Think "One-on-One"

On October 12, 2006, New York Yankee pitcher Cory Lidle and his flight instructor crashed their plane into an apartment building on the Upper East Side of New York City. Advertising executive Dave Trott was in London, at a reception where a television was on, showing news from CNN, when a news flash appears on the screen about the crash. Pictures are broadcast from a news helicopter.

Because of terrorism fears, it's especially big news. The building is on fire and debris is showering down. Firetrucks are blocking the street and policemen are everywhere.

Trott was worried because his sister lives in the neighborhood. He checks the time difference and figures she would normally be at work then. So he calls her at her office and is relieved when she picks up.

He says, “Hi Shirl, I just want to check you guys are okay.”

She says, “Sure, why?”

He says, “Because of that plane that just hit the Upper East Side?”

She says, “What plane?”

He says, “It’s on CNN, an apartment block at 72nd and 2nd.”

She says “WHAT?”

She hangs up and calls her husband, back at their apartment.

He says, “I didn’t hear anything, let me look out the window,”

He looks, comes back to the phone and says, “Gee there sure are a lot of cops and firetrucks around.”

He heads out to the street to see what’s up. But the cops won’t let him out of his building.

He's told, “Sorry buddy, we gotta keep the streets clear. A plane just hit a building on the next block.”

He hadn’t noticed; hadn't heard a thing.

Trott was over three thousand miles away. In another country. On another continent. And he knows a plane has hit a building in his brother-in-law's neighborhood before the brother-in-law does.

Besides the obvious lesson about the speed and power of modern communication techniques, this scenario can teach us a lot about how effective communication works.

As Trott points out, our view of the world is dominated by our context, our surroundings, and our environment.

Trott's brother-in-law was focused on something else. Two blocks away was outside his consciousness. So the plane-crash didn’t exist for him.

Meanwhile, even though Trott was far, far away, he was in a room with CNN on. His immediate consciousness included the crash footage. For him, the crash wasn’t 3,000 miles away. It wasn’t even two blocks away. It was right next to him.

To be heard, we have to be in someone’s immediate consciousness. That means in an intimate space. That means one-to-one.

That means, if we’re using the media, we can only ever talk to one person at a time. We’re never addressing a crowd of people, even if the reach of your communication is immense. And even if we are speaking to a group, we're heard better when the communication is direct. Personal.

We’re only ever talking to one person at a time.

This concept isn’t new. It's how effective marketing has always worked. Think back to Lord Kitchener’s original World War I poster (see above). The British Army, fighting the Germans, was running out of soldiers, so they ran a recruitment poster.

But the visual didn’t show massed ranks of soldiers. It didn't focus on the need for hundreds, thousands, or even millions of recruits. The visual was Kitchener pointing out of the poster, straight at the viewer. The headline implored, "YOUR COUNTRY NEEDS YOU."

One-to-one.

And that poster worked. It got millions of recruits by talking to people one at a time. It was so successful the we copied here in the States with a picture of Uncle Sam and the same headline (see below). It worked well here too.

One at a time.

That poster was created nearly 100 years ago. Since then media has changed and changed again. We got newpapers, then magazines, then telephones, then moving pictures, then talking pictures, then radio, then television, then color television, then CD players, then the internet, then MP3 players, then digital, then satellite, then social media, then whatever’s next. Media has changed and it will keep changing.

The only thing that doesn’t changed is people. They’re still the same. We're still the same. All we're aware of is our immediate consciousness.

That’s where we need to reach people.

Whatever the medium is.

We’re still only ever talking to one person.

Dow Closes Below 10,000 for First Time Since Nov. 4

The Dow Jones Industrial Average closed below 10,000 today for the first time since November 4. The Dow industrials were down 103.69 points, or 1%, at 9,908.54 at the closing bell. The Dow is now down 7.6% from its 15-month high on January 19.

Dow Closes Below 10,000 for First Time Since Nov. 4

Best Super Bowl Ad

Simple. Clear. Touching. Story-driven. Effective.

For my money, it was the hands down winner.

Bond Bubble?

Lately, the phrase “bond bubble” has used with increasing frequency. About a year ago, Warren Buffett compared the Treasury market to the earlier housing and internet stock bubbles. In December, Citigroup chief equity strategist Tobias Levkovich called investors’ stampede into fixed income “quite worrisome,” with bond fund cash flow nearing “three standard deviations above average” (a level of risk so far from normal that you might expect to see it just 1% of the time).

Why is that so?

