Seven reasons for SMEs to do more business overseas

Recently I wrote a report for JCDecaux Airport on the SME market and particularly SMEs doing business overseas. It was launched at Coq d’Argent in the City of London.

To write it I did extensive desk research, interviewed six SME businesspeople around the country (Sheffield, London and Edinburgh) and conducted research with Millward Brown amongst 500 SME business people who regularly fly on business.

Within the report I identify seven reasons why doing business overseas is becoming more attractive or necessary to SME businesses. They are outlined below. Incidentally, the fieldwork pre-dated the Brexit vote but impending Brexit only magnifies some of the seven reasons.

 

ONE: Improving Financial Performances

Businesses with the potential to do business overseas might be encouraged to do so because financial performances are improving.

The proportion of SMEs in profit has increased since the downturn. According to the BDRC SME Finance Monitor 80% of SMEs interviewed in Q3 2015 reported making a profit in their last trading period. This was unchanged from Q2 2015 but has increased steadily over time. It was just 69% in Q3 2013.

The economic climate is less of a barrier to doing business overseas for SMEs. BDRC report that, “From a peak of 37% at the start of 2012, the proportion of SMEs seeing the current economic climate as a major barrier has declined steadily and was 13% in Q3 2015. This means that ‘legislation and regulation’ is now just as much of a barrier as the economic climate (13% overall)”

It has led to some optimism. 86% of the business flyers responding to the survey conducted for this research agree that any UK company with the opportunity to do business overseas would probably be wise to take it.

Most SME’s expect their businesses to grow or not to contract. Research amongst SMEs by The Daily Telegraph and Easyjet found that, Slightly more than a half of those questioned (56%) expect their businesses to grow in the coming 12 months.” The Albion Growth report gives a slightly higher figure (61%) for a slightly longer time period (2 years). Albion found that only 4% expected their business to contract.

However, optimism is cautious.

The Telegraph continues, “almost a third of the sample put their business growth estimate at less than 5%, and a further 23pc expect to grow by no more than 10%.

The net balance for both sales and orders are still positive but have fallen. The recent figures from Lloyds’ Business in Britain report shows a dip in the total sales and orders balances over the last six months in 2015 for SMEs.

The same report also pointed to a decrease in the positive net balances for total exports – and especially exports to Europe.

 

TWO: Spreading costs, risks and customer bases across markets

Against this backdrop of cautious optimism another reason for SMEs to do business overseas is to spread their costs, risks and customer bases across markets.

Goldman Sachs reports that SMEs improve productivity by spreading risks and costs across markets.

Alastair Morris, Sales Director of Pryor Marking Technology described the importance of spreading risks as follows: “Today our business is about 40-50% export with product going to over 60 countries around the world and in fact we have distributors or partners in around 60 countries where we have regular sales that we’re shipping product to every month… If some markets are struggling you’ve usually got enough business in other markets that are OK, it brings a lot of stability to the business, spread across different markets”.

His thoughts were echoed in the following advice from a business flyer who completed our online survey, Pay considerable attention to the currencies you will be working with, consider how big movements in those currencies will impact your business. Try to divide a bulk of your overseas income between major currencies, like Dollars and Euro’s. Regardless of how well your business is doing in any given region, currency fluctuations will have a big impact, by hedging your currencies, you should find that as one currency goes down another goes up, mitigating your losses”.

Barclays found the main reason SMEs do business overseas is to spread their customer base. They also found that over a quarter (28%) of SME firms that do business overseas do so to reduce the effects of UK market conditions and to overcome limited domestic opportunities. 18% said it was necessary to help them remain competitive.

The Lloyds’ Business in Britain report also concluded that weakening demand in the UK is seen as a big threat to business for SMEs with one in three identifying it as the main threat to business.

 

THREE: Trading further afield than traditional markets

Spreading costs, customers and risk is all the more possible as new markets open up.

The government are keen to point SMEs to the opportunities in new markets. The following is from the government report Exporting is Great; Export Guide.

While the USA and the EU remain the UK’s largest trading partners, high-growth countries such as China, Brazil and India are becoming increasingly important export destinations. Characterised by rapidly rising populations and GDP levels, all expect significant import growth between now and 2018.

This growth is in part due to the rise of the global middle class. The Organisation for Economic Co-operation and Development (OECD) forecasts that this will double to almost five billion by 2030, presenting a major opportunity for UK firms like yours to export the types of high-quality products and services at which we excel.

Trading further afield does have appeal for UK exporters. According to SME research by Albion Ventures, “15% [of SMEs] are looking at new markets within the EU, while an even higher proportion (19%) are looking outside the EU.”

