Advertising in the Digital World

Advertising on the internet is now bigger than on TV and is growing fast. Many businesses are jumping on the internet and social media bandwagon to hawk their wares, or just to build brand awareness. Some advice for businesses:

Stick your toe in the water by building brand awareness on social media.  Advertising on Facebook is cheaper than on Google, and is best for expanding your business’s online visibility. Ads appear in Facebook’s news feed and can be targeted by location, language, age, gender, workplace, college, interests, relationship status, education level, college major or your own email lists. Eighty percent of the time, Facebook is viewed on smartphones, where simple branding-type ads work best. However, product-selling ads are also used. Ads that require the customer to input lots of information, such as financial services ads, should be targeted only at desktop computers.

A trial ad campaign can be set up for as little as $1 per day, though $5 to $30 per day is better to gauge effectiveness. If you’re going to go to the trouble of producing decent ads, then you’ll want to give them a good test. Facebook will generate metrics for you, such as number of clicks, likes and shares. The average cost-per-click for Facebook ads is 28 cents in the U.S. Test multiple versions of ads to see which generates the most response. A company like AdEspresso will help you design effective Facebook ads, if you need help.

Google AdWords is a little more expensive, but also gets lots of attention. Ads can be assigned to certain search words, or products can be advertised in Google’s Shopping Ads (Product Listing Ads or PLA). Amazon also has a large reach. Other social media platforms include Instagram, Snapchat, Pinterest and Twitter, but the limitations of each of these needs to be considered.

To save time, consider using an advertising management platform like Hootsuite, Salesforce or Nanigans, which allow you to automate a lot of the ad process. Other companies will help you design ads or both design and manage the entire marketing effort. For larger campaigns, third-party ad management can drive the cost-per-click below 1 cent. The trick is to spend enough on an ad in order to have it appear with reasonable frequency, but not to overspend.

A search engine optimization (SEO) expert can help drive your company up the search rankings in Google, ensuring that users see your website.

Native advertising is growing as a share of ad spend, as opposed to banner ads, which can suffer from “banner blindness.” Native advertising contains content that is related to the same topics as the regular content on a website. It often consists of a product testimonial or description written by the advertiser. The idea is to provide an informational service as well as advertising, which may garner more attention from viewers.

Progressive web apps are gaining ground at the expense of regular apps. It is becoming apparent that, on average, consumers use only seven apps on their mobile phones and ignore the rest. Apps can be a hassle because consumers must download updates and revalidate their accounts. But apps are still valuable because they result in a lot of online orders, if you can get customers to use them. Because of this, Google has developed progressive web apps. These are versionless apps that work just like accessing the web via a browser and never have to be updated. Apple has been reluctant to compromise its revenue selling traditional apps, but is likely to come around, eventually.

Retail outlets and restaurants will especially want to pay attention to their Google Maps listing, which also has star ratings. Currently, these have a small number of reviewers leaving comments, so just a few can have a large effect on the overall rating, for better or for worse.

Use closed captioning on video ads. Many people don’t turn on the sound on their computer and so don’t pay attention to muted videos that play automatically.

In electronic gaming, rewards advertising is rapidly gaining ground. This is advertising that promises an in-game reward, such as game “money,” abilities or lives in return for a willingness to view the ad first: A good way to get the attention of an increasingly video game-addled population.

 

The Economic Toll of Hurricane Harvey

Hurricane Harvey will ding third quarter GDP but boost the fourth quarter. Much of the Texas coast, including Houston — the nation’s fifth-largest metro area — was shut down for over a week because of the storm. As business resumes after Labor Day, it will be operating at about 80% of normal staffing levels for a while. That is likely to knock 0.3 percentage points off of U.S. GDP growth in the third quarter, resulting in a pace of about 2.5%. However, as more folks return to work, the economy will likely see a boost to GDP in the fourth quarter. Likewise, the national employment report for September is likely to come in weak, with a gain of fewer than 100,000 jobs, but the following months will show larger than average gains. Continue reading “The Economic Toll of Hurricane Harvey”

How Will Political Gridlock Affect the Economy?

Consumer and business confidence soared after the presidential election because of the belief that President Trump’s policies on spending, tax cuts, health care and regulatory reform would give the economy a boost. So, what will be the impact on the economy if political gridlock prevents or delays Trump from delivering what he promised?

For starters, let’s assume a government shutdown is avoided. Congress will need to pass a bill known as a continuing resolution by April 28 in order to keep federal agencies funded and operating. If they fail, the reduction in federal spending would ding second-quarter growth and inhibit the economy’s ability to recover from a weak first quarter. Continue reading “How Will Political Gridlock Affect the Economy?”

What Now for Borrowers and Savers After the Fed Move?

Now that the Fed has raised the effective federal funds rate a quarter of a percentage point to 0.9%, and indicated its intention to raise twice more this year, the effects will ripple out to most borrowing rates, but only to some savings rates.

