This particular holiday story begins sometime after 2008, at a time when America’s workers were most in need of holiday cheer. Pink slips were falling like flurries of December snow, and amidst all this gloom, bosses around country announced that there would be no holiday work party.
“And lo and behold there was a revolt,” says BizBash Media CEO David Adler. “Not surprisingly after the recession people were saying, 'where can we cut our budget?'
"And people cut the holiday party because they didn’t think it was that important.”
Adler collected survey results from companies that had cancelled their holiday work parties and found that only six percent of employees were okay with canceling the holiday party.
"People felt that it was a symbolic thing that a company did that shows how the company feels about the people," Adler says.
Some of the people surveyed said that they saw the party cancellation as a sign that their job was at risk and they felt disconnected from each other.
And this is the part of our holiday tale where we meet an adorable furry little creature: The prairie vole.
Sue Carter studies psychiatry at the University of Illinois, Chicago. She pioneered the use of prairie voles to study the physiology of Oxytocin, a hormone that, among other things, allows humans to be social.
“It allows us to look other people in the eye. It allows us to tolerate being close to people. It’s a very important, natural, central component of how the body decides whether it’s safe to be social or not,” says Carter.
She hasn’t seen a study that looked specifically at holiday parties but she says it makes sense that people revolted when their work party was cancelled because humans do very poorly under conditions of isolation, “and a lot of things that go on in modern life are actually isolating, things like using a computer, working in a cubicle rather than a social group. So any opportunity for to be social is generally good for us."
As of last year, more holiday work parties are returning to the workplace. In a study, recruiting firm Battalia Winston reported that 91 percent of companies polled were having a holiday party, the highest percentage since the recession. But not all business cut back on spending during the recession. Some holiday traditions were actually born.
Eleven years ago Adam Williams was trying to make it in Los Angeles as a magician. One day he approached the owner of a shopping center and said, 'I’d like to do a Christmas magic show here, and for my finale I will make it snow.'
The owner passed on the magic act but loved the snow idea. Williams agreed to make it snow even though he had no idea how to do that.
Williams contacted a chemist friend and developed a formula for synthetic snow that vanishes on contact and is safe enough to land on a child’s tongue. And it worked, that first gig at the shopping center was the beginning of Williams’ new career. He gave up the magic act but now runs a multi-million dollar company called Magic Snow.
During the recession Williams started getting calls from shopping centers in the places with high foreclosure rates.
“Phoenix; Nevada ... where you had huge developments built around residential complexes,” says Williams.
These also happen to be places where it never snows. So these commercial property owners hired Williams to work his magic, in the hopes of attracting customers.
On a recent night Williams invited me to The Grove, the Los Angeles shopping center where he did his first snow show. Now he’s paid six figures to make it snow twice a day from November 18 through Christmas.
“The show here is choreographed to a small Bellagio style fountain that plays Christmas music every night,” says Williams, the sound of water splashing in the background.
Williams ducked behind a giant planter where a control board was hidden. He adjusted a few knobs and suddenly the music coming from the fountain stopped and it started snowing.
A teenage couple slow-danced in front of the Apple store and kids all around start freaking out.
Williams says that reaction, and competition from online shopping, is what's driving the demand for malls to hire him and his snow shows.
It’s far from "Mission Accomplished," but in a conference call with reporters yesterday, federal officials said healthcare.gov -- the website for people to buy insurance under the Affordable Care Act -- is functional more than 90 percent of the time.
Many of those buying homes are utilizing the 30-year fixed-mortgage rate, which last week was averaging 4.29 percent. In the first half of 2013, 90 percent of new home loans were the 30-year. Why are they so popular?
Amazon CEO Jeff Bezos debuted a promotional video on "60 Minutes" where a working prototype of the drone -- a GPS-guided flying robot that looks a bit like a mini-barbecue with helicopter blades attached -- delivers a package to a customer’s front-lawn. He said the goal would be to get orders to customers in as little as 30 minutes. Is it feasible? Maybe not. And that might not be the point.
It's a bird! It’s a plane! It's… That book I just ordered on Amazon, flying toward my house in the clutches of a tiny drone.
Or at least, that’s what Amazon CEO Jeff Bezos thinks the world could be like in as little as five years -- a vision he laid out to CBS’s Charlie Rose in an interview on “60 Minutes” last night.
Bezos showed Rose a promotional video where a working prototype of the drone -- a GPS-guided flying robot that looks a bit like a mini-barbecue with helicopter blades attached -- delivers a package to a customer’s front-lawn. He said the goal would be to get orders to customers in as little as 30 minutes. As Rose ooh-ed and ahh-ed, Bezos told him “I know this looks like science fiction. It’s not.”
Is it feasible? Maybe not. And that might not be the point.
Even if GPS guided drone deliveries become technically possible for Amazon in the next five years, there are other, perhaps even bigger, challenges to the project, says Sucharita Mulpuru, an analyst for Forrester Research who specializes in technology developments in the online shopping industry.
“I just don't know how something like this scales,” she says.
Mulpuru estimates that Amazon currently delivers at least a million packages a day, meaning “you would need a lot of drones to go back and forth between a warehouse.” And then there's the question of getting all those drones approved by the FAA to buzz over our heads all day.