Alastair Morris, Sales Director of Pryor Marking Technology has found the Indian and Chinese markets have increased in importance for them. Both are taking up more of his time. He says, “The BRIC countries have been a very important story for Pryor. We have a joint venture in India, which has become the market leader in the domestic Indian market, a very important market for us. Obviously having a joint venture there takes a lot of management time. China has also grown and developed very strongly and is now our second largest export market.”

Alistair Hill, CEO and co-founder of On Device Research is eyeing other markets. “Over the past two years we’ve opened up two other offices in Dubai and Singapore. After that we don’t have any plans at the moment but, as I’ve said, we have to be global and there are other territories we’re looking into particularly in South Africa in which we’ve got clients and its of interest and then afterwards we’d love to be in Latin America but it’s a push too far at the moment”.

There are big growth opportunities on offer. Iain Weir, Marketing Director of Ian Macleod Distillers Ltd points out the strong link between a country’s rising GDP and opportunities specific to his business.

“There’s been fantastic growth and that growth has been global. We’ve seen continued growth in developed markets such as Europe, North America but very excitingly growth in developing markets, the BRIC countries, in particular and other small developing markets… You tend to see a correlation between a growth in GDP in a country and a growth in aspiration and demand for Scotch whisky”

 

FOUR: ‘Inadvertent’ and ‘Born Global’ exporters

A fourth factor pushing UK SMEs towards doing business overseas is that they are being exposed to opportunities far sooner, more frequently and in more unsolicited ways. This is driven by developments in technology.

Barclays note that nowadays many SME firms “do not plan to export: they fall into it, or regard it as a part of their normal business”.

They report that 59% of these companies were approached directly by new customers from abroad whereas only 40% actively sought overseas customers.   Existing clients or suppliers introduced 25% of them to new overseas customers.

In fact, 41% of respondent to the survey carried out for this report said that one of the reasons their company does business overseas is that they get enquiries from abroad without really trying.

In his report on small business firms Lord Young writes, “Those firms that are trading online can become ‘inadvertent exporters’ by overseas customers accessing their site and becoming customers. In Growing Your Business, I reported that 25% of PayPal’s activity in the UK comes from overseas trading. 81% of SMEs on eBay export to five or more countries. Last year, eBay launched a new initiative to support UK businesses to sell overseas by allowing them to create a shop for other eBay sites across Europe.”

Lord Young’s report (the report concentrates just on small firms, not all SMEs) quotes a finding that “The internet represents a £19 billion business opportunity for small firms in the UK.”

Barclays believe this new trend means, Having a master plan is not considered as a pre-requisite to securing overseas customers.”

However, they also say that, “There is an argument that owner-managers could be missing out on valuable opportunities to do business abroad by taking a more reactive rather than proactive approach to exporting.”

Not only are SMEs being presented with exporting opportunities they are being presented with them from birth.

A recent Barclays report concluded that British SMEs are ‘Born Global’ these days. By this they mean that they were doing overseas business practically from the moment they were created.

Many of the respondent to the survey carried out for this report work for companies that had been ‘born global’ as 52% said their company had started doing business abroad within a year of being established.

Barclays note that of those SMEs currently exporting and set up during the period of 2007 and 2014, 65% started trading overseas within their first twelve months. This is a proportion that has grown through and after the economic downturn. Just 34% of businesses set up before the downturn had traded abroad within their first year.

Making this finding particularly poignant is the fact that the UK is ranked third out of 14 OECD countries in terms of the proportion of start-up businesses less than two years old in the business population. 21% of the UK business population is made up of business less than two years.

Diamond Dispersions is a company that launched towards the end of the noughties. Sue Wright, Director and co-founder of Diamond Dispersions

describes how they were ‘born global’. “The inkjet market is worldwide. There are three or four big players in the UK but mostly the market is overseas so we decided that we would go ahead and go abroad for the market so we export about 85% to 90% of what we make here and it goes all over the world”.

Alistair Hill, CEO and co-founder of On Device Research, another recently launched company, found his company needed to be ‘born global’ too. “The market is global now whether you like it or not and we can’t help that our clients are all over the world and, as a result, travelling is absolutely essential. If we were just focussed on the UK market we would probably not exist in a few year time because we wouldn’t be able to compete on a global scale so there is no option for us”.

 

FIVE: Move to a digital economy

Digital products like On Device’s cross borders far more easily than those of a company like Diamond Dispersions who ship product around the world. The move to a digital economy means an increasing number of start-up SMEs will find themselves doing business abroad, especially as digital solutions can be used throughout clients’ global operations.

