Central Perk: 27 ian. 2014

luni, 27 ianuarie 2014

Mish's Global Economic Trend Analysis

China's Fake Export Numbers Under Close Scrutiny
Europe Dumps Global Warming Efforts; Good Idea?
France Unemployment Hits New Record High; Hollande's November Pledge Reviewed
50th Anniversary of War on Poverty Coming Up; Success or Failure?
Deflation Will Return: Europe First, Then US; Global Supply Arbitrage

China's Fake Export Numbers Under Close Scrutiny

Posted: 27 Jan 2014 10:59 PM PST

China's export numbers are so unbelievable that even mainstream media doesn't believe them. Bloomberg has the story correct, but its title could use a bit more punch.

Please consider China Trade Puzzle Revived as Hong Kong Data Diverge

China's trade numbers, distorted by fake exports last year, are set to come under renewed scrutiny after a discrepancy between Hong Kong and Chinese figures for bilateral trade widened to the largest in eight months.

Hong Kong's December imports from China fell 1.9 percent from a year earlier to HK$176 billion ($22.7 billion), the city's statistics department said yesterday. That compares with $38.5 billion in exports to Hong Kong reported earlier this month by China's customs administration, up 2.3 percent, based on data compiled by Bloomberg.

Economists split on how to interpret the latest numbers, which follow reports earlier last year that invoices for fake exports were used to disguise capital inflows, inflating China's trade data before regulators in May cracked down on the practice. Exaggerated overseas shipments would mean that global demand is weaker than China's statistics indicate.

"From the last few months' data, we have seen hints that some Chinese exports are fake and in fact that reflects hot money inflows," said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong.

China's exports to Hong Kong in December exceeded the city's reported imports from the mainland by about 70 percent, the biggest difference since April.

Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong, said the gap between China's reported increase in exports to Hong Kong and the city's reported decline in imports isn't big enough to raise any red flags when compared to the difference earlier in 2013.

That's because China records exports when goods leave, while Hong Kong waits 14 days after items arrive in port to record them as imports, Shen said.

Round Tripping

Another possible explanation for the discrepancy is "round tripping" of goods that are exported from China to Hong Kong and then back to the mainland, Australia & New Zealand Banking Group Ltd. said in a report yesterday.

"The round-tripping trade has become an avenue to fuel China's capital inflows," as the current account may have been "improperly used as an alternative way of liquidity injection," economists Liu Li-Gang and Raymond Yeung wrote. The gap in interest rates fuels the practice and policy makers in China and Hong Kong "need to closely watch the potential risks such activities present to the financial system."

Place your bets. But I suggest no data from China is likely to be very reliable, especially export and GDP numbers.

Moreover, if export numbers are inflated, then GDP numbers are inflated by definition.

Of course, GDP is already overinflated for two other reasons:

GDP is not adjusted for various shadow banking schemes and other malinvestments that will eventually be written off.
GDP is not adjusted for massive amounts of air and water pollution that will at some point have to be cleaned up.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Europe Dumps Global Warming Efforts; Good Idea?

Posted: 27 Jan 2014 06:33 PM PST

Regarding the religious debate over global warming, I am pleased to report Green Fade-Out: Europe to Ditch Climate Protection Goals.

The EU's reputation as a model of environmental responsibility may soon be history. The European Commission wants to forgo ambitious climate protection goals and pave the way for fracking -- jeopardizing Germany's touted energy revolution in the process.

The climate between Brussels and Berlin is polluted, something European Commission officials attribute, among other things, to the "reckless" way German Chancellor Angela Merkel blocked stricter exhaust emissions during her re-election campaign to placate domestic automotive manufacturers like Daimler and BMW. This kind of blatant self-interest, officials complained at the time, is poisoning the climate.

At the request of Commission President José Manuel Barroso, EU member states are no longer to receive specific guidelines for the development of renewable energy. The stated aim of increasing the share of green energy across the EU to up to 27 percent will hold. But how seriously countries tackle this project will no longer be regulated within the plan. As of 2020 at the latest -- when the current commitment to further increase the share of green energy expires -- climate protection in the EU will apparently be pursued on a voluntary basis.

Global Warming Hysteria

I am certainly not against improving the quality of the air we breathe.

Without a doubt, China needs a massive breath of fresh air and a flood of unpolluted water as well. So do emerging market countries in general.

Rather, I am against carbon trading schemes, taxpayer funding of green energy, and other silliness based on global warming hysteria.

In contrast to what the global warming advocates have predicted, a UN report shows the Earth has cooled for 15 years.
In spite of hysteria over the melting of ice caps that theoretically would put the entire state of Florida underwater, Antarctic ice has been growing for decades, reaching a 35-year high in 2013.
Humorously, a research ship attempting to prove global warming got trapped in unusually thick ice this January and had to be rescued by icebreakers.

Does any of that matter? Realistically, not one bit. More importantly, it does not matter one bit if the earth has been warming for the previous 100 years.

