I have not posted a blog in a while, so I thought that with the Holidays approaching I would take some time to put something together. It has been a very exciting 2008 for VerticalScope, and for myself personally, as we have grown the business both organically and through acquisition. I thought it would be worthwhile to touch on a number of topics that I hear people talking about so often lately.
The Recession
Well 2008 has certainly been a tough year, particularly the second-half. In all honesty, I guess it makes sense. I remember the days of traveling to Southern California for our Modified Automotive Group business and I was always astonished at the amount of money being spent (on credit). It seemed as though any average 27 year old just starting out his career already had an Escalade, a $600,000 home, and who knows what else. I soon learned about 30-year "interest-only" mortgages, and low vehicle lease rates. These credit programs were setup in a time of lax credit-standards, and with the belief that "homes would never go down in value". Well, anytime you hear the words "it will never go down in price" or "you can't lose" you should become very weary. Those words often lead to a "bubble" - as average investors throw all of their money into these "can't lose" investments. To save you from reading what every news medium has already reported, I'll just say "the rest is history" - and there is no such thing as "can't lose" investment.
So, where do I feel we are at today? Well, I think that the effects have not fully set into consumers mind-sets just yet. I don't think people fully appreciate the massive job losses we could have in 2009, and how the economy will affect their average every day lifestyle. Whether it is the massively out-of-whack buy-out price on your leased vehicle, or the inability for many of those people to even qualify for a new vehicle lease (or loan), the fact is, these things take time to sink in. However, I think the news has started to spread, and those that thought they would not be effected at all, are probably looking at their investment statements from November 30th wondering "what happened". There are the eternal optimists that think this will be over in no-time, and its all just caused by the media. On the other side, there are the eternal pessimists who believe this will last for 10 years. I am somewhere in the middle. I believe that "good companies" and "smart employees" will find the end of the recession on at least a psychological basis by the end of Q3 2009. Unfortunately, I believe that there are many companies that will simply not survive the requirements of the new economy. For those companies, and for the "underperforming employees" (at good and bad companies) this recession is going to last a very long time. I believe America will be need to re-define itself as a global leader, and that is going to have to start with the motto "a hard day's work for a fair day's pay".
How will the recession effect online advertising?
This is a great question, and its one I ask myself everyday. Each day I have a slightly different answer, however, recently I have come to many of the same conclusions as my above paragraph. The fact is, some companies will survive and excel in these difficult times. They will deliver excellent value for their clients money, and ultimately, a game of "survival of the fittest" will play out. Companies that have been delivering poor value to their clients, and have simply "showed up" will be cut from the budgets. In this market climate, there will be no time or money for poor performers. However, as the poor performers are shed from the budget, it will be the strong performers that really shine, and will capitalize on their more dominant market position and superior economics. The end result: the economy will shed some dead-weight, and reward the strong. When I hear that analysts are looking at "8% growth" for online advertising next year, I believe that this will be spread disproportionately -- the top performers will see 20-30%+ gains, while the weak performers will see substantial decreases.
How is VerticalScope progressing?
Things have been great at VerticalScope throughout 2008. We have made great strides in solidifying our business, and finally became a "Top 10" Automotive Resources property according to ComScore Media Metrix in November 2008. We are just one spot behind Source Interlink Automotive who were the buyers of the Modified Automotive Group magazines from us in February 2007. We look forward to once again showing all of the "corporate entities" above us what an "enthusiast-run" company can do. We will be sure to create headaches for many of them!
What's on the horizon?
While I certainly can't give any "inside information" we have a very exciting launch coming up in the Automotive market in the weeks to come. We feel this launch will solidify us as a "top performer" in the Automotive marketplace for automotive shoppers, car enthusiasts, and advertisers. As the market takes a swing at the Companies we are chasing, we feel we will be perfectly positioned to seize the opportunity.
I will try to make another post in the coming weeks, or perhaps over the Holidays, with some additional insight into VerticalScope's performance in 2008. In the meantime, be sure to think about giving to your favorite charity, or volunteering your time this Holiday season... 2009 is going to be a very difficult year for a lot of people, and the charities will certainly be able to put the funds to good use. And finally, if you find yourself out of job, or out of energy, think of how lucky you are to live in the US or Canada - 1st world countries, with plenty of opportunity. Rather than complaining, or feeling down, seize the opportunity that our fine countries have given us. Pull up your socks, and work your butt off - there is no better way to get the economy and your career out of a rut than to out-work the competition.
