Important advertising trends of2011 — how you can fullycapitalize on todays marketplaceopportunities
Areas covered• The current state of our economy – and what that means to us as Advertisers.• An in depth look at the common problems that advertisers are facing – and what the smartest ones are doing about them.• An assessment of today’s key advertising vehicles, what’s working, and what’s not• Initial reactions to Digital – how is this performing?• Exploring proven mediums for reaching your ideal clients.
Consumers are watching their spending U.S. Consumer Spending 14-day rolling average 90 80 70 60 50 40Source: Gallup Daily, http://www.gallup.com/poll/112723/gallup-daily-us-consumer-spending.aspx
Consumer confidence is low • Consumers’ assessments of their own financial situation have remained quite dismal despite the expectation of improvement in the overall economy. • Just 20% of all households reported their finances had improved in early March 2011, barely above the sixty year low of 16% recorded in November 2009.Source: University of Michigan’s Survey of Consumers Report, March, 25 2011
Index of consumer confidence U.S. consumer confidence average since 1978 120 110 100 Index value (1066=100) 90 80 70 60 50 40 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2011Source: University of Michigan’s Survey of Consumers Report, March,25 2011
It is tempting for companies to cut back on marketing when sales go down… • Multiple studies show that companies who increase their recession marketing efforts experience higher sales during and for years after as compared to those who don’t. • Let’s look at some data…Source: "How Advertising in Recession Periods Affects Sales," American Business Press, Inc., 1979 , Facts on the value of marketing during aneconomic downturn/recession; http://www.coin-op.org/pdfs/Facts%20on%20the%20Value%20of%20Marketing%20During%20an%20Economic%20Downturn Recession_Press%20Release.pdf,:4.Kijewski, Dr. Valerie.
Maintained marketing spend through 1974-1975 recession • Companies during the 1974-75 recession who did not cut marketing budgets experienced higher sales and net income during those two years and the two years following than companies that made cuts during the same time period.Source: ABP/Meldrum & Fewsmith study, 1979
Maintained or increased marketing budget through the 1981 – 1982 recession • 600 U.S. companies were analyzed during the 1981- 82 recession and the three years following. • Companies that maintained or increased their advertising expenditures enjoyed a 256% growth by 1985.Source: CARR Report, Aug 13 2001
Snap, crackle, profits • During the Great $ $ $ Depression, Kellogg doubled its $ advertising budget, and heavily $ $ $ pushed its new cereal, Rice $ Krispies. • By 1933, even as the economy cratered, Kellogg’s profits rose 30%. • And became and what it also remains today: the industry’s dominant player.Source: The New Yorker http://www.newyorker.com/talk/financial/2009/04/20/090420ta_talk_surowiecki
Consumers feel advertising is a sign of stability• 48% of adults believe lack Advertising in down economy of advertising during a keeps company top of mind recession indicates the business must be struggling.• 86% of executives agree advertising in a down economy keeps a company 86% at the front of the audience’s mind. Executive pollSource: http://www.marketinginsightstoday.com/archives/1223;http://www.jjhill.org/resources/press_releases/WomenVenture_03_24_09.pdf;http://mystrategicplan.com/resources/does-your-marketing-budget-makeