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With Big Heads and Bigger Wallets, Activist Investors Are Out to Shake Up Major Brands

Posted by Dale Buss on August 16, 2013 02:33 PM

More CEOs than ever have to worry about "activist investors" sniffing around their companies—or taking a big bite out of them. These aggressive financiers who used to be known as "corporate raiders" seem to be taking on a new cache.

The announcement this week by the dean of these investors, Carl Icahn, that he'd taken a major stake in Apple has raised the profile of this gaggle of discontented financial dynamos to new levels. He pressed CEO Tim Cook to use Apple's cash hoard to buy back more of what Icahn called Apple's "extremely undervalued" shares.

And these days, the ilk of Icahn—on whom the Gordon Gekko character in Wall Street was partially based—individually and collectively have a larger voice than ever before. Their ranks also include Bill Ackman, currently tilting with JCPenney and Herbalife management; George Soros, who's involved with Apple and JCPenney as well; Dan Loeb, who has taken aim at Sony's Hollywood operations for unlocked value; Nelson Peltz; and David Einhorn. Now Jos. A. Bank has one nipping at its heels.Continue reading...

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Employees May Be Grumbling, but Now McDonald's Faces Restive Franchisees

Posted by Dale Buss on August 7, 2013 05:51 PM

If success has many fathers, flat sales can turn people into real—well, anyway, struggling fast-food chains now are getting pressure from their franchisees as well as their employees. McDonald's and Steak 'n Shake are two venerable burger brands that increasingly have their hands full with restive restaurant owners on whom they depend to reach the end consumer.

In fact, while McDonald's CEO Don Thompson has been rather casually parrying attacks on his company from living-wage supporters, it may be a much bigger problem for the chain that a franchisee revolt seems to be brewing among store operators who are complaining that McDonald's increasingly is charging them too much to operate their restaurants. According to Bloomberg Businessweek, they've got complaints about what McDonald's now is charging for rent, remodeling and fees for training and software. As a result, franchisees aren't interested in investing in existing or new McDonald's, the news service said.Continue reading...

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PayPal Gaffe Makes Pennsylvania Man World's Richest—for a Brief Moment

Posted by Mark J. Miller on July 18, 2013 06:10 PM

Bill Gates may be the world’s wealthiest person (at least today) with a net worth of $73.7 billion, but Pennsylvania resident Chris Reynolds briefly topped the Microsoft founder—thanks to an unusually large deposit from PayPal.  

The 56-year-old opened up his monthly PayPal account notice last week and discovered that he had been credited with $92 quadrillion ($92,233,720,368,547,800), making him the world’s first quadrilionaire and one thousand times richer than the entire planet's combined GDP.

The wealth was brief, however. By the time he logged in, the account balance was back down to a more paltry sum: zero. "I was skeptical,” Reynolds told the LA Times. "And my skepticism was validated within two minutes."Continue reading...

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ING Launches Orange Money Approach to Retirement Savings

Posted by Dale Buss on March 18, 2013 06:12 PM

ING U.S. came up with "the number" as a way for Americans to think about how much of a nest egg they would need to retire comfortably, and it turned out to be a very effective advertising icon for getting across the point: You need to have a tangible retirement goal to plan, save and invest effectively.

Now, ING U.S. is back with a new visual aid in a new TV advertising campaign, and it could turn out to be just as or even more effective: "orange" money. The orange color represents the well-known hue of the ING brand, but more important is that orange money stands for the stuff in your wallet, or savings, that you shouldn't spend because it's designated to put away for retirement. Only the "green" money is safe to spend.Continue reading...

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FICO on Location-Based Marketing: GPS Data Supports Omnichannel Analysis

Posted by Sheila Shayon on February 14, 2013 03:15 PM

As retailers increasingly leverage location-based marketing to predict customer behavior and influence purchasing decisions, the result is more sophisticated data about who and when to target — and what offers to make.  

“Collecting GPS data is becoming quite pervasive. Using the knowledge of where a customer goes, which path she travels and how much time she spends at various locations can improve the quality of customer interactions and types of marketing offers and increase the likelihood that she’ll redeem an offer,” writes FICO’s Shafi Rahman and Amit Sowani.

FICO, founded in 1956, introduced analytic solutions including credit scoring, predictive analytics and business rules management and optimization, now used by most of the world's top banks, leading insurers, retailers, pharmaceutical businesses and government agencies, as well as managing the personal credit health of millions of individuals. 

The organization identified some key steps in location-based data collection:Continue reading...

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American Express Kicks Off 2013 With Biggest Layoffs in Four Years

Posted by Shirley Brady on January 10, 2013 05:02 PM

Along with adjusted net income of $1.2 billion, American Express delivered a surprise in its fourth quarter earnings report today: the elimination of 5,400 jobs as part of a global reorganization of its business units, with over $400 million in severance and its business travel unit taking a big hit.

The company has endured more than a decade of downsizing under CEO Ken Chenault: 7,700 jobs in 2001; 6,500 jobs in 2002; 7,000 jobs (10% of its workforce) in 2008; 4,000 jobs in 2009. This round of cuts, as Wall Street Journal reports, represents "its biggest retrenchment in a decade," and will shed 8.5% of its workforce.

“Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth,” said Chenault. “For the next two years, our aim is to hold annual operating expense increases to less than 3 percent. The overall restructuring program will put us in a better position as we seek to deliver strong results for shareholders and to maintain marketing and promotion investments at about 9 percent of revenues.”

More details on the restructuring and impact on the company — which just launched a #foraliving recruitment campaign on Twitter and YouTube — from its press release:Continue reading...

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Simple Banking: A Modest Digital Proposal to Revolutionize Banking

Posted by Mark J. Miller on January 9, 2013 10:07 AM

Banks are always crowing about how they aren’t going to have fees for this or that, but somehow, over time, the monthly bank statement comes and there are a load of fees on there. And most of them are worded in such a way that the consumer has absolutely no idea what they are for.

Australian Josh Reich has certainly felt the bewilderment. “Banks make money by keeping customers confused,” Reich told the New York Times. “There’s no incentives to make the experience better.”

So what did Reich do? He partnered with a pal, Shamir Karkal, and started an online bank, Simple, a “worry-free alternative to traditional banking” that doesn't charge any fees.

Formerly known as BankSimple, the Portland, Ore.-based startup which has now processed more than $200 million in transactions, offers its 20,000 customers data-rich analysis of expenditures as well.Continue reading...

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"Do What You Do": Capital One Touts Mid-Mobile Banking Multitasking

Posted by Barry Silverstein on January 8, 2013 10:01 AM

The flurry of mobile banking ads lately is no accident. Just like every other business, banks have figured out that consumers are on the go — and connected — all the time. Banks are already scrambling to get their piece of the mobile payments market, and now mobile banking apps are the latest new thing.

A slew of campaigns are featuring the ease of mobile banking, with banks such as Barclays expanding mobile. Bank of America says, "Life is mobile. So is your bank." Chase calls mobile banking, "The power of Chase in the palm of your hand."

But Capital One, instead of pitching the mobile app itself, is focusing on the convenience factor for the consumer.Continue reading...

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