PeppercomBlog

H1N1. That’s all we need.

Posted by Matt Purdue

Just as the global economic slump seems to be bottoming out, the World Health Organization has raised the pandemic alert to its second-highest level. WHO expects that the flu outbreak could go global, which would have a serious impact on multinational commerce.  

My colleague Carl Foster over at the PepperDigital blog has been following the news coverage of the H1N1 outbreak. When he says that we’ve got to temper the feverish news reports with reality, he’s got a point. But, frankly, this H1N1 problem seems serious. To put this in perspective, since the so-called bird flu (H5N1) virus first erupted in 1997, it has killed millions of birds, but “only” 248 human beings. The low mortality rate is due partly to the fact that H5N1 seems to be mainly a bird disease. The virus has a hard time mutating to the point where it can attack humans. 

H1N1, however, appears to be better suited to breaking the “species barrier” and moving from pigs to humans, and then from humans to humans. The virus has already killed more than 150 people. While it’s important for all of us in the communications sector to stay calm and transmit the facts, it’s also important to be prepared for things to get worse. How are your clients set up to handle a potential flu outbreak in their communities, in a supply hub, or even in one of their offices? Do they have the ability to communicate calmly, quickly and accurately with employees and business partners? Do they have a plan for quashing rumors as they happen via Facebook, Twitter, etc.? Are they ready for any press queries should something unfortunate occur? 

As WHO declares that “all of humanity that is under threat,” we owe it not to just to our clients but also to society as a whole to make sure we’re doing all we can to be prepared and make certain that cooler heads prevail.

Pet Airways for Aristocats

Posted by Milos Sugovic 

Just when I started believing in the credit crunch, along came funding for a stupid idea – a pet-only airline offering first class pet travel. Now this might not be the most ridiculous service offering ever, but it’s definitely top-tier and belongs with the Snuggie and these Chindogu Japanese products mocked on Freakonomics. It turns out I was wrong: stupid ideas can make you money if you can connect with the right consumer. And that’s how Pet Airways, among other capitalist ingenuities, will “take off” on July 14th this year.  

The airline’s mission is to guarantee “Pawsengers” with safety and comfort when flying, promising that pets are cared for by a trained crew of pet attendants.  Each time your loved one moves from the Pet Lounge to the limo or makes a transfer, the owner can track and trace their progress. Oh, and in case you’re curious, there’s a frequent flyer club called MyPAWS which comes with perks such as discounts at their online store, pet-friendly hotels, as well as at 1-800-PetMeds.  There’s no question about it: Say goodbye to Double Happiness Travel, I’m flying to Washington D.C. using Pet Airways!

“Stress Tests” Communication

Posted by Matt Purdue

We’re on the verge of one of the most significant moments for communications professionals in this decade. As the New York Times reports, the White House is preparing to announce some of the results of the “stress tests” imposed on the 19 largest banks in the country. As you might recall, banks were forced to conduct these tests in an attempt to find out just how their balance sheets would perform under various adverse economic scenarios. The banking system has been crippled over the past 18 months as banks have had to lower the values of the assets they hold. This trouble has spread from the banking sector into the overall economy, prompting a global recession (check out the link for an intriguing article on what defines a recession).

To attempt to get to the bottom of just how bad things could get, the Obama administration ordered these tests. Since the government made this decision, it’s been unclear about how test results would be disseminated to the public. Naturally, some observers fear that revealing the results will cause multiple bank runs (a la “It’s a Wonderful Life”) and send depositors scurrying from “bad” banks to “good” ones. Ironically, this is exactly the kind of terror the government is trying to avoid. 

Double Happiness Travel

Posted by Milos Sugovic 

This weekend I learned it the hard way – you get what you pay for. Like many New Yorkers, I looked to get out of the city for the Easter weekend and headed down to Washington. My mode of transportation: Eastern Travel, a Chinatown bus that’ll take anyone with a $20 bill and the willingness to watch “Shaolin Soccer” for five straight hours. I thought the quality of service hit rock bottom about a year ago when we were stranded on the Washington-Baltimore Parkway for about 30 minutes, after which a delayed act of Buddha miraculously kick-started the engine. Well, this weekend was worse.

I decided to beat the traffic and take the bus down on Thursday after my class concluded at 8 p.m. (hence my decision to go with the low-cost alternative) and boy was I in for a treat. The bus driver, a rookie for the calling, departed from Chinatown at 9 p.m. to pick up passengers at Penn Station. You’d think the trip would take less than an hour, unless of course, the driver isn’t familiar with New York City’s grid and is desperately looking for Houston Street (still puzzles me why). It took several individuals at the front and a couple of iPhone navigation systems to get us safely to Penn Station. And that was only round one.

