Archive for January, 2012

FPS’ Friday Fiver

Hello All, and apologies for a late night Fiver – it’s been one of those weeks in financial and professional services. Still, below we have a trip through the week’s news highlights (sadly not including Tom Watson’s intern) as you head into the weekend. Thanks to Ed, Jonathan, Ross and our latest contributor, Josh Glendinning. Have a great weekend all.

UK VS THE WORLD…..While UK GDP figures dominated the headlines on Wednesday, members of the FPS team were given an insight into what lies ahead for global growth in 2012. At an event put on by British American Business we heard from, Alexis Karklins-Marchay of Ernst & Young that despite the woes of the Eurozone, the global economy can still expect growth of over 5% this year.

Much of this output will come from what Ernst & Young term Rapid-growth markets (RGMs), a set of 25 countries they expect will account for nearly half of global growth in the next ten years. Their report on RGMs and its micro-site are an excellent resource for anyone looking for facts and figures on the future shape of the world’s economy.

As an aside, one of the panellists, Stephen Castle of the International Herald Tribune, offered an anecdote from his time in the Brussels press corps. An unnamed member of the German press, brought up in the same region of the former East Germany as Angela Merkel offered Stephen an insight on Merkel’s approach to the Eurozone crisis. In the GDR, cars and appliances were never reliable, and the parts required to fix them were never available. As a result, citizens took to patching things up and making do until they broke again. The German journalist had decided Merkel was taking the same approach to the crisis…

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FPS’ Friday Fiver

 

Bookmaking and bezzies

Every now and again I take a trip to the online bookmaker. Winning is fun, losing is not. I try to stick to more obscure sports like athletics where there is some chance I know more about the likely outcomes than those setting the odds. However, for the most part I rely on knowledgeable friends for tips and advice on whether KJ Choi is up to the task of winning the US Masters or whether Mon Mome has another Grand National left in him.

Professional investors aren’t so different when it comes to picking a stock or perhaps more importantly a company or a nation’s bond debt.

While I rely on tips from friends, professional bond investors look to credit rating agencies for a steer on the likely risk associated with their investment. These agencies are supposed to tell you whether the company or government you are lending to can afford to pay you back, but as Phillip Stephens points out in an excellent piece in today’s Financial Times, these agencies aren’t always right.

Whether investors need to find some better informed “friends” is a big question but what is not in doubt is the huge significance of these agencies views on European sovereign debt in 2012.

How soon is now?

An interesting development this week for those of you interested in ‘nowcasting’ (No? No one at all?).

On Monday (16th Jan 2012) the Spanish bank, BBVA, announced it was teaming up with Google to provide improved real-time economic forecasts for its clients. BBVA will apply its research team’s forecast models to Google’s search engine data in an attempt to provide more accurate and timely economic indicators. The first iteration of this will see BBVA and Google measure current and future demand in the Spanish tourism industry.

http://news.bbc.co.uk/olmedia/145000/images/_146120_weather_map_300.jpg

The Financial Times reported this story as the latest attempt to try and use Google search engine data to provide ‘nowcasts’.  For those who don’t know, ‘nowcasting’is the prediction of the present, very recent past and very recent future (we’re talking hours and days rather than weeks). It is a meteorological term that has been increasingly applied to economics in recent years, particularly since the financial crisis. The idea that drives nowcasting use in economics is that so much economic data, particularly official data, is out-of-date before it is even collected and released. Economic conditions change so quickly that it’s not much use knowing what happened last quarter when you’re trying to make policy decision today. To put it in the meteorological context, it’s like trying to decide what to wear today based on what the weather was like 3 months ago.

What’s particularly interesting about nowcasting (no? still just me?) is the role that businesses can play in helping create new economic indicators. Central banks, investors and traders want to know what’s happening in the economy today and what better source of information is there than the businesses who themselves find they are capturing more and more data about consumer and business activity.

