As we wrote in a previous post, more social media stocks are going public this year. LinkedIn has beat Facebook, Skype, Zynga, Twitter and Groupon to the metaphorical punch. The price per share at closing time May 19th had settled on $94.25 more then doubling the IPO of $45. That means that the market value represents almost 37 times last years sales for LinkedIn or $8.9 billion. Lets compare this to Google Inc’s shares that are valued at just under six times sales for 2010.
Warning signs have been seen with other stocks this year according to The New York Times. Renren, the Chinese version of Facebook went public in early May at $14 a share and quickly shot up. The stock now sells for below the original opening price. All this poses difficulties for underwriters to accurately price a social media stock ahead of time. Some suspect that people are so hungry to buy Facebook that buying LinkedIn shares appeared to be a good second place option.
If the first day of LinkedIn’s IPO offers any insight on how the next social media stocks will rise; then the key may be buy early and sell at the end of opening day. For those that did this saw their money double in 9 short hours. At the same time offerings were only 10% of the companies total shares and considered very hard to get.
Ahh, sit back and watch the bubble expand.
At my last position it was used in office to ask a quick question or discuss lunch plans. My first interview with Andrew, aka The Brand Chef, was over Skype. Last night I was going through my old business magazines and ran across an Inc. article from 2005. The article was about eBay buying Skype for $2.6 billion. I thought to myself, ‘Didn’t Microsoft just buy Skype?’ EBay admitted to overpaying for Skype in 2007. This could be true, but perhaps they just bought it too early.
Fast-forward to May of 2011 when Microsoft announced an agreement to acquire Skype for $8.5 billion. Is Skype really worth three times what it was worth in 2007? Soon after the agreement was announced The Financial Times said that this may once again lead to a new tech bubble; since there isn’t a clear value long term for these new companies. This acquisition comes on the heals of LinkedIn’s plan of an initial public offering. It seems to only be a question of time before Facebook and Groupon also go public. I for one will look into investing in these companies, but fear they will start out at a high per stock price only to drop a couple quarters later. If Google’s IPO is any indicator the stocks will have vast highs and lows. On second thought I will continue to use these free services to there fullest and leave the gambling to others. After all we know what happens to bubbles.
Woah, baby… what a year 2010 has been for Marketing Communications! And 2011 looks to be just as interesting!
Since I went from “Gainfully Employed” to “Gainfully Unemployed” this year, I think I have a slightly odd perspective of the economic climate in 2010 and where 2011 is headed.
I left my “Traditional” agency position in 2010 due an overwhelming trend of companies utilizing more nimble, economical and progressive resources. The interest in working with a traditional agency model – layers of bureaucracy, pricing to sustain monster overhead costs, lethargic action – was waning. And while our government was telling us the economy was gaining ground, I was watching the foundation in the Midwest crumble under our feet. Thus, traditional agency clients were backing off their marketing budgets or dropping out of the picture altogether.
Small businesses, on the other hand, were hopping. I watched as agency after agency reduced their staffs to a percentage of their former glory to keep up with the changes, but in the long-run, the 1990’s model of marketing communications was too burdensome and the smaller houses were picking up the slack and running jetting into the future.
It was no longer “Call such-n-such at Name-Name & Namerson Agency to get that ad rate or media buy quoted.” Sammy Smallbusiness was wearing that hat, as well as all of the other hats!
From creative director/writer to media buyer and interactive developer, one and two-man shops were trouncing out the larger agencies just by streamlining duties saying, “There are no boundaries,” and consolidating costs. Instead of Client A needing to talk to an entire team of marketers to get a campaign off the ground, they simply walked into a coffee shop and had a meeting with one, maybe two or three motivated and talented small business owners and the ball was rolling.
“…companies have hired temporary workers in significant numbers. In November, they accounted for 80 percent of the 50,000 jobs added by private sector employers, according to the Labor Department.’
“Workers are accepting that jobs and employers aren’t a lifetime ticket to anything. Companies are realizing that working in agile shorter term chunks and projects with highly skilled (and often cloud based) resources brings new blood, new expertise, and results with far less risk.”
Just as in the “.com” boom of the ‘90s there were thousands of start-ups that opened their doors and within a year (for some, even less time) were closed.
Before the mass exodus of agency and marketing staffers begins, PLEASE remember this:
Small businesses that are truly succeeding in today’s economy are pioneers not copycats. They evolved out the stagnate protoplasm of agency dino-dung and are fulfilling a need that was lacking in the previous economic model. (Efficiency, innovation, focus, flexibility, etc.) In 2011 they’ll have to sustain the excitement of that evolution as well as build on a shaky foundation.
