thing might backfire. Even with the ugly little ornament front and center in the photograph, people who share it on social sites could inadvertently promote the display, products, and store.

Worse, it could result in tipping off other retailers that the holidays have started. And since so many retailers get their cues from the time-honored marketing strategy of follow the leader, what is meant as a symbol of admonishment could accidentally become a symbol of start your engines.

The same holds true for the campaign release. In it, The Consumerist promotes Pier 1 with a put down for sending out a July email that prompted people to "Get an early start on Christmas" and preview items before they hit the stores. Along with Pier 1, they also list Sam's Club, Costco, and Nordstorm as early Christmas Creep offenders.

Even those people who agree enough is enough are likely to shake their heads in disgust — until they apply Advertising Rule Number 6: People lie. In this case, they might join a protest for about 30 seconds. And then run to wherever they can find festive decorations on sale.

Despite all good intentions, the road to hell is paved with them.

Don't get me wrong. The Consumerist is right. Thanksgiving and even Halloween are slowly becoming former shadows of themselves as pre-holiday space is already being set aside in some stores. Kids don't even have time to carve pumpkins or make pilgrim cutouts before someone is trying to turn their heads and talk about gifts. But I still can't fault retailers exclusively.

Even some of the commenters on The Consumerist's site expressed a sense of sympathy for the stores. One of them said they had been asked to start collecting holiday supplies for their office party on December 10. And if none of the stores carried decorations early, they would have a hard time of it.

Sadly, there are only five ways to stop stores from promoting the gift-giving season early. 1. Ignore or boycott them outright. 2. Do what The Consumerist asks people not to do (something illegal or damaging), which I can't reccommend. 3. Continue to find sympathetic media outlets and wage a public relations war that could easily be lost to struggling retailers who are just trying to make it to gift giving. 4 and 5. I'm not even going to mention them because someone will probably get right to it.

In other words, I don't think it can be stopped. But on the bright side, if retailers continue to get a jump on the holidays, the whole thing will eventually catch up with itself. In about 10 years, we will be shopping for next year, this year, and nobody will be the wiser. At least, we can all hope.

*Based on the examples, The Consumerist is trying to avoid promoting specific stores. But unless Christmas Creep retailers are outed, then the ornament trolls are not much more than empty action. On the other hand, at least they are trying to do something.

Advertising Everywhere: Can Businesses Help Schools?

A few years ago, I made a joke that advertising was going everywhere — including chalkboards and teacher name tags. But with school districts facing budget cuts, some school districts are starting to sell advertising beyond the common sports scoreboard buy on the football field.

In a recent article by Helmut Schmidt, districts are now selling advertisements on websites or even letting firms wrap ads on wall lockers or put them on floors and walls. One school in Texas even offers up school bus wraps as a source of revenue.

Another school district uses a corporate sponsorship program that brings in $18,000 a year for one school. It paid for scoreboards, theater microphones, and an ATV to haul equipment and injured players.

The positive side of advertising on school assets. 

While some school districts have not earned as much money as they had hoped from experimental advertisements, others have raised an additional $55,000 a year or covered up to half the costs associated with special events. There may be some other opportunities beyond the obvious.

Businesses have grown more impatient with the quality of the students being produced by the educational system, specifically saying that the students do not have even the minimum skill sets to enter the workforce. Although advertising creates an additional incentive, the most obvious solution is to ask the private sector to voluntarily partner with the schools, provided their product or service or message doesn't encourage disruptions or distractions.

Several years ago, I was involved with groups of community leaders within the business sector to help encourage small- and medium-sized businesses to increase business giving on the pretense that a strong community produces a stronger economy, a better educated workforce, and more opportunities.

While the intent was more altruistic in nature, increasing the incentive for businesses to seriously consider schools for partnerships, sponsorships, and even on school grounds advertising could help reduce some costs without asking children to peddle catalog products door to door. Some schools already allow some advertising-related programs, including messages in the back of yearbooks or scoreboards.