But all those hurdles may be beside the point for Amazon, Mulpuru says. A more pressing concern for the company is the very real possibility of rising service costs at the U.S. postal service, which Amazon currently depends on for much of its shipping.
“There are probably a number of solutions that they are looking at that are probably far more viable, but far less interesting than the drone,” Mulpuru says. Trotting out a drone on national television, she says, “is really as much about Amazon establishing itself as a player in innovation along the lines of a Google or a Facebook.”
In other words, Amazon’s drone campaign may have more to do with getting the public excited about the company delivering on innovation in general, and less to do with the specific dream of actually having a package delivered to your door with a drone.
Kara Stone is an artist living in Canada. She recently built her first video game. But instead of a battlefield or a fantasy world, the game's landscape is built around the experience of mental illness.
Like many people in North America, Stone suffers from depression and anxiety. Her game, "Medication Meditation," was inspired by her struggles with depression. She describes it as "a series of five little exercise based around daily living with mental illness."
"All of these exercises come from my own experiences with trying to deal with living with mental illness -- or emotional disregulation," Stone says. "All of these lifestyle changes that I've had to make have filtered into this game."
The first exercise is called "Talk," where the gamer simulates the experience of a visit to a therapist's office. But, as anyone who has seen a therapist will find, there are a few quirky differences between the game and the real thing.
"The therapist is a disembodied ear, and you are a disembodied mouth," Stone says. "She takes you through a set of questions. The first one is 'How are you feeling?' And, you get to type in however you are feeling at the moment. It's nothing like a real therapist, obviously. It is an attempt to look at it in a funny way."
Stone believes that mental health issues could be a growing area for video games can be used. But, she says, "Medication Meditation" isn't supposed to be one of those games.
"There's a lot of room for experimentation within video games to kind of grow and serve different purposes. I don't think my game... No, it's not a self-help game. It's not really trying to help people. It's more just about a different way of using video games."
There is no way to win "Medication Meditation," but not because Stone wanted to frustrate the gamer. She's more interested in commenting on a widely-held societal belief about overcoming mental illness that isn't always true.
"There's a lot of rhetoric in dealing with mental illness that is like, 'let's overcome this, let's beat this,' but for me, dealing with my own mental illness, I can't really view it as, 'Oh, I'm going to beat this. I'm going to win. I'm going to kick this mental illness to the curb.' I just have to concentrate on the daily things, and making those ordinary experiences a little bit better."
By midday Monday, roughly 375,000 people had logged onto healthcare.gov. But an "Open for Business" sign may still be a long distance from a health insurance policy that works at the doctor's office. There are a lot of steps between signing up for health insurance and actually getting that insurance card.
Just think about all the folks-and computers- that need to talk to each other.
“Between the enrollee, the IRS, Homeland Security, and healthcare.gov,” says Robert Town, a professor of health care management at the University of Pennsylvania's Wharton School, there is a whole lot of verifying that that needs to happen.
“I'm sure there will be SNAFU's in the process," he says, "because it’s a pretty complex set of connections that have to be made.”
“It is puzzling why the government decided to fix the front door without having a reliable back door,” says Robert Laszewski, an insurance industry consultant. He says health insurance companies are getting all sorts of funky data from the government, about who is trying to sign up. Right now, Laszewski says, sorting things out is doable because the numbers are manageable. But, he says, “If we do start getting tens of thousands, or hundreds of thousands enrolling during the month of December and we have a high error rate, we haven't accomplished a lot.”
And the government says people are coming. The site could get more than 800,000 visitors today.
For its part, the Obama Administration says it's working on fixing the back-end of the system.
But, says Peter Van Loon, COO of Connecticut’s health insurance exchange, making a fix, “it's not inconsequential to do, as we found out, when we built our system to make sure the carriers got the information they need.” His exchange is state run. People there don't have to rely on healthcare.gov.
But, states and the fed are still under the same pressure -- to get everyone who signs up that insurance card.
The Purchasing Managers Index is upon us!
A Purchasing Manager is someone who buys stuff for a company. And every month, they tell us something about the economy, by telling us about how all their purchasing is going.
Doug Fischer runs Marquette University’s Center for Supply Chain Management.
“We will ask them about their new orders -- better the same or worse, production levels, inventories, employment, supplier deliveries,” says Fischer.
The idea is if you ask how these things are going at companies, you can figure out where the economy is headed over the next few months.
“For people in financial markets it gives an early read on whether things are improving, and that gives an idea of whether interest rates might rise or stock market might do better,” says Kevin Logan, chief U.S. economist for HSBC.
The magic number is 50 -- if the PMI is above 50, it means all of those things (production levels, inventories, etc) are improving. If the PMI is below 50, it means things are getting worse.
The U.S. PMI this month, according to the Institute for Supply Management, is 57.3.
Overall, “they’re pointing to a pretty broad improvement in the global economy,” says Michael Feroli, Chief U.S. Economist at JP Morgan. “You’re seeing strength particularly in Asia and the U.S. and some pockets of Europe.” Germany’s PMI hit a 2.5 year high, while France’s declined.
