Monday, July 27, 2009

Will the new home sale surge last?

Today's news about a stronger-than-expected climb in national new home sales shouldn't be a surprise. There was plenty of inventory to be sold at affordable prices and plenty of federal and local stimulus money (in the form of tax credits).

Don't let the good news give you comfort.

There are plenty of indicators that suggest we still have a long way to go before the homebuilding industry returns to a sense of normal. For starters, the tax incentives will be going away.

Recent reports indicate another round of foreclosures - caused by more people losing their jobs and continued difficulty with loan modifications - likely will keep prices depressed and open up more opportunities for purchases of existing homes far into 2010.

A recent report on SoCal Connected, a great public television news show on KCET, offered some interesting confirmation of this.

Also, a recent column in the WSJ points out how long it takes for home prices to climb once they reach bottom. At this stage, many builders simply can't start new construction on approved lots because they would lose money on every home they sell if offered at today's market prices.

So, the struggles are not over, particularly in places like California, Arizona and other states with high foreclosure rates and other rough local economic indicators.

As this column is devoted to public relations, the next question is: How will this continuation of a negative cycle impact colleagues connected to the homebuilding industry? In recent weeks, I've seen two great, smart colleagues either lose their jobs or have their jobs downsized to a contractor status. There were others before this. I'm sure there are more. I just haven't heard about it, yet.

The industry knows recovery is a ways away, so they continue to downsize. And, when this happens, the public relations and public affairs departments take big hits.

It is very likely some of the smartest communications professionals will be lost forever to the homebuilding industry. They can't afford to wait for the recovery and are taking posts in other industries. Sure, when the homebuilding industry recovers, there will be PR and PA openings, but the pool of applicants will be largely inexperienced, in my opinion.

Will recruiters be necessary to lure back the trained, seasoned pros? I hope so.

Current trends and analysis tell us two things about the importance of communications to any industry: That public relations is critical to a company's bottom line in any economic cycle and the profession plays an even bigger role during a period of recovery. You will hear a lot more about this at the 2009 PRSA International Conference.

What's more, the homebuilding industry will continue to face significant challenges in the years and decades before us: Environmental regulations are increasing, water supplies are questionable, communities are better organized thanks to social media, etc. Public relations and public affairs professionals will play important roles in the continued success of this important industry sector.

And, that should mean attractive compensation rates, whether you are an agency or an individual getting hired internally.

The homebuilding industry recovery is several months, if not more than a year away. But when it does recover, it likely will be financially attractive to PR pros.

In the meantime, stay current and remain engaged in the homebuilding industry (Both can be accomplished by joining an association like the Building Industry Association, reading the industry news and attending events). The homebuilding industry will be robust, again.

And, don't forget to arm yourself with the tools and information to build the business case for PR. Right now, it's difficult to make that case with a homebuilding CEO. In early 2010, his or her receptiveness will be markedly improved.

Sunday, July 19, 2009

Political ads 24/7

The political broadcast advertisement cycle is no longer confined to the election cycle. The obvious political video, with all the trademarks of an election-year campaign, is now appearing on You Tube and on paid television advertising with more frequency and regularity. In California, the governor is making a direct appeal to the people for his budget stance. Nationally, various groups are making their appeal regarding the President's health care overhaul.

We have Obama to thank. Well, actually, we have Arun Chaudhary to thank.

About this time last year, the Obama team led by Chaudhary - the young film school professor who took a leave from New York University - was clearly demonstrating the power of the video to wins the hearts and minds of Americans. A new book due out next month explains the political power of You Tube and offers a case study on the Obama campaign.

Obviously, the premise for why politicians used You Tube and other social media channels 2008 still holds today: Skip the traditional news media and speak directly to the public. If you have a compelling message spoken eloquently by a charming and mostly respected figure, the chances are better than 50-50 you can turn sentiment in your favor.

Because the President's video team, which now is led by Chaudhary, hasn't stopped posting videos, we are seeing a continued use of this medium in non-election periods.

Consider that since the President took office, the White House has used the medium in various ways to persuade, inform and to keep the momentum going. Perhaps among the most notable post-inauguration videos has been The President's and First Lady's plea for volunteerism (Which actually is about the 6th most viewed You Tube video on the official White House site).

In California this month, the governor has gone to the airwaves to make his case about the next (and overdue) budget. Schwarzenegger's effort has been countered by paid advertisements by the California Teachers Association, for starters. I feel like I'm in a time warp because I used to think these videos were used only when candidates sought office.

It's almost as if the campaign season is in full swing in California - but we're still a few months away from the next race for CA governor. (Arnold's final year is 2010). It's interesting to note there are some cynics who believe the CA governor is using the video medium in a pull-out-all-the-stops effort to end his term on a positive note with some sense of accomplishment.

So, this brings me to some questions.

Like, are we approaching video overload and saturation? In a world where attention spans are approaching the goldfish stage and we can't wait for the latest technology or social media channel, it would seem the video format - at least through You Tube - might be approaching "old school" status. Most pundits say we're not there, yet.

The other question is "true impact." This is an item closer to my heart since public relations professionals continually must examine social media efforts to provide expert counsel to clients.

So, if the most popular You Tube video on the White House site (the inauguration) shows only 1 million or so views compared to the current all time leader - "Evolution of Dance" video with 122 million views - are political videos really making an impact?

Yes, some would argue, since the Obama campaign videos - either those done by the campaign or by independents in support of the future president - were viewed as least once by a third of the country. Note, the "Yes We Can" music video with celebrities created in February 08 has the second-highest viewership (18 million) of all "News and Politics" videos on You Tube.

How can we measure this? Where is this headed? More on that in a future post.