One SME offering a global, digital solution is Showpad. Emma Acton, Senior Director of EMEA Marketing of Showpad notes:

“It’s a global solution. What we often find is that we start with one team or one department and then they start to see the value of the platform and roll it out elsewhere within the business. Sometimes the initial project can be for the entire salesteam straight off.

We might start in the UK and expand out to mainland Europe or vice versa so we might start in mainland and back into the UK or even the US, we’ve got a lot of global customers so they’re a customer of ours in Europe and they’re a customer on North America or Canada as well so sometimes we start with one department or one team and then expand out so travel is definitely on the cards for the salesteam and the sales management to go out and talk to those customers.”

 

SIX: Clients expect

SMEs are finding that clients increasingly expect them to be able to operate in different countries.

89% of business flyers responding to the survey conducted for this report said the sector their company operates in is becoming more global these days.

In fact, 33% said one of the reasons their company does business overseas is that their biggest clients expect them to operate in multiple counties.

Emma Acton, Senior Director of EMEA Marketing of Showpad says, Organisations, particularly the big guys that we’re selling to, the big customers, they expect you to be global; they expect you to be able to do it across the board.”

That expectation had a big implication for the ambitions of the business. They had to develop global ambitions very quickly. “Whilst we started small we’ve had to expand out and grow the business across Europe and North America.”

Alistair Hill, CEO and co-founder of On Device Research, a tech startup business describes the expectation of big clients as follows.

“A lot of our clients are big global companies and they only want to work with clients who work globally. If you only work regionally they don’t really want to know so its not a luxury to us its essential and that’s why we keep on pushing into these new markets”

He too felt the need to quickly develop a global strategy; It’s a deliberate strategy for us. Long term we aim to be a global company and as a result we have offices in different places in the world and clients all over the world. And really our clients buy from us because we are global as well so its an essential part of our strategy and therefore travelling to these places is a business requirement rather than an opportunistic event.”

He also described how the plucky SME with a willingness to enter other markets could steal an advantage over rival companies in those markets.

“We have local competitors in lots of different markets and they are snapping at our heels all the time. They do struggle though because they’re not global however the global companies who are doing what we’re doing, they are incredibly competitive and really we’ve learned from that, that these local companies although they have fantastic capabilities they don’t win the big contracts because they can’t do things globally.”

 

SEVEN: The size of the prize is increasing

As a result, risks and rewards are increasing. Alastair Morris, Sales Director of Pryor Marking Technology describes how the size of the prize is increasing.

“The aspect of internationalisation that is difficult is that customers are becoming more global, becoming more corporate, they’re connecting different manufacturing sites around the world so whereas a company manufacturing in the UK looking for an equipment supplier would be likely to buy it from a UK company the customer is now global and they want to source a single supplier for their global business.

It’s an opportunity for us because it means customers we’ve got we can now supply globally, into lots of different manufacturing sites, it’s a risk for us in that if that customer is a foreign customer that’s sourced a local supplier they then get the bulk of the business so there’s a definite shift towards global contracts which is both an opportunity and a risk.

It is ever more important that we are a global company, that we’re able to support projects in a lot of different countries and we see that on contracts we’re negotiating now”.

The business flyers who responded to the survey conducted for this report feel that risks and rewards are increasing. The majority see greater risks and rewards. Interestingly, more of them see greater rewards than risks.

Notably, 71% of them say their company is pitching for overseas contracts that are worth far more than the overseas contracts being pitched for a few years ago. Around three quarters expect overseas revenues to contribute more to the company’s revenues in the next few years (30% expect it to contribute a lot more, 41% expect it to contribute a little more).

 

 

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Brexit: Blitz or Bug, there’s a capital idea for advertisers

This is a piece I wrote whilst working on a contract as the Interim Head of Audience and Insight at ESI Media.  I wrote it to suggest an angle for a piece written by ESI Commercial’s Managing Director, Jon O’Donnell.  Jon is a creative character who enjoyed stamping his own character on it and embellishing it by linking it to a recent ESI event.  You can read his splendid version here.  In the meantime, here’s mine.

Britain 1939.  Fear. And then Britain basked in sunshine for months before the bombs rained down.

The World 1999.  Fear. And then over the first few minutes, then hours, then days of the year 2000 the Millennium Bug turned from feared monster to laughing stock.  It didn’t show.

Right now economists and advertisers alike are searching the skies for any evidence of Brexit fallout.

The signs are contradictory.  Permanent hiring has dropped but so have unemployment benefit claims.

Business confidence and business activity has fallen but, after a poor August, there are signs of recovery.

Consumer price inflation remains low and retail sales have risen but consumer confidence has dropped.  But now it is creeping back up.

What can you be sure of?