“In the U.S. the motor vehicle sector seems to be picking up,” says Feroli, “and in Europe what you’re seeing is a gradual easing up of some of the stress caused over there by tightening financial conditions.”
But the PMI just covers the short term – in a few months everything could change. And for now, even though most countries are doing better, not many are doing great. Logan says what’s been missing in the U.S. and global economy, particularly in Europe, has been a “vigorous expansion in business capital outlays, investment spending.”
We've been living in a world of easy money and low interest rates, but Logan's troubled by the fact that businesses haven't taken much advantage of either.
“Housing has yet to fully recover from the move up in mortgage rates this year,” points out JPMorgan’s Feroli.
And there are some “red letter dates” coming up on the calendar as well. “The biggest risk to the global economy,” says Jeff Burchill, CFO of FMGlobal, “is the political uncertainty in Washington.”
Then again, that kind of uncertainty has been the norm for some time.
“At the same time, the risks we see don’t seem to be in any greater than they normally would be,” says Feroli.
The current slew of PMI’s are good -- but they don’t paint a picture of unbridled strength.
Thirty minute delivers aren’t just for pizza companies anymore. Amazon.com plans to deliver goods in about the same time. How could the Internet retailer possibly ship stuff so quickly? Drones.
“It looks like science fiction, but it’s real,” says Amazon spokesperson Mary Osako. “One day, we think seeing Prime Air vehicles will be as normal as seeing mail trucks on the road today.”
But first, Amazon needs the government to establish rules so drones don’t crash into planes and other stuff.
The Federal Aviation Administration is working on regulations, but those are still years away.
Ryan Calo is an assistant professor of law at the University of Washington. He wonders if Jeff Bezos’ plan for drones will fall inside the existing law.
“It seems like he’s planning autonomous delivery, where no human being is necessarily, in the loop. That won’t fly, so to speak, under the current FAA’s understanding,” says Calo.
But influential corporations have a long history of working with the government on regulations. And Amazon is no exception.
Calo says, “Amazon seems like it’s already been in touch with the FAA. And I think it will work with the FAA to explain what it needs to do and how it means to do it.”
So Amazon could help craft the rules for future drone commerce. And that future may not be so far away.
“Unmanned aircraft will be the next big wave in all of aviation,” says Ben Gielow, government relations manager for the Association for Unmanned Vehicle Systems International – a trade association for the drone industry.
Unmanned aircraft systems are already a $14 Billion industry worldwide. But that’s mostly for military applications. Drones for the private sector could be huge.
Other parcel companies are also considering the use of unmanned aircraft.
“Fed Ex said a couple of years ago that they would like to have all of their pilots on their big cargo airplanes be on the ground, says Geilow. “What you could be seeing are some very long transatlantic or transcontinental flights that could be conducted with multiple crews on the ground, which would be a big cost savings for some of those package delivery carriers.”
Are Amazon and FedEx exceptions? Calo thinks not.
“I think a large, sophisticated delivery company that wasn’t looking at what robotics has to offer is not doing its job. And so I’d be surprised if those big carriers weren’t thinking about this already.”
As the week continues, we’ll learn more about America’s housing market. But we do know that many of those buying homes are utilizing the 30-year fixed-mortgage rate, which last week was averaging 4.29 percent. In the first half of 2013, 90 percent of new home loans were the 30-year. Why are they so popular?
“[It’s] really pro-borrower,” explains Marketplace’s Adriene Hill. “These are fixed-rate loans with no prepayment penalty, which means you don’t carry risk if interest rates rise or interest rates fall.”
Click the player above to hear about some alternatives to these kinds of mortgages, and the concerns that arise as interest rates change.
It’s far from "Mission Accomplished," but in a conference call with reporters yesterday, federal officials said healthcare.gov -- the website for people to buy insurance under the Affordable Care Act -- is functional more than 90 percent of the time.
According to a new report from the Centers for Medicare and Medicaid Services, the site’s performance is up. The error rate, the number of times the pages would crash, has dropped from 6 percent a few weeks ago, to less than 1 percent today. And it’s quicker -- at the end of October, consumers were waiting about 8 seconds for a page to load, now it’s under 1. But the big thing is that now lots of people can be on the site at the same time -- up to 50,000 -- and the site doesn't crash, which means it can handle about 800,000 visitors a day.
But consumer use is just half the equation. There have been reports of so-called back end troubles, where insurers can’t get the information they need to complete enrollments.
In the call yesterday, officials said over the holiday weekend they put in some patches and upgrades to deal with some of those problems. Insurers are saying some consumers believe they’ve bought plans on healthcare.gov but the company can’t find any record of it. In other instances, key information is missing -- like how much federal subsidy someone should receive, so insurers don’t know how much to charge. It’s a mess and could only get worse at the start of the new year.
New insurance policies kick in on January 1, 2013 for people who sign up by December 23.
While CMS has made upgrades, one of the biggest changes appears to be management. Administration officials are now holding war room meetings twice a day to monitor problems in real time. The hope is this new structure -- and more time to focus on back end problems, now that the front end is doing better -- will help them to drill down and get the bottom of the problems.
It's not often the U.S. Treasury shakes things up. Like most government departments, it prides itself on being steady and predictable, an island of certainty in a turbulent financial world. That reflects in the bonds that it sells, all of which are backed by the full faith and credit of the U.S. government, and all of which come with a fixed rate of interest.