The simple facts of the matter are as follows:

The earth has gone through periods of cooling and warming that have lasted tens of thousands of years.
Random fluctuations in nature, lasting decades or longer happen all the time.
It is preposterous to make any kind of realistic assessment regarding the last 100 years or even the last 1000 years.
Even if it was possible to make a realistic assessment as to what is happening and why, carbon trading schemes and taxpayer subsidies are a ridiculous way to solve the problem.

Gratefully, Europe appears to be abandoning the mass hysteria. It's probably the only smart thing European Commission president José Manuel Barroso has ever done while in that role.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

France Unemployment Hits New Record High; Hollande's November Pledge Reviewed

Posted: 27 Jan 2014 02:40 PM PST

In November, French president Francois Hollande announced he had met his electoral pledge to halt the rise in joblessness by the end of 2013.

No one with any economic sense believed it.

Today in the face of a new record high unemployment rate, Hollande says unemployment has "stabilised".

No one with any economic sense believes his statements today either.

Please consider France Unemployment Hits New Record High.

France revealed on Monday tha the number of registered jobless rose to a record 3.3 million in December, belying President Francois Hollande's pledge to reverse the trend by the end of last year.

The number of job-seekers rose by 10,200, the labour ministry said. If those holding part-time employment were taken into account the number of unemployed rose to 4.89 million, another record.

Hollande, a Socialist who is under fierce pressure to tackle unemployment and with polls showing his approval ratings the lowest of any president in modern French history, claimed in November he had met his electoral pledge to halt the rise in joblessness by the end of 2013.

Despite the bleak figures, Hollande - who is currently in Turkey - said that unemployment had "stabilised" but added that "this is not enough."

Stabilization?

December unemployment rose 0.3 percentage points compared to November
In the past year, unemployment rose 5.7 percentage points
By what obscure definition does that performance constitute stabilization?

The average monthly rise in unemployment is .475 percentage points. Thus, it's a relative success for unemployment to rise only 0.3 percentage points. But relative success and stabilization are not the same thing, except of course in political fantasyland.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

50th Anniversary of War on Poverty Coming Up; Success or Failure?

Posted: 27 Jan 2014 11:26 AM PST

Before you can assess the success or failure of a program you must first understand the mission. Then, with the objectives of the mission in mind, one can measure success or failure.

If you set the bar low enough or modify the mission, then anything can look like a success. Conversely, everything fails if standards are sufficiently high.

Thomas Sowell discusses those ideas, in relation to the war on poverty, in Fact-Free Liberals.

Since this year will mark the 50th anniversary of the "war on poverty," we can expect many comments and commemorations of this landmark legislation in the development of the American welfare state.

The actual signing of the "war on poverty" legislation took place in August 1964, so the 50th anniversary is some months away. But there have already been statements in the media and in politics proclaiming that this vast and costly array of anti-poverty programs "worked."

The real question is: What did the "war on poverty" set out to do -- and how well did it do it, if at all?

Both President John F. Kennedy, who launched the proposal for a "war on poverty" and his successor, Lyndon B. Johnson, who guided the legislation through Congress and then signed it into law, were very explicit as to what the "war on poverty" was intended to accomplish.

President Kennedy said, "We must find ways of returning far more of our dependent people to independence."

The same theme was repeated endlessly by President Johnson. The purpose of the "war on poverty," he said, was to make "taxpayers out of taxeaters." Its slogan was "Give a hand up, not a handout." When Lyndon Johnson signed the landmark legislation into law, he declared: "The days of the dole in our country are numbered."

Now, 50 years and trillions of dollars later, it is painfully clear that there is more dependency than ever.

Ironically, dependency on government to raise people above the poverty line had been going down for years before the "war on poverty" began. The hard facts showed that the number of people who lived below the official poverty line had been declining since 1960, and was only half of what it had been in 1950.

On the more fundamental question of dependency, the facts were even clearer. The proportion of people whose earnings put them below the poverty level -- without counting government benefits -- declined by about one-third from 1950 to 1965.

All this was happening before the "war on poverty" went into effect -- and all these trends reversed after it went into effect.

By any reasonable measurement of war on poverty mission statements made by presidents Kennedy and Johnson, the war on poverty was a miserable failure.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Deflation Will Return: Europe First, Then US; Global Supply Arbitrage

Posted: 27 Jan 2014 03:09 AM PST

In an email update last week, Saxo Bank chief economist Steen Jakobsen commented "Europe has a more than 50:50 chance of deflation, while the US is 25:75 against."

Steen is talking about a general decline in prices of goods and services, which is also how central bankers use the term deflation. For now, let's use that definition. I will tie things back to money and credit (my preferred way of discussing inflation and deflation) a bit later.

In contrast to Steen, I believe deflation is near-certain in Europe, and strongly odds on in the U.S.

Global Supply Arbitrage

A simple statement by economist Andy Xie is what got me thinking about the prospects of deflation once again: Demand is local, supply is global.