Something you can be sure of is the resilience of London and Londoners.  Bearing in mind London contains more Remainers than Brexiteers this resilience is a sort of Blitz spirit.  They are prepared for turbulence but remain confident.

Londoners typically show more consumer confidence than UK consumers in general.  The respected GfK Consumer Confidence barometer shows this to be still true, even after the Brexit vote.  The latest figures (August) show London to be the first region to climb out of the negative confidence zone.

In fact, London’s full time workers never went into the negative consumer confidence zone, unlike the nation’s full time workers overall.

Advertisers might take heed of confidence in London and concentrate more spend on Londoners.

After all, there is a high level of physical availability of goods in London but Londoners, amidst all that choice, often just need reminding of your brand.

London accounts for more retail spend than Scotland, Wales & Northern Ireland combined (Mintel).

Londoners are more likely to spend without thinking and have expensive tastes. They are more likely to pay more for goods and services that make their busy lives easier. They are more likely to agree that advertising helps them to choose what to buy and, surprisingly, they feel less bombarded by advertising than the rest of the country. (TGI)

London’s workers are more likely than the average British worker to shop for clothes and eat and drink on their way home from work.  They are more likely to stop off at a cinema or theatre (ESI research)

They are also more likely to shop online on their commute too.  Londoners account for two-thirds of all mCommerce spend when commuting (Centre for Economics and Business research).

Brexit hasn’t changed London’s role as a national and global powerhouse yet.  It probably never will.  London’s consumers won’t cease to power the spending and confidence of the nation either.

The Brexit bombs might start dropping soon or, like the Millennium Bug, the bogeyman might never appear.

Whatever happens, advertising to Londoners is a capital idea.

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Will we accept robots on holiday?

Imagine the following scenario. You walk into a hotel after a long flight and the person behind the hotel desk isn’t a person at all but a robot. The scenario sounds futuristic but there are already robot receptionists in some hotels.

How would you feel?

It wouldn’t feel very ‘human’, of course, but then it can feel rather less than human when you’re faced with a real but incompetent human receptionist. Robots make less procedural mistakes than humans and they don’t get tired.

I was commissioned by the travel company Travelzoo to run a multi-country study investigating the extent to which people across the world are ready to accept robots in the travel industry.

Travelzoo were delighted with the amount of PR that the research generated, from Lonely Planet to CNN to The Mirror and beyond. It exceeded the expectations of their award winning PR team.

The countries covered were the UK, Germany, France, Spain, US, Canada, Japan, China and Brazil. I used Nordstadt for the fieldwork. Over 6,000 respondents around the world answered our questionnaire in local languages. All had recently booked travel online.

They were asked the very same scenario this article opened with; you walk into a hotel and a robot is the receptionist.

Perhaps unsurprisingly the majority of respondents (83%) prefer the idea of human hotel receptionists to robots.

However, they were then asked which they would prefer if the robot receptionist was a little more competent than the human. At this point 59% opted for the machine, 41% stuck with the human.

You might argue that it is natural for people to opt for competent service or you might be surprised at our willingness to welcome the machines. Now let’s move on from receptionists to waiters.

In a scenario in which a human waiter and a robot waiter are equally competent, 81% of us would prefer the human, a similar figure to the receptionist scenario.

If the human waiter were less competent than the robot waiter, however, the majority of us (56%) would still want the human to wait our table. People didn’t naturally opt for competence in this scenario.

The Europeans, especially the French, were least likely to want to replace less competent waiters with efficient robots.

It seems that people can accept the idea of robot receptionists more than they can accept robot waiters.

You might think the issue is mobility. It is easier to imagine a machine working behind a desk than negotiating the tables at a pavement café. However, people would accept the use of robots as hotel porters more readily than they would accept robot receptionists. Porters negotiate miles of crowded corridors and take several lift journeys every day.

Similarly, the idea of robots bringing room service was more acceptable than robots working on the reception desk. Only the French would prefer a less competent human bringing room service to a competent robot.

Women were similar to men in the extent to which they would welcome robot porters and room service providers (i.e. roles that involve coming to the hotel room door), which suggests there is no personal security issue at play here. We are simply more open to some travel jobs being taken by robots than others.

People were especially reluctant to replace airline cabin crew and the customer facing crew on cruise ships with robots. In all countries the majority thought humans could do these jobs better than robots. Notably these are jobs that, in emergencies, extend to directing people to life rafts and emergency exits.

After these two jobs it is the humble bar tender we’d prefer to be human. Perhaps bartenders are lifesavers in a different sense. Only the Chinese were happy to see the bartender turn robot.

