-- Posted Tuesday, 17 June 2003 | Digg This Article
Of course gold is not totally worthless, but you have to agree that gold never seems to reach its true potential. Ever wonder why gold never seems to reach its potential and why gold is still considered worthless by the overall masses?
Started to make reservations for the June gold show in Vancouver & at the last moment changed my mind. I thought: millions of dollars will be spent by those participating in the gold show, but not one dollar or effort from the convention’s activities will go toward the promotion of the product “GOLD”. Gold Mining Companies would try to create interest for their properties & shares & newsletter writers would try and sell a few more subscriptions. Nothing wrong with all that of course, but what about poor ole’ gold? Yes, gold itself would be forgotten while everything else under the sun would be touted.
To put things in perspective consider that these booths that gold companies & participants rent is close to 5,000 dollars for just 2 days of floor space. A lot of money spent toward marketing individual companies & individual writers. But how much of this money goes toward marketing the product “gold”? Again, there is nothing wrong with this as this is free market capitalism, but my point is would all this money not be better spent if it was going to a commercial that would air on national TV talking about how wonderful the product “gold” is?
The real goal here is to create more interest in the gold mining industry & gold market, right??? But let’s look at the cold hard facts. Most of these folks that attend these gold shows are repeat investors who already are sold on investing in gold & thereby again we are “preaching to the choir”.
My point & question is what are we doing to bring in NEW potential investors into the gold market?
What we need for this industry to become a true growth industry are new investors who previously never have invested a buck in a gold related investment. This industry needs fresh blood, but the marketing to attract these new investors just is not there!!!
Yes, $4,500 x 110 booths = close to half a million dollars!!! Nice money if you can get it, but all I can think about is how many new gold investors could be turned on to the product “gold” if this money instead went toward a marketing campaign & TV commercials for the MASSES to see!!! Not too many gold wanna bees are willing to travel to Vancouver to contemplate investing in the gold market. Our goal should be to send our message out to where we can reach these potential investors. But will this ever happen?
A week ago I visited Quebec & “gold country” to speak with a number of gold industry types and market leaders. Let me share the first commercial I witnessed when I turned on the TV in my Quebec hotel room.
In this commercial there were shown 2 couples madly in love with one another, an older couple and a younger couple. For a long time there was no dialogue, just the camera showing this older and younger couple madly & sincerely in love with one another. Finally, at the close of the commercial, there began a dialogue, a voice over from a narrator.
Let me share what the narrator said.
“There are two things in life that last forever: love and a diamond.” Those were all the words that were spoken!!! What did I just observe? A “Madison Avenue” promotional advertisement to promote the product called a “diamond.” I do not even know who paid for and sponsored the ad, the commercial didn’t say. What was the purpose of this ad? Of course the purpose of the ad was to promote “diamonds”. After the commercial a subliminal message is left in the brain that the diamond is OK.
Can you count the commercials you witness on TV promoting the product “gold”? No, and you possibly never will. I am willing to bet that I pay my webmaster more money in one year than is spent by the entire gold industry in the same period of time marketing & promoting the product “gold”.
And I’m not talking about the stupid and wasteful dollars the so-called World Gold Council spends in promoting the “jewelry” industry. And while the World Gold Council promotes the “jewelry” industry, how much does the jewelry industry spend on the promotion of “Gold”? Zero of course.
Why does no one promote the product “gold”? First of all most gold bugs and those that make their living in the gold market are very content to only follow the cyclical up trends of the gold price. I cannot count the number of gold analysts who bragged about having had the wisdom to get out of the gold market when the last bear gold market started in the early 80s.
Can you imagine other executives associated in other industries who calmly quit supporting their industry & market sector when their product ceased being popular?
Let me share something with you. Do the market leaders within the automobile industry patiently wait for a bad winter so the extra salt corrosion will compel people to buy a new car? Do the executives within the clothing industry wait for women to become bored with their dresses so they will come into their stores to buy a new dress? Does the airline industry gurus sit back just “HOPING” that folks will come to their airline and fly their planes?
