Thomas Keeley

Covering business, nonprofits, technology, and everything in between

This probably doesn’t come as much of a surprise to anyone these days,  but the New York Post is reporting that magazine print advertisement sales have declined 21.5% during the first quarter of 2009 (as compared to Q1, 2008).

From the article:

MAGAZINES are generally seen as good early warning signs for economic downturns. The thinking is that corporations would rather cut back on ads before they actually have to start cutting back on people.

If that thinking holds, we’re in for a long and deep recession.

Tomorrow, Media Industry Newsletter is releasing its report on the first quarter of 2009 and it will show ad pages have tumbled a numbing 21.5 percent for monthlies in the period compared with the first quarter of 2008. (MIN gets early numbers because the March issues are starting to hit newsstands.)

In comparison, in the first quarter of 2008 magazines had just gone negative, dropping 4.6 percent after racking up small gains for most of 2007. Ad pages have now been falling for five straight quarters, MIN reports.

For many of these companies, the inevitable decline in print advertising sales has been written on the wall for some time now. However, I think it’s likely that executives thought that this would be more gradual, giving them time to reevaluate their options, rejigger costs, and attempt to modify their online presence.

While the vast majority of print publications have made the transition to (or integration with) the online space, it appears that many haven’t figured successful ways to monetize their content, and still rely heavily on their print ads as a source of revenue.

Should this decline continue into the next quarter (Q2), I fully expect that the gradual layoffs that have been seen throughout the mass-media industry will be significantly intensified, driving unemployment rates even higher.

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Just how bad is the economy?

While Washington is putting the finishing touches on a stimulus package that was designed to bring the economy back up to par, create jobs, and boost weak sales numbers, it appears that the economy seems to be recovering on its own.

Here are some numbers that were reported today:

  • Retail Auto Sales (includes parts and dealerships): Up 1.6% in January, which is the first gain since August.
  • Core sales (all sales, with autos, gasoline and building materials excluded): Up 1.2% in January, after seeing a 1.7% decline in December.
  • Online and catalog sales: Up 2.7% in the month of January.

While these numbers only represent a segment of the economy, I can’t help but wonder how things would improve if we just waited a bit longer and thought out this stimulus package more instead of trying to rush it through both bodies of Congress.
 
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Each year the Chronicle of Philanthropy publishes a list of the 50 top charitable givers for the previous year. While some of the names on the list might not surprise you, the majority of the donors who place in the top-ten are new to this top 50 list.

It’s important to note that the vast-majority of those who are in the top-ten are making (or have made) their gifts by way of a bequest, or a gift that doesn’t become available until after their death. While it can take years to cultivate and secure a bequest from an individual donors, let seven of the top-ten help strengthen the case for why it is so important for fundraising professionals to actively pursue planned giving options.

Top 10 highest charitable givers from 2008:

Leona M. Helmsley

Rank: 1
Total amount committed in 2008: $5.2-billion
Location: New York, New York
Source of wealth: Family wealth, Hotels

Beneficiary: Leona M. and Harry B. Helmsley Charitable Trust
Donor’s background: Ms. Helmsley was the head of the Helmsley Hotel Chain, in New York..
Type of Gift: Bequest

James LeVoy Sorenson

Rank: 2
Total amount committed in 2008: $4.5-billion
Location: Salt Lake City, Utah
Source of wealth: Invention, Investments

Beneficiary: Sorenson Legacy Foundation
Donor’s background: Mr. Sorenson, a medical-device inventor, was chairman of Sorenson Development, a holding company and the investment arm of the Sorenson Companies, in Salt Lake City.
Type of gift: Bequest

Peter G. Peterson and Joan Ganz Cooney

Rank: 3
Total amount committed in 2008: $1-billion
Location: New York, New York
Source of wealth: Finance

Biggest beneficiary: Peter G. Peterson Foundation
Other key beneficiaries: Peter G. Peterson Institute for International Economics and Sesame Workshop
Donors’ background: Mr. Peterson co-founded the Blackstone Group, a New York financial firm that holds interests in corporate debt, hedge funds, private equity, and real estate. He served as secretary of commerce during the Nixon administration. Ms. Cooney co-founded the Children’s Television Workshop (now called Sesame Workshop), in New York.
Type of gift: Direct donation

Harold Alfond

Rank: 4
Total amount committed in 2008: $360-million
Location: Palm Beach, Florida
Source of wealth: Manufacturing, Retail

Beneficiary: Harold Alfond Foundation
Donor’s background: Founded Dexter Shoe Company, in Dexter, Me.
Type of gift: Bequest

Donald B. and Dorothy L. Stabler

Rank: 5
Total amount committed in 2008: $334.2-million
Location: Harrisburg, Pennsylvania
Source of wealth: Construction, Real estate