The majority of people are also comfortable with the idea of robots being used in nurseries in holiday location, assisting human childcare workers. Surprisingly parents of young children were keener on the idea than average. Perhaps their desire to see their darlings entertained is greater than any fear of robot nursery assistants.

In general, the survey uncovered more comfort with the idea of robots replacing roles in the travel industry than expected. Overall, 61% said they would be comfortable with the use of robots in some roles. Overall, perceived advantages of robots in travel industry jobs outweighed concerns.

The biggest concern was that they take away jobs. In unemployment-hit Spain this concern outweighed all the perceived advantages of robots in travel.

The French and Germans worried about robots being too impersonal. The biggest fear of the British is that robots wouldn’t understand slang or irony. In these three countries the main concern was as prevalent as the greatest perceived attraction (efficiency).

In all nations there was a mixture of fear and optimism about the coming of the robots to the travel industry. Optimism outweighed fear on balance.

It is fortunate that we err to optimism as 77% of us expect robots to be a big part of our life soon. The Brits were the most sceptical but even 69% of them expected robots to be a big part of life soon. The robots are coming and, it seems, they’ll be pretty well accepted on our holidays, even if we can see them in some roles more than in others.

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Millennials research by Metro and MailOnline

Recently I led a research project about Millennials for Metro and MailOnline. It was launched at Advertising Week Europe as ‘Millennial Rules’.  Currently it is shortlisted for a Mediaweek award.

The topic of millennials is broad, confusing and often seemingly contradictory. My pitch to win the project was based on the idea of a central hub of insight that would be the ‘go to’ destination for agencies and advertisers seeking to understand the generation. It should lessen confusion and address contradictions rather than add more of both.  

The central hub that was created can be seen here. It contains nine rules for advertising to millennials, eight millennial traits, a competition for agencies, presentation slides, infographics and an expert guide. Hats off to the Metro and MailOnline teams for producing such a useful and good looking website.

You can read all about the full research methodology in the expert guide. I got to work with the Bournemouth University Faculty of Media and Communication (and met some wonderful millennial students there), CrowdDNA who partnered me for the qualitative work and the desk research and Alligator Research who I used for the quant.

 Below, as a taster and content for this blog, is a section from the nine-chapter, sixty page experts guide. Such a big report is there to ensure every brief line in the slide deck can be traced back to a fuller explanation. It ensures nothing gets forgotten and research departments have all the facts, figures and findings. This particular section deals with social media.

…..

Young people have always felt insecure about how others see them but in the millennial story it would be impossible to untangle social media from the pressure to be perfect. 34% of millennials say social media forces the to be vainer, according to Adjust Your Set.

Social media not only triggers insecurity about looks but also the fear of not getting on in life too.

 “With everything we see on social media this can make us feel overwhelmed. We see constant achievements or people the same age so much further ahead in life. Seeing all this on social media sometimes can make you question yourself and doubt what you have achieved” (Older Millennial).

Millennials live lives that only yesterday’s celebrities would have recognised – always in front of a lens, always having to make what they are doing seem ‘cool’.

Any given moment could turn into a photo shoot.

They are on a quest for physical perfection. Today’s twenty- somethings are three times more likely to go to the gym than their counterparts were 30 years ago, according to Holland and Barrett. The use of protein shakes is high, exercise is personalised (meeting personal physical goals rather than being team sport focused) and lifestyles don’t allow for anything that might cause physical damage so smoking, drinking and drug use is declining amongst the young.

Yet all this work isn’t creating more overall confidence. Rather, the bar is simply set much higher. According to Holland and Barrett, only 3% of the younger generation feel extremely confident about their body shape, whereas more than 11% of those aged over 50 said they felt secure about their appearance when they were in their 20s.

Older millennials have started to grow in self-confidence and put the importance of social media into perspective.

“When I was younger I would say I was more susceptible to social media but now I am older and more experienced I am able to see the positives in my life and hold them in higher regard” (Older Millennial).

“On Instagram and Facebook people only really post when they are doing interesting or exciting things. You can get a misguided impression that they are somehow more interesting than you” (Older Millennial).

“Whilst I use Facebook, I do struggle with reading people’s declarations of their ‘perfect lives’ whilst I’m sitting at home in my pyjamas. I rarely post now and that makes me feel a lot more secure in myself” (Older Millennial).

They still take a lot of pleasure in social media and buy into the desire to show an idealised version of their life.

“Social media is a guilty pleasure. Of course there’s pressure. I feel the pressure of it to show how brilliant my holiday is” (Older Millennial)

But they see other uses for social media. Initiative reported that the older millennials are less likely to use social media as ‘Social Me’ (self focussed with emphasis on marketing themselves and boosting their profile) and more likely to see it as ‘Social We’ (a (a support network linking like-minded people and old friends)

The entrepreneurs see social media as a springboard from which they can launch their businesses. Crucially they can use it for free, be creative and make their own story part of their business.

