The Next Wave of Digital Marketing Trends

Sometimes the most important small business marketing tools and technologies start out as expensive enterprise solutions exclusive to big brands and agencies; only much later do they become affordable and accessible to small businesses.
During a recent trip to San Francisco, I stopped by the tradeshow floor at Ad:Tech and found myself staring into the not-too-distant future of small business marketing. I didn't have a chance to see everything Ad:Tech had to offer, but I did have time to talk with a few innovative companies offering solutions that are sure to influence the way small businesses approach marketing.
Here's what I found that's worth sharing along with some tips for getting ready to adjust to new trends.

Innovation No. 1: Online Display AdvertisingBanner ads may sound like an antiquated way to get noticed, but actually display advertising is becoming much more interesting due to two important trends.
One such trend is better local ad targeting. Several companies, such as Local.com, LinkedIn and Facebook, have announced that they're getting into the local targeting game by offering geography-based advertising along with the standard demographic or keyword targeting you'd expect. Local targeting is already prevalent in search engine marketing and it's good to know that display ads are heading in the same direction.

The other noticeable trend to get excited about is the movement toward ad pricing based on cost-per-action rather than cost-per-click. Paying for ads based on CPA means that you don't pay the publisher until you get the action you want from the ad. For example, if you want your online display ad to drive someone to an online store to buy the advertised product, you won't have to pay until someone actually clicks the ad and completes the purchase. Several companies--such as Hydra--have announced an emphasis on CPA tracking and billing.

• How to get ready
  Get to know your acquisition costs on an intimate level. If cost-per-action advertising sounds attractive, you'll need to have a firm understanding of what you're willing to pay for each new customer or action your advertising obtains in order to know how to bid. If you're interested in the possibilities of targeted display advertising (and you're interested in getting sophisticated with your targeting) start building a profile of your best prospects and customers--including geography, demographic information and typical buying behavior. If you need help figuring out how to analyze your customers to get that information, online advertising company Ad Buyer offers a set of free audience profiling tools.

Innovation No. 2: Online Retail Promotions
Selling physical goods has long been about driving traffic to your e-commerce store so prospective customers can see and buy your products. That trend seems destined for a giant turn in the opposite direction, because it won't be long before smaller retailers have the ability to sell more of their products on other highly targeted consumer websites. One such website is Milo.com, where the CEO announced the company's intention to enable anyone to search real-time availability and local product information on every product, on every shelf, in every local business in America.
Another outstanding innovation for online retail comes from Pixazza. Pixazza is changing the way consumers shop by allowing people to browse and buy products that appear in any photos. For example, let's say you're reading an article in an online entertainment magazine and you see a photo of Jennifer Lopez wearing earrings that are to-die-for. Getting yourself a similar pair is easier than ever; as you hover over the photo Pixazza recommends earrings at suggested prices far below what Jennifer Lopez probably paid for hers.

• How to get ready
  It's time to get your inventory database in shape. Selling products on websites owned by other companies will likely require you to conform to their database and information technology standards. There's no need to get overly sophisticated here. If your company has the ability to publish real time inventory and product information to your own website, you probably already have enough technology to quickly enable a feed of that information to other online databases.

Innovation No. 3: Social Media Advertising
Social media is arguably the most innovative internet tool to emerge since, well, the internet. There are definitely good reasons to advertise on social media sites (this includes your own fan pages and networks). The challenge for a small business is the same challenge facing any business: How do you get enough people to pay attention to your ads while they are busy uploading photos or conversing with friends?
There are a number of companies working to make social media advertising more engaging and even fun, and it won't be long before there are a plethora of choices for small budgets. At the show, NTB Media announced an interesting video advertising product with built-in games and quizzes to get people to pay attention and remember the content in the videos, and Fan Appz announced access to an integrated suite of social media applications designed to attract attention and engagement in exchange for a subscription of just $50 per month.

• How to get ready
  Test before you invest. Social media advertising is already accessible and affordable to small business, but affordability isn't the only reason to invest in a particular form of advertising. Don't invest in a new social media tool or advertising strategy until you are sure you have the ability and the time to track your results and compare them against other opportunities. As a small business, you can't afford to invest in everything. If you don't track and compare your results, you won't have the information you need to make budget-wise choices.  

Innovation No. 4: Mobile MarketingAdvertising and messaging to mobile phones is definitely a hot topic among marketers. In the past, most mobile marketing tools focused on only one aspect of mobile marketing, such as text-messaging, application development or mobile websites. Those tools are now converging as integrated solutions. One such company, 2ergo, recently announced plans to offer a comprehensive suite of marketing solutions that include SMS, MMS, e-mail and mobile websites. Be on the lookout for companies offering comprehensive mobile solutions priced for small businesses in the not-too-distant future.

• How to get ready
  Make sure at least a portion of your website is designed to display and function properly on mobile devices--especially the pages that contain contact information for your business. If you have a location-based business, start making your communications more mobile friendly so people can respond to your offers and information while they are on-the-go. Sending text-messages and e-mails with mobile coupons and snack-sized bites of product information are great places to start. Also, social media users are more likely to become mobile savvy than the average internet user, so make sure you have a presence on the most common social sites.