Borrowing Rates

The bank prime rate, which is the short-term borrowing rate available to the most credit-worthy customers, has already fully adjusted. The prime rate usually rises within one day of a Fed hike. Ditto for home equity lines of credit, which are tied to the prime rate. Continue reading “What Now for Borrowers and Savers After the Fed Move?”

Finding and Keeping the Workers You Need

While labor shortages have been most severe for technology and health care businesses, they are cropping up in more and more industries, now that the U.S. unemployment rate has fallen. A recent survey of small businesses found that half of them can’t find enough qualified job applicants. The question: What can businesses do to make sure they have the workers they need? The answer, human resources professionals say, comes down to a three-part strategy: Recruit, retain and train.

With good workers increasingly scarce, employers are having to get creative about recruiting. A job ad posted on the company website might not cut it anymore. Companies may need to hire recruiters in order to find the social media websites or career niche websites where folks with desired skills tend to hang out. Recruiters can make sure that want ads are mobile-friendly for the millennials who never use desktop PCs, for example. They can arrange for quick interviews using Skype or Facetime. Some also offer applicant tracking systems. Continue reading “Finding and Keeping the Workers You Need”

Even Without Tax Cuts, Consumers Will Boost Economy

Consumers will shoulder the burden of keeping the economy on track in 2017 while waiting for Donald Trump’s tax cuts to be passed. Low unemployment, job and wage growth will keep money in consumers’ pockets, while the rise in the stock market since the election will provide a bit of an extra bump up to spending.

Consumer spending should rise by about 2.8% in 2017, up from 2.6% in 2016. 2017 will be the fourth straight year that consumer spending growth will have been markedly higher than overall GDP growth, indicating how much this spending is carrying the economy. Continue reading “Even Without Tax Cuts, Consumers Will Boost Economy”

Steel Prices on a Sharp Upswing

Prices for steel will rise through early 2017 on the expectation of more infrastructure spending by the Trump administration and robust construction of hotels, office and school buildings. Over the longer run, though, production overcapacity in China will help temper increases.

The cost of steel plate products, used in bridge construction, pipelines, etc., are already up sharply—a 20% increase since the presidential election. Buyers are also shelling out 7% more for steel-reinforcing bar used in road and bridge and building construction. Also up: Prices for hot- and cold-rolled steel, used to make cars, appliances and more. Hot-rolled steel is up 14%; cold-rolled 11%. Meanwhile, scrap metal is selling for 16% more. Continue reading “Steel Prices on a Sharp Upswing”

What Rising Interest Rates Mean for the Housing Market

Low inventories of homes, especially those at the lower end of the price range, should keep rising mortgage rates from pulling down sales growth much. But home price gains are likely to slow, especially for homes at the higher end of the price range and ones in large metro areas of the West where price growth had been high for a while.

Thirty-year fixed mortgage rates have risen by about half a percentage point since the election. For a new $250,000 loan with a 20% down payment, the principal and interest payment has risen by $55 per month. The annual income a borrower needs to qualify for that loan is now $44,000, up from $42,000 earlier. Qualifying income for those who make a down payment of 5% has risen from $50,000 to $53,000. For a $350,000 loan with 20% down, the increase in the monthly nut will be $80, with qualifying income at $65,000, versus $62,000 earlier.

Continue reading “What Rising Interest Rates Mean for the Housing Market”

How the Next Fed Rate Hike Will Affect You

We expect the Federal Reserve to raise its federal funds interest rate from 0.25% to 0.5% at its meeting on December 14. This will have a domino effect, boosting some loan and deposit rates for consumers, but not all of them.

How the Fed Rate Hike Will Affect Your Loan Rates

When the Fed raises, the bank prime rate will immediately jump by the same quarter percentage point. Interest rates on home equity lines of credit will also rise by the same amount, to a minimum of 3.75%. Auto and personal loan rates should rise, too. In fact, auto lenders may nudge their rates up a tick more in the months to come as delinquencies on subprime auto loans creep up.

Continue reading “How the Next Fed Rate Hike Will Affect You”

The Friday Jobs Report: Setting the Stage for the Federal Reserve’s December Rate Hike

The days of job gains of 200,000 or more per month are likely in the past as the labor market continues to tighten and employers struggle to find qualified workers. Instead, expect a gain of 170,000 jobs to be reported for September. Despite the modest number, this is still likely to cause a slight drop in the unemployment rate, to 4.8%, and push up wages by 2.7% from a year earlier. That’s a bit faster than the yearly rate of 2.4% recorded in August.

A decent jobs gain of 150,000 or more, a drop in the unemployment rate and faster wage gains would signal the further improvement in the labor market that the Federal Reserve is looking for to justify its first quarter-point interest rate hike in a year. The end of the next Fed meeting is November 2, and it’s obvious that Fed Chair Janet Yellen has enough political sense not to do anything the week before the presidential election, lest she be blamed by one side or the other for trying to influence the results. Therefore, the Fed move will likely take place on December 14, safely after the election.

Continue reading “The Friday Jobs Report: Setting the Stage for the Federal Reserve’s December Rate Hike”