Business Blog

18 April 2013 Last updated at 18:54 ET

At the beginning of the financial crisis the orthodoxy was that businesses like advertising would be the worst hit.

As your business crumbled it would be the first overhead to go.

But today global advertising seems to be one sector bucking the gloomy trend, with the biggest growth sector being online.

Spending on web advertising topped $100bn for the first time last year. Digital now commands nearly one in five advertising dollars, and forecasts suggest we can expect double digit increases for at least the next couple of years.

Unlike with traditional TV campaigns, advertisers online can increasingly target commercials at precisely the right sort of people, using sophisticated data mining and tracking technology.

But what do the people at whom this is aimed - you, the consumer - actually think about being tracked online so that companies can predict your spending habits?

A group of students at the British Museum tell us what they think.

Manuel

Most of the content that you access online is free because of advertising. But I think the price you're paying for the content is too high because it's way too invasive.

They don't let you watch whatever you want without previously watching the ads.

For example with YouTube, when you are about to watch a video… they make you watch the ad first and then you can watch the video that you selected. It's not nice, it's invasive.

From the advertiser's point of view it's really cool because you are speaking to the precise target, right?

But essentially I don't like advertising at all - I don't like anything between what I want to do and me, you know, and advertising online does that.

They prevent you from enjoying what you want to enjoy in life.

[The internet] used to be freer… now it's all dependent on copywritten material and permissions and advertising providing you the content.

It's supposed to be the other way around. It was supposed to be… people generating content for other people to watch, and now it's all about advertising once again as it is on TV and all media.

I believe that the nature of the advertising should not be that invasive because they know what I've looked on Google for example. And according to that they make the ads appear.

So they know what I'm doing, they know what I like… how are they supposed to know all that about you? My girlfriend doesn't know that much about me.

Kei

It's very annoying because the advertisement itself of course it's annoying but I really don't like the contents of the advertisement because it's something like meet some boyfriend in internet, it's like I need boyfriend.

So, it's like dating website. And the other one is something, how to reduce your fat in your body.

I think [they're targeting me] because maybe the website checks, what kind of other website I saw or [checks] my age or something.

It's not what I want so just was very annoying because it makes me feel like I'm a very small and typical person. And the website acts like they know what I want and I really reject that.

Amy

I find it quite creepy the way that [adverts on Facebook] seems to know your behaviour and who you are and directs ads at you based on that.

For instance if I've been Googling Weightwatchers or something like this, there will be weight loss and slimming pills.

My friend was getting married, and she had wedding dresses and wedding adverts. It feels quite intrusive.

I'd rather go and look for things I want to buy… rather than them guessing [about] me and my personality… that feels big brotherish.

I'm not a big fan of adverts.

Kate

It's a bit weird actually, but maybe because I studied Arabic… I'm encouraged to meet Arab men.

I feel really creeped out when not for any reason just because it's strange that it would know that.

David

I don't really notice [online advertising]… I don't visit many sites where it plays a big part, for instance the BBC website doesn't have any advertising so it's not a huge concern for me.

I have certain feelings about the advertising industry in general but I wouldn't limit those to online advertising.

I don't really have a basis of comparison, it's always been present on the internet and you're confronted by advertising every way you go and all walks of life. So no, it doesn't seem particularly conspicuous online.

Ruth

I think [online advertising] is excessive and not very necessary for who they are targeting, and it's not reaching the right audience.

It is just never anything that's necessary to me, not necessary to young women actually.

It's more targeted when I seem to access my cookies and such, that's when I get - depending on where I'm browsing from, if it's my laptop or my home computer or my laptop - more the cosmetic stuff and clothing and things like that.

It catches my eye and I might come back to it later, so yes, it does work.

[I feel I'm being targeted on Facebook] more than the others… so I choose not to use Facebook as much as I would Twitter or any other networks that I do use.

The students were speaking to the BBC World Service's Business Daily programme. You can listen to their online advertising special here.