“Social media gives you the freedom to make money for yourself and that’s what’s amazing about social media – if you want to start a business or promote anything you can do it without paying someone to do it for you. But from a social sense, I find it so stressful, same old thing, everyone trying to portray their perfect lives. But there is so much opportunity on an entrepreneurial level and that’s why I think it’s a good thing on balance” (Older Millennial).

The younger millennials we met were thoroughly bought in, immersed in both the pleasure and pain of social media. A millennial who is also a teacher told us;

 “You’ve got girls taking selfies when I’m trying to teach or videoing me and putting it on Facebook. I thought I was tech savvy but I’m not. They know so much more than I do. They try and charge their phones in the classroom saying oh no I’ve only got 20% battery and I still need to get home. Their whole lives revolve around their phones” (Older Millennial).

And here’s what some of the students we met at Bournemouth University said;

“I would definitely say I’m a different person on social media – you try to be the perfect you! You only post the pictures in which you feel you look your best on to Facebook and Instagram. You are seeking social acceptance and appreciation” (Younger Millennial)

“Many people feel pressured to keep up a positive image on social media, normally an image that suggest they’re succeeding in life and this is depicted by things such as materialistic items, beauty and exotic holidays etc. If you’re not seen this way, people feel they’re seen as a failure’’ (Younger Millennial).

“On Instagram I am a reputation-conscious monster, desperate to portray a persona of ‘coolness’ and ‘attractiveness’ to those who don’t know me in person’’ (Younger Millennial).

‘Likes’ on social media are important to this group.

“Instagram is a young person’s medium, where ‘likes’ are as valuable as money and maintaining an attractive profile means everything!’’ (Younger Millennial).

 “Social media is self-promotion. It is gratifying when your post gets lots of likes or retweets” (Younger Millennial).

“I know some people who have posted a photo and not had ‘enough’ likes and have then deleted it. They think if people don’t ‘like’ you online then they don’t like you at all” (Younger Millennial).

On balance, they would rather be ‘liked’ in person (girls said they would rather someone in a club said they really liked their dress than just get a like on social media) but a social media ‘like’ can theoretically happen anytime, not just when out and dressed up. This group is ever likely to be in front of a lens and ever likely to be critically appraised. There are very few hiding places.

They have adopted tactics to maximise their chances of getting a ‘like’. We heard about “Prime-Insta Time” from a student who times her use of Instagram to match the maximum number of eyeballs that will see it.

We also heard about the role of purchases in the pursuit of ‘likes’.

“I have one friend who has to put a picture on Instagram most days and if she goes shopping the first thing she does is take a photo with the new clothing she has bought’’ (Younger Millennial).

“Many Instagram users have bought things based on the ‘rep’ and number of likes they will receive and I am no exception” (Younger Millennial).

No wonder then that millennials are said to be in constant search of affirmation. Friends play an important role and their advice can be sought on potential purchases even when they’re not in the shop to see for themselves. We met millennials who said all shops should have Wi-Fi so they can send pictures of potential purchases to their friends and receive their instant answers.

But it is also important to remember the role of competition in their lives. They are competing with the very people they are seeking affirmation and ‘likes’ from.

The more competitive amongst them were posting pictures of purchases already made. They were not asking for advice on purchases to be made. It is an important distinction because it says, “here’s what I’ve done” and shows they’ve taken another step. One more step forward in the competition – one more step towards perfection.

 

 

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Extra curricular reading of business media

Recently I ran some research for the PPA around business media.  It was a survey amongst people on the databases of business media companies.  Some of the quirkiest findings were around extra curricular reading.

My research showed that 61% of respondents read business media in the evening, after work. 44% read it at the weekends and a staggering one in five of us read it on holiday (however, that last stat became less staggering when I realised that I do it). In fact, only 28% of the respondents did none of these things (presumably only reading business media at work).

There’s an obvious link between this behaviour and another stat that said 71% of them like to take their time with business media. I remember talking to an Engineer who had been scouring his place of work to find back copies of the The Engineer magazine to take on holiday with him. A deck chair and a pile of The Engineers is heaven for some.

Of course, a lot of this extra curricular reading is done via internet enabled devices.  It is done on the spur of the moment and doesn’t require being as pre-planned as our engineer friend.  Such devices blur the lines between work and home – or work and the beach.

The research found 67% of us are looking for breaking news on business media websites and that happens a lot via digital platforms outside office hours. I suspect a study of fortnight holidays would show more of that in the first week than the second. It takes time to wind down and we live in an ‘always-on’ society.