But next year, the Treasury is going to make a change, by issuing what's called a floating-rate note. Investors appear to be keen on the idea of a government floater, but for the rest of us who might not understand why floaters are so appealing, we turn to Marketplace's New York editor and resident explainer of arcane financial terminology, Paddy Hirsch. He says if you want to understand what a floater is, imagine yourself floating on a boat.
"When you're sitting on the deck of your boat, sipping martinis or whatever you do up there, you are always a certain distance from the surface of the water. Let's say five feet. But how far are you from the sea bottom?" Hirsch says. "The distance from the surface of the water to the sea bottom varies. One minute it might be one-and-a-half feet, another it might be three feet. But you're always five feet on top of that, floating on the water."
Still confused? Hirsch explains that in the same way you would be floating on your boat a varying distance from the ocean floor, the same would be true for this new type of government debt.
"Instead of being fixed at, say seven percent, these notes will come with an interest rate of, say, five percent that floats above a variable base rate," Hirsch says. "So your total interest payment will move up and down as that base rate moves: five percent plus whatever the base rate happens to be."
Hirsch says while the notes may sound complicated, they are actually quite commmon in the private sector.
"It's very simple, and corporations use these kinds of bonds all the time. They usually use LIBOR, the London Interbank Offered Rate as their base rate -- which was why the manipulation of LIBOR was such a big deal. In this case, the government will use the yield on the 13-week Treasury bill. If that rate goes up, then the interest rate on the floating rate rises too. If it goes down, the rate falls."
And as interest rates rise, investors stand to make a lot of money. But Hirsch says that doesn't mean they're a sure thing.
"The holders of these notes will get paid more as interest rates rise -- and with base rates at zero now, that will happen eventually," Hirsch says. "But of course these bonds will come with the standard warning: down the line, if rates fall, you could lose money, and remember, these notes will adjust constantly, just like you on your boat."
To learn more about floating-rate notes, watch Paddy Hirsch's Whiteboard.
An estimated 300,000 protesters in Kiev, Ukraine are blocking government buildings today in the largest political crisis Ukraine has faced since the 2004 Orange Revolution. Demonstrators are calling for a change of government after President Viktor Yanukovych abruptly ditched a deal for closer ties with the European Union. He says the EU integration pact would hurt ties with Russia.
For a look at the economic underpinnings of the Ukrainian government's eleventh hour decision to nix the deal, Marketplace Morning Report host David Brancaccio talked with the BBC's Andrew Walker. Walker says by refusing to develop even closer ties with the EU -- Ukraine already exports a lot to the European Union -- Ukraine's government may be denying the country "easier access to a very lucrative market."
"There's money to be had from it if Ukraine could boost its exports to what is a much richer part of the world than its neighbors on the other side, on the East -- Russia and so forth," Walker says.
But Ukraine also has close ties with Russia, though not quite on the same magnitude with the EU. Walker says that a possible motivation for Ukraine's actions may be a contentious history with Russia that has at times resulted in Russia denying Ukraine energy imports.
"I think one of the other things at the back of the Ukrainian government's mind is the thought that by being close to Russia, they've got more of a chance of avoiding some of the problems they've had in the past, where Russia has turned off the gas caps," Walker says. "There was a period where it was almost part of the annual routine -- where having a row about gas prices, gay payments between Russia and Ukraine, sometimes leading to supply being interrupted. So, close ties with Russia would reduce the risk of that kind of thing happening in the future."
A new smartphone comes out this week: The YotaPhone -- that’s Yota, with a T -- is a Russian-made Android phone with a second screen on the back. Asking price, about $600. It poses a question: what distinguishes real innovation from a gimmick?
“I guess I’m cautious to say, ‘This is ridiculous,’” says Sarah Kessler, who writes about technology for Fast Company. After all, lots of people said the iPad was a dumb idea with a silly name. “But I guess when I first looked at it, I did not really see why I would need one, no.”
The smartphone market is “kind of a Samsung/Apple game,” says Alexis Madrigal, who covers tech for The Atlantic. Breaking out of the pack to win new customers, he says, “strikes me as really difficult, without something that really wows you in-person, where you go, ‘Oh, I must have this thing, and I’m going to take the chance on a less well-known brand.”
How about the YotaPhone’s second display? “It strikes me as kind of -- middling,” he says.
He agrees, the YotaPhone is no lightsaber. “This is a band-aid of an innovation,” he says.
But just the other day, he had a problem the YotaPhone might have addressed: Getting off the BART train in San Francisco, he ran out of battery. The YotaPhone’s second screen uses e-Ink, like a Kindle, which uses hardly any juice. Maybe a YotaPhone wouldn’t have bricked itself. He could’ve texted the colleague picking him up.
So, would he consider buying one?
“Because I had that experience on BART -- hell, yes, I would.”
So, there’s one potential customer.
Cyber Monday means lots of good deals online for holiday shoppers, but what if you’re back at work today? Turns out a growing number of companies don’t mind if employees try to bag some bargains from behind their desks.
