Tuesday, July 28, 2009

Britney Spears, Facebook, Twitter and the Post Consumer World.

The July 24th Issue of USA Today Money page B1 had three interesting articles that are best read together. I will take the editorial license to combine them here. In Rally pits optimists vs pessimists the core argument was that the optimists see companies making profits by slashing costs as proof that the economy is recovering. If your revenue is going in the tank and you can increase profits continuously the argument goes, you can make lots of profits on no work. (Sort of like the mortgage industry was for a while) The optimists were gloating that the pessimists were "missing out on gains"

The second article was about the Candies ads with Brittany Spears that were not released on TV but were first introduced on "Facebook" and "BritneySpears.com", as well as to Britney's 2.5 M Twitter "followers" (as they are called) Isn't that what hey called Jim Jones disciples?

See this full article in USA today Back-to-school Pitches go social

Hidden in this article was a gem. Back-to-school spending is expected to be down 7.7% this year. That means your teenage daughter will still get the $199 Bebe jeans, but she just might have to cut down on her designer cosmetics to the tune of about $50. Or god forbid, have to wear something twice. My prediction, lots more teenage crime to get the stuff that they can't live without. Keep your eyes out on that trend.

A 7.7% decrease doesn't sound like much (I think it will be more) but it comes on top of last year's falls and precedes next year's fall in consumer spending. Something will have to fill that consumer need gap for our teenage and pre-teen children. I don't know what it is, but I sure am trying to figure it out.

On another note, in the same article Forrester Research predicts social networking advertising to children will rise from a paltry $455M in 2008 to $3.1Billion in 2014. That's a big bet, and predictably that's a necessary one for consumer products makers who are facing a real decline in available cash for discretionary consumer spending.

All things considered with education costs and health care and other non-discretionary costs rising and wages falling, discretionary spending for students will be heading south for a long long time.

The last of page 1B articles was about the increase of the minimum wage to $7.25. That news should be a counter to post-consumerism. More money for the masses to spend on stuff they don't need! Alas! a good portion of that article was about reduced hours for most minimum wage earners. they have more time on there hands and less cash to spend.

So this is what we should read. Page B1 in one run-on sentence.

The optimists think we can get back on track by cutting costs to zero to increase profits, marketers think we need to spend eight times as much on Facebook and Twitter to chase 7.7% less spending and the minimum wage is rising while wages are falling.

Sounds like a post consumer alert.

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