But communities, especially those that are supported by larger corporations that could creatively fund science, computer, and robotic classes or associated clubs and after-school programs (areas where education is perceived as weak), could increase revenue with both paid and charitable opportunities for businesses.

The upside for these businesses is three-fold: supporting the community through education, reaching a specific demographic, and investing in students who will eventually become employees, customers, or both. At the same time, it could help put a human face on businesses that many students are not exposed to until well after their college years.

The negative side of advertising on school assets. 

Many people do see the conceptual model differently. Some fear allowing one advertiser means allowing in all of them. Some are adamant that sports fields ought not to look like the minor leagues. And yet others are afraid that some advertisers might convey messages contrary to the position of schools, such as soft drinks and snack foods.

There are even several organizations that have developed anti-commercialism activist groups to stop the proliferation of advertising in schools. Among their complaints are that it promotes materialism, supports coercion, and wasted taxpayer dollars when students are required to watch advertisements.

The group also cites one example where commercially-produced educational material contained biased or incomplete information in 80 percent of the material. Specifically, they felt that such material favored consumption. The group also felt that the advertisements sexualized images.

A few years ago, Coke and Pepsi tried to promote a similar advertising-based concept but were fought by the NEA, the nation's largest teacher's union, which sells its own adveritsing programs. There are several other cases where soft drinks have been blocked, including one in Philadelphia that rejected a $43 million deal for the district several years ago.

Dehumanizing People: How Social Connections Create Elitists

In one of the more interesting studies to come out this week, the Kellogg School of Management at Northwestern University and the University of Chicago Booth School of Business hint at a downside to being an "influencer" online.

Although the study does not cite online connections specifically, but rather social connections in general, it does provide a cross section for human behavior that manifests online. In many cases, the behaviors tracked in relation to the study mirror the behaviors of people who eventually grow massive social connections online, as individuals or in tight-knit groups.

Specifically, the study suggests that socially connected people have an increased tendency to view others as less than human — and even treat them as such. In fact, the study links bullying in school, gang violence, and war detainees being tortured as the negative consequences of strong social connections.

How social connections can eventually lead to disconnection.

Although researchers point out that there are many studies that share the positive aspects of social connections (increased self-esteem, happiness, and even improved physical health), they go on to point out that connectivity satiates the motivation to connect with others and create the perceived distance between "us and them."

In extreme cases, the social connections do not necessarily lead to animosity, but eventually convince participants to believe that they are superior and people outside their circles are inferior. This includes believing that outsiders have diminished mental capacities, sometimes going as far as thinking them to be objects or animals or less than fully developed people.

Does online social connectivity eventually lead to dehumanization?

Unrelated to the study, some people think so. Nathania Johnson touched on it two years ago in telling the story how of George Smith Jr. dealt with a blogger who inappropriately attempted to blackmail Crocs. He warned her away, saying he was better connected.

"He called her a nobody (in his blog, not to her face) because he claims to be so connected that he knows who the big bloggers in his space are. (He later 'clarified that she was only a nobody as a blogger ..." — Nathania Johnson, When Bloggers Attack

Ike Pigott created a near-perfect analogy in his post The Internet Is A Kennel, which retold how social connections can elevate someone to become a "chosen one" with propped up minions who will defend their idols to the death, often without even understanding the disagreement or conflict.

"I was pilloried by several people for daring to question the value of the Almighty Robert Scoble. I was asked why I think I am better than he is, and I was questioned about why anyone would bother following me." — Ike Pigott, The Internet Is A Kennel

Geoff Livingston once wrote that he found the A-List to be a condition of society's general values. And that while he understands that may be inevitable, it is not for him. He tends to avoid the ladder toward "elite hood," even at his own "ranking" detriment.

