Ged Carroll

Category: economics | 經濟學 | 경제학 | 経済

Economics or the dismal science was something I felt that I needed to include as it provides the context for business and consumption.

Prior to the 20th century, economics was the pursuit of gentleman scholars. The foundation of it is considered to be Adam Smith when he published is work An Inquiry into the Nature and Causes of the Wealth of Nations. Smith outlined one of the core tenets of classical economics: each individual is driven by self-interest and can exert only a negligible influence on prices. And it was the start of assumptions that economists model around that don’t mirror real life all the time.

What really is a rational decision maker? Do consumers always make rational decisions? Do they make decisions that maximise their economic benefit?

The problem is that they might do actions that are rational to them:

  • Reducing choice when they are overwhelmed
  • Looking for a little luxury to comfort them over time. Which was the sales of Cadbury chocolate and Revlon lipstick were known to rise in a recession
  • Luxury goods in general make little sense from a ration decision point of view until you realise the value of what they signal
  • Having a smartphone yet buying watches. Japanese consumers were known to still buy watches to show that they care about the time to employers when they could easily check their smartphone screen

All of which makes the subject area of high interest to me as a marketer. It also explains the amount of focus now being done by economists on the behavioural aspect of things.

  • Brand actions library & things from last week

    I’ve spent a bit of time this week contributing to the next edition of Planning Dirty’s Brand Actions Library. This is a collection of inspirational case studies by vertical market for planners and strategists at marketing agencies. I’ll let you know when the brand actions library is available in the meantime you could do worse than going and subscribing to the Planning Dirty newsletter.  I’ll let you know when it comes out.

    Finally, let’s down to business and cover the things that have made my day this week:

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    Nick DeWolf was the co-founder of Teradyne; a provider of automatic test equipment for technology companies. He served as its CEO until 1971, when he travelled and continued his lifelong passion for photography. His son-in-law has built up an archive of his photography on Flickr. He’s got some amazing shots of Hong Kong in the early 1970s. There is enough distance between the time he was there and the 1967 riots to show the city on the rise. You can see the genesis of the modern Hong Kong, but also it still has touches of tradition including the floating villages in the typhoon shelters. Check them out.

    Interesting documentary on global capitalism by Deutsche Welle. It is interesting to see the way the editorial team framed the story. Germany has seen its news media break big stories on financial capitialism based stories. Munich-based Süddeutsche Zeitung has been a key driver in this.

    House music producer Kerri Chandler has given away 2GB of never digitised before tracks via WeTransfer, get them before they’re gone. You have less than five days to download them.

    Elsewhere electro legend Egyptian Lover picks his favourite Roland TR-808 songs

    Lastly Star Alliance highlight their connection service. It’s hard to get differentiation between OneWorld, SkyTeam etc. So I thought that this ad did a really nice job of it

    https://www.youtube.com/watch?v=yiU9A1S6cg0

  • Loose networks & social connections

    I went to a family funeral and got to think about loose networks and social connections.

    In Ireland the tradition for a funeral is:

    • As soon as possible after death, the body goes to the funeral home. A coroner will have had to sign off on it
    • The body is put on exhibition in the coffin at the funeral home and family greet visitors from the deceased close and loose network who come and pay tribute to the deceased. The coffin is then closed and taken to the church in a procession, which slows as it passes the deceased’s home
    • The following day a funeral mass is held, followed by a procession to the cemetery and then the burial

    This all happens really fast; usually three days from time of death to grave. Those of the family that can make it home try to, but there isn’t much time. So those who are a long haul flight away generally are excused from coming back home.

    In the rural west of Ireland word goes out through a number of channels

    • Local radio – Galway Bay FM lists deaths and funeral information at regular times throughout the day
    • Local newspapers – the deaths feature on their web sites and in their print editiions (depending on publications and the timings of the death). The print edition of the Connacht Tribune comes out on a Thursday; which means that you might miss a mid-week funeral. When I was a kid it would be picked up from the local general store on a Thursday afternoon for the Connacht Tribune
    • RIP.ie – a web service that people can consult to see what funerals are going on in their vicinity
    • Word of mouth then does the rest. Whether its gossip between neighbours, across the counter at a local shop or announced from the pulpit at mass. We would be back in the local general store would on Sunday on the way home from mass for the national Sunday newspaper and a copy of The Irish Farmer’s Journal. But a secondary reason for that visit was to hear of any local deaths in case you’d have to go to pay your respects. Shop owners were perennial gossips and this was a vital role for the community