It is an opportunity for business media and a chance to use analytics to find out what articles are being read in the evenings, at weekends and during school holidays that are less read during work.

Now, where did I put that copy of The Engineer?

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The immersive experience of print

This week I was privileged to present at the PPA Business Media Summit at the Intercontinental Park Lane. I shared the stage with such luminaries as Bruce Daisley, MD of Twitter and John Barnes, MD of Incisive Media. The moderator was editor and writer Jon Bernstein, formerly of The New Statesman and Channel 4 News.

My role was to outline some research findings that the PPA had commissioned me to produce. I ran an online survey, using Alligator research, amongst 400 professional people sourced from the databases of the PPA’s Business Media publisher clients. They ranged from engineers to lawyers, financiers to marketing and pharmaceutical professionals. Business media spreads far and wide.

Anyone who has ever been employed knows business media does a good job and my objective was to put some figures behind the great work it does. Jon asked me some interesting questions in the Q&A that followed my presentation.

This blog piece is about the first question he asked me. It was about the fact that respondents were more regularly reading websites than the business media print products. What of the quality of that engagement, he asked? Does the immersive nature of print give it the upper hand?

Firstly, comparing regular reading of print and online is a little ‘apples and pears’ because print has an issue date and websites are constantly updated. It makes it hard to choose a common metric. For print I used “read at least one out of every two issues” and for websites, “at least once per fortnight”. The same? Not really, but close.

The issue date issue is part of the answer to Jon’s question. A magazine’s arrival is an event. It isn’t as ubiquitous as tap water; it’s a glass to enjoy. 71% of my sample liked to take their time reading business media, though 67% are constantly checking business media websites for breaking news.

The Engineer is a business magazine that went out of print a few years ago. Centaur brought it back – one of several print publications to do a Lazarus. Engineers told me how ecstatic they were to see it come back yet none of the content disappeared, just the ‘event’ and the magazine moments; the magazine’s arrival, the moment, as one engineer told me, that you’ve set the machine running and can sit back with the magazine. No dodgy Wi-Fi issues or grubby fingers on smart screens. The only issue is the one in your hand.

Some of us have been around print for years and we have habits and associations that are hard to break. Recently I was handed a free NME at a tube station (that companion of our youth is now without cover price) and it felt a bit guilty and a bit special to just be given one. It went in my bag as something to look forward to.

However, I was in a focus group with the youngest of smartphone touting millennials the other day and they told me about the joy of print; glossy fashion magazines with page after page of delicious fashion advertising.

So it isn’t just about the old romantic notions of print held only by those of us who remember a pre-digital world. It is about appropriate platforms. Print is personal and can look beautiful so it appeals across the ages.

But then my iPhone is personal and can look beautiful too. The web might have started cluttered but it needn’t go on that way. Mobile first strategies are making our screens immersive, not despite the small screen but because of it, because it is personal and beautiful. I’ve never believed that screen size matters, just design and resolution. I know a lady who tells me her husband read a novel on his watch! That anecdote sounds less and less unusual every time I tell it.

The design of apps makes for immersive reading too. Much thought goes into keeping us in their walled gardens. As a result, Enders tell us that 86% of the time we spend on connected devices is spent within apps. 36% of those with a smartphone in my PPA research had downloaded a business media app and 27% of them used it everyday. Only 2% never used it. Get someone to download and they will use it. Yes, the youngest members of the sample were more likely to have downloaded business media apps but so too were those in the boardroom. It is certainly an emerging behaviour.

App reading can be complementary to print and website reading. Those reading a print business media title regularly were very likely to have downloaded an app and so were those who read business media websites regularly too. It’s not one or the other; it’s about appropriate platforms. I like the Kindle app on my iPhone on which I read my Amazon purchases. I can immerse myself in my book, one handed, hanging onto a tube train – but I’d rather be on a sofa with the actual book. The app is just immersion on tap.

Why don’t I read via a screen all the time? Why don’t people in my research just give up on the print product? In a nutshell it is because it requires a different sort of energy and the information I read is later recalled in different ways.

Research by NewsUK last year concluded that reading via a tablet triggers more electrical activity so it encodes into memories faster than print. Print is a less stimulating though less tiring way to read and so it ends up encoding as much into our memory as tablet reading does but over a longer period. They argue, therefore, that simply comparing dwell time of print and tablets overlooks the energy spent.

Researchers in an Israeli Institute of Technology in 2011 had people prep for a multi choice exam either using screen based or print based course material. When given only 7 minutes to prepare both groups did equally well. When given an indefinite period to prepare the print group did much better. The researchers put it down to print encouraging people to read with goals and revisit paragraphs to ensure they understand. Behaviours consistent with the NewsUK view that print is a slower boiling pot.