The retail holiday got its name in 2005 from Shop.org (the online arm of the National Retail Federation) when retailers noticed a bump in online sales the Monday after Thanksgiving. At first a lot of companies blocked employees’ access to shopping sites that day. Now, 54 percent of firms allow workers to shop on the clock with IT teams watching for excessive use. That’s up 20 percent from three years ago according to an annual survey.
"Companies have really smartly said it’s okay to get a little personal business done as long as you are still productive on the job," says Kathy Northamer with Robert Half Technology, the IT staffing company that does the survey. "Companies have realized it’s helped them let their workers be more productive because they’re not taking off a whole day to cybershop."
At the Maryland web-consulting firm HindSite Interactive, company president Payman Taei doesn’t mind if staffers shop on Cyber Monday. "It’s one day a year, and you know this is not something that goes on on a daily basis, so why not take advantage of it and let everybody be happy," Taei says. He even tells his staff to tip him off to good deals. Last year he shopped for the company and saved 25 percent on an external hard drive.
Chef David Landers is walking through Reading Terminal Market in downtown Philadelphia, a beloved indoor space packed with shoppers and dozens of merchants selling all kinds of food. Chefs visit for ingredients and inspiration, home cooks stock their kitchens and some folks just come for the famed roast pork sandwiches at DiNic's, Philadelphia’s less famous and often more delicious sandwich rival to the cheesesteak.
But Landers isn’t here for lunch or to get ingredients for a restaurant. As senior chef for Campbell Soup Company, he shops and dines around the world, tracking changes in the way we eat. He stops at a basket full of something Campbell’s finds quite interesting right now, the ingredient that inspired the new product we’ll meet later.
“With ginger, we’re gonna put that at a stage five,” Landers says. “A couple years ago, ginger would have been at a stage three or a stage four, something that maybe you would have found at very ethnic restaurants and specific recipes.”
Campbell’s ranks food trends from one to six. A one is something that’s barely known, stuff only hipster chefs with Mennonite beards are using in their restaurants. Six is what everybody’s eating. Lately, ginger’s been climbing the charts.
Field research like Landers and other company chefs do—eating and shopping in restaurants, stores and markets around the globe—is only part of how Campbell’s develops new products. They’re also in our kitchens. Like many companies, Campbell’s uses techniques from anthropology and other social sciences to study us up close and personal, stepping inside our homes and our lives to see how we’re changing. This is deep dive, personal research, the opposite of mass surveys, taste tests or various techniques that fall under the well-documented trend that falls under the umbrella of Big Data (Campbell’s uses those techniques too, of course).
Companies now study us, consumers, the way we imagine pith-helmeted anthropologists examining indigenous tribes. Since they’re Margaret Meading around our lives and watching us, Marketplace thought it only fair that we have a good look at what they’re doing. Campbell’s agreed to open its research process to us, the first time the company has allowed a journalist inside its newly redesigned test kitchens.
The new facility is inside company headquarters in Camden, New Jersey. Workers in crisp black uniforms man sizzling skillets, stir bubbling pots, and work digital ovens in six fully-equipped kitchens, designed to mirror the homes of the consumer segments Campbell’s watches.
Each kitchen has different appliances, design and most importantly, different food in the cabinets and refrigerators. For the group called “Uninvolved Quick Fixers,” there are pizza boxes strewn around and a gallery of take-out menus stuck to the fridge. The stove looks like it’s never been touched.
“They’re doing a lot of microwaving and frozen foods,” explains Jane Freiman, the test facility’s manager.
On the other end of the spectrum is what Campbell’s calls “Passionate Kitchen Masters.” Freiman swings open handsome stainless steel doors to show off a fridge thick with fresh fruits, vegetables, meats and cheeses, plus an array of neatly arranged high-end sauces. Cabinets are also full of artisanal pastas and a wide variety of spices.
Creating kitchens with this level of fine detail required entering customers’ lives. Researchers, including trained anthropologists, may spend hours with a family. It’s deep dive, personal research, the opposite of mass surveys.
“We’re in their homes,” says Charles Vila, Campbell’s vice president of consumer and customer insights. “We are cooking with them; we’re eating with them; we’re shopping with them.”
Among the conclusions from that kind of research into Passionate Kitchen Masters: They use broth.
Broth is not a sexy product as food goes. It’s a bit like a band’s bass player: last on the tour bus to hook up, but essential to the final product. Broth is the sturdy component of soups, sauces, braised meats, and, under the Swanson brand, the company balance sheet. It’s a $400 million dollar retail business for Campbell’s.
When a brand pulls in nearly half a billion dollars, any sales-boosting twist is worth a pile of money. Recent field research shows home cooks wanna make Thai dishes, but can’t easily get key ingredients like lemongrass.
“Even for confident cooks, to bring those together, to go and purchase them, and actually blend them in such a way that it actually works, that’s not easy,” says Campbell’s vice president Dale Clemiss, overseer of Swanson and other brands, including Prego and Pace.
Add that insight to what the chef noted about America’s growing taste for ginger, and a new broth is born.
Swanson’s new products are broths infused with Latin and Asian flavors. The company uses Big Data and large scale survey research. But if its Thai Ginger broth is a hit, that’s a triumph of what we’ll call Deep Data, information drawn from rich, personal interactions. Data from that research also informed a complete change in the marketing of Swanson’s traditional broths.
