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September 20, 2011  By admin  
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June 27, 2011  By admin  
In the investing world, we talk about bubbles. A bubble happens when stocks in a particular sector are over-hyped, and greed starts driving the market.
In a stock market bubble, investors stop thinking about what they’re buying and start looking around them to see who else is buying it.
Joe Investor sees a sizable group of other investors piling into a stock or sector, driving the price higher. He figures they’ve thought things through, so he’ll go along for the ride.
Jill takes Joe’s lead, figuring he knows what he’s doing. Jerry follows Jill. Julie follows Jerry. The blind are leading the blind.
Well guess what?
There are marketing bubbles too…
Some marketing tactic or strategy is hyped beyond all reasonable expectation… newbies who don’t know any better jump in… and a bubble is born. As the hype grows, it creates a kind of vortex that sucks in more and more people. The number of dupes and the number of promoters both skyrocket.
Some investment analysts are calling the recent LinkedIn IPO a warning sign that a new tech bubble might be upon us. The stock debuted at $45 and immediately started gyrating between $80 and $120, hundreds of times 2010 earnings. In plain English, there was no justification for these prices.
Groupon and Facebook are planning IPOs as well, and they will most certainly garner the same kind of senseless, nosebleed valuations. The bubble will balloon and burst. And overnight, billions of dollars will change hands, just as they did during the dot-bomb bust of the late nineties. Foolish investors holding these stocks will get the shirts ripped from their backs.
With marketing bubbles, the damage is subtler… 
Each day, a new crush of wild-eyed marketing neophytes rush in, lured by the promise of easy money, like ants to a Twinkie. Hungry for knowledge, they buy up info-products right and left. And do they learn?
Bubble stuff. All about Facebook and Twitter and mobile marketing and Groupon and other so called “game changers.” Now I’m not saying there is no value in these things. It’s just that they are hyped into the ozone… out of all proportion… beyond anything even remotely real.
And that hype drowns out the importance of learning the basic, bread and butter stuff, without which these neophytes are going to get their heads handed to them.
In the world of investing, the basics are things like earnings growth, return on equity, and profit margins. The boring, common sense stuff that allows you to rationally compare one stock to another. In the marketing world, it’s return on resources invested (RORI). Is marketing this way worth my investment? Is it the best use of my resources?
The fact that there are