No readers, none of these industry players sit on their hinies just HOPING the public will buy their product. They get off their collective butts and market and advertise their product.
Markets are made!!! You cannot sell a product by just Blindly hoping for the occasional market up trend when things are going well within an industry and a product is popular.
If our culture can market a “pet rock” and induce millions to buy a worthless piece of rock as happened during the crazy 70s do you not think the product “gold” could also be marketed and its image improved before the masses? But no one within this market really believes in the marketability of gold. Most gold folks just patiently sit back for a sinking dollar to propel the gold price a little higher and they are happy.
Let me share something here about the humble diamond since I am using the diamond to compare the potential that the product “gold” has.
What gives the diamond its value? Did society just come to a conclusion that a diamond is lovely and should be priced in many dollars? Did it come to have value by itself? If it has value, why?
The diamond has value because the folks that mine it spend multiple millions on concentrated & high priced marketing campaigns to convince the public that a diamond is something of value.
Did you know that over a hundred years ago the humble opal was considered by earlier generations to be the most valuable and sought after precious stone? The diamond’s present day value was created through slick & creative marketing & advertising campaigns.
Again, the gold industry and its participants represent the ONLY industry that sit back like knots on a log waiting for events to occur that may enhance the value of their industry and the product that they manufacture & produce.
OK. Maybe we ought to examine here why no one within the gold industry believes in marketing the product “gold”. There just may be a scientific reason explaining why gold industry leaders think the way they do.
Ever see the movie “Joe Versus The Volcano”?
In the movie, the main character, Joe Banks (Tom Hanks) is persuaded by a crooked doctor with ulterior motives that Joe has a “Brain Cloud”. Joe is convinced by the bad doctor that he has this “Brain Cloud” that is killing him and shortening the span of his life. Joe is a hypochondriac so he is ready and WILLING to believe in the existence of the “Brain Cloud” without even seeking a second doctor’s opinion.
There perhaps lies the answer my friends that explains why no one within the gold world desires to market the product “gold”! They all suffer from this mysterious “brain cloud” disease!!! Why do supposed recognized gold leaders and professional gold market players not work toward the promotion of the product “Gold”? They all suffer from this mysterious “Brain Cloud” disease that inhibits them from looking at the gold industry just like any other industry that must have a marketing & promotional campaign to get the masses to BELIEVE in their product.
I began studying this gold industry and gold market in 1997. I saw at that time a small closely knit group of players within the gold world catering & serving even a smaller group of gold investors.
In addition, I observed an industry that was dying and decaying from a lack of interest by investors.
But do you know what else I saw and observed as an outsider then? I saw an industry that had POTENTIAL. But inhibiting that potential was the decision by the gold industry to REFUSE to market & promote their product: “GOLD”. Yes, I still believe even today that gold has great potential if it can ever be marketed & promoted in the same fashion every other industry product is marketed!!!
I began writing about the gold industry 2 years ago because I felt the industry needed a breathe of fresh air from one of the common folks who had the ability to look at the gold market objectively & as an outsider (as average folks do). But the more I study this industry the more I come to realize that it is not just a breath of fresh air that this gold industry needs but rather a good belch to wake everyone up!!!
Why does this industry not function as any other industry?
That is a worthwhile question that deserves an answer. Ever look over the Internet and see what these gold industry executives are making? Even the mid tier companies and non producing companies have execs pulling in hefty 6 figure salaries. As I have written before the senior gold mining companies actually make out quite well in a lower gold price environment.
Who does then truly suffer because gold is not promoted nor advertised? The common gold equity investor suffers and, most importantly, the smaller junior & exploration sectors suffer.