Here is the complete context as noted in Keynes Is Dead, Abenomics Fizzles, US Fails to Reach Escape Velocity, Stimulus Fatigue

Keynes Is Dead

I have argued for many years that this round of globalization has fundamentally changed how an economy works, even for a large one like the United States. While demand is and always has been local, the supply side has become genuinely global. Both manufacturing blue-collar jobs and most white-collar jobs have become global. Today's information technology allows a multinational company to position research, marketing, finance and managerial jobs to anywhere. Hence, when a country stimulates demand, it's met by supply from anywhere.

Supply From Anywhere

With supply arbitrage in mind, please consider Invasion of Spanish Builders Angers France Struggling to Compete.

The earth movers digging out a sandy pit in the beach town of Biarritz could be any construction site in France. Except the builder of the 300 homes and its workers are Spanish. In the neighboring town of Anglet, a Spanish company built the concert hall inaugurated this month. A kilometer up the road, in Bayonne, a Spanish company is building a 15-lodging apartment block.

And that's just in a small corner of southwestern France.

The losing French bidders are crying foul, saying the Spanish pay lower wages and cut corners on regulations. The Spanish, fleeing a construction slump and an unemployment rate of 26 percent at home, say they're just using European Union rules allowing free movement of businesses and workers.

"We thought for a long time we were in an industry that couldn't be shifted offshore," said Didier Ridoret, president of the French Constructors' Federation, or FFB. "Instead, the reverse happened: the offshore came to us."

With the best French bid in Anglet priced 40 percent higher than the winning offer, reversing the trend won't be easy.

French builders say a majority of homes in border regions are now being built by Spaniards, Portuguese and Italians.

"These contracts are often awarded solely on the basis of price," said Patrick La Carrere, head of the builders' federation in southwest France. "The Spanish have much lower charges so they can always undercut us."

For companies hiring Spanish builders, the choice is clear. The 2 million-euro contract for the Anglet concert hall was awarded to Altuna y Uria SA, based in the Basque town of Azpeitia, after its bid was 800,000 euros less than the best French offer, said Jerome Poties, head of culture for the town.

According to accounting firm KPMG, Spanish companies pay 30 percent of a worker's salary in social security contributions, and the employee pays 6.35 percent. In France, companies can pay as much as 45 percent and labor another 22 percent.

It's not just lower charges that help Spanish firms, said Maxime Alimi, an economist at Axa Investment Managers in Paris.

"There have been reforms in Spain that have made labor more flexible," Alimi said. "In France, salaries are extremely rigid. It's a tendency that's not likely to change."

"The Offshore Came To Us"

The offshore came to France. And the implications are enormous.

In Europe, with free movement of citizens, supply of labor could theoretically come from anywhere. In practice it didn't, at least on a large scale. But that is starting to change, and the repercussions will be huge.

Worst Ahead for France

Spain is still in the state of economic depression, but the worst is arguably behind. For France and Italy, the worst suffering is clearly ahead. Both countries are in huge need of work rule reforms and pension reforms. Public sector spending must decline. Wages and prices are going to have to decline for France to be competitive.

One way or another, it's going to happen. Even in Germany, the harmonized CPI is barely positive, with the most recent reading at 1.219%.

What happens if President Hollande lives up to his promises to make France more competitive and to reduce the size of the public sector?

Not many believe he will do that, but it really won't matter. The offshore came to France.

Currency Crisis

A second deflationary factor in Europe is the emerging market currency crisis. Foreign bank exposure to Turkey is $350 billion, and Greece is particularly exposed. For details, please see Start of a Global Currency Crisis?

Stress Tests

A third deflationary factor in Europe is the pending stress tests. Although the ECB Watered Down 2014 Stress Tests Second Time, some banks are still likely to have capital shortfalls.

Increased lending? Forget about it.

Recession in Germany and France

In December, France's statistics body, the INSEE, said France would avoid recession. I did not believe it then, and I sure don't now given Eurozone PMI Strengthens, Except France.

It's going to be very difficult for Germany to avoid recession when France slides back into one.

Europe First, Then U.S.

In the U.S., the Fed and others way overestimate the robustness of the jobs market. The discrepancy between the household survey and the establishment survey is 65,000 jobs a month.

For details, please see Employment vs. Jobs Discrepancy based on December 2013 Data, released in January.

Retail Sales Cost-Cutting, Competition, and Cannibalization

Numerous retailers are cutting employees. Wal-Mart, J.C. Penney, Macy's, Target, Aéropostale, and numerous other retailers have announced cutbacks as noted in Tsunami of Retail Store Closings and Downsizings Coming; Expect Layoffs and Shorter Hours.

Notably, Sam's Club CEO Rosalind Brewer announced a 2% Reduction in Sam's Club Employees to thin middle-manager ranks. Where are those managers going to get another job?