Mutual fund investors put boatloads of money into bond funds last year, with new cash flow into bond funds totalling $375 billion, according to the Investment Company Institute. More than 2/3 of that money came from individual investors. By way of comparison, the total new bond-fund cash flow for the previous 10 years combined was $423 billion. As the chart above illustrates, more money flowed into bond funds last year than flowed into stocks right before the tech bubble burst. And with interest rates still at incredibly low levels, bonds look less attractive now than at any point in recent memory.

Remember too that mutual funds are marked to market daily based upon the values of the assets that comprise them. Thus, even though bonds are generally relatively safe (if they are "money good" and thus don't default, the investor -- the mutual fund -- gets its principal back), investors in bond funds risk their principal when interest rates rise and bond prices fall accordingly. In short, with so much money having been dropped into bond funds and interest rates at ridiculously low levels, there is good reason for bond fund investors to be very afraid.

During the credit crisis, Treasury bond yields fell to a multi-decade low. As yields dropped, of course, bond prices rose to what many analysts believe are unsustainable levels. When yields reverse course and begin to rise, as they inevitably will, bond prices will head south, perhaps in a major hurry.

The turn has already begun for long-term bonds, providing a preview of what the future might hold for investors in short- and intermediate-term bond funds. The yields on long-term Treasury bonds, for instance, have risen about 1.5 percentage points in just over a year, causing the Barclay’s Long-Term Treasury Bond index to fall by 13%. A 13% loss is obviously significant, especially when the investor thinks his money is safe. Added danger comes from the bond market’s current steep yield curve. Long-term rates are high relative to short-term rates. That generally means rates will head up, as they do historically after times like this.

It's unclear how this potential bond bubble will play out, but the bull market in bonds is almost certainly a thing of the past. For 27 years, falling yields boosted returns to levels rivaling stock returns. Over the past decade, bonds have often outperformed stocks. But in the game of bond market limbo, rates have gone pretty much as low as they can go. For investors who, during the equity market’s “lost decade,” ran ro the relative safety of the bond market but aren't yet ready to jump back into stocks, the principal protection offered by fixed annuities might offer an attractive alternative.

Next in line for a bailout: Social Security

"Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.

"A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

"Instead of helping to finance the rest of the government, as it has done for decades, our nation's biggest social program needs help from the Treasury to keep benefit checks from bouncing -- in other words, a taxpayer bailout.

"No one has officially announced that Social Security will be cash-negative this year. But you can figure it out for yourself, as I did, by comparing two numbers in the recent federal budget update that the nonpartisan CBO issued last week.

"The first number is $120 billion, the interest that Social Security will earn on its trust fund in fiscal 2010 (see page 74 of the CBO report). The second is $92 billion, the overall Social Security surplus for fiscal 2010 (see page 116).

"This means that without the interest income, Social Security will be $28 billion in the hole this fiscal year, which ends Sept. 30."

Next in line for a bailout: Social Security

The 15 Most Brilliant Super Bowl Ads

"The Super Bowl isn’t a sporting event. It’s a business. And that business is advertising. This year, with every ad spot already sold out, prices topped out at more than $3 million, according to the Associated Press. Marketers shell out premium bucks to capture 100 or so million eyeballs, more than half of which are more interested in the ads than the football, according to Nielson.

"While Monday morning advertising quarterbacks will make lists about which ads were the best and the worst, based on whim, buzz and focus group, only one thing ultimately counts in advertising: does it sell product?

"....

"'The best scoring ads always tell a story with a beginning and an end, and a climax, and that’s what you see in the Budweiser ads,' says Glenn Kessler, president and CEO, HCD Research. 'A lot of their ads tell a story that sometimes has drama.'

"As it happens, the most effective ads on our list are consistently the ones that use a product within a narrative, whether in a humorous way or not. Even better than telling a story is adding a clarion call, says Tim Calkins, Clinical Professor of Marketing at the Kellogg School of Management at Northwestern University. That’s exactly what Denny’s did last year when it combined narrative and humor with a free breakfast, effectively getting customers into its restaurants. (Though with free food they probably could have dispensed of creativity completely.) Pepsi-owned brands also did well on our list, with ads that focused on comedy and entertainment, including the two audience-generated spots from last year’s Doritos Crash the Super Bowl contest."

See all the top ads here. See the worst ads here.

The 15 Most Brilliant Super Bowl Ads

Weather Channel Prediction

On the other hand, while I'm hoping Drew Brees and the Saints win tomorrow, I expect the Colts to prevail.