If there is a lesson for business media publishers in all this it is that you don’t need to make screen reading exactly like print reading. Publishers tried that and it isn’t a bad starting place because it made them de-clutter. However, digital reading will be all about interactivity and personalisation in future.

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We need a monument of hope in the age of the Shard

This is a piece I wrote for Mediatel in 2011.  At the time I was working at The Daily Telegraph and we were promoting a roadshow of media buying agencies that The Telegraph was undertaking.  The Shard was a recent addition to the London skyline and gave me a striking metaphor to begin with.

The Shard towers over London, a lean, tapering, thrust to the sky. It’s magnificent but it’s not kind. The contrast with the Gherkin couldn’t be starker. The Gherkin, built in 2003, before the financial crisis, is plump and jolly – a monument to a time of plenty. The Shard tells the story of the new world but there’s optimism missing in its sharp narrative.

In these dark days the future is uncertain and we need a monument to inspire hope. After the ’87 crash, New York adopted a statue of a raging bull to represent financial hope but I propose that London, not least ad-land, needs a statue of slightly balding man in his late fifties. He doesn’t need to look aggressive or triumphant or even saintly, he could just look a bit, well, like someone’s dad.

He is your hope. The country is feeling the pinch of the financial crisis and things are set to get worse. But we are not all feeling the pinch equally, we are not all in it together as the government tell us. There is a wealth gap opening up in the country and it’s not between north and south or the franchised and the underclass; it’s between the generations. Your baby boomer parents have all the money and for them, the party isn’t over.

This is a story of luck. The baby boomers were born in a post-war world. They were expected to be the generation that fought the Russians but they ended up riding a wave of good fortune and they sucked up all the wealth. Nobody could imagine the extent to which the babies of the fifties would have it so good.

“Average Baby Boomer” is the title I’m giving my proposed statue, or “Brian”, to give him a name. He bought his first house for a ninth of the price his average son paid this year for his average property. His son is in negative equity, having only just got rid of his student debt but “Brian” has made a mint from property. His present mortgage has practically gone but he is one of the baby boomers who bought a second home recently because his son’s generation couldn’t get the credit to benefit from falling house prices. He and his wife are busy furnishing it.

Brian was once a bright lad who got himself a good job as an accountant, at a time when there was more social mobility. Bristol University research shows that, on average, accountants of Brian’s generation were born to parents who had average incomes. Those taking up accountancy jobs in later generations had parents whose incomes were 40% higher than the national average.

Social mobility is part of the baby boomer success story.

Brian has climbed the tree as the years have gone by and he’s at a level in his company that means his wage has increased by over 25% in ten years. For those lower down the tree, like his son, wages have barely kept pace with inflation.

When he retires he has a final salary pension, the level of which was worked out by someone expecting Brian to live no longer than seven years after retirement but, he’ll keep going until his late eighties, spending most of that time active and spending. No such luck for the rest of us, a PWC survey found recently that 94% of major employers intend either to reduce or axe current defined benefit provision.

I mentioned that Brian’s an accountant but he’s also the bank manager of the fastest growing bank in the UK, the bank of mum and dad. According to research from Sainsbury’s Life Insurance, parents in the UK have forked out a staggering £34 billion in loans and financial gifts in the last year alone. This includes those who received a total of £8.4 billion for mortgage or rental deposits or payments, £3.5 billion for home improvements and £2.2 billion to pay off debts.

Deloitte says household incomes are at their lowest since 1955 and Mervyn King says we face the biggest downturn either since the thirties or perhaps it will be the worst yet. None of us have experienced anything like this but it is Brian’s money that will make our world keep turning.

He represents hope. His statue might not be as attractive looking as the figure of someone in the 25-44 age groups but he is cast in gold. He is the opportunity now for advertisers brave enough to think beyond their traditional targets. For many advertisers who target 25-44s, a significant amount of their existing customers are 45+ anyway but they are often left un-targeted. Times have changed. When the young could get credit, it was easier to ignore this large, rich group of people but that was in Gherkin time, not the age of the Shard.

As part of the Telegraph Works programme we’re visiting advertising agencies on a roadshow, bringing an exhibition showing just how the Telegraph works. As part of the day advertising director, Nick Hewat is doing a couple of talks in which he discusses Brian along with characters representing younger generations. It’s compelling stuff and if that roadshow comes to your agency do go along. He makes a thought provoking case and, you never know, if he convinces you, you might just join my campaign for ad-land’s new monument to hope.

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