Biggest beneficiary: Donald B. and Dorothy L. Stabler Foundation
Other key beneficiary: Lehigh University
Donors’ background: Mr. Stabler founded the Stabler Construction Company, in Harrisburg, Pa., in 1940. The company grew into the Stabler Companies, which included 13 subsidiaries involved in businesses like highway construction; quarrying of stone, sand, and gravel; concrete manufacturing; the manufacture, sale, and servicing of highway safety equipment; and real-estate development.
Type of gift: Bequest

David G. and Suzanne D. Booth

Rank: 6
Total amount committed in 2008: $300-million
Location: Austin, Texas
Source of wealth: Finance

Beneficiary: University of Chicago Booth School of Business
Donors’ background: Mr. Booth co-founded Dimensional Fund Advisors, an international finance firm in Santa Monica, Calif. Ms. Booth is a former art conservator who has restored paintings in the collection of the Georges Pompidou Center, in Paris; in the J. Paul Getty Trust, in Los Angeles; and in the Menil Collection, in Houston.
Type of gift: Direct gift

Frank C. Doble

Rank: 7
Total amount committed in 2008: $272-million
Location: Medford, Massachusetts
Source of wealth: Energy

Beneficiaries: Lesley University and Tufts University
Donor’s background: Mr. Doble founded the Doble Engineering Company, a Watertown, Mass., company that provides diagnostic test instruments for electric power companies.
Type of gift: Bequest

Robert L. and Catherine H. McDevitt

Rank: 8
Total amount committed in 2008: $250-million
Location: Binghamton, New York
Source of wealth: Investments

Biggest beneficiary: Georgetown University
Other key beneficiaries: Le Moyne College, Roman Catholic Diocese of Syracuse, various other churches and universities
Donors’ background: Mr. McDevitt owned the McDevitt Brothers Funeral Home, in Binghamton, N.Y. His mother was secretary to A. Ward Ford, president of the company that eventually became IBM. She bought IBM stock early in the company’s history and gave the stock to Mr. McDevitt, who spent 70 years accumulating additional shares. The majority of the bequests he left will be paid in IBM stock.
Type of gift: Bequest

Michael R. Bloomberg

Rank: 9
Total amount committed in 2008: $235-million
Location: New York, New York
Source of wealth: Media and entertainment

Beneficiaries: Arts, education, health-care, and social-service organizations
Donor’s background: Mr. Bloomberg, the mayor of New York, founded Bloomberg LP, a financial-data and news-service company in New York.
Type of gift: Direct gift

Dorothy Clarke Patterson

Rank: 10
Total amount committed in 2008: $225-million
Location: Sarasota, Florida
Source of wealth: Family wealth

Beneficiary: Patterson Foundation
Donor’s background: Ms. Patterson was the widow of James J. Patterson, a vice president and assistant managing editor of The Daily News, a New York newspaper founded by Mr. Patterson’s father, Capt. Joseph Medill Patterson, and Col. Robert R. McCormick. Captain Patterson’s father and Colonel McCormick were cousins and also co-published the Chicago Tribune newspaper.
Type of gift: Bequest

Source

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I know that for many people, online reputation management is always a major issue, especially for those of us who work on projects that aren’t related to our current employment.

One of the biggest challenges in online reputation management is the powerful caching and indexing power of search engines like Google and Yahoo. With their massive databases, internet uses can easily generate queries that could potentially show charitable and political giving history, email addresses, website comments, previous employment, etc.

While it’s difficult for most people to try and remove things that have already been indexed, there are things you can do to prevent certain things from showing up in search engine queries.

For example, if you’re a nonprofit organization and have a web-based newsletter that you send out to your membership that contains the names of donors by specific giving levels; odds are you don’t want this information made available to everyone.

While there are a variety of methods that one can use to prevent their information from being picked up by search engine spiders, a company called drop.io has developed a simple way to secure your files, even if you’re the most novice internet user.

From the company’s about page:

Drop.io is an easy to use, online file sharing service that provides users with a simple and private way to share images, video, audio, documents and other digital content through unique, user-created and controlled sharing points called ‘drops.’

In just two clicks, users are able to seamlessly create personal sharing points, upload content via web, e-mail, MMS, Facebook, Firefox extension, phone and fax inputs and share it with friends, family and colleagues through drop.io’s various web, e-mail, MMS, twitter, iTunes and fax outputs.

Each ‘drop’ is non-searchable, non-networked, does not require any type of account registration and can be password-protected and set to expire after a period of time.

Drop.io is used by a wide range of users seeking a convenient and private method for sharing all types of digital content, ranging from mothers sharing baby photos to large companies using ‘drops’ as collaborative workspaces.

While there are many other options available, I truly believe that this one is by far the easiest to use, and more importantly, least technical.

You can visit Drop.io here.

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Unfortunately, it looks like Google is calling it quits (at least for now) on its Print Ads program.