18 April 2013 Last updated at 18:54 ET By Robert Plummer Business reporter, BBC News

On a lazy midweek morning in the East End of London, one of the UK's hippest and most influential record shops is experiencing the calm before the retail storm.

Right now, barely more than half a dozen potential customers are browsing the racks at Rough Trade East, while the sound of David Bowie's comeback album fills the air.

Except for a few discreetly positioned signs, there is little indication of the turmoil expected this Saturday, when the store is likely to see its biggest crowds of the year.

In common with more than 200 other independent record shops throughout the country, Rough Trade's two London outlets are taking part in Record Store Day (RSD), a celebration of popular music culture with particular appeal for those who collect rare vinyl releases.

And this year, the event comes as a salutary reminder that despite the recent collapse of retailer HMV, now set to continue in diminished form under new ownership, the UK's music shops are still a force to be reckoned with.

Rough Trade is certainly on a roll at present. Last week, at trade paper Music Week's 2013 awards, it was voted Retail Brand of the Year, ahead of rivals including Amazon, iTunes and Spotify.

Buoyed by this success, Rough Trade East's staff are braced for a busy session at the tills on Saturday.

"It's lots of fun, in its own chaotic and stressful way," says Cordelia behind the counter. "We have people queuing up outside from midnight, just for the unique releases that come out on that day.

"It gets really full, but it's all very civilised. People don't fight over the records - it's more, 'You have that one and I'll have this one.' It's a very special way to experience a record shop."

Brand power

"We've enjoyed double-digit growth since opening Rough Trade East back in 2007," says the firm's co-owner, Stephen Godfroy. "The first quarter of 2013 shows this trend continuing, with a 25% year-on-year sales growth performance."

The 5,000-sq-ft (500-sq-m) shop on Dray Walk, just off Brick Lane, is housed in the former loading bay of the old Truman brewery. When it opened as the UK's biggest music-only specialist shop, just before the start of the credit crunch, many observers were sceptical about its prospects.

But Mr Godfroy was convinced that High Street chains such as HMV were putting off customers because they had "commoditised" music - and that the solution was to bring back "the joy of browsing".

Nearly six years later, time seems to have proved him right. As he puts it, "the big red herring of HMV has been seen, particularly by the media, for all its failing glory".

This year's RSD offers him a chance to showcase that approach. The annual event began in the US in 2007, but soon spread to other countries. This year will be its sixth in the UK.

The big draw for collectors is that every year, a strictly limited series of seven-inch singles, LPs and the odd CD by a wide range of artists is made available, for as long as stocks last and only through participating shops. Once they're gone, they're gone.

Sought-after items for 2013 range from releases by Jimi Hendrix and Frank Zappa, via Paul Weller and Nick Cave, to relative newcomers such as James Blake and Jake Bugg. In all, 450 limited-edition new records will hit the shops on 20 April.

Although Record Store Day gives an undeniable lift to Rough Trade's sales, Mr Godfroy has misgivings about it, seeing the phenomenon as "a double-edged sword".

"It's a wonderful day of infectious celebration, but it's effectively a media event that focuses a lot of releases and footfall on a single day, which throws up unwanted logistical challenges and somewhat distorts the reality of bricks-and-mortar retail," he says.

"For example, RSD has certainly provided a boost in confidence for the typical independent music retailer, but for Rough Trade, the cost is often a misguided media message that we need 'supporting' like a charity, which couldn't be further from the truth, as our sales performance testifies."

Value of vinyl

The rise of Rough Trade East has gone hand-in-hand with a revival in the fortunes of the vinyl format.

Once considered doomed to extinction, the black plastic disc has seen a resurgence in popularity. LP sales in particular have steadily increased in value.

However, not everyone who buys a vinyl album actually plays it or even owns a turntable. Since most records come with a download code allowing the purchaser to obtain the music in mp3 form, the disc itself can be treated simply as an attractive artefact, with no need for the stylus ever to hit the grooves.