Can Search Trends Predict Economic Activity?

Posted by Milos Sugovic

You bet. A new piece of research by Choi and Varian (2009) shows that search query data is correlated with the level of economic activity in a given industry, and thus may help in predicting the subsequent sales data release. Or, put in layman’s terms: more searches translate into more sales. Now some might be thinking “so what?” Isn’t it obvious that if people seek out a product in cyberspace, they’re more likely to purchase it? Yes, but look at the bigger picture.

This sort of analysis can be extended to several industries, and it’s only a matter of time before marketing and sales departments start paying even more attention to Yahoo! Buzz and Google trend indices. (Full disclosure: Yahoo! is a Peppercom client.) So when Ford’s marketing department sees a one percent decrease in searches, they can expect a 0.5 percent decrease in sales, as the article shows. Perhaps then they’ll start paying attention to the correlation with keywords like “hybrids” and “bailout” as well. So it’s only natural for search trend data to creep its way into sales models.

Till then, it’s important to keep an eye on the digital movements specific to you and your industry. Economists, investors and journalists will increasingly be looking for data releases with a shorter time lag, and digital data is proving it’s a good complement, if not replacement, for traditional measures. And for those of us in PR, it’s important to stay on top of this thing called the “cyberspace”. You never know what the next Google, Yahoo! or MSN Live search might uncover for your client.

Statistical Pictionary

Posted by Milos Sugovic

I randomly (pun intended) came across this rant by Andrew Gelman, a professor of statistics at Columbia University, on the use, misuse and abuse of graphs. Now if you’re too lazy to read the entire post, this pretty much sums it up: 

Graphs are gimmicks, substituting fancy displays for careful analysis and rigorous reasoning. It's basically a tradeoff: the snazzier your display, the more you can get away with a crappy underlying analysis. Conversely, a good analysis doesn't need a fancy graph to sell itself…[I]n writing this piece right here have I realized the real problem, which is not so much that graphs are imprecise, or hard to read, or even that they encourage us to evaluate research by its "production values" (as embodied in fancy models in graphs) rather than its fundamental contributions, but rather that graphs are inherently a way of implying results that are often not statistically significant. 

Given his credentials, I may not be in a position to challenge his point of view, but I can’t help but disagree with him on a few things.  

It’s not the beginning of the end...

Posted by Matt Purdue

I’m not sure where I get off paraphrasing the eminent Winston Churchill, but I will do it anyway: It’s not the beginning of the end, but it may be the end of the beginning…of the recession, of course. U.S. stock markets were up in March, impressively so. The Dow was up 13%, and the Nasdaq up nearly 16%. The equities markets are irrational creatures, though. A geopolitical event or a slip of the tongue can send stock in investors screaming for the exits. 

But there are more reliable indicators that suggest the U.S. economy’s plunge is slowing. That great engine of our economy, the consumer, is just beginning to thaw. The rate of decline in retail sales and consumer spending is decelerating, and we’re seeing some improvement in both home sales and home starts. By no means is the picture rosy yet. What we’re witnessing now is that this once pitch-dark economy is starting to show some shades of gray. Most analysts predict that gross domestic product will probably decline sharply in the first and second quarters of this year, before bouncing back late in 2009 and into 2010. 

Go With The Bank

Posted by Matt Purdue

During this, the Great Recession, media and pundits have thrown around the phrase, “Not since the Great Depression…” It’s become a horrible cliché. But today we’re facing a situation where this tone might be appropriate. The federal government’s response to the problems in the U.S. auto industry are certainly unprecedented in recent times. Just for review, the Obama administration’s intervention hit a high (or low, depending on your political leanings) point late last week when it decided to ask GM CEO Rick Wagoner to resign.

Think about this: The government has essentially told the head of a publicly held company to take a hike. Not the shareholders, not the board, not even Congress--but the President of the United States. What kind of precedent does this set? In today’s era of cut-throat media, CEOs always get too much credit for organizational success and too much blame for failure. Certainly Wagoner should take the heat for stubbornly pushing GM’s ruinous reliance on SUVs and trucks over the past decade. But, in a way, Wagoner is being made the ultimate scapegoat. In this case, at least, it looks like many GM board members will also get the axe. At least six of them will be resigning.