Google have been quick to realise that the search engine data they capture can provide unique insights into the economy. The Bank of England has already realised the power of this data as highlighted in this FT Alphaville article from last year. Tim Harford also wrote a very interesting article on this in the FT back in 2010.

This desire for more accurate data from different sources presents a great PR opportunity for many businesses; an opportunity many have yet to capitalise on. Using a business’s data for PR purposes is not a new idea. However, where this often falls down is in trying to turn the data in to something that tells a wider economic story, rather than a story about the business itself.  There must, however, be a huge number of companies with interesting data of their own that can be turned into economic indicators. The data of haulage companies, payments systems and mobile phone companies in particular, spring to mind. The key to success is in creating credible indicators which is why partnering with economics consultancies helps. This requires investment but if a company can create something that is used by media, investors and even central banks, then the PR and stakeholder relations benefits will surely outweigh the costs.  

A second PR opportunity lies in the co-opting of the term ‘nowcasting’ into a business environment. As mentioned, it has already moved from meteorology to economics but being able to know what is happening today, rather than last month, is as relevant to businesses leaders as it is to economists. Any company that works in providing management information or using big data may want to look at how building a proposition around ‘nowcasting’ could differentiate themselves from their competitors.

 

Bread is getting cheaper (sort of)

The monthly inflation figures rolled around again this week and finally gave Sir Mervyn a chance to let out the top button on this shirt – both CPI and RPI inflation dropped below the magical (by which we mean ‘hideous’) 5% rate at which it had been stuck for several months.

Good news all round then? Well, not really. For one thing, at 4.2% CPI is still double the official target set by the Bank of England, meaning Merv’s fountain pen won’t be getting a rest any time soon. For another, inflation is still way above wage increases, meaning we’re all battling against dwindling real incomes. And for another, despite the Government keeping interest rates at practically zero (thus encouraging, in part, high inflation), economic growth is unlikely to rise above a rasping cough when Q4 figures are published next week. We’re trying to be positive, we really are. But it’s still looking far from rosy.

The Labour party: Time to cut its losses

Despite UK unemployment reaching a 17-year high this week, Labour leader Ed Miliband was still unable to land a clean hit on David Cameron during this week’s PMQs. Instead, the Prime Minster cleverly navigated Ed’s questions, even landing some of his own punches when he sneaked in a few sound bites about Ed not even being able to do a U-turn, relating to his apparent support of Government cuts,  that were sure to lead news coverage of the session. When the Opposition leader doesn’t score when unemployment is as high as it is, alarm bells should be ringing.

Furthermore, he has faced criticism from allies: Lord Glasman, who was previously seen as a committed supporter of Ed. Glasman wrote an article for the New Statesman that appeared to question his leadership which the media lapped up, whilst more recently he has been on the end of union bosses’ wrath for supporting the Government’s public sector pay freeze. Clearly there is discontent in the Labour ranks, even if it isn’t at the core of the party yet.

As Matthew d’Ancona wrote in the Evening Standard last week, Government ministers are praying for Ed Miliband to remain as Labour leader as he currently seems incapable of steering the Labour ship back to recovery. The media appears to know this, as do the electorate, so why is Labour allowing the elephant in the room to remain?  

To say that Labour missed a trick by not selecting Ed’s charismatic and believable brother David as leader last year, is a significant understatement.  Ed Miliband has had a poor start to the year leaving his and Labour’s future unclear. Sometimes you need to cut your losses when something is not working, this should be a growing thought for the Labour party and its incumbent leader.

A perspective on the Concordia disaster

Last week 11 people died and 24 are currently still missing in a tragic incident that has captured the attention of the world. A seemingly self-inflicted disaster of this magnitude is unusual and as all involved, including the media, struggle for clarity on how events unfolded, speculation has been rife.

The last week has seen press coverage that poses serious questions about the safety of modern cruise ships, tales of heroism but also a lot of wild conjecture, some of which has been in poor taste.