Mr Godfroy sees the vinyl revival as a product of a "post-digital era", characterised by "savvy, multi-format consumption".

"With the value of digital delivery resting largely on immediacy and rental disposability, it's paradoxically put into sharp relief the values of vinyl ownership in particular, with its superior audio, visual and ceremonial qualities," he says.

Rough Trade sells music in all formats, both in its two shops and on its website, which offers an mp3 subscription service, Tracks of the Week.

So far, the bulk of the retailer's sales are still on vinyl and CD. But there are plans for a new offer later this year that will allow customers who buy physical releases in-store to receive automatic digital copies as well.

"Our tills marry the offline purchases with the customer's online account, creating a seamless multi-format, multi-channel offer," says Mr Godfroy.

Rough Trade's other big new move for 2013 is to open a branch in New York, a city that has lacked a sizeable record shop since Virgin's US chain folded in 2009.

But whereas Virgin favoured high-rent sites in Times Square and Union Square, Rough Trade is following its UK policy in picking a more low-key location.

Its Rough Trade NYC shop will be in Brooklyn, not Manhattan, and will be twice the size of its east London store.

So this time next year, Rough Trade will be able to offer its own take on Record Store Day in the country where the event began.

18 April 2013 Last updated at 18:50 ET By Anthony Reuben Business reporter, BBC News

The 25th edition of the Sunday Times Rich List is due to be published this weekend.

When the first one was published on 2 April 1989, the paper called it an indictment of Thatcherism.

Margaret Thatcher had been in power for a month short of 10 years.

"The very limited success of the Thatcher revolution in transforming British society is graphically and grimly illustrated" by the list, the editorial said.

Old money

"Liberated from red tape, inflation, crippling taxes and the union barons, British businessmen by now should have seized the commanding heights of the economy and society," it said.

In that original list of the country's 200 richest people, only 86 of them had made their fortunes themselves.

The list was spattered with landowners, containing 11 dukes, six marquises, 14 earls and nine viscounts.

And at number one was the Queen (classified in the alphabetical list as "Queen, the") with her £5.2bn, sitting at the top of a tree grown from inherited wealth.

Much has changed in the 25 years of the list, not least the relegation of the Queen, who dropped out of the top 200 as a result of the decision by the report's author, Philip Beresford, to stop counting the value of things such as the royal art collection, which could not really be described as her personal wealth.

Her Majesty is not the only holder of inherited wealth who has slid down the league table.

"Wealth that is self-made is becoming more and more evident," Mr Beresford told BBC News.

"When I first started 25 years ago about two-thirds of the rich list were people who had inherited their wealth.

"Today, approaching 80% are self-made and that's really a legacy of the Thatcher years."

Peter York, the market researcher and cultural commentator, says the lack of self-made millionaires on the 1989 list "just shows you that development works in arrears to what you think is happening".

"The Thatcher revolution bore fruit in the sense that the home-grown money started to show itself in the mid-1990s."

Foreign money

But if you look at the self-made people likely to feature at the top of this year's list, a pattern emerges.

Lakshmi Mittal, who has been top of the list since 2005, could hardly be described as having made his money in Britain.

He owns a big stake in the global steel and mining company ArcelorMittal, only a tiny proportion of the activities of which take place in the UK.

Alisher Usmanov's wealth comes from iron ore in Russia and a stake in Facebook.

Roman Abramovich made his money in Russian oil.

The Hinduja brothers do indeed have extensive business interests in the UK, although they are dwarfed by their Indian businesses.

Leonard Blavatnik made his money buying stakes in Russia's newly privatised oil industry.

But with a few exceptions expected in the top 20, such as Sir Richard Branson and Sir Philip Green, not many have made their fortunes in Britain.

"The very richest people on the list are what most people would call foreign," Mr York says.

He adds the list has been distorted because "London has become the city of choice for the global super-rich".

"That's partly to do with fashion and partly to do with tax," he says.

And the tax regime is an inheritance from Thatcherism, he agrees.

"'Rich people have rights too,' you remember she said."