Economic outlook for marketers, 4Q 2014

One of the things I like to do from time to time is check in on a variety of different leading economic indicators to get a sense of how the overall economy is doing. That knowledge lets me know – within a certain amount of error – what marketers can expect their quarter to look like. How much should we push our customers? How much should we challenge pricing?


The consumer is the heart and soul of B2C. If the consumer doesn’t shop, the B2C company doesn’t sell – and the B2C marketer has to work doubly hard just to tread water.

So how is the consumer looking?



Nonfarm payrolls are expanding, and fairly significantly. We’ve technically got more people employed now than ever. Of course, some portion of that is natural because as a nation, we have more people than ever.



U-3, the general measure of unemployment, is below 6%, a place it hasn’t gone since before the Great Recession. If you look in the data, even U-6, the total labor pool across the board, is down to 11.8% underemployment. That’s a far cry from the peak of the Great Recession, when we were pushing 20% underutilization of labor.

Initial Claims of Unemployment:


We’re back to almost the first dot com bubble, and the height of the boom times before the Great Recession, in terms of the number of people who are filing for job losses. While there are still a whole bunch of people without work, it could be much, much worse.

Real Disposable Income:


2012 was a much better year for income, but we’re approaching it in a much more sustainable way as we head into Q4 of 2014.

Overall, there are a lot of macroeconomic potential shocks out there waiting in the wings. Instability in the Middle East. The Russian-Ukrainian war. Ebola. But the bigger picture, at least for the general US consumer, is that 2014 is ending on fairly solid footing. What does that mean for you as a marketer, if you’re a B2C marketer? You probably don’t have to overhype the low cost message quite as much as you did last year – the consumer overall probably feels a little bit better than 2013, which means slightly looser purse strings for the holiday season.


For the world of B2B, we look to things that are going to impact companies’ ability to buy from other companies. This means looking at leading indicators from shipping to what it costs to run a business.



PPI, the Producer Price Index, is the general cost of doing business. What’s unusual here is that business got really expensive during the Great Recession, then prices dropped as the economic shocks rippled up the supply chain, and then for a while things got back on track. But in 2011, PPI plateaued, and it’s been holding there ever since. While you might think it’s a good thing that production costs have leveled off, the reality is that level pricing means that companies of all sizes aren’t making more money on average.



The Baltic Dry Index, BDI, is an index of what it costs to put a bunch of things on a container ship and ship it overseas. This is a great B2B leading indicator because companies don’t buy shipping containers unless they have product to sell. It’s not something you buy just for the heck of it. Again, we see that things went crazy int he run up to the Great Recession, BDI crashed hard at the beginning of 2009, and it really hasn’t made a huge lift since then. We also see the softness in 2011 extending out to today.



The CBOX VIX, or volatility index, looks at how volatile the markets are. It’s an indicator of how safe or risky investors feel. The VIX hit the roof during the Great Recession and had a few aftershocks in 2011 and 2012, but has calmed down considerably since then. A major portion of that has been the Federal Reserve Bank effectively handing out free money for years to investors via TARP and the Quantitative Easing programs, as well as holding interbank interest rates near 0%.

Do you see the pattern here? In each of the three charts, B2B leading economic indicators show that the B2B economy is in a holding pattern. The sky isn’t falling by any means, but the pie isn’t getting any bigger, either. If you’re in B2B, maybe you’ve noticed this already. Leads are probably becoming sales opportunities at a slower pace. Sales opportunities are probably taking longer and longer to close. If that’s the case, then there’s a good chance you’re caught in this economic plateau as well.

The good news is that a strengthened consumer will eventually ripple upstream to B2B, in general. As you can see from the charts above, the consumer face-planted in 2008, while B2B took as long as two years to fully feel the impact. Thus, as the consumer gets back on their feet, we should expect B2B to do the same. When will that be? Assuming the consumer continues to heal up and get back in the game, probably B2B will feel it in late 2015 or early 2016.

So overall, a merry holiday season for the consumer B2C marketer; B2B won’t get any coal in the stocking, but Scrooge’s ledgers will still be a bit thin.

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Lead generation and fishing pools

If you’ve ever gone fishing at a small pond or stream, you know that there are a certain number of big fish, a certain number of medium fish, and a whole bunch of fish you don’t want.

Fall Photos

In the beginning of the season, fishing is awesome. You catch some big fish, take a few selfies, and enjoy some pan fried fish. As the days go on, the fish get smaller on average, until the pool isn’t really yielding great catches any more. After you’ve caught the fish you do want, there’s not much else to do at that fishing pool. You have to leave it until the little fish grow up to be big fish, and there’s no way to hasten that process. You go off and find a new fishing hole and come back to your favorite little fishing hole later in the season or the next season.

Lead generation functions very much like this. The first time you find a new lead source, whether it’s an audience on Twitter, the listeners of a podcast, an email newsletter you can contribute to, etc., it performs great. You get a fair number of the big leads. You get a lot of the medium leads, and you get a fair number of the small leads, too. Then over time, lead quality begins to decline. The volume of leads goes down. Pretty soon, the lead source performs no better than general advertising, and that’s because the only new leads in that pool are coming in from other sources.

What this means for you strategically is that you’ve always got to have another lead source, another fishing pool you can move to. Once a source begins to dry up or show signs of tapering, you can move to the next pool… and then the next pool. This is also one of the reasons why you need a balance of inbound and outbound marketing; inbound marketing methods are effectively only a handful of pools (like organic search and organic social), and switching pools can take a fairly long time. Outbound marketing with paid media allows you to switch pools rapidly – just swipe your credit card and turn on ads in a new pool.

If you’re in a situation where your existing pools have been fished out, pack up your gear and start walking, because you need to make it to the next pool before you or your business get really hungry.

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Effort signals intent

One of the peculiar features of the new Ello platform is that it’s missing controls that we take for granted now on social networks. You can click retweet and instantly send someone else’s message to your followers. You can click twice in Facebook on the Share button and the message spreads. You can hit the Forward button in Google+.

What do you have to do in Ello? Copy and paste, plus manually attribute to the author:

Content credit: Steve Garfield

Oddly, this isn’t a failure to me, because effort signals intent. My cat can accidentally retweet something just by playing with the computer mouse or stepping on my phone. Bots and scripts can and do reshare and retweet effortlessly all of the time, and that word signals the problem: when something is effortless, you don’t have to commit anything to it. When you don’t have to commit time, energy, effort, or resources to something, it has very little value. How much, to a brand marketer, is a retweet from my cat worth? Even if you’re selling cat food, my cat can’t read, so while the metric says yes, you got some social engagement, the reality is that you got a random cat paw.

If you have to work a little, that puts up a very small barrier to entry. That puts up a tiny speed bump – but to an audience looking for mindless and instant, you may as well have put up the Great Wall of China.

Think carefully in your own marketing about what kinds of engagement require effort and what kinds don’t. Measure carefully those that take commitment and effort, and make a special effort to reach out to those who do commit to you, because they are signaling much greater intent. That intent might be evangelism, might be purchase intent, might be a new personal relationship waiting to happen. Reward it! Reward people commensurate to the effort they make towards you, and keep those who work hardest on your brand’s behalf closest to you.

Not all digital activities are equal!

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