When it comes to the anthropologists working in corporate America collecting this data, the profession is wary. There are ethical issues to consider that don’t come up in academic anthropology.
“There are lots of good reasons to hire anthropologists in the private sector,” says Colby College anthropology professor Catherine Besteman. “The pitfalls are an effort to use anthropology to convince people to buy things that are not in their best interest or may not benefit them.”
Deep Data can be powerful, especially in sniffing out need for new products, something hard to find through a multiple choice survey. But there are potential dangers. Ethnography and other anthropological research techniques are time consuming and expensive, which means sample sizes are small.
“Some people have based results on an ethnography of ten people,” explains Kelly Goldsmith, marketing professor at Northwestern University’s Kellogg School of Management. “That is not even rare. Do you really, as a marketer, wanna base your decisions on the experiences of ten people who were willing to let a stranger come into their house and watch them cook dinner?”
This kind of research can lead companies astray if misused. Wharton School marketing professor Americus Reed points to Song, an airline launched by Delta a decade ago. Its research said flyers wanted joy, so it offered flight attendants with fancy uniforms and goofy entertainment routines. The fun didn’t last. Delta shut down Song barely two years in, just after the airline filed for bankruptcy protection.
“Even though if you ask them to talk about and observe them, they’ll tell you all kinds of things about trying to make the experience much more fun, what it really comes down to for most consumers is: who’s got the lowest fare?” Reed says.
As for the flavored broth sloshing around Campbell’s test kitchen bowls, it’s less about price and more about taste. The company hopes its very personal research is turning out the right recipes.
Mark Garrison: Chef David Landers is at Reading Terminal Market in downtown Philadelphia, which is packed with shoppers and dozens of merchants selling all kinds of food. But Landers isn’t here to get ingredients for a restaurant. As senior chef for Campbell Soup Company, he shops and dines around the world, tracking changes in the way we eat.
We stop at a basket full of something Campbell’s finds quite interesting right now, the ingredient that inspired the new product we’ll meet later.
David Landers: With ginger, we’re gonna put that at a stage five.
The company ranks food trends from one to six. A one is barely known, stuff only hipster chefs with Mennonite beards are using. Six is what everybody’s eating. Lately, ginger’s been climbing the charts.
Landers: A couple years ago, ginger would have been at a stage three or a stage four.
Test kitchen manager Jane Freiman shows off Campbell’s new facility in Camden, New Jersey. It’s the first time the company’s allowed a journalist inside.
Workers in black uniforms man sizzling skillets, stir bubbling pots, and work digital ovens in six kitchens matching consumer segments. In one, for the group called “Uninvolved Quick Fixers,” the stove looks untouched.
Jane Freiman: They’re doing a lot of microwaving and frozen foods.
On the other end of the spectrum: what Campbell’s calls “Passionate Kitchen Masters.”
Freiman opens a handsome stainless steel fridge thick with fresh food. Charles Vila, Campbell’s VP of consumer insights, says putting these kitchens together requires entering customers’ lives.
Charles Vila: We’re in their homes. We are cooking with them, we’re eating with them, we’re shopping with them.
Researchers, including trained anthropologists, may spend hours with a family. It’s deep dive, personal research, the opposite of mass surveys. And it’s telling Campbell’s what Passionate Kitchen Masters want is broth. Broth is like a band’s bass player: last on the tour bus to hook up, but essential to the final product. Broth is the sturdy component of soups, sauces, braised meats, and, under the Swanson brand, the company balance sheet.
Dale Clemiss: Swanson is a $400 million dollar retail business.
That’s VP Dale Clemiss. When a brand pulls in nearly half a billion, a sales-boosting twist is worth a pile of money. Recent field research shows home cooks wanna make Thai dishes, but can’t easily get key ingredients like lemongrass.
Clemiss: Even for confident cooks, to bring those together, to go and purchase them, and actually blend them in such a way that it actually works, that’s not easy.
Add that insight to what the chef said about a growing taste for ginger, and a new broth is born. Jane Freiman serves it up in the test kitchen.
Swanson’s new products are broths infused with Latin and Asian flavors. The company uses Big Data. But if this Thai Ginger broth’s a hit, that’s a triumph of what we’ll call Deep Data, information drawn from rich, personal interactions. But Northwestern marketing professor Kelly Goldsmith points out a potential danger for companies.
Kelly Goldsmith: Some people have based results on an ethnography of ten people, right? That is not even rare. Do you really, as a marketer, wanna base your decisions on the experiences of ten people who were willing to let a stranger come into their house and watch them cook dinner?
Anthropological research can lead companies astray if misused. Wharton School marketing professor Americus Reed points to Song, an airline launched by Delta a decade ago. Its research said flyers wanted joy, so it offered flight attendants with fancy uniforms and goofy entertainment routines. The fun didn’t last. Delta shut down Song barely two years in.
Americus Reed: Even though if you ask them to talk about and observe them, they’ll tell you all kinds of things about trying to make the experience much more fun, what it really comes down to for most consumers is: who’s got the lowest fare?