The role of the captain has been the focus for much of the media and below we have selected a number of articles which highlight the breadth of ways in which the disaster has been covered in the information vacuum that followed. Without clear communication from those involved we will know little about the truth of the matter until the inevitable enquiry begins.

Where was the captain?

Costa Concordia captain ‘was greeting friend ashore’

Drinking in the bar

Dining with a mystery woman

 That’s it for this week. Thanks to Matt Battersby, Dave Chambers, Ross Gillam and Sallie Bale for their contributions.

FPS’ Friday Fiver

Hello all and welcome to the second Financial & Professional Services Friday Fiver of the year. Apparently, Monday 16th January is set to be ‘Red Monday’ – the most depressing day of the year. With that in mind, this week’s Fiver at least attempts to lift the gloom a little with the return to blogging of our resident sharp-tongued Apprentice critic, Marie Cairney, who brings us her views on Scottish independence (as a Scot herself). We’ve also got thoughts on Tesco, Mitt Romney, cockney slang and an intriguing new report from Barclays Capital. Thanks to Ed, Jonathan and Ross for their contributions as well this week.

CAMERON THE BRAVE…..In a display of blunt brinkmanship combined with a lesson in ‘being careful of what you wish for’, the PM this week tried to push Alex Salmond into a corner on the future of the UK, most likely to the bewilderment of those around him. Perhaps buoyed by his new-found devil may care – we can go it alone – attitude recently honed in Europe, Cameron decided to raise an issue that didn’t really need to be raised right now. So much so that we were looking for some really bad news that needed to be hidden in the ensuing manufactured maelstrom.

There wasn’t any but then I guess the economic crisis can’t get much worse. Philip Clarke at Tesco might have been slightly relieved for five minutes although not even a divided kingdom could distract from those awful results yesterday (more on that below). While Marie can’t speak with any certainty or authority for a nation on how much they want to stay in the UK (being a deserter for 20 years now), she can say that if there is one thing that Scots don’t like; it is being told what to do by governments they don’t vote for, especially if they are predominantly English. Have the Conservatives learned nothing?  Instead of calling Salmond’s bluff Cameron played right into his tartan-mitted hands and raised the not inconsiderable heckles of 6 million people. Well done. Or as they say up there ‘Gaun yerself Big Man’!

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Digital Customer Service – 5 brands getting it right

This post is by Sallie Bale, who is in the process of setting up her own account, but was desperate to just get blogging!

Spurred on by a recent article, ‘Why social customer service will come of age in 2012′, below is my work-in-progress Top 5 social media customer service channels. As that Econsultancy article points out, social media and customer service should be a match made in heaven. But so often due to a lack of knowledge, money or attention, some brands can get it pretty wrongg as we have seen over and over again.

As with many new issues, organisations often have a tough time understanding how digital customer service will work with their current offerings or processes. Mashable reports that many organisations are battling the same issues, which they distilled down to: Integration, Scaling and Crisis management.

I expect that many brands think they’re “opting out” of using social media channels in this way, but in some cases this simply is not an option; the customer is likely to use it any way. Referring to a study on WARC, Lawrence Fenley, MD, Sitel, said: ” With easy access to real-time information, a new generation of ‘always-on’ consumers is more empowered and demanding than ever.”

These sentiments are echoed by Mark Hillary in his insightful thought piece in the HuffPo. He asserts that the way corporate customer service is run hasn’t fundamentally changed in a very, very long time. He points out that the crucial difference between traditional customer service and social is that it is so easily amplified within the target market. To sum up, he argues:

“Consumers will complain using their own channels whatever you as a company ask them to do, so social media for customer service can no longer be ignored. It’s no longer a cool, trend-setting, inclusive, and awesome area to explore. If you are not answering your consumers within the social web then they will just assume that you are ignoring them.”