---

John Arnold's no-nonsense marketing advice is featured in his well-known marketing books which include Web Marketing All-In-One Desk Reference for Dummies, E-Mail Marketing for Dummies and the forthcoming book Mobile Marketing for Dummies. John is also a leading marketing speaker, trainer and consultant specializing in DIY marketing advice for small businesses, franchises and associations. If you have a marketing tool or technology you'd like John to write about, contact him at http://JohnArnold.com.
http://www.entrepreneur.com/marketing/onlinemarketing/article206418.html

Synthetic CDOs: Where's The Love?

Bob McTeer is a fellow at the National Center for Policy Analysis. He was also President of the Dallas Fed for 14 years. 

It’s hard for me to enjoy a good fight if I don’t have a dog in it, so to speak.
I spent much of last Tuesday watching the TV in a Washington hotel room trying to decide whether I had a dog in the Goldman Sachs attack. Which side would naturally be my side--my home team? Who were the Cowboys?
Finding my side was more difficult than I expected. As I settled in, Goldman started off as the slight favorite if, for no other reason, than the other side featured bullying senators sitting on their thrones casting stones at their modern-day Christians. (Forgive me. I know it's not the best fit.)
But, somehow, I found it difficult to fit synthetic CDOs into my good-guy basket. I taught money and banking in night school many years back when it was a simpler subject:
"Financial intermediaries serve the purpose of channeling our saving into the most productive investments, thus contributing to maximum economic growth. They are an essential part of the market pricing and allocation mechanism."
The home team tried to say something like that with their references to market making and by pointing out that they gave market participants the opportunity to select their desired level of risk. Their desired level of risk?
Who desires risk? I guess they meant the desired level of return which is positively correlated with risk. But why didn't they say it that way? I couldn't think of the rhetorical pothole they were trying to avoid. Then I remembered that Goldman people are smarter than the rest of us, so I shouldn’t worry my pretty little head about it.
As a person who "believes in the market," I knew that if the market rewarded Goldman as handsomely as it apparently does for creating things like synthetic CDOs there must be a great demand for that service. You don’t make gobs of money selling what no one wants to buy. They are so valuable, they must have some value. Right? Well, they do give people the opportunity to buy risk.
Somehow, my mind wandered back to my class in the history of economic thought--in the sections before Adam Smith--in the dark ages. Before Adam Smith were the Mercantilists, who wanted to export everything, import nothing, and accumulate the difference in gold. Gold was the measure of the wealth of nations. King gold! The king is dead. Long live the king.
Along with the Mercantilists were the Physiocrats, who likened an economy to the blood circulatory system and, more to the point here, believed that the only true measure of the wealth of nations (still lower case) was agricultural output. The farmers created all the wealth, and all others were parasites. We didn’t spend much time on the Physiocrats.
Extending beyond agriculture wasn’t hard. Nonagricultural goods are also good. Manufacturing is good. Services are good also. Remember time and place utility? That’s what makes a $75 meal in a restaurant a better deal than the $5 supper at home.
Once you get comfortable with services in concept, financial services aren't too much of a stretch. After all, we've got to channel those savings into investment. How many people does it take to do that, I wonder? What percentage of GDP should finance be, do you think?
I don’t know much, but I do know that last question was a loaded question that nobody who "believes in the market" would touch with a 10 foot pole. The markets themselves answer such questions and we would reveal our lack of faith in the markets if we even speculated on such "should be" questions. We just don't do normative.
Well, I didn't think so, but, recently, I had a very unusual experience that I still haven't figured out. I attended a forum for economic bloggers and all the participants appeared to be true believers. At a break-out session, someone asked how big the finance sector should be, implying that ours may have grown too big somehow. I waited for the axe to fall, or, at least, for someone to go get soap to wash out the offending mouth. But neither happened. Instead, a discussion ensued that was premised on the possibility that the market had let it get too big. I couldn't believe it.
That discussion preceded the televised discussion of synthetic CDOs last Tuesday. You start to rationalize the great social value in CDOs, but then the "synthetic" part demands your attention. Billion dollar bets on nothing?
This line of thinking caused me to reflect on whether I should become a Physiocrat after all. I can see the value in ham, eggs and pork bellies, all properly hedged of course.
But just as I was about to head down that road, the Chairman of the Senate Committee had the Chief Executive Officer of Goldman bent over the ropes. The Chairman was coming in for the kill while the CEO struggled to recover from the damage of his rope-a-dope defense. Wasn’t it true that Goldman had a huge short position, essentially betting against the housing market and America? Well, the large short position was matched--pretty much--by a large long position. The "net" position wasn’t so large.
That made some sense to me, but the Chairman said he didn't want to talk about net positions, or long positions. He just wanted to talk about the gross short position. But the shorts were there because of the longs. Or was it the longs were there because of the shorts? Probably both. Anyway, what matters is that risk management requires being on both sides of the trade.
By the way, let's talk about market makers and market making. No, let's not talk about that. Let's just talk about your big short against America.
I'm not real sure who's on the side of the angels in this particular debate, but I am sure which side thinks I'm stupid, along with the rest of you out in television land. Well, stupid is as stupid does. And that’s all I have to say about that.