As for the broth sloshing around in Campbell’s test kitchen bowls, it’s less about price and more about taste. The company hopes its very personal research is turning out the right recipes. In Camden, I'm Mark Garrison, for Marketplace.
We love our families, though they may be a handful this time of year. But sometimes we hide things from them, particularly things to do with money.
Whether it's out of shame, or a desire for autonomy, or as a tool to control those around us, money secrets can be toxic. But it can help to know why you, or someone you love keeps those secrets.
Here to help us dig deeper is Dr. Gail Saltz, a psychiatrist and author of several books, including "The Anatomy of A Secret Life: The Psychology of Living A Lie."
Marketplace Money listener Katherine works for a DC-based national non-profit that handles financial education. When she wrote to us, she had this to say:
"What did my family teach me about money? Everything. 75% what NOT to do, 25% what to do. My parents divorce was largely caused by financial lies and resulted in bankruptcy."
The financial lie, astoundingly, was Katherine's Dad lied about losing his job.
"He left the house everyday. One of the great mysteries of his life is my mom didn't know where he went all day. My mom was at home taking care of two young kids and was pregnant at the time. Dad put everything on credit. It proved disastrous." Katherine was 7 years old. Her parents eventually split up, and her mom never remarried. "She didn't have great lessons to offer me about how to share finances."
Dr. Saltz says this is actually less uncommon than one would expect. "I heard a lot about this during the recession, when a lot of people lost their jobs. For many men, employment equals identity, equals masculinity, equals power and control in the world, and the same of losing your job and getting fired is too much."
"Handling it by pretending its not happening," Dr. Saltz says, "which is an extreme form of denial, is an unfortunate and pathological method of dealing, but it's something men do."
To listen to Dr. Saltz and Carmen talk to Katherine about combining finances with her spouse and other questions, click on the play button above.
Yup, we're a proud bunch of nerds so welcome to our version of a holiday shopping recommendation list: Books!
Here are some of my first picks for the season:
"S" by JJ Abrams
Remember what your used college textbooks looked like--with the previous three owners' notes in the margins and random pieces of paper and receipts stuck between pages? This book is that, but the notes are parallel story lines. Amazing fun for library-lovers and the packaging alone means a no-way to digital.
"The Circle" by Dave Eggers
I know, I know, it's like required reading for all cool tech people. I preferred Eggers in his previous creations such as "What Is the What" but this inside-man novel of a quasi-Google campus raises some issues we'll all be facing soon (if not already).
"Alexander McQueen: The Life and the Legacy" by Judith Watt
My favorite fashion-designer McQueen bio on a budget. For fellow "Project Runway" lovers, this paperback release is a lovely escape into a world of dazzling creativity. Sometimes we need to look at shiny, gorgeous things created by human hands.
"This Explains Everything: Deep, Beautiful and Elegant Theories on How the World Works" by John Brockman
Do the best minds in science and practice agree as to what's the best theory every created to change humankind? Actually they do (hint: Dodo bird), but they come about explaining their picks in the most profound ways. The philosophical part of your brain will thank me.
The University of Southern California plays UCLA on Saturday, and there'll be a lot of money at stake on that football game. Not so much for gamblers, but for how it could prove decisive in who gets an extremely well-paying and high-profile job.
USC’s looking for a head coach. Interim coach Ed Orgeron was initially considered a long-shot for the gig. But he’s nearly undefeated since taking over after the school fired the previous coach, Lane Kiffin. USC’s surprising performance is shaking up the high-stakes coaching search.
Big money is on the table. College football’s highest paid coach -- Alabama's Nick Saban -- makes more than $5.5 million. USC may be willing to top that for a proven coaching star. And much more money than that is at stake.
“The attention that a great head coach can bring to a school is pretty phenomenal in terms of the dollars that are related to it and in terms of the marketing value,” says Kenneth Shropshire, sports business attorney at Duane Morris and a Wharton School professor.
Orgeron’s unexpected success complicates USC's search. His previous head coaching run -- at the University of Mississippi -- was a disaster. So football watchers thought USC would choose a big-name coach with a shelf of national titles. But winning matters, and now Orgeron's getting support from current and former players, alums, and importantly, the wealthy and powerful fans who write checks.
“You have to listen to those donors because they are the people who are primarily funding your program,” says Daniel Durbin, director of the Annenberg Institute of Sports, Media and Society. The institute is at USC, so he’s following the situation closer than most.
Passionate support aside, the school needs to be sure the interim coach’s current success is no fluke.
“He is to a degree catching lightning in a bottle, says Temple University sports economist Michael Leeds. “The question is: is this a one-time boost or is this evidence that he has grown as a coach and is ready to take over a marquee program?”
That means what happens on the field Saturday will be critical. Leeds, Durbin and many others believe it will be hard for USC not to give Orgeron the job if he defeats crosstown rival UCLA. A victory just might be enough to clear doubts stemming from bad seasons past.
Mark Garrison: College football’s highest paid coach makes more than $5.5 million. USC may be willing to top that. And much more money than that is at stake, says sports business attorney Kenneth Shropshire.
Kenneth Shropshire: The attention that a great head coach can bring to a school is pretty phenomenal in terms of the dollars that are related to it and in terms of the marketing value.
