The Big Shift in Digital Advertising
“I think the golden days of Facebook advertising are over,’ said one business owner. ‘On Amazon, people are looking for you, instead of you telling people what they should want.’”
Good morning! Or should I say gm? (See below.)
Here are today’s highlights:
The gig economy can be hazardous for drivers as well as passengers.
The biggest Philadelphia-area mall owner shifts from retail to housing.
A celebrity botox doc who tried to be a developer blames his failure on his workers.
A series of mom-and-pops turned Southern California into the birthplace of fast food.
CRYPTO
A crypto greeting has gone viral: “The catchphrase ‘gm’—or, to put it the old-fashioned way, good morning—is increasingly popping up on Twitter, Telegram and Discord channels, often alongside images of surf, sun-dappled flowers and sunsets. The abbreviation is more than just a pleasantry for people who embrace blockchain, the technology underpinning virtual currencies like bitcoin. Blockchain enthusiasts are using it to signal that they are early to a technology whose future they believe is bright. ‘gm! Here is a picture of a beautiful field full of flowers,’ Ethereum co-founder Vitalik Buterin tweeted to his roughly four million followers last month.”
“The rise of gm, almost inevitably, has birthed a counterculture, with some tweeting ‘gm to everybody except’ a person or a group of people they don’t like.”
“‘Gm to everybody except the SEC’ is a classic,’ said Mr. Versluis, the TikTok influencer.” READ MORE
MARKETING
A new kind of tracking: “For years, digital businesses relied on what is known as ‘third party’ tracking. Companies such as Facebook and Google deployed technology to trail people everywhere they went online. If someone scrolled through Instagram and then browsed an online shoe store, marketers could use that information to target footwear ads to that person and reap a sale. But that kind of invasive tracking is being scaled back or blocked by Apple and Google to protect people’s privacy.”
“Many small businesses already appear to be spending less on digital ads that rely on third-party data, such as Facebook and Instagram ads, and are reallocating marketing budgets to platforms with lots of first-party information, like Google and Amazon.”
“Shawn Baker, the owner of Baker SoftWash, an exterior cleaning company in Mooresville, N.C., said it previously took about $6 of Facebook ads to identify a new customer. Now it costs $27 because the ads do not find the right people, he said.”
“Mr. Baker has started spending $200 a month to advertise through Google’s marketing program for local businesses, which surfaces his website when people who live in the area search for cleaners.”
“Amber Murray, the owner of See Your Strength in St. George, Utah, which sells stickers online for people with anxiety, started experimenting with ads on Amazon after the performance of Facebook ads deteriorated. The results were remarkable, she said.”
“‘I think the golden days of Facebook advertising are over,’ Ms. Murray said. ‘On Amazon, people are looking for you, instead of you telling people what they should want.’” READ MORE
RETAIL
Philadelphia’s biggest mall owner wants to pay debts by building thousands of apartments: “Facing more than $2 billion in debt and a wounded mall business, the Pennsylvania Real Estate Investment Trust has an audacious plan to change its fortunes: The region’s biggest mall owner wants to become a developer and put 5,200 apartments on six mall sites as a way to raise cash and bring shoppers and diners onto its properties. CEO Joseph F. Coradino said he’s pivoting by necessity: ‘I used to be in the mall business and now I’m in the real estate business.’”
“PREIT’s strategy reflects those of other mall owners, who are replacing department store anchors with health-care facilities, hotels, entertainment centers, gyms, and apartments.”
“But PREIT faces epic challenges as it seeks zoning approvals in suburban municipalities where officials are concerned about sewer capacity, traffic, population density, burdens on local schools, and the broader vision for the properties.” READ MORE
FOOD & BEVERAGE
Southern California wants to be known as the birthplace of fast food: “An ardent Bob’s Big Boy (founded 1936 in Glendale) guy would never be caught dead at Jack in the Box (founded 1951 in San Diego). A true Taco Bell (founded 1962 in Downey) fancier wouldn’t dream of sullying her taste buds with goods from Del Taco (founded 1964 in Yermo, in the Mojave Desert). You couldn’t pay a Carl’s Jr. (founded 1941 in Los Angeles) devotee to cross the threshold of a McDonald’s (founded 1940 in San Bernardino).”
“Most began as mom-and-pop undertakings, or pop-and-son enterprises, and wound up as corporate-owned chains. The forthrightly named Hot Dog on a Stick was a mom-and-son effort: Dave Barham used his mother’s cornbread recipe to coat hot dogs and sell them along the Santa Monica sand in 1946.”