From AdWeek:

In a entry posted Tuesday on the corporate blog google-tmads.blogspot.com, Spencer Spinnell, director of Google Print Ads, said the company would stop selling print ads on Feb. 28, and that all previously purchased campaigns would cease by the end of March.

Spinnell acknowledged that the product simply did not deliver the kind of results Google was hoping for. “The product has not created the impact that we — or our partners — wanted,” he wrote.

While the product may not have had the initial impact that they wanted, it definitely had a lot of potential, especially in the nonprofit/activism space.

However, I think that the real problem with this product is that they didn’t market it as well as they could have. I remember when I first found out about Google Print Ads, and it happened to only be by mistake, and I have a feeling that there are plenty of other users out there who came across it the same way.

I really hope that Google doesn’t completely call it quits on this project, and instead puts it on the shelf for awhile, with the intention of bringing a new-and-improved product back once the economy gets better.

I guess we’ll see what happens.

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Job numbers are much worse than you think

If you pay attention to any financial news medium, the one thing that you tend to hear mentioned frequently is the most current workforce data. While the one number that they tend to use the most is the unemployment rate, when trying to get a wider picture of the state of the American workforce, it’s important to take other indicators into consideration.

For example, using the latest employment numbers from the Bureau of Labor Statistics’ Employment Situation Report, the unemployment rate for the month December, 2008 was 7.2%. All this says there are roughly 11,100,000 Americans without jobs.

While this number in itself is discouraging, when you dig deeper the picture is even more grim.

From the same Employment Situation Report:

…there were 642,000 discouraged workers in December, up by 279,000 from a year earlier. Discouraged workers are persons not currently looking for work specifically because they believe no jobs are available for them.

So when taking this data into consideration, it shows that not only is 7.2% of the population unemployed, but of those, there are 642,000 Americans who want work don’t believe that they could find something. What’s even more troubling is that this number has risen over 75% in the last year alone.

Sadly, the numbers become even scarier as you read into the data on those who are currently employed:

In December, the number of persons who worked part time for economic reasons (some-times referred to as involuntary part-time workers) continued to increase, reaching  8.0 million. The number of such workers rose by 3.4 million over the past 12 months.  This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs.

This data shows that even amongst Americans who did have jobs, over 8,000,000 desired full-time hours.

When compiling all of this together, it shows that amongst the American workforce (~154,447,000), roughly 12.8% (~19,742,000) are either unemployed or discouraged by their current employment situation.

I can’t even imagine what things will look like when January’s numbers are available.

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Pandora to add commercials

With the economy hurting just about every industry, it looks like even some of the most successful and “sticky” websites on the net are going to be making changes to increase revenue. This time, it looks like it’s Pandora that is going to try their luck with increasing their advertising potential:

Pandora has recently rolled out ads between songs, though, moving into a format slightly more akin to traditional radio. CEO Tim Westergren told California’s Press-Democrat that the commercials were just one of many things that Pandora was experimenting with, but that the service would never run as many as traditional radio.

From a business stand point, I can understand the logic behind them wanting to do this, it’s a simple concept. However, I can’t help but wonder how this is going to affect Pandora’s visitor loyalty.

While the “music genome” concept is extremely unique and interesting in its own right, I think that if they open up the advertising floodgates on the site too much, people are going to be more inclined to utilize other online radio services, such as AOL Radio, which now features a smoother integration with AOL Instant Messenger.

If Pandora is going to continue to ramp-up their advertising as a means to generate additional revenue, before they take it even further, they should consider modifying their subscription model. Instead of having it be a $36 annual fee, they should break it down into a monthly fee-structure, as people are more likely to put $3 on their credit cards than they are $36.

Beyond the monthly pricing, they should consider “add-on” features that would be available for an additional fee, such as unlimited listening (without the time-outs), which would make the product even more attractive for office and retail environments.

While many companies are struggling during this difficult economy, I think that Pandora, of all of the online companies, is in a position where they can make minor structural changes that will help them generate the necessary revenue, without having to go overboard on advertising.

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On January 6th, both the “twitter-sphere” and “blogosphere” was enraged with frustration after the traditionally reliable Salesforce.com platform was offline for 38 minutes, bringing many businesses and nonprofits to a temporary standstill.

From eweek.com:

Salesforce.com, which hosts CRM and other enterprise applications over the Internet for thousands of companies, said on its Trust.salesforce.com community site that the problem thwarted over 177 million transactions in Europe, Asia and North America beginning around 20:39 GMT.

A core network device failed, stopping all data from being processed, according to the site, which provided details about the outage here. Salesforce.com staffers worked quickly to get the system up and running again and did so within an hour of the device failure.

“While we are confident the root cause has been addressed by the workaround, the Salesforce.com technology team will continue to work with hardware vendors to fully detail the root cause and identify if further patching or fixes will be needed,” Salesforce.com said.

