Miley and the FTC Regulation

In my last post, I described the new FTC regulation that will go into effect this December and it's actually having an immediate effect on celebrities. For some teen fans, it was an enormous disappointment to see Miley Cyrus quit her Twitter account a few days ago. Her family members and fans questioned why Miley deleted her account and she explains her reasons in a YouTube video, in which she raps an explanation for her actions. The video is painful to watch, might I add. The reason why I mention this video is that she offers countless reasons as to why she deleted the account, such as her need to live her own personal life and not for the entertainment of others. She also confirmed that no one else influenced her decision.

After this elaborate explanation, it turns out that Miley Cyrus decided to stop using Twitter because of the new FTC regulations to go into effect. Rather than having to disclose all of the products that she was being paid to endorse on her Twitter account, it was decided that it was better to close the entire account. The FTC requirement probably would have referred to every "just about anything the spoiled brat wears, eats or tweets about," as the author of the article kindly puts it.

I'm beginning to realize how many companies use celebrity endorsements without our knowledge. For those who followed Miley on Twitter may have seen her comments or observations about Wal-Mart, for example, without even knowing that she was being paid to mention the store. This is almost a form of subliminal advertising and a way for companies to reach consumers inconspicuously so that we do not tire of seeing/listening to ads. I'm interested to see how else this FTC requirement affects the power and meaning of celebrity endorsements.

Amazon Has “Magical Business Model,” Says Analyst

The New York Times article that I just came across suggests that even Wal-Mart is looking to Amazon on how to increase company revenue. Founder Jeffrey P. Bezos intended Amazon to be an online bookstore, but the company has expanded from its original media products, including books, movies and music to become an online general store.

Amazon’s allure not only lies in its diverse selection of products, from Legos and kayaks to Cheerios and diamond rings, but its ability to ship these orders out so quickly. In fact, Amazon has gotten so good at predicting consumer demand, that the company rarely has to hold products for long in the warehouse, essentially eliminating inventory carrying costs and allowing for the further expansion of product categories.

In addition, even though Amazon’s revenues are not as large as the billions of the Wal-mart empire, Wal-mart is imitating Amazon’s third-party marketplace, which allows individuals to sell their products. The third-party marketplace on Amazon is now a venture that now brings in about 30 percent of the company’s profits.

Amazon has become a greater threat to independent stores, which have no ability to compete with the low prices and high range of products that are available on Amazon’s website. For example, Amazon has been responsible for depressing profits margins at Lombardi’s Sports in San Francisco. The owner of the family business, Ken Lombardi, can only hope to carry some products, like sneakers, at the same price as Amazon, and perhaps offer competitive edge with the store experience that online shopping cannot offer. Independent stores may also be able to compete with Amazon, if they carry luxury brands, such as Nike, Ralph Lauren and Chanel, which refuse to have their products sold on online to prevent prices from being cut.

I think that this article sheds light on how Amazon is able to move quickly ahead of its competitors in the race to deliver any product imaginable at unprecedented rates. Amazon’s success shows our preference for speed, and efficiency in everything we do and our reliance on the Internet to achieve that.