http://blogs.forbes.com/streettalk/2010/05/02/synthetic-cdos-wheres-the-love/

Four Best Ways To Invest In Bonds

For the casual observer, bond investing would appear to be as simple as buying the bond with the highest yield. While this works well when shopping for a certificate of deposit (CD) at the local bank, it's not that simple in the real world. There are multiple options available when it comes to structuring a bond portfolio, and each strategy comes with its own tradeoffs. The four principal strategies used to manage bond portfolios are:
--Passive, or "buy and hold"
--Index matching, or "quasi passive"
--Immunization, or "quasi active"
--Dedicated and active
Passive Bond Strategy
The passive buy-and-hold investor is typically looking to maximize the income generating properties of bonds. The premise of this strategy is that bonds are assumed to be safe, predictable sources of income. Buy and hold involves purchasing individual bonds and holding them to maturity. Cash flow from the bonds can be used to fund external income needs or can be reinvested in the portfolio into other bonds or other asset classes. In a passive strategy, there are no assumptions made as to the direction of future interest rates and any changes in the current value of the bond due to shifts in the yield are not important.

The bond may be originally purchased at a premium or a discount, while assuming that full par will be received upon maturity. The only variation in total return from the actual coupon yield is the reinvestment of the coupons as they occur. On the surface, this may appear to be a lazy style of investing, but in reality passive bond portfolios provide stable anchors in rough financial storms. They minimize or eliminate transaction costs, and if originally implemented during a period of relatively high interest rates, they have a decent chance of outperforming active strategies.

One of the main reasons for their stability is the fact that passive strategies work best with very high-quality, non-callable bonds like government or investment grade corporate or municipal bonds. These types of bonds are well suited for a buy-and hold strategy as they minimize the risk associated with changes in the income stream due to embedded options, which are written into the bond's covenants at issue and stay with the bond for life. Like the stated coupon, call and put features embedded in a bond allow the issue to act on those options under specified market conditions.
Ladders are one of the most common forms of passive bond investing. This is where the portfolio is divided into equal parts and invested in laddered style maturities over the investor's time horizon. Dividing the principal into equal parts provides a steady equal stream of cash flow annually.
Indexing Bond Strategy
Indexing is considered to be quasi-passive by design. The main objective of indexing a bond portfolio is to provide a return and risk characteristic closely tied to the targeted index. While this strategy carries some of the same characteristics of the passive buy-and-hold, it has some flexibility. Just like tracking a specific stock market index, a bond portfolio can be structured to mimic any published bond index. One common index mimicked by portfolio managers is the Lehman Aggregate Bond Index.
Due to the size of this index, the strategy would work well with a large portfolio due to the number of bonds required to replicate the index. One also needs to consider the transaction costs associated with not only the original investment, but also the periodic rebalancing of the portfolio to reflect changes in the index.

Immunization Bond Strategy
This strategy has the characteristics of both active and passive strategies. By definition, pure immunization implies that a portfolio is invested for a defined return for a specific period of time regardless of any outside influences, such as changes in interest rates. Similar to indexing, the opportunity cost of using the immunization strategy is potentially giving up the upside potential of an active strategy for the assurance that the portfolio will achieve the intended desired return.
As in the buy-and-hold strategy, by design the instruments best suited for this strategy are high-grade bonds with remote possibilities of default. In fact, the purest form of immunization would be to invest in a zero-coupon bond and match the maturity of the bond to the date on which the cash flow is expected to be needed. This eliminates any variability of return, positive or negative, associated with the reinvestment of cash flows.

Duration, or the average life of a bond, is commonly used in immunization. It is a much more accurate predictive measure of a bond's volatility than maturity. This strategy is commonly used in the institutional investment environment by insurance companies, pension funds and banks to match the time horizon of their future liabilities with structured cash flows. It is one of the soundest strategies and can be used successfully by individuals. For example, just like a pension fund would use an immunization to plan for cash flows upon an individual's retirement, that same individual could build a dedicated portfolio for his or her own retirement plan.
Active Bond Strategy
The goal of active management is maximizing total return. Along with the enhanced opportunity for returns obviously comes increased risk. Some examples of active styles include interest rate anticipation, timing, valuation and spread exploitation, and multiple interest rate scenarios. The basic premise of all active strategies is that the investor is willing to make bets on the future rather than settle with what a passive strategy can offer.
Conclusion
There are many strategies for investing in bonds that investors can employ. The buy-and-hold approach appeals to investors who are looking for income and are not willing to make predictions. The middle-of-the-road strategies include indexation and immunization, both of which offer some security and predictability. Then there is the active world, which is not for the casual investor. Each strategy has its place and when implemented correctly, can achieve the goals for which it was intended.

http://www.forbes.com/2010/04/30/invest-bond-portfolio-personal-finance-bond-portfolio_2.html