    Local media and traditions have carved out a distinctive niche that doesn’t involve Facebook or other social media platform

    The people that come along include a mix of closely connected contacts and threads of loose networks including:

    • Family
    • Relatives (second and third cousins, families who are connected via marriage)
    • Close friends
    • People who you knew but may have lost touch with like school friends
    • People you’ve done business with. In my relatives case it was agricultural  contractors and the local hardware store – which has a much wider range of stock than your average ToolStation or Home Depot to deal with the requirements of farms
    • Business relatives and friends of the bereaved

    For the bereaved, the process does as good a job as you can helping the family deal with grief. In the case of my relative who had a sudden heart attack and died it provided closure. The person was eulogised and then sent on the next part of their journey onward.

    For a rural community, made up of small towns and farms it presents an opportunity to reinforce loose networks and business connections. In our family’s case the farm as a business is passed down from generation-to-generation.

    It becomes important for for business people to attend these events to cement business relationships. In our family’s case some of the visitors were business connections of one of my Uncle’s (who is still living) rather than the deceased.

    Attending these events requires commitment. You had attendees travelling over an hour to pay their respects.

    I was a bit surprised by how robust these loose connections were with relatively little reinforcement. It seems the habit of the funeral process plays its part.

  • COSCO Shipping + more things

    COSCO SHIPPING Lines | Customer advisory on network breakdown within America Regions – Customer statement on how their business IT systems were (allegedly hacked and) shut down. COSCO is one of China’s state shipping companies. COSCO is also one of the largest owners of containers in the world. COSCO also owns OCS, the Hong Kong shipping line. More security related content here.

    ITV Self Serve – this could be the equivalent of 1980s era slideshow style cinema ads for your local Indian restaurant. I could see the benefits for estate agent chains, car supermarkets and local hotels. All of which will be reliant on powerful expensive intermediaries (rightmove, autotrader and booking.com respectively)

    Facebook Added Several Creative Tools to Its Ads Manager App – Adweek – reminds me a fair bit of percolate’s editing features

    Hollywood Marketing Firm Ant Farm Is Shuttering | Hollywood Reporter  – Omnicom, an advertising and media holdings conglomerate, is seeking to shed any venture that doesn’t have a substantial return on investment, or a 25 percent margin. “Omnicom is having a tough go, and they didn’t think they [Ant Farm] was core to their strategy,” said one insider.

    Why Monocle shuns social media in favour of going swimming with its readers | The Drum – contrarian strategy in action

    Resilient Anonymous Communication for Everyone (RACE) – Federal Business Opportunities: Opportunities – interesting project, there is a tension between this and the US law enforcement community’s concern about ‘going dark’

    China economic analysis by Martin Wolff | FT – mix of rising debt, slower growth and lower than needed domestic consumption

    Facebook stock plummets after warning of slower revenue growth – Axios – most of the growth now must be in the developing world

    Apple Is in Danger of Abandoning Creative Pros – ExtremeTech – “You will see us do more in the pro area,” CEO Tim Cook said back in early 2017 at a shareholder meeting, in a response to a question about the Mac Pro. “The pro area is very important to us. The creative area is very important to us in particular.” I still don’t doubt the company’s commitment. But I’m certainly disturbed by its inability to execute lately.

    Molecular clock chip promises improved smartphone navigation | eeNews Europe – huge for navigation and time stamped applications

    The man who invented the self-driving car (in 1986) – POLITICO – interesting reflection on where machine learning has been before

    There is no precedent—a president sides with America’s enemies – interesting if optimistic take on the rise of China. I think that the west’s beliefs have been shown to be malleable over the past couple of decades

    Understanding multimodality: An analysis of early JUMP users – drives overall app use, cannibalises short distance drives

    Before scooter shares, The Sharper Image was selling Razors to tech workers — Quartz – circular innovation in action. I remember the first person I saw with a micro-scooter was a German freelancer that we had in the office. It made him look like a knob as he tried to ride it through Covent Garden during the dot com boom. When working on Genie (a still birth mobile internet product that was extended out of a trial proof of concept) we had lots of them all over the office. The bag that the scooter came in was a solid cotton canvas duffle that I still have. As far as I remember I only took the bag and there was a load of these scooters sitting folded up and unloved in a cupboard in the back of the office when I left a year or so later

    WPP courts Chinese tech giants‎ Alibaba and Tencent over $2.5bn deal – if they wait until Brexit drops, Alibaba and Tencent could push through a tricky purchase easily

    The Chinese Communist party entangles big tech | Financial Times – there’s some antitrust arguments the west can easily make

    Multinational brands predict higher spend on influencer marketing | PR Week – not sure why at the moment, where is the business case?