And so, with that in mind, here is my Top 5 list of great customer services channels:

1. First Direct

Witty, unafraid and funny. First Direct’s Twitter team are friendly, well trained, informative and engaging. But they also use humour to diffuse tension:

@uwitness: Dear First Direct – one quick way to put me off you as a bank is to send me an offer related to Jamie Oliver. Just saying.

@first_direct: @uwitness Sorry – are you more of a Nigella fan?

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FPS’ Friday Fiver

posted by Edward Jones

This is the last time in 2012 I say this – Happy New Year! I hope you all had a good Christmas but now it’s done let’s look forward to what will no doubt be a memorable year, in many ways, most of which Dr Doom will relish, but many of which are truly historic. Here is our first fiver of the year.

Probably the best recovery of any opposition party in history

So the Labour Party hasn’t had the best of weeks. In fact on Thursday it really didn’t have the best of days. Firstly, Lord Glasman, adviser to Ed Miliband, gifted the tories and the so-called ’Miliband hunters’ in the Labour Party with a stinging critique of the Labour leader’s, err, leadership. Shortly after this excitement, Diane Abbott kicked up a storm over comments she made on twitter, later interrupting an interview on Sky News to take a call from Ed Miliband himself, who proceeded to give Abbott a ‘severe dressing down.’ The icing on the cake was a leaked strategy document script for broadcast (according to Labour HQ), which is worth a read, if you haven’t already (P1 & P2), and yes, it does include those fateful words in the above subtitle.     

Count the cars

No doubt you’re bored of hearing about Europe and the mess our inter-dependent economies now find themselves in. The simple fact of the matter is, the problems are not over, and 2012 is set for more of the same.

Singing a different tune at the end of 2011 however, Sam Jones, the FT’s Hedge Fund Correspondent penned an intriguing piece about the lengths hedge fund managers go to find out what they are investing in. The crux of the article was that all may not be quite as rosy as it seems in the East and that problems may lurk within the Chinese economy. Hedge fund managers have dispatched intelligence gatherers to factory gates to “count the cars” and ensure official figures match realities on the ground.

Image: http://thefederalist-gary.blogspot.com/2011/07/real-estate-bubble-chinas-ghost-towns.html

The article also linked to a video of hedge fund manager Hugh Hendry dating back to 2009 on a jaunt amongst seemingly empty Chinese skyscrapers pondering who is actually going to rent these steel giants. Both the article and the video are worthy of five minutes of your attention.

Top 50 Most Valuable Brands in China

Moving seemlessly from empty skyscrapers to those who might fill them.

Click on the image – Simples!

Old hacks new tricks

After tweeting this in error, Sky’s crime correspondent Martin Brunt gave a quick lesson in how to shut down an embarrassing moment with this swift response.

Tweet that

A precise report which helpfully landed in our inbox earlier today revealed the following:

Who ‘owns’ your company’s Twitter followers?

A US firm is suing a former employee who took 17,000 Twitter followers with him when he left the company. PhoneDog Media is seeking damages of up to USD370,000 from Noah Kravitz after claiming the costs and resources invested in its followers and fans were substantial. Kravitz speaks to TheDroidGuy about the dispute and says the company never asked for the Twitter account back and suggested he could tweet on its behalf. In contrast, PhoneDog president Tom Klein says the Twitter account was created to promote PhoneDog content and to give fans a chance to follow Noah ‘as a representative of the company’. The New Statesman says the case could have far-reaching legal implications regarding the value of social media and its users and how intellectual property law has adapted to the emergence of social media. The outcome could also influence how companies choose to use and invest in such technology in future.

It is an interesting development, and follows (to some extent) the debacle around Twitter account ownership of Laura Kuenssberg, who you may remember, moved from the BBC to ITV taking some 60,000 followers with her. The central question (or one of them) being are you following the tweeter due to the specific interest you may have in them as a person, or because of the inherent brand association they enjoy thanks to their role i.e., were you following Laura Kuenssberg, or the BBC ‘s Chief Political Correspondent?