In "Retail Sales Cannibalization" I noted

"Brewer aims to better compete with brick-and-mortar rival Costco as well as to take on online membership clubs like Amazon Prime service. She seeks to double revenue and turn it into a $100 billion business, roughly the size of Costco."

Is doubling revenue remotely possible? If so how?

The only way it is possible is via reducing prices and costs to the bare bone and taking customers away from Amazon, Macy's, J.C. Penny and its own parent company, Wal-Mart.

The deflationary repercussions are enormous.

The China Factor

China is slowing. This puts pressure on commodities which in turn puts pressure on producer prices, then final prices.

A 3 billion-yuan ($496 million) Chinese trust product is on the verge of collapse. $496 million is a tiny amount, but it's also a sliver of the problem.

Bloomberg reports China Trust Products Gone Awry Evoke Soros Crisis Echoes

China's $4.8 trillion in shadow-banking debt, arranged by trusts and fund managers with less transparency than commercial-bank loans, was equivalent to as much as 55 percent of the nation's 2012 economic output at the end of that year, according to Moody's latest estimate.

Goldman estimates the 2 trillion yuan in lending by trusts last year accounted for 10 percent of financing in the economy and a removal of credit flows from trusts would knock 0.8 of a percentage point off the nation's growth rate. Gross domestic product will expand 7.45 percent this year, the slowest since 1990, a Bloomberg survey of economists signals.

The first default of a trust product in at least a decade would shake investors' faith in their implicit guarantees and spur outflows that may trigger a "credit crunch," according to David Cui, China strategist at Bank of America Merrill Lynch in Hong Kong. The government and state banks may bail out a significant portion of bad debt "to prevent a financial crisis," he said. Guangdong International Trust & Investment Corp. failed to pay Yankee notes in 1998, the nation's first default since the People's Republic of China's founding in 1949.

A credit crunch in China will not be good for global growth, and that is on top of China's efforts to ease slowly.

For further discussion, please consider ZeroHedge's report China's First Default Is Coming: Here's What To Expect.

Equity and Bond Bubbles

The Fed (central bankers in general), once again spawned enormous asset bubbles in equities, corporate bonds, and housing.

For discussion, please see Bubblicious Questions: What Causes Economic Bubbles? When Do Bubbles Burst? Can the Fed Prevent Bubbles?

The popping of bubbles is inherently deflationary.

Housing Bubble Returns

Even though household formation by millennials is at a record low percentage, home sales are at modest levels thanks to investor demand in the form of all-cash buying: All-Cash Home Sales Hit Record 42% of Sales.

CNBC reports All-cash offers crushing first-time homebuyers

Insatiable demand from hedge funds, private equity investors and foreign buyers, all armed with ready cash, are elbowing first-time buyers out of the housing market.

First-time buyers tend to purchase lower-priced homes, but all-cash investors have cornered the market on those, leaving little behind. All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from 38.1 percent in November, and up from 18.0 percent in December 2012, according to a new report from RealtyTrac.

The equity, corporate bond, and home bubbles are poised to burst. When they do, demand for goods and services of all kinds will decline. In turn, prices will drop.

Subprime Car Loans

Automakers have been relatively happy lately. Unfortunately, Subprime Car Loans are the driving force.

As the fifth anniversary of the Federal Reserve's policy of keeping interest rates near zero approaches, the market for subprime borrowing is again becoming frothy, this time in the car business instead of housing. U.S. auto sales, on pace for the best year since 2007, are increasingly being fueled by borrowers with spotty credit. They accounted for more than 27 percent of loans for new vehicles in the first half of the year, the highest proportion since Experian Automotive began tracking the data in 2007. That compares with 25 percent last year and 18 percent in 2009, as lenders pulled back during the recession. "Perhaps more than any other factor, easing credit has been the key to the U.S. auto recovery," Adam Jonas, an analyst with Morgan Stanley, wrote in an October note to investors.

The money for subprime loans comes from yield-starved investors who buy bonds backed by them. Issuance of such bonds, which pay higher rates than U.S. government debt, soared to $17.2 billion this year, more than double the amount sold during the same period in 2010, but still below the peak of about $20 billion in 2005, according to Harris Trifon, an analyst at Deutsche Bank.

Technology, Education, Medical Expenses

Competition in electronics, computers, and even computer storage is intense. Falling prices are the norm.

Two days ago Microsoft announced "new worldwide prices" to match Amazon Web Services prices. "Effective March 13, customers will see lower prices for Block Blobs Storage and Disks/Page Blobs Storage matching AWS' prices. We're also making the new prices effective worldwide which means that Azure storage will be less expensive than AWS in many regions."

In general, price deflation reigns in areas where that has been little government interference in the free market.

Two areas of highest price inflation have been healthcare and education. However, online eduction offerings are starting to eat away at what used to be a rising-cost, brick-and-mortar college experience.