    Amazon advertising is working directly with brands now, cutting out ad agencies – Digiday – this is similar to what Baidu, Sina and Tencent do in China.

  • Income and wealth inequality + more

    Income and Wealth Inequality in America, 1949-2016 by Kuhn, Schularick and Steins (University of Bonn) – We expose the central importance of portfolio composition and asset prices for wealth dynamics in postwar America. Asset prices shift the wealth distribution because the composition and leverage of household portfolios differ systematically along the wealth distribution. Middle-class portfolios are dominated by housing, while rich households predominantly own equity. An important consequence is that the top and the middle of the distribution are affected differentially by changes in equity and house prices. Housing booms lead to substantial wealth gains for leveraged middle-class households and tend to decrease wealth inequality, all else equal. Stock market booms primarily boost the wealth of households at the top of the distribution. This race between the equity market and the housing market shaped wealth dynamics in postwar America and decoupled the income and wealth distribution over extended periods. The historical data also reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years, and that close to half of all American households have less wealth today in real terms than the median household had in 1970. – long read but very worthwhile study on historic US income and wealth inequality. More related content here. (pdf)

    Yahoo Messenger is shutting down on July 17, redirects users to group messaging app Squirrel | TechCrunch – end of an era

    New Ways for Gaming Creators to Get Started and Get Discovered on Facebook | Facebook Newsroom – in app ad bidding

    New Ways to Enjoy Music on Facebook | Facebook Newsroom – rip off of musicia.ly

    Apple Ignores What’s Wrong With the Mac | Sascha Segan | PCMag.com – a pretty fair critique of Mac industrial design

    Apple, where’s the smarter Siri in iOS 12? USA Today – it would be more interesting if one could use the workflows created by others a la IFTTT

    Meet the people who still use Myspace: ‘It’s given me so much joy’ | The Guardian – something to be said for smaller communities

    Facebook Gave Data Access to Chinese Firm Flagged by U.S. Intelligence – The New York Times – it gave access to a number of vendors including the main Chinese players

    The Chinese “gang” manipulating the market — now in EOS?

  • Re-Tros & things from this week

    This documentary on genre defying Chinese group Re-Tros and their first European tour in support of Depeche Mode. People often use the descriptor post-punk for Re-Tros, but Re-Tros come out of a different historical context to the post-punk movement in the west. Their style definitely has a jazz or progressive rock-style improvisation feel to it. The 1980s descriptor ‘electronic body music’ applied to the likes of Front 242 seems to be as good a descriptor as any.

    In what has become an internet tradition, Mary Meeker presents her annual trends presentation

    And here are the slides

    If Mary Meeker hadn’t convinced you about the robust state of innovation in the Chinese technology eco-system then this presentation by George S Yip may do the trick.

    I started using the Usenet for the first time in years for a research project. I wanted to go back and understand longer term trends. The Usenet archives were a handy primer. The Usenet served a similar purpose to the likes of Reddit. I wanted a native application and this was the best Usenet client that I found. NZBVortex | Simply the best Usenet client for Mac. Many old favourites were no longer in development or supported by the latest version of macOS.

    The top thing would be catching up with old friends. ‘Old is gold’ as they say. I got to go to the Bicester Village outlet centre (as guide rather than shopper) and the contrast between the restaurants just outside the village was an eye-opener to my foreign guests.

    My key take away on their reaction: China isn’t going to be jumping up and down to invest in a post-Brexit UK. Bicester Village’s owner has already hedged its bets; it has twin outlet villages in Barcelona, Dublin, Madrid, Milan, Paris Shuzhou and Shanghai – all competing for global luxury buyer spending. They are either in nicer climes or more convenient for East Asian shoppers. They’ve been changing the way Chinese consumers buy luxury and Bicester may not reap the full rewards now. More luxury related content here.