After reviewing the daily performance history, particularly the average transaction speed, it appears that this problem is nothing more than a capacity problem versus an overall vulnerability in their system. Though, I guess the argument can be made that in a cloud environment, any downtime is vulnerability.

It should be noted, however, that since the outage, transactions have once again returned to the <.3 average speed (down from .313 on Jan. 5 and .320 on Jan. 6).

So the question I’ve seen many asking, is whether or not cloud computing is truly the way to go? Based on all the hype of given at the Dreamforce conference this past November, it’s a model Salesforce is banking on.

If you’re a major corporation, it’s conceivable that even 39 minutes of downtime could lead to millions of dollars in lost revenue. However, even with the latest downtime, Salesforce.com still maintains an average uptime of 99.99999%, which in my opinion is something that I would be confident in.

In my opinion, when looking at the cost savings, scalability, and security, regardless of these minor hiccups, cloud computing is still a smart solution for organizations of all sizes, including nonprofits.

Just remember that cloud computing (on a widely used public scale) is still relatively new. As is the case with any new platform or technology, there will be hiccups and problems. However, if you’re dealing with a good company (which Salesforce.com is), they will resolve these issues quickly and provide and explanation for why the outage occurred, and more importantly how they’re going to work to prevent it (I’m still waiting for Salesforce.com to do this).

Let’s also remember that one of the biggest pushers of cloud technologies, Amazon.com, has experienced outages much greater than the 38 minutes Salesforce.com users recently dealt with.

In both February and July of this past year, many of Amazon’s S3 users were knocked offline, not just for minutes, but hours.

While any downtime with Salesforce.com is troubling, by no means is 38 minutes of downtime enough rationale to convince me that they don’t still have the best CRM product on the market.

While statements of sluggish sales seem to be the norm in today’s economy, for awhile it seemed that there were many analysts who were hopeful that the 2008 holiday sales results would yield positive numbers and provide some glimmer of hope, hopefully providing a much needed boost to economic (primarily investor) confidence.

Unfortunately, it doesn’t appear that consumers were in spending mode this holiday season, and Christmas was likely much smaller for many American households than previous years.

Let’s first look at what the analysts were banking on:

The chart (source) above shows the growth and total sales from previous years, as well as the 2008 projections from the National Retail Federation (NRF). As you can see, the NRF initially projected that for 2008, despite the economic shortcomings, retail sales would rise upwards of 2.2%, or $10.2 billion compared to 2007.

From CNN Money:

The NRF’s projection would still be the weakest holiday sales gain in six years. That is, if it makes it to that level - NRF spokesman Scott Krugman said Friday that “it is going to be very difficult to hit that number.”

“It’s really three things that hammered retailers,” he said. “There were fewer holiday shopping days versus last year. We had bad winter weather in the final week before Christmas.”

The third thing that hurt retailers, according to Krugman, was deep discounting. Even though the big sales were designed to boost store traffic and sales, and “minimize the damage,” he said that level of discounting will ultimately hurt merchants’ bottom line.

With hopes of positive growth in retail sales now gone, let’s look at some of the 2008 holiday retail sales projections and data from other firms:

  • MasterCard Inc’s Spending Pulse: indicated total store sales down almost 3% for Nov/Dec
  • Beemer of America: expects a declination 2.8% for the holiday season
  • Global Hunter Securities: forecasting a 6% - 8% decline in sales for November through January

From what it looks like, a decline of anywhere between 2.5% - 4.0% seems to be the consensus across the country when all is said and done this holiday season.

While any decline in retail sales is significant, it’s even more catastrophic when it comes at a time where negative growth hasn’t been seen in years.

With such weak sales, not only are retailers going to find themselves with excess inventory, but they will also be losing a significant portion of their projected revenues. Even a slight loss for many retailers is enough to implement heavy job cuts and quite possibly complete closures.

Sadly, it appears that this recession is going to continue to drag on well into (and possibly beyond) 2009.

All data and information for this article was gathered from: here

If you answered yes, it’s quite clear that you’re not alone.

According to a Washington Post - ABC News poll, 63% of Americans say they are hurting during this extremely tough economy.

What’s even more troubling:

Nearly two in 10 said they or someone living in their household had lost a job in the past few months, and more than a quarter said they had their pay or hours reduced. And 15 percent said that at some point in the past year they fell behind on their rent or mortgage.

Not only is that a bad sign for the overall economy, it’s an particularly troubling sign for businesses and nonprofits.

With economic confidence so low, and people hearing countless horror stories, I’m extremely fearful to see the decline in year-over-year declines now that we’re officially in a recession.

Unfortunately, nobody really knows when things are going to get better, so until then we’re stuck in a waiting game, hoping for the best.

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