The number and quality of accredited online schools and colleges is growing, and costs have come down. On September 3, I wrote Future of Education is At Hand: Online, Accredited, Affordable, Useful

Healthcare Costs Slow

At long last, healthcare costs have started to slow. NPR reports Health Care Costs Grew More Slowly Than The Economy In 2012

Obamacare had nothing to do with the trend even though the Whitehouse tried to take credit, and even though we are talking about 2012, before the exchanges were operable.

Moreover, actuaries suggest the Affordable Care Act likely produced a small overall increase in spending.

Some cite lingering effects of the recession for slowing costs. I suggest it's nothing more than "what can't go on, won't".

Deflation in Terms of Credit

Above I talked about reasons why prices are likely to decline. But what about credit?

Subprime loans are likely to blow up once again. Demand for business loans will plunge. Writeoffs of all kinds will increase. Asset prices including stocks, corporate bonds, and houses will all take a hit.

These are all symptoms of deflation in a practical sense.

What about money supply?

I have little doubt the Fed (central bankers in general) will step on the money supply spigot in response to another slowdown. But credit dwarfs money supply.

Once again, those who view inflation and deflation in the myopic eyes of money supply alone will come to the wrong conclusions about prices of goods, services and assets, just as they did in 2008 when they thought hyperinflation was just around the corner.

Those who understand credit and credit market to market will get the picture right. I repeat my claim that I made in 2007. The US will go in and out of deflation over the course of a number of years.

Deflation is once again nearly at hand, but Europe will be first.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Interesting Facts about Celebrities

Posted: 27 Jan 2014 10:47 AM PST

Actors Who Played Star Wars Characters

Posted: 27 Jan 2014 09:47 AM PST

Dove of Peace Attacked by Seagull

Posted: 27 Jan 2014 08:48 AM PST

Pope Benedict's dove of peace attacked by a seagull.

Hunting Fail

Posted: 27 Jan 2014 08:34 AM PST

I didn't expect it.

Tomorrow:

TOMORROW

Millions of Americans will watch President Obama deliver his State of the Union address tomorrow night, and the folks who want to get the most out of the speech are watching on WhiteHouse.gov.

Our enhanced version has the graphics and charts you need to get the most out of President Obama's plan for 2014. That's why more than 1 million viewers watched our enhanced version last year -- and it's why so many folks have already signed up to watch this year.

RSVP to watch tomorrow night at 9 p.m. ET.

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An Old Timey State of the Union

Featured

An Old Timey State of the Union

This Tuesday, January 28th, we're offering a special enhanced version of the President's State of the Union address. Which got us thinking -- what if every president had one?

Watch the video -- then tune in tomorrow night for the real deal:

Applying Lessons from the Publishing Industry to SEO Consulting

Posted: 26 Jan 2014 03:11 PM PST

Posted by SarahKershaw

"Search has been less and less relevant since Facebook released News Feed. Now we get the vast majority of our traffic via social, and about 1-2% from search"
â€" Chris Dannen from Fast Co Labs

"We benefited a ton from an early SEO audit thanks to IAC's SEO pros, but once the right framework was in place, it's been up to us as content creators to really dig deep into Google Analytics to determine where the opportunities lieâ€¦"
â€" Jordan Shakeshaft, editorial director of Life by DailyBurn

"None" was another person's response to my question about the role of SEO within her company. "There's very little of actual value in it for us." This from a respected British magazine.

In preparation for this post, I started thinking about publishers and their plans for 2014, specifically their growth strategies for the coming year. My thought was that as the publishing industry usually leads the way when it comes to new content techniques and products, it is at the forefront of publishing initiatives. As publishers blaze new trails, we as consultants have the opportunity to learn by proxy, observing what has worked and what has not. These observations can then be applied to our own clients' content creation. In this post-panda arena, the scramble to produce high-quality, compelling content is as real as ever, and lessons need to be learned fast. Let the publishing industry be your guide; come, walk with me.

In researching this post, I spoke to a combination of editors, industry analysts and publishing company employees. The quotes are representative of my contacts and their responses, but it is in no way comprehensive for the publishing industry as whole.

As per the quotes above, the sobering reality is that, at best, publishers see SEO as just one small part of their marketing strategy. Moz's very own legend, Dr. Pete, has been trying to tell us this for a while, encouraging the search community to look beyond rankings. Our goal as consultants is to continue to add value in this altogether more varied landscape. The good news is that we can if we leverage our technical knowledge and use this to present some of the newer ideas, beyond our usual scope, to our clients.

This post is an examination of some of the other opportunities publishers are pursuing this year, along with my dreams for what they could be doing and some tips on how to present these ideas to clients.

What are publishers doing for growth?

1) Investing in site redesigns

The internet was all aflutter earlier this month, when The New York Times launched its site redesign. That project, in addition to generating buzz, traffic, and links, was the site's first major redesign since 2006. The main visual changes include:

Changing of fonts and font colours so it more closely resembles the print edition. The links from the home page to the categories page are now black, not blue for example.
Article comments now appear on the right-hand side of the article, allowing comments to receive the same level of visibility as the article.
Infinite scroll, rather than pagination.
A much more minimal look on article pages with more white space.