Ed Orgeron’s unexpected success complicates the University’s choice. His previous head coaching run—at Ole Miss—was a disaster. So football watchers thought USC would choose a big-name coach with a shelf of national titles. But winning matters and now he’s getting support from players, alums and importantly, the wealthy fans who write checks.
Daniel Durbin: You have to listen to those donors because they are the people who are primarily funding your program.
Daniel Durbin directs the Annenberg Institute of Sports, Media and Society. It’s at USC, so he’s following the situation closer than most. Passionate support aside, the school needs to be sure the interim coach’s current success is no fluke.
Michael Leeds: He is to a degree catching lightning in a bottle and the question is: is this a one-time boost or is this evidence that he has grown as a coach and is ready to take over a marquee program?
Temple University sports economist Michael Leeds says what happens on the field tomorrow will be critical.
Michael Leeds: If he wins, it would be extremely hard for USC to let him go.
Many share that opinion. A victory against an archrival just might be enough to clear doubts stemming from bad seasons past. I'm Mark Garrison, for Marketplace.
If you're not crowding into a store today, it might be because personalized sales offers are coming to you. Those offers might be based on what you usually spend, whether or not you take a yearly vacation, how many kids you have and even what kind of laundry detergent you usually buy.
Matt Carmichael is a journalist who studies data, and wrote the book "BUYographics: How Demographics and Economic Changes Will Reinvent The Way Marketers Reach Consumers." He followed a small group of families around to how they were spending their money and what money choices they were making.
Carmichael says the middle class is shrinking in some ways and evolving in other ways and that has led to all sorts of interesting tradeoffs. "In terms of how we spend money, what have typically been competitive spaces aren't what we think they are anymore," Carmichael says.
In the book, he uses a person named Liz as an example. Liz was trying to save up to buy a laptop and she couldn't reach her saving goals because her friends kept getting married and she spent the money on attending their weddings. "The laptop maker isn't necessarily looking at the bridal industry as a competitor, but because of the changes in our income and because of the changes in our middle class you start seeing product categories competing in ways that they haven't before," Carmicheal says.
And that research Carmichael provided was valuable to the families he studied, too.
Carmicheal says one of the most interesting cases was a woman from East Baton Rouge Parish, Louisisana named Sandra. Sandra is a single mother of two girls and she's burdened with all the things that a lower class single parents are burdened with. "As we were talking, she started to realize that she wasn't really taking care of herself very well, and she started to think you know maybe I actually treat myself a just little bit better and we'd all be better off," he says.
This final note today comes from the intersection of basketball and loopholes.
It turns out the price of an extra time out is $50,000.
In case you missed it yesterday while you were in a food coma, the NBA fined Brooklyn Nets coach Jason Kidd for apparently intentionally spilling his soda onto the court after colliding with a player and stalling a game versus the LA Lakers.
His team was out of time outs, but the mess stopped play. Kidd says it was an accident, but the League isn't buying it.
And the Nets lost anyway.
When it comes to global trade, countries only have a couple of options: They can set up shop on their own, or they can team up with their neighbors, to do business on special terms, in a trade-bloc. It's what the Europeans do with the EU, and it's what the U.S. does with NAFTA.
And it's what the Russians want to do with a bunch of former Soviet republics in what's being called a Eurasian Union.
Ukraine is located between Russia and Europe, and it has a difficult choice of partners, but it looks as though it's decided its future lies in the East. The country, one of Europe's biggest, has been courted by east and by west. The EU has offered Ukraine an historic free trade deal, Russia wants Kiev to join ITS economic bloc. The pressure on Ukraine to decide whom to embrace has been enormous.
At the Roshen sweet factory in Kiev, thousands of little chocolates packed with nuts and cognac trundle down the production line. Earlier this year Moscow banned imports of everything this confectionary company makes. It's imposed trade restrictions, too, on other Ukrainian companies. Roshen's owner, Petro Poroshenko, believes that Russia has an odd way of wooing his country.
"The whole world is absolutely clear to understand that the real reason is a political reason," Poroshenko says. "It's a form of pressure on Ukraine because of the necessity to make a strategic decision about our future development."
Last week, the Ukrainian government appeared to MAKE that strategic decision. In a rowdy session of parliament, the country's prime minister announced the cabinet was putting on hold the Association Agreement with the EU, it would concentrate instead on repairing economic ties with Moscow. Ukraine's Energy Minister Eduard Stavitsky told me his country had no choice.
"Over the last year trade between Russia & Ukraine fell by 25 percent. That's a huge blow to our economy," Stavitsky says. "We spoke to EU officials months ago about how they might compensate us - but all we got were declarations that Ukraine would profit in the medium to long term.
The government's decision has sparked anger on the streets of Kiev, where pro-EU protestors have clashed with riot police. Demonstrators have accused the authorities of dragging Ukraine back to the Soviet Union, and the country's President, Viktor Yanukovich, of selling out to Moscow to stay in power.
For now, the Ukrainian authorities have calculated that Moscow is their best choice. But President Yanukovich still plans to attend the EU summit, and he knows (because the polls tell him) that more Ukrainians favour closer ties with the EU than with Russia. Perhaps, there's still time for an unexpected twist before the curtain falls.