For the longest period of time the classic proxy for the theoretical risk-free rate has been the 3-Month U.S. Treasury Bill, this may have to be re-thought given the U.S. debt-crisis that just got "resolved" today. The crisis brought home the realization that the U.S. Ecoomy, far from being infallible, is actually vulnerable in it's present state.
The longer-term ramifications of both the crisis itself and the solution that was agreed upon today are going to be profound. The United States has re-discover its place in the global economy instead of relying on past laurels, and soon, while the other developed nations still look to it for economic leadership and haven't realized that this need is more psychological than anything else...
Employment Outlook: ADP vs BLS...
Earlier this week the Markets were buoyed up by some favorable economic reports coming out, but most significantly by yesterday's ADP Employment report that predicted a 157K increase in private jobs. Traders that were holding short positions given the low seasonal performance of markets in summer months, further drove markets up in a "short squeeze rally".
Come Friday morning, the BLS Employment report came out, and proved ADP wrong...yet again. According top BLS estimates, only 18K Non-Farm jobs were added in June, much lesser than the 105K economists were expecting and a miniscule fraction of the 157K ADP predicted. And this is a consistent pattern in the past year, ADP has been off vs BLS by 50% or more on at least 6 occasions. That is a coin toss. So I say either ADP proves why they have a better read on employment than BLS or they stop reporting this number in the public interest...as it is the markets are jittery and beyond the implications to investors, the markets have a direct bearing on consumer and corporate morale. We do not need another volatile factor added to an already chaotic mix of indicators.
Come Friday morning, the BLS Employment report came out, and proved ADP wrong...yet again. According top BLS estimates, only 18K Non-Farm jobs were added in June, much lesser than the 105K economists were expecting and a miniscule fraction of the 157K ADP predicted. And this is a consistent pattern in the past year, ADP has been off vs BLS by 50% or more on at least 6 occasions. That is a coin toss. So I say either ADP proves why they have a better read on employment than BLS or they stop reporting this number in the public interest...as it is the markets are jittery and beyond the implications to investors, the markets have a direct bearing on consumer and corporate morale. We do not need another volatile factor added to an already chaotic mix of indicators.
"Mix Modeling on its death-bed" Starcom MediaVest Group CEO Laura Desmond
http://www.adweek.com/internet-week-blog/laura-desmond-wants-her-industry-deep-six-its-market-mix-132255
Starcom MediaVest Group CEO (and #57 on Forbes 100 most powerful Women in 2008) Laura Desmond believes that Marketing Mix Modeling, platform for measuring Advertising ROI is on it's death-bed, citing backward-looking focus and lack of ability to evaluate consumer attitudes as part of the reason it is becoming obsolete.
I think Marketing ROI as a concept won't go away (taking care to distinguish Mix Modeling as the device and Marketing ROI as the objective) for at last a couple of reasons:
-Elegance in evaluating Marketing Strategy was not the primary raison d'etre for the approach, it came about as a means for stakeholders outside the Marketing Department to understand how the dollars they were pumping into advertising was contributing to topline growth (and bottomline performance)- in other words the "business performance" focus she faulted. After all influencing consumer attitudes is not the end-goal of advertising, growing sales is (by influencing consumers positively), so successful advertising needs to demonstrate ability to drive both, not just any one of the two purposes.
-Today the approach does more than that and can simultaneously evaluate both business performance and consumer attitudes, depending upon how much effort you want to put in. I have already written in the past that consumer attitudes not only can but should be measured in marketing-mix models (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411790)
Starcom MediaVest Group CEO (and #57 on Forbes 100 most powerful Women in 2008) Laura Desmond believes that Marketing Mix Modeling, platform for measuring Advertising ROI is on it's death-bed, citing backward-looking focus and lack of ability to evaluate consumer attitudes as part of the reason it is becoming obsolete.
I think Marketing ROI as a concept won't go away (taking care to distinguish Mix Modeling as the device and Marketing ROI as the objective) for at last a couple of reasons:
-Elegance in evaluating Marketing Strategy was not the primary raison d'etre for the approach, it came about as a means for stakeholders outside the Marketing Department to understand how the dollars they were pumping into advertising was contributing to topline growth (and bottomline performance)- in other words the "business performance" focus she faulted. After all influencing consumer attitudes is not the end-goal of advertising, growing sales is (by influencing consumers positively), so successful advertising needs to demonstrate ability to drive both, not just any one of the two purposes.
-Today the approach does more than that and can simultaneously evaluate both business performance and consumer attitudes, depending upon how much effort you want to put in. I have already written in the past that consumer attitudes not only can but should be measured in marketing-mix models (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411790)
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