This redesign freshens up the look of the page as a whole and the cleaner, sparer UI is more in keeping with what other publications are doing. This video from Fi talks us through its process for redesigning USAToday.com, which has several design features in common with the Times' update.

The insight: Good design matters.

Your access point: When presenting ideas of this ilk to your clients, it is important to be in cahoots with the designers. Your aim is to collaborate in these projects, ideally from initial conception. The advantage of being an outsider weighing in on a site redesign is that you are invariably not bound by the limitations of a CMS or the like; you are free to see the site and where it stands in relation to industry competitors with a detached view. You can represent SEO and call on your experiences with redesigns to offer suggestions.

2) Embracing social

You probably already know that social networks are an increasingly important means of discovery, and amongst the under-45s, they are the most popular method of finding content. Social becomes more and more important as user groups get younger. For example, 44% of 18- to 24-year-olds rely on social, versus just 19% of users over 55. This is illustrated by this graph from the Reuters Institute's Digital News Report 2013:

Clearly, if you wish to build long term trust with your users, social networks are critical for getting your content in front of younger users. It goes without saying that social networks are also now critical for engagement among all age groups.

What is surprising is the extent to which publishers are still missing this opportunity, whilst newer companies such as Upworthy and Buzzfeed are swooping in and winning traffic. This recent article from the Media Briefing visualizes how some of the media players are doing on Facebook, and the newsworthy part is that none of the more established players feature at all. In short, they are not getting it right. The winners in this particular data set are companies that have been formed within the last eight years (Buzzfeed was formed in 2006, Upworthy in 2012); the Huffington Post is the old guard here, and that is only nine years old.

The results are clear Upworthy and Buzzfeed have mastered the sort of content that gets people sharing. Whilst the audience may eventually tire of cats in unlikely situations, photoshop-shaming, and listicles, you can be sure that both companies are investing time and effort to evolve from their current strategy. Mark Suster expanded on this idea in a recent post, saying "I think companies like Upworthy can build really compelling businesses in the future â€" but I'm willing to bet serious cash ... that it won't be by sticking to the playbook [that is, writing content to generate as many social shares as possible] that has worked tremendously well to date."

The insight: For all of the chatter about social networks, publishers are still not getting it right.

Your access point: Present working in social networks as a series of easy-to-implement A/B tests.

Using the Upworthy premise, as outlined below, clients have a quick, clean testing method that should give them confidence to test their social network content.

Upworthy produced a wildly popular slide deck back in 2012 that outlines some of their tactics, which makes for an interesting read. The key takeaway, regardless of the sort of content your client might produce, is the idea of testing multiple headlines. Upworthy writes 25 different headlines for a post, and then tests the headlines in two demographically similar cities within Facebook for an hour or so. They then push the headline with more shares.

This is both agile and data-driven; keep this example in mind, as it's deliciously simple and reasonably easy to implement. It can also be applied to subheadings, images, and more. As consultants, A/B Testing is very much within the traditional scope of your work. By using this experience (and the client's trust in this experience) you are moving into new terrain via a familiar method.

Let social embrace you back

To approach the opportunities of social networks from another angle, Facebook and Twitter are both making a concerted effort to woo publishers. Facebook's algorithm tweak in August 2013 has increased the amount of traffic sent to news sites. Buzzfeed saw a 69% jump during this time, and they were not the only ones. In December 2013, Facebook gave us more insight.

"We've noticed that people enjoy seeing articles ... and so we're now paying closer attention to what makes for high-quality content and how often articles are clicked on ...

"Starting soon, we'll be doing a better job of distinguishing between a high-quality article on a website versus a meme photo hosted somewhere other than Facebook ... this means that high-quality articles you or others read may show up a bit more prominently in your News Feed, and meme photos may show up a bit less prominently."

(Is this the end of memes? Maybe so if Facebook gets its way)

The insight: Facebook is working to keep its users entertained with your content

Your access: Leverage your Analytics prowess; you are an Analytics tiger!

Analyse your Facebook referral traffic comparing August-December 2013 with the previous six-month period and the same period in 2012, and assess how much impact the algorithm update had on your site. In the same article quoted above, Facebook claims that they have increased the amount of traffic to media sites by an average of 170%. If you did not see a significant jump it suggests that the site is not sufficiently integrated into Facebook. The sort of numbers referenced by Facebook (the 170%) are considerable, all publishers would love to see traffic increases in this range, let this be your approach to re-evaluate your Facebook strategy.