While savvy trend-watchers are already taking advantage of the change in attitude when it comes to small businesses; just as in any economic boon, somewhere soon, someone will hang out their shingle and you’ll hear a quiet, yet powerful “pop,” and the air will start escaping quickly.
I’m interested to see what happens in 2011. I do see the marcomm world continually splintering off into inspiring, outstanding small businesses. But I can also smell the aroma of stale ideas and regurgitated planning from 2004. I hope, for the sake of those moving into the arena, the planning has been thorough, unique and focused on delivering a TRUE branding experience.
Personally, I’m drawing up detailed plans for world domination. If that world includes you, please beware…
Andrew B. Clark
The Brand Chef
In a conversation with one of my Des Moines social media buddies this morning, I was reminded that with the onset of CreateWOWmarketing, I’ve (As CreateWOW AND TheBrandChef) fell off a bit on my posting regularity. Sure, it’s one of those “The cobbler’s kids have no shoes” situations. How can I create content and meaningful posts when I’m spending 12 hours or more a day doing it for my clients?
Then I remembered a post I’d written over at The Brand Chef. It kinda shook me from my “production-boy” slumber… the contents of THAT post are below.
Let me know if it rings a bell with you… my other marketing brethren out there…
Have time? You’d better find it…
Economic times are tough for marketing and advertising agencies. Businesses are backing off marketing budgets. Some are folding their hands and letting fate take their brand into the abyss. Heck, some are closing the doors all together. And that directly affects the marketing and agency professionals that depend on them for their own livelihood.
So what do you do in hard times? What do you do when times require tightening the belt or cutting back? Hopefully you do what we all tell our clients to do… “For God’s sake, keep marketing!” Without constant visibility, people (even customers you’ve depended on for years) will forget about you. To us marketers, that’s obvious, right?
Over the last 18 months, I’ve heard marketing “pros” and agency staffers (from receptionists on up to CEO) saying some of the oddest things. Things like, “The work just seems to have dried up.” and “I’m not getting any callbacks.” or “Clients are ‘InSourcing’ all the work we’d do…”
Solution: How about you “SPEND” your way through the downturn? YES, SPEND! And I don’t mean doling out your hard-earned cash for new equipment or some rock star biz-dev stud bolt. I’m talking about strategically investing what you DO have, time, into generating those ever-elusive new leads.
I’ve put together a list of five simple (and VERY economical) actions that marketers and agencies can do to churn up new business. And all you have to remember is “SPEND…”
S = Social Media Marketing: Many “traditional” agencies are still having a hard time figuring out the power of using social media for marketing. If your agency or marketing team hasn’t jumped into the social media waters yet, I encourage them to get in there! It’s inexpensive (costing little more than time – and we all know you have oodles of that) and it has outstanding targeting capabilities. You just need to find and join the right conversations.
P = Public Speaking: Can you think of a better way to position yourself as “thought leader” of your chosen field? Associations, civic groups and chambers are always looking for great information and presentations for their meetings. Think of standing in front of 100 business owners looking for marketing advice. It’s a captive audience and each time you present your message, it’s honed to a sharper and more effective tool for your other marketing efforts.
E = Email: Do you know what 93.6% of business owners do every morning when they walk into the office? They check their email! Why not be in front of them, IN their office, ON their desktop on a regular basis? There are plenty of FREE or LOW COST broadcast email services out there (my favorites are AWeber and MailChimp). Get a sign-up form on your website. Set up your target list. Create a reason for them to WANT to open and engage with you (remember you are a marketer). Then, and this is the MOST important part, KEEP DOING IT AND FOLLOW UP!
N = Networking: If the calls aren’t coming in then you need to get out and start introducing yourself to your audience again. Sitting in your office, looking through PeachTree or QuickBooks isn’t going to get people interested in what’s going on in your world; nor will it help your attitude much. Not interested in chamber functions or professional associations? Then get involved with your church or a board for a non-profit. I don’t think God frowns upon doing business between the pews as long as you thank him once-in-a-while.
D = Dial The Phone! This is one that should go without saying, but for some reason, those that choose “Communications” as a profession seem to HATE talking on the phone. Ridiculous! As I said above, FOLLOW UP! You’ve spent time working your social media, speaking engagements, emails and networking, now just give ‘em a call! You need to reach out and touch someone (more than once) before they’ll turn their attention to you. Sure, the phone is cold, impersonal and intimidating, but it can be the best lead generator in your office – if used correctly.
Guess what you do for a living. You market! You advertise! If you’re able to do it for your clients, then why is it so difficult for you to do it for yourself? Even if you only do a couple of the SPEND tactics, isn’t it better than sitting on your thumbs waiting for the phone to ring?
How do you generate new leads when times are tough? Do you SPEND your time wisely? If you don’t do it, someone else will.
Keep Cooking (at all times)!
Andrew B. Clark
The Brand Chef