"Some A Listers follow formulas, sharing and content mechanisms to achieve their best practices. The Karaoke Show is on all of them. And they are rewarded for it with popularity and, in some cases, financially." — Geoff Livingston, When Social Media Rewards The Mindless And The Elite

Professionals are not the only ones who are sharpening sticks online. For all the altercations that have occurred on the Web between two or more people attempting to "out follower" each other in power, kids are learning from the behavior of adults. Nearly three in four teenagers say they have been bullied online, usually under the same conditions that professionals allow to play out.

But bullying isn't the only anecdotal evidence of a dehumanizing effect caused by social connections online. With more and more regularity, people who consider themselves A List material are dropping "followers," cutting "friends," and ignoring commenters who do not meet a certain rank, score, or inclusion on a list. In fact, some scoring systems reward them for dismissing the "under class."

The Study: Social Connection Enables Dehumanization. 

Beyond the most extreme cases of violence and inhumane treatment, the research suggests that more varied and subtle consequences are commonplace. It may include harassment in the workplace to overly aggressive fans at a sporting events.

"Any factor that creates disconnection from others, such as power, socioeconomic status or anonymity, may therefore enable dehumanization by disengaging people from the minds of others," the researchers concluded. "The present research suggests that social connection is one such factor that can increase disengagement with the minds of those more distant others, leading to a failure to see people as they really are."

Of course, this is not to suggest everyone is susceptible to allowing their elite status to make them feel superior over their minions and masses of followers. Many A Listers do not adopt anti-social behaviors such as those mentioned above (dehumanization or disengagement) as they begin to believe in their own celebrity. And, there are some very smart people like Arik Hanson who caution professionals away from systems that aggravate the problem by dividing and ranking people.

The study included four experiments. Researchers found that participants who were thinking about a person close to him or her were more likely to dehumanize other people. In extreme cases, they justified treating others like animals. The study was published in the Journal of Experimental Social Psychology.

Integrating Communication: Ogilvy & Mather Study

The latest results from a new Ogilvy-ChatThreads study seems very promising for social media. The study found that social content can significantly increase spending and consumption among consumers. 

• Social content increases the likelihood of spending and consumption by two to seven times. 

• Social content is more pervasive when combined with public relations, television, or out of home. 

• Social content is most effective in shifting brand perception during a short seven-day period. 

"Much of the work to date has looked at direct channel impacts; for example, do direct clicks from a social media site result in sales?" says Irfan Kamal, senior vice president of digital/social, Ogilvy. "We found that in the real world, social content exposure by itself, and more  broadly when combined with other types of media exposure, is linked with two to seven times higher likelihood of consumption and actual spending increases."

The study captured detailed touch point data in the moment from the consumer's point of view. They also were able to track day-to-day brand exposures and assess the complex interaction with various media and marketing efforts. The study was primarily conducted using restaurant consumers. 

Not all of the study findings were especially positive for social media. 

The data revealed that only 24 percent of the study group reported exposure to social content. The study group reported a 69 percent exposure rate for television. The discrepancy is easy enough to understand. 

Social content is an extremely active and nonlinear space, with most people flipping content at a expedient pace. While television is evolving, it is still a relatively singular and passive activity that demands more attention. People are willing to become lost in a show. They are less likely to be lost in one activity online.

Ogilvy is headed in the right direction with integrated communication. 

I've long held that social media does not exist in a vacuum. When shaping brand perception and making purchasing decisions, they might consciously and subconsciously consider multiple exposures — a recent advertisement, a recent article or news story, word-of-mouth from friends offline, social media, etc.

Ideally, the best marketing strategies create multiple exposure points (advertising, speaking engagements, etc.) that directly or indirectly prompt consumers to look for more information online. And when they look online, they find a well-maintained, engaging (but not sales driven) presence on the social network of their choice. 

And if they don't? Then your television commercial might have made them think about ordering a pizza — but the order will be placed with your competitor. So maybe it's time to quit thinking in terms of milk or cookies when most people agree milk and cookies is more effective.