But wait, there's more

Beyond sending more traffic to publishers, Facebook is also working with publishers to share the vast trove of data about what is trending so publishers can incorporate it into their stories. Facebook's Public Feed API shares public data and is open to anyone with the functionality. A second API, the Keyword Insights API, is only available to a select number of news organisations. The Keyword Insights API allows news organisations like CNN, Today Show, and BSkyB access to programmatically search through Facebook's public data for anonymous keyword data. This data can be sliced by gender, current city, and age range. There are no plans yet to release it to a wider audience, but it seems inevitable that (if successful) it will be rolled out in the future. (Note, an email to Facebook about this has not yet been answered. I will update in the comments if I hear more.)

The insight: other publishers are working with Facebook, if only in the sense that they are incorporating new data sources for their users.

Your access: Shaming (gently!). Depending on the size of your client. The Keyword Insights API isn't publicly available yet, but you can present opportunities for anyone consistently producing content to get access to similar data. For example, try Mass Relevance, a Facebook Preferred Marketing Developer, which can provide insights and trends from Facebook slicing data by a variety of metrics, including device.

What publishers could be doing

Now we have a general sense of how some publishers are trying to grow, I've also compiled a short list of some of the opportunities or ideas that have not been mentioned thus far. This list is based on stealing ideas from other industries, general common sense, and no small amount of wishful thinking.

1) Embracing Google products

Google's range of products is staggering. For publishers this can lead to confusion about how to use the products available. To address this, Google has created Google Media Tools, a valuable hub designed to demystify many of the products in the roster, explaining everything from hot searches and trends to Google Earth to Google Crisis Response, and references examples of how publishers are using these products. For example, NBC Today uses Google Trends each Monday to give viewers a sense of what was popular over the weekend. At the Google For Media Summit, hosted earlier in January, attendees tweeted about BBC News' integration with Hangouts.

Quick note: Make sure you get it right. This screengrab of a Google search for "bbc news" is from 22nd August 2013, not 2001...

Clearly, it can be difficult to implement, but do not give up. Again, referring to Dr Pete's slide deck, as Google products increasingly appear in the search results, pure organic search results will be forced lower down the page. Embrace Google's products to maximise your client's chances of staying on the first page.

The insight: Competing for organic rankings is only ever going to get you so far. (Again, Dr Pete said so!) Encourage clients to embrace the suite of Google products out there, in the spirit of trying new things and also offering new products to the end users.

Your access point: Your expertise. Most people do not differentiate between Google Search, Google News, Google Local, Google Trends, etc. Anything to do with an internet search engine is your domain.

Your second access point: Training.

Offer your clients and their writers training in using these new products. As an experienced consultant, there will inevitably be a few training slide decks or "best practices" guides in your past. Use this didactic approach to showcase your knowledge and support the clients when they start to use them. As with the BBC example above, it might not be perfect immediately, but persevere.

2) Planning for change

"The pace of technological change will not abate, and to think of our current time as a transition between two eras, rather than a continuum of change is a mistake."
â€" Richard Gingras, Senior Director of News and Social Products at Google

The New York Times appears to have taken this advice seriously, for amidst the redesign fanfare, the most important feature is the Times' decision to change the back end. I interpret this as a commitment to the future; this fluidity is admirable. As referenced in this Fast Co Labs summary of the redesign:

"The new system, however, is more dynamic. "We can continually iterate on the site and take advantages of the trends as we see them happening, rather than having to do a big unveil."

Insight: Change is the only constant. (this is probably true of more than just technology used in the publishing industry)

Your access point: this will be the toughest sell of anything else recommended in this post. Persuading clients that it is important to invest money in the backend system without any proven ROI is difficult. I'd welcome any ideas in the comments, but know this: It still has to be done. The best method I have so far is to use sites like the New York Times as a case study. The theory being that as they can present new ideas quickly, they get more press (possibly with links), and maybe even more readers. By monitoring new products on The New York Times and monitoring their search visibility using a tool like Searchmetrics, you should hopefully see traffic growth. You can then present this data to your clients. The good news is that you don't have to manually check the Times' site everyday; instead, sign up for the free email digests from Mediagazer, as they monitor new product developments.

3) Understanding paywall models

Paywalls are starting to work, and you can be certain that your clients will be watching how competitors are starting to use them. As a consultant, it is important that you understand the variety of paywalls out there and how to implement them. These articles from SEO Book and Mashable are excellent resources to get you started. Google also has some limited information about using First Click Free, their solution for publishers wanting to charge for their content whilst still appearing in the search results. The goal in this instance is to develop an opinion on paywalls as well as an up-to-date idea of how your competitors are using them (and if they are successful).

The insight: As paywalls are beginning to pay off, you will be asked about them

Your access point: Forward planning. By researching ahead of time, you will be ready with an opinion when asked (and you will be asked).

4) Putting their content to work

Publishers are in the enviable position of having plenty of content to play with, however now it's a question of putting that content to work. Here are a few ideas, some riskier than others.

i) Creating new page types

Creating new page types is a classic tactic to get more traffic. If this is what your client is looking for, look at different ways of categorizing your content.