This is the real reason we do not see gold promoted as any other product. If gold continues its severe cyclical price patterns with no growing investor interest then by the end of this decade the gold industry will cease to exist as we know it. Have no fear about the senior gold companies, though. They will remain & grow stronger still, but the junior & exploration sector will be the ones who lose the greatest & eventually these companies will come to be more dominated & controlled by the senior gold companies. Maybe this is the real goal here behind the refusal to market gold?
As long as the gold market remains weak and with little growing investor interest then this gold market will continue to be ripe for exploitation and manipulation.
All of this would change though if gold was marketed as any other product.
Are there answers to this problem?
Yes, I believe there are. A new strategy is called for and the gold industry must launch promotional & marketing campaigns to change gold’s image before the ignorant masses. And I am talking here about simple non political advertisements. To build up gold’s image before the masses it is not the discussion of political issues that will draw new investors in. It must be simple old fashioned positive ad campaigns that paint gold in a favorable light.
Do we really want to see this industry become a “growth” industry? Presently the gold industry blithely sleepS during gold bear markets and then when the price of gold shows a little strength everyone awakens & gets on board the gold train.
It should not be this way. There should always & at all times be a PERMANENT coordinated marketing & promotional campaign directed at the masses just as every other industry has including the very successful diamond industry.
Yes, let’s take a look again at the diamond industry because these guys know how to market their product & they know what they are doing.
I like to consider the diamond. To me the diamond is by far the most worthless bit of mineral on the planet. Sure, it has some industrial uses. But is it truly beautiful? It has no color & is just a clear rock that has to be cut a certain way before it is sold and then it has to be stuck under a high powered light to show off its glittering qualities.
But because of marketing the diamond has value. And let’s get one thing straight here right now. The product “gold” has far, far more marketing & promotional characteristics & uses than the diamond will ever hope of having!!!
I have always believed that if just one successful well heeled gold mining company or private individual launched a massive world ad campaign then PROBABLY OVERNIGHT you would see the public perception of gold begin to change positively.
I have talked to a number of gold mining officials & discussed these issues but all I see is apathy. For the most part the gold industry refuses to take responsibility for promoting gold.
The truth of the matter is that if a gold industry executive ever went to seek employment in another industry he or she would be fired before their first 30 days. Their boss would say,” Harry (or Henrietta), what are you doing to promote & market our industry & product?” and the former gold exec would say, “Gee, we didn’t believe in promotion or marketing within the gold industry.”
Bye!!!
In reality I often wonder that we as gold investors are not the greater fool for investing in an industry that does not believe in self promotion.
But I’ll make a promise to you gold investor. If you decide to take your gold mining dollars out of gold stocks and invest in either the clothing industry, automobile industry or airline industry these folks will show you in a heart beat their efforts to get consumers to buy clothes, to buy new cars & to fly by airplane.
And when you ask the gold industry to show you the dollars & effort spent in marketing gold in a fashion to get people to fall in love & to purchase gold? What will be the reaction by the gold industry?
Duhhhhhhh!!!!!!!
I can hear the criticism to what I am writing even now. You are saying, “But gold is different! Gold is MONEY and you cannot market MONEY!” And if we just wait LONG enough gold will yet be discovered by the masses!
Hog Wash!!!
While gold is money it is still a product that must be marketed just as every other product is marketed.
Is there money to be made investing in gold mining equities? Sure, during a bull run there is great money to be made. Is the gold mining industry presently a “growth” industry? No. Does this gold mining industry have a future & potential? Yes. This gold industry has a great deal of potential.
The locked up fantastic potential within this gold market will only be realized when this industry ceases being satisfied with “preaching to the choir”. Only when this industry develops a real HUNGER & a burning passion & a BELIEF in the product they produce, gold, will they ever begin to grow.
Let’s stop here a moment and consider this thing called “passion”. In most industries you find folks (industry execs & leaders) who really believe in the “widget” their company produces. But do we see this “passion” exhibited within the gold world? Not really.
Sure, we see gold followers wanting a higher gold price so they can make a killing in gold stocks. But this level of greed is NOT the same thing as exhibiting a true PASSION & belief in gold.
People that really believe in a product PROMOTE it & ADVERTISE it & are not content until the entire world also shares their passion.
I just cannot over emphasize how important this concept & need for true passion must be for this gold market to become a true GROWTH industry.
And how can the gold industry become a true “growth” industry? By creating a real & sustained marketing campaign via TV commercials & other popular media forums. In my opinion a TV commercial promoting gold will go far more to enhance the public’s interest in gold than a gold show that no one attends except the same ole’ crew.
But the key here folks is to stir peoples PASSIONS!!! Ultimately, that’s what sells a product. If you can through your marketing efforts get the masses to fall in love with what you sell then you will not be able to keep the consumer away from your front door.
Passion, truly believing in what we talk about & the proper marketing campaign will move this gold industry forward.
Yes, on the day that you turn on your TV & see an ad for the product “gold” then on that day you will have witnessed a positive turning point for “gold”.
I know that I have gabbed long enough, but let me add one more thought. Gold followers are always waiting for a magic button to be pressed that will change market perception of gold over night. We thought the masses would get excited when gold got past 300. That did not do the trick so we thought 325 was the magic number. Then the magic number was 350, then 375 & now everyone waits with baited breath because 400 has to be the magic number that will finally compel the masses to hop on board the gold train. But let me stop here and share with you something very important that no gold follower wants to hear.
The masses really are not looking at the gold price.
Yes, you heard me correct. The masses are really not impressed watching the gold price climb higher. I just read the May 2003 issue of Money magazine. On page 77 the magazine devotes several pages to bashing gold. What the masses are paying attention to are 20 years of NEGATIVE psychological brainwashing of the product “gold”.
An entire generation has now grown up being brainwashed that gold is a piece of crap.
My point here is that the masses do not look at gold as gold bugs do. But here is where simple modern day Madison Avenue marketing can come into play. Ads placed in USA Today showing beautiful pictures of gold surrounded by lovers walking in the park holding their hands. Or commercials aired on TV similar to the diamond commercials.
Let me close by explaining briefly what gold truthfully does mean to most folks who follow this industry.
Gold represents a means to “get rich quick” when a temporary gold bull rally occurs. For most gold industry execs & gold market participants gold does NOT represent a viable business, but simply a means to make a few fast dollars. Even many of the gold junior & exploration companies have no desire to build real companies but only to milk their properties for as much as they can & then sell it to the highest bidder.
That is probably one of the reasons the SEC rides herd so strongly monitoring the gold stock world. The SEC recognizes that this industry for the most part is not managed as a viable business, but strictly as a wealth generating machine where every trick is played in the book that will bring a faster & quicker dollar.
But my point here is that wouldn’t there be more money to be made in the LONG RUN if the gold industry was managed as a viable business?
This is ultimately the real reason there is no national nor world wide marketing campaigns for the product “gold”. And because of this fact no one anywhere within the investment world sees the gold market as anything but a short term mechanism to create a fast “buck”.
When I speak of real & organized marketing campaigns what this represents to the world in general is that these gold folks are for real & they take their product (gold) very seriously. Instinctively & psychologically the broad investment world recognizes that an industry that does not believe nor support product marketing & endorsement campaigns that something is inherently wrong with that industry.
And why should the broad investment community lend their hard earned dollars to an industry that ultimately shows through their lack of marketing a sincere desire to GROW their industry???
Again, my point is that Gold’s future lies not in a deteriorating dollar.
Nor does gold’s future rest in the hands of a higher gold price. Gold’s future, if it is to have one, lies in marketing & advertising. If marketing & advertising can work for every other industry sector then it can also work for gold.
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David N. Vaughn
Gold Letter, Inc.
David4054@charter.net
Gold Letter Website
June 17, 2003
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-- Posted Tuesday, 17 June 2003 | Digg This Article
