"A better way to fix bankers pay" by Shumeet Banerji, can be viewed by clicking here. The opening paragraph discusses that world governments have begun administering newregulations for banks so that they don't collapse the world economy again, but they never bothered to ask the question of why the old policies didn't work. Shumeet says, "Why did the system go out of control in the first place? Most bankers understood that they might face catastrophic institutional failure and enormous loss of personal wealth. Why wasn’t that enough to keep them from taking such unprecedented risks? The implicit response seems to be that they were distracted by their greed."
Mr Banerji goes on to state several proposed solutions and offers little sensible insight into the problem and no quality solutions. First of all, there are a lot more aspects that affected the global economy than banks and bankers. Second, "greed" was not what caused to banks problems, in fact it was the exact opposite! Greed would lead to generating and holding on to capitol. Instead, banks, forced by government regulations, handed out massive amounts of money for people to buy homes they couldn't afford using adjustable rate mortgages and little to no down payment. This act of semi-communist generosity led to mass use of the word - "toxic assets." More specifically, banks gave people way to much money for homes that weren't worth it and people began foreclosing in mass when the need to move arose and nobody would by the house for what the banks were forced to pay for them, causing what George W. and Barack Obama both agree was necessary - TARP funds, the Trojan horse of government bailouts.
It is typical of people to blame greedy American capitalism for the worlds problems, but the fact is, American liberal generosity is what caused this particular problem. I'm not saying American liberal generosity is a terrible thing, but when you give money away that you don't have, problems will arise. And you can't fix them with more government regulations. It is popular mob mentality that wants governments to limit pay for some individuals in certain areas of business, but this is a ridiculous solution that would cause mass exodus of any talent capable of solving bank's problems. Now is a good time to point out that for every $1 the government spends on regulating an industry, companies spend $46 complying with these regulations. Common sense would say if we want companies to improve performance, government regulation needs to be reduced - not increased. But unfortunately, common sense is a rare commodity that government rarely invests in. By the way, I just saw a commercial from the government telling me that text messaging teenage girls asking them for nude photos is bad, thanks for spending our tax dollars on that message - I'm sure nobody would have figured that out without the commercial...
Anyway, how am I going to tie this into Internet marketing? Well, I could list a few common sense solutions like switching the expensive TV commercial I mentioned above into a banner ad that nobody would click on. That would at least contribute to some government savings, every penny counts when there is a real problem. But what about the banking industry? Has anyone ever seen a TV commercial for a bank? I know I have. I also know that no TV commercial has ever convinced to go open a new bank account or apply for a loan. Banking typically comes out of necessity, I certainly don't know anybody that goes banking for fun. If banks want to improve performance (including ROI on marketing campaigns), than they should spend less on branding (look what happened to WaMu - they bet everything on branding that didn't work out so well. You're Washington Mutual, why would you spend billions of dollars for a hip new name!?) and more on selling products people are looking for, where and when they are looking for them.
Banking is not that different than any other industry when it comes to selling products. More than half of consumers always use the Internet when researching their purchase, yet advertising budgets typically include far more money for radio and TV, leaving a very small portion to reach the bulk of their customers. Common sense business solutions are the only thing that can save the banking industry, and that comes from smart business men and women with common sense - NOT our government. And one last point I need to drive home to every business in America, if you do not have an effective Internet marketing strategy, than your business is not doing the best it can. Often advertising gets cut from the budget during lean times, but Internet marketing makes money, so why would anyone want to cut profits from their budget during lean times? If your Internet marketing is not making money for you, than I strongly suggest a consultation with a contingency marketing consultant - we don't charge a dime until we increase your profitability, so you can't loose. Even you Big Banks, the rules of smart business are very much the same everywhere.
- Mark Rogers