As referenced in Sara Wachter-Boettcher's Content Everywhere, the BBC Food pages tried this approach in 2011 by introducing pages organizing their content by recipe and also by ingredient. This led to an increase of 150,000 in organic traffic, and overall traffic doubled to 1.3 million visitors.

The insight: New page types lead to more traffic

Your access point: Grounding the creative task of thinking of new page types within standard information architecture best practices. Abby Covert, Information Architect extraordinaire, explains it well: there are 5 methods of categorizing. Use these as a starting point for inspiration when thinking about how to group your client's content:

On this theme, I would love to see news publishers in particular tagging their content with zip-codes. I think it would prove a useful resource for tourists, anyone looking to rent or buy in an area, historians, and even schools. This could become even more useful on portable devices if there was an opportunity to tie news stories of particular importance into existing map products. But I'm getting carried away.

Some news organisations are already trying new page types, the AP has, frankly, had some fun experimenting with Archive page types to commemorate pivotal moments in history, and has used its own images and stories to add to the narrative.

ii) Partnering with new businesses

Partnering up with other businesses can be seen as risky because success cannot be guaranteed. One option would be to partner up with some of the newer content creation services on the market. LinkedIn has just bought Pulse, a service that pulls in news it believes will be of interest to you based on your LinkedIn profile.There is also the wistful Kennedy app, which automatically supplies iPhone users with context when taking notes and writing deep thoughts.

Insight: Your client's content can live on in different formats.

Your access point: Introducing this and other like ideas to your client. In terms of publishers, the opportunity lies in being part of the potential newsfeed as it is a valuable branding opportunity. You might be able to generate revenue from supplying products like this with your content.

5) Looking to other niches within publishing and adapting their best ideas.

The academic eBook publishing industry is in a stage of rapid change as it moves beyond the basic eBooks into much more exciting enhanced eBook territory. The broader industry themes are:

Interactivity
Socially-connected groups
Adaptive eBooks

Interactivity

Bookry, a Welsh company, is just one of the many companies out there building interactive components for eBook. The company specializes in building widgets that allow eBook users to play with data tables. This allows users to see how positive coefficient correlation looks and how the data points, when changed, change the graph. By allowing users to play around with the data, you make them think about the material itself. The most obvious use is to improve educational resources, but there's no reason why it couldn't be applied in a broader sense for all publishers.

Socially-connected groups

The idea behind this is that eBook publishers are trying to encourage commentary and interaction with the course material. Most publishers are already offering social sharing as a matter of form, however some eBook publishers are going one step further and developing products that allow all the comments, notes and questions to be stored in the cloud, all in one place. This allows the user to keep track of where she has interacted but also is useful for professors looking to grade a student on the quantity and quality of her interactions. It would be incredibly useful for users to track all comments and interactions in one place, other than on the site of the comment.

Adaptive technology

McGraw Hill launched what they call Smartbooks last year, designed to assess the reader's understanding of the material and then adapt it based on her knowledge of the subject.

Another company, Knewton, based in New York, specialize in adaptive technology and offer education publishers the opportunity to personalise the reading experience. The effect on students' pass rates has been impressive, which supports the idea that tailoring content to the user's comprehension boosts retention. Any publisher or content-producing site looking to launch a body of work for a large audience of differing ages might find these developments interesting.

This is an extremely top-level summary of some of the developments in the eBook publishing sphere, as documented in the Digital Book World Conference held last week in New York.

The insight: use developments in a related industry to inspire your clients, in ebook publishing as per my example, the industry leaders are pushing ebook content in new, exciting, immersive directions, adapt these ideas to suit your customer's content.

Your access point: Your expert curation skills. By taking the time to understand the broader industry trends, you can skim the very best ideas and present them as opportunities to your client. If you assume responsibility for industry developments, you save your clients time and headspace whilst also expanding your sphere of influence.

Have you seen new publishing products, or been involved in building them? Do you have any strong opinions about where content creation is heading next? Please share in the comments below. In terms of reading around on this subject, I've included a limited list of resources that I have found helpful.

Resources

Ebook Publishing - useful for quickly gleaming ebook industry trends
Future of StoryTelling - the best thing I watch; it covers the new ways to tell stories
Understanding Media by Understand Google - a free and useful Coursera course (sign up for the next semester!)

People

Tim O'Reilly - an ebook pioneer. He's thinking at least two years ahead.
Charlie Melcher - of Melcher media, founder of the Future of StoryTelling mentioned above and also involved in Al Gore's Our Choice app, as referenced in this Tedtalk.
Frank Rose - Frank Rose writes beautifully on immersive content, he will inspire you to think about the role the audience plays in telling a story.
Tim Pool - now at Vice magazine. Tim's livestream of NY's Occupy Wall Street has changed the perception of citizen journalism.
Jeff Jarvis - this post from 2008 has some thought provoking ideas.
Chris Danen - Fast Co Labs, tends to write about the future of media and often brings in Fast Co examples.

Products

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luni, 27 ianuarie 2014

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