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What would you do with $600 billion?

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The news that Publicis and Omnicom are merging to create an advertising and creative leviathan, valued at just over $35 billion with nearly $23 billion in revenues, has set the marketing world alight. But the fact total global spend on advertising will hit $600 billion in 2015 is more interesting.

TechCrunch reported that the merger would bring under one roof advertising and creative agencies such as BBDO, Saatchi & Saatchi, DDB, Leo Burnett, Razorfish, Publicis Worldwide, Fleishman-Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand and ZenithOptimedia.

It will also unite agencies that work with “some of the world’s biggest buyers of advertising, including mobile carriers like Verizon and AT&T, drinks companies like Coca-Cola, financial services companies like Visa, and many more.”

There’s going to have to be some seriously high Chinese walls internally to keep clients happy and some anti-anti-trust lobbying in multiple territories to get the deal through.

What really interested us however, was a link to the news that global advertising spend would reach $518.8 billion in 2013 and exceed $600 billion in 2015.

$519 billion in 2013… or 0.7% of global GDP

$518,900,000,000 is a lot to money to encourage you (you lucky, lucky consumer) to choose, buy, consume and then throw away more stuff. Most of this stuff will be bought because of insecurities, be unhealthy or harmful, unnecessary or have built-in obsolescence, be resource inefficient and generally unsustainable.

Freelance journalist and author ES Turner described advertising as, “The whip which hustles humanity up the road to the Better Mousetrap. It is the vision which reproaches man for the paucity of his desires.”

$519 billion is a big number, but a seemingly small share of GDP to those of us lucky enough to live in the developed world with our trillion dollar economies (and even bigger debt mountains).

$519 billion exceeds the gross domestic product of each of the poorest 171 countries of the 192 measured by the World Bank, including Norway, Poland and South Africa.

$519 billion is more than the combined GDP of the poorest 88 countries in the world. Many of which will suffer the worst and most deathly effects of climate change – such as small island states and those in extreme weather settings.

For reference, the total revenues of oil and gas giants Shell and ExxonMobil who exacerbate climate change, was $484 billion and $482 billion respectively in 2012.

In a typically provocative 2007 TED talk, Bjorn Lomborg set out the relative merits of spending on climate change mitigation versus solving other pressing global issues. He used as his baseline figure just under one tenth of the world’s current advertising spend ($50 billion). He chose to spend that $50 billion over four years, representing just one fortieth of the annual advertising splurge.

The issues his Copenhagen Consensus team assessed, using a cost benefit-style analysis, included climate change, communicable diseases, conflicts, education, financial instability, governance and corruption, malnutrition and hunger, population migration, sanitation and water, and subsidies and trade barriers.

He estimated that the cost of implementing the Kyoto protocol on climate change would cost $150 billion. Early Intergovernmental Panel on Climate Change (IPCC) research estimated the protocol would cost between 0.1-1.1% of global GDP ($55-$615 billion). Without the US (which ultimately did not sign the protocol), this fell to 0.05% of GDP ($28 billion).

Lomborg pointed out, “The UN actually estimate that for half that amount, for about $75 billion a year, we could solve all major basic problems in the world. We could give clean drinking water, sanitation, basic healthcare and education to every single human being on the planet.”

A fallacy of the false alternative

Don’t get us wrong, we find Lomborg an intelligent and engaging speaker. He just misses the point about most things.

Lomborg’s suggestion that there is a trade-off between solving climate change and addressing some of the world’s other major problems is a ludicrous false dilemma.

There is more than enough wealth in the world to solve every single one of the major global problems. It’s just that those with the wealth would prefer not to. We choose to spend one in every $142 on advertising stuff.

It is assumed that advertising increases consumption and this stimulates economic growth. That said, the tobacco, alcohol and gambling industries swear blind that advertising does no such thing, although that is puzzling since they spend so much on it.

The International Monetary Fund’s World Economic Outlook forecasts global growth of 4% in 2013. The advertising industry expects to see 5.4% growth. Despite much heralded improvements in marketing as a science, we appear to spending a lot more to achieve less.

On a finite planet, we should probably aim for prosperity without unsustainable growth. Advertising that encourages unsustainable consumption should probably be discouraged.

Here’s a thought. An 8.3% tax on advertising might provide this discouragement and provide the $50 billion Lomborg wants us to spend on addressing the world’s most pressing issues.

William Lever, the first Lord Leverhulme and founder of Lever brothers (now Unilever) made the oft-misattributed and misquoted statement about advertising, “I know half my advertising isn’t working, I just don’t know which half.”

In reality, almost all advertising in a digitally connected age isn’t working and is wasted on simply terrible products and services. If companies made genuinely exceptional products and services in the most efficient fashion that met a genuine consumer need, word-of-mouth alone would propel sustainable sales, loyalty and advocacy.

Lomborg concludes his talk with the words, “At the end of the day, you can disagree with the discussion of how we actually prioritise these, but we have to be honest and frank about saying, if there’s some things we do, there are other things we don’t do. If we worry too much about some things, we end by not worrying about other things. So I hope this will help us make better priorities, and think about how we better work for the world.”

‘Better priorities’ and ‘better work for the world’ would mean spending less on persuading us to buy more junk and more on addressing climate change, and providing clean drinking water, sanitation, basic healthcare and education to every single human being on the planet.

Further reading:

How to be good in the ruthless world of advertising

Lomborg talking nonsense (again) on global warming

Stock market unsustainable

Government has ‘concerns’ about payday loan advertising

Simon Leadbetter is the founder and publisher of Blue & Green Tomorrow. He has held senior roles at Northcliffe, The Daily Telegraph, Santander, Barclaycard, AXA, Prudential and Fidelity. In 2004, he founded a marketing agency that worked amongst others with The Guardian, Vodafone, E.On and Liverpool Victoria. He sold this agency in 2006 and as Chief Marketing Officer for two VC-backed start-ups launched the online platform Cleantech Intelligence (which underpinned the The Guardian’s Cleantech 100) and StrategyEye Cleantech. Most recently, he was Marketing Director of Emap, the UK’s largest B2B publisher, and the founder of Blue & Green Communications Limited.

Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

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sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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