Snippets of Interest From the Past Week – These items provide a range of information for those looking carefully at the corporate world.
- Recent reporting shows that during the first three months of 2019, food and drink companies have taken a break from the mergers and acquisitions that have been their steady diet for the past few years. Part of it could be due to the turnover in the CEO positions of five of the larger companies, but it could also be due simply to a coming realization that acquiring more isn’t necessarily better for the bottom line.
- Dean Foods, one of the largest companies in the dairy industry, is experiencing a continuing decline in milk consumption – which seems inexplicable during a time when many consumers are moving toward healthier drinks. The consumer decline for Dean has also been exacerbated by Walmart opening their own dairy plants to help in the guarantee of delivery. Dean is currently considering a sale of the company, privatization or a divestiture of some of its assets. One additional item that could be added to the list is to ramp up a blockbuster advertising for consumption of milk – it seems like an appropriate time and there haven’t been any good milk ads in a long time.
- And, speaking of advertising, McDonald’s is acquiring Israeli digital startup Dynamic Yield, in order to improve in-store ordering and online marketing. McDonald’s will pay $300 million for the company; the deal is the first acquisition that McDonald’s has made in a number of years and its biggest in two decades. The food and drink companies, mentioned earlier, should probably make note of this fact.
- The news business is undergoing a distinct change – which comes on the heels of the “historic meltdown” that newspapers around the country faced during the 2009 financial crisis. At that time, America’s newspapers began racing to transform themselves into digital businesses, hoping to avert the crisis with print versions of the news. The problem has been that they have found it difficult to convince customers to pay for the digital services. Consequently, there are a small number of newspapers that have managed to stabilize their businesses. Local papers have experienced sharper declines, with greater incursion into their online advertising from the tech giants, such as Google and Facebook. According to the WSJ, nearly 1,800 newspapers closed between 2004 and 2018, leaving 200 counties with no newspaper and roughly half the counties in the country with only one (ref University of North Carolina study). The shrinking of the local news landscape leaves Americans with less news about what’s happening close to them. The downward spiral is expected to continue – “it’s hard to see a future where newspapers persist,” one analyst reports.
- It’s said that Facebook has tried to fill the void in local news service but couldn’t find enough stories to make it worthwhile. On an unrelated matter, however, Facebook has plans to change its popular Groups, turning it into an ads generating operation. Using Groups could make ad targeting easier as users could be defined by race, geography, stage of life, and hobbies. With the new privacy regulation limiting what data Facebook can pass along to advertisers, grouping users on their own could be a clever way to circumvent regulation (ref. WSJ). It’s possible that users may feel otherwise, however – many groups are based on private practices like religious and political preference as well as vices users hope to kick. Facebook indicates that 61% of users across all platforms interact with Groups monthly. That will likely make it very tempting to insert advertising into the process.