I just finished reading a great Q&A in CW Bulletin, the online companion to CW Magazine. The interview is with a veteran creative director and entrepreneur at Grayton Integrated Publishing on how to cut costs with creative projects like marketing, advertising, and publications.

The interview contains some very sound advice, and I was struck at how much of it sounds familiar (pun intended):

What’s the first step to defining your objectives?
Whether you’re creating a magazine or a brochure or launching a full-blown campaign, don’t discuss what it will look like until you’ve agreed on its purpose. Who is your audience? What are you telling them? What are you hoping to achieve? Don’t try to figure out if your vehicle should be a bus or a Ferrari until you’ve determined where it’s coming from and where it’s headed.

Turns out the interviewee is my mother. Long-time readers of this blog may also remember that my Grandmother was recently in Sailing Magazine.

Alright dad, time to step it up!

Update: A few gramatical errors and some horrible spelling errors. Turns out my mother was also a copy editor.

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I probably shouldn’t admit it in public — considering I’m a social media analyst — but I subscribe to the daily print edition of the Wall Street Journal. This morning I had just finished running through the paper when it realized that I hadn’t seen such a brutal collection of news about tech companies in quite some time.

To wit: Here are the headlines on the front page of the Marketplace section.

1. “In rare move, Microsoft is exploring job cuts“
2. “Nortel Networks files for chapter 11″
3. “Smurfit says bankruptcy is possible amid crunch” (Smurfit-Stone is a cardboard manufacturer)
4. “Motorola to cut 4,000 more jobs as cellphone sales collapse by half”

Of 23 total articles in the section, 9 (39%) were about tech companies and they were almost universally negative — and that doesn’t even include the front page article about Steve Job’s health. The only positive news was “IBM plans new center in Iowa.” Needless to say, the market is down, and the tech market is down right along with it. Granted Motorola and Nortel have been in trouble for a while, but Microsoft, Google, and Seagate are all well run companies. If there was any illusion that the tech industry might not get hit in the recession the Journal blew it away.

Rest of the tech headlines:

1. “IBM plans new data center in Iowa”
2. “Goolge plans 100 layoffs of recruiters”
3. “Bartz eases some hurdles to Yahoo-Microsoft deal”
4. “Satyam seeks leaders, names auditors”
5. “Growth in world-wide PC shipments levels off”
6. “Seagate slashes salaries”

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This past week’s Consumer Electronics Show in Vegas produced two big stories with one major theme: recession. The first, not surprisingly, is that consumer technology manufacturers have responded to falling discretionary income. After years of excess the pitch from manufacturers is now  “value,” not glitz or pizazz. My colleague James McQuivey reported from the show that several exhibitors spent more time emphasizing the value in their old products than launching new ones.

The second story was the falling attendance. Early estimates put attendance down by 8% year over year, and if the taxi lines were any indication the actual attendance was much lighter than that. (UPDATE: VentureBeat reports the drop at 22% — yikes!) Frankly this is not a big shock. When budgets are tight — both for individuals and businesses — expenses like travel and trade shows hit the cutting room floor.

For marketers this is a big problem. The last few months I’ve been doing a lot of research with my colleague Laura Ramos on the types of media information sources that have the biggest impact on business buyers. What we have found again and again is that trade shows have a big impact, especially amongst the biggest buyers. Among IT hardware buyers, for example, 65% of buyers report trade shows are important or very important to their purchases, the 6th most influential information source overall. (see the very complex graphic below)

For the balance of the recession — and economists are split on how long that may be — attendance, and consequentially client impact, for trade shows is going to be down. Marketers, this is going to hurt. One of your better tools for informing buyers will be neutered. As your marketing budgets get slashed the pressure to go cold turkey on trade shows and events is going to be high, and many marketers will cut. This would be a mistake. Fewer of your competitors will pay to shake hands and demo products to customers so while your attendance may be down, the competitive impact will be up. If your budget is really tight, think about opening up your local offices for an open house; the customers may not be able to pay to travel to you, but you should be able to get to them at a low cost.

Many marketers will look to cut budgets in the next few weeks and while the pressure to cut trade shows and events will be high, keeping the intimacy with customers will pay dividends, even during a recession.

UPDATE: Just this morning I got an email from Oracle advertising “HP Oracle Exadata Roadshow Boston‏.” Their database is wrong for my location, but the strategy is dead on. If customers can’t pay to get to you for trade shows you must go to them.

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As an economist I find our current economic meltdown equal parts frightening and fascinating and, as of late, I have been thinking a lot about my macroeconomic courses from college. At the time I had a very tough professor — Dr. Louis Philippe Rochon. He was a post Keynesian, essentially economic nihilism, and as a result we read a lot of obscure original texts and papers. One of the papers we read was by Hyman Minsky.

In light of today’s economic meltdown a lot of researchers have been looking for clues from the past, and many have settled on Minsky’s “Financial Instability Hypothesis.” As I understand it — I never spent much time with Minsky as he is a bit of an obscure economist — the theory tries to bring speculative bubbles and their subsequent popping into the orthodoxy of market dynamics. This insight was likely pretty accurate for our meltdown in 2001, however it is the wrong theory for today.

Right economist, wrong theory!

If we are looking to understand today’s meltdown we instead need to look to Minsky’s theory of “Financial Innovation” (I’m trying to dig up my old notes and will post a link to the paper once I find it). The crux of Minsky’s argument — its worth noting that he was a bit of a pessimist — was that regulatory bodies, no matter how well meaning, cannot regulate as fast as financial institutions innovate. Therefore at a high enough interest rate banks and other lenders have the incentive to “create” money through financial innovation.

I would argue that the option ARMs and other exotic mortgages created in the last 10 years were just the financial innovations that Minsky was theorizing about and in essence built an infinite money supply. That money supply (in the guise of the housing market) was driving the economy most of the last 7 years.

What we are experiencing now is the crumbling of all that “innovation” upon which we built our economy, and the money supply is “correcting” back to a more realistic level. In the process a lot of wealth is getting destroyed. My guess is Minsky is happy he died well before his theories proved as prescient as they have.

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