September 24, 1869. On this day, two scheming Wall Street financiers, Jay Gould and Jim Fisk, took advantage of the declining gold market and bought as much of the precious metal as they could, hoping to artificially drive up the price and sell it for an astronomical profit.
The US had been struggling with currency since the Civil War. America had been taken off the gold standard, and Congress authorised $450 million in government-funded “greenbacks” to finance the Union march to battle. The later years saw the two currencies, gold and greenbacks, in direct competition. When President Ulysses Grant heard of Gould’s and Fisk’s scheme, he ordered the treasury to release the rest of the gold reserves into circulation. This stopped the Gould and Fisk plot in its tracks, and prices nationwide dropped suddenly by 18%.
Within an afternoon, the US was in economic bedlam. The perpetrators managed to escape the heavy hand of the law thanks to expensive lawyers and political connections. The rest of the United States, on the other hand, felt the full force of the repercussions. The US stock market crashed a gargantuan 20% in one day, with wheat and corn fetching 50% less value and foreign trade grinding to a catastrophic halt.
Unscathed, Gould, “the Mephistopheles of Wall Street”, continued to line his own pockets with an estimated $12 million of stolen profit. Fisk claimed that third-party brokers had made the trade without his knowledge and slithered back into Wall Street’s shadows. Hours earlier, the pair had boasted to a riot of reporters and spectators that the value of gold would reach $200 an ounce come dinnertime.
This day, known as Black Friday, left oily tendrils of destruction in the US economy for years afterwards. Millions went bankrupt, including the President’s own brother-in-law, and some were reduced from Honourables to homeless in less time than it took to research this piece.
It’s a fascinating tale of greed, and some would say not too far off the chaos shrieking in the streets this morning. Black Friday: when thousands, seduced by bargain televisions, Xboxes, and novelty waffle-makers, mob the largest retail stores and fend off sanity to fetch the best price.
The only difference lies in what economists say about the current situation. They who run the world’s treasuries and banks see the unstoppable force of perpetual consumerism as a reason to celebrate – a prettified version of “normal”. What they choose not to notice, underneath the biggest and best brands fighting to make sales in a crowd literally in fights that can only be won by the biggest and the most tenacious, are the smaller companies on a tropological see-saw of profit, conditional stability and precipitous loss.
For FlexxDigital, Black Friday has stretched its cumbersome wings and cast its shadow over the week leading up to Thanksgiving. As big brands pour their budget into promoting cut-price anti-radiation boxers, Facebook has been inundated by an onslaught of new advertisements. Facebook Business Manager crashed in an attempt to keep up with what can only be described as flagrant capitalism, and reams of crucial customer data were lost.
As a knock-on effect, leads suddenly surged in cost-price, as a lot more brands were fighting for impressions. Never a site to shy away from a popularity contest, Facebook upped the cost per impression, meaning that smaller companies, agencies and brands were left to fend for themselves.
After a tumultuous couple of days, FlexxDigital had to shut off all its advertising for a day and a half. This meant that our clients didn’t receive the leads they needed this week and, understanding though they were, the Facebook crash put our reputation on shaky ground. To catch up, we’ll need to raise our budgets as much as a fifth or a quarter next week, adding to the profits we’ve already lost.
As well as the financial loss, we’ve also had to deal with skewed data when trying to optimise our ads. Customer conversions weren’t registering on Facebook and, as a result, we can’t see which ads are working and which aren’t.
Though it’s hardly a problem that’ll result in a one-way ticket to the entrepreneurial abyss, the man-hours lost creating the ads lead to another chunk of money coming out of the budget. It also means we risk repeating the same mistakes, as discovering the success of our ads is placed into the flighty hands of guesswork.
As a small business owner, it makes sense to scout out the games you can win, and Black Friday isn’t among those. In fact, 91% of SMB owners said that Black Friday had little to no impact on their bottom line, with 57% reporting some kind of loss.
The massive retail discount day may not lead to years of recession and multiple bankruptcies, but the queues, card transactions and the annual glut of consumerism can be as bad for small businesses as President Grant’s choice to force a slew of gold reserves into an unstable market.
If you’re worried about your business, profits, or how to gather leads in a marketing drought, head on over to our website, www.flexxable.com and watch our FREE case study. Whatever your trouble, Flexxable can guide you towards the smart decisions.
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