“One, In-N-Out, has stayed in the family since the first one opened, in Baldwin Park in 1948, and the loyalty of its customers and workers approaches the devotional.” READ MORE
HUMAN RESOURCES
At least 50 gig-economy drivers have been killed on the job since 2017, according to Gig Workers Rising: “Much attention has been paid to the risks that ride-hailing passengers might face when entering a stranger’s vehicle, but the drivers’ group and the families of drivers who were killed say they hope the report will highlight a concern that receives less focus: the risk that passengers themselves may pose to drivers. Though the report relied mostly on public news accounts, it is notable in part because it is the most recent count of violence against drivers since Uber and Lyft released their own safety reports years ago.”
“Because gig drivers are often classified as independent contractors rather than employees, they often receive less support from the companies they work for when something goes wrong, the report said.”
“In some cases, Gig Workers Rising said, families of dead drivers never heard from the companies they drove for, or did not receive death benefits or assistance with insurance claims or funeral services.” READ MORE
AGRICULTURE
Vertical farming faces challenges but continues to grow: “A recently constructed 95,000-square-foot warehouse in Compton, Calif., ticks off all the boxes for the booming storage industry: 32-foot-high ceilings, a secure truck court and access to truck routes. But it won’t be used for cargo or storage. Plenty Unlimited, an agricultural start-up based in San Diego, is using the site for an indoor vertical farm, expected to open later this year. ‘It’s the ability to put production anywhere without considering climate,’ said Arama Kukutai, the company’s chief executive.”
“Plenty Unlimited supplies Albertsons grocery stores with lettuce varieties grown on a smaller-scale farm outside San Francisco. Walmart, an investor, will soon sell Plenty’s produce throughout California.”
“And Plenty has aspirations beyond greens: Last month, it announced plans with Driscoll’s, a berry seller, to develop an indoor farm in the Northeast devoted to strawberries.”
“Bowery Farming, which is based in Manhattan, is outfitting a 150,000-square-foot farm on the site of a former steel plant in Bethlehem, Pa., that is scheduled to open in May.”
“Upward Farms, a start-up based in Brooklyn that blends vertical farming with aquaponics and uses fish waste as fertilizer, is building a 250,000-square-foot warehouse on six acres in Luzerne County, Pa., about 100 miles from Manhattan.” READ MORE
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REAL ESTATE
A Botox doctor who tried to become a developer is now facing bankruptcy: “It is a fall from grace story with all the components of a Hollywood blockbuster, featuring tens of millions of dollars, glamorous real estate and dashed dreams. Its protagonist: a cosmetic dermatologist to the stars, known for his Botox and buttock-enhancement procedures, who tried his luck as a megamansion developer. The resulting Bel-Air mansion, complete with a DJ booth, a Champagne tasting room and an NFT art gallery, is now slated to hit the auction block after the developer, Alex Khadavi, filed for bankruptcy protection, court records show. In a bankruptcy court hearing in Los Angeles on March 30, Judge Sheri Bluebond indicated that she could soon sign off on the sale of the property, Dr. Khadavi’s largest asset, by auction with a reserve price of $50 million. A reserve price is the minimum amount that the owner of an auction item will accept as the winning bid.”
“The 21,000-square-foot mansion is the brainchild of Dr. Khadavi, 49, with slick black hair and high cheekbones, whose penchant for perfectionism led him to spend roughly $30 million on the home’s construction, not including land cost. That was about three times his originally projected budget, he said.”
“About halfway through the project, which Dr. Khadavi said was originally intended for his personal use, he realized that his aspirations for the property had outgrown what he could actually afford to maintain. He would have to put the property on the market. ‘I dreamed too big,’ he said.”
“Costs were exacerbated by the Covid-19 pandemic, which disrupted the construction schedule, he said. Crews were often out because they said a member had come down with the virus. ‘People don’t take pride in what they do. Nobody wants to work these days,’ Dr. Khadavi said.” READ MORE
THE 21 HATS PODCAST
Do You Take Money Off The Table? This week, Shawn Busse, Paul Downs, and Jay Goltz discuss their philosophies about taking money out of the business. Of course, you can’t take money off the table unless there’s money on the table. Paul tells us that he once calculated his average earnings for his first 22 years in business and they came to about $11 an hour. But he now expects to make more money in the next five years than he did in the previous 35. We also talk about content marketing, direct mail, and trade shows. Plus: Was the Paycheck Protection Program, despite the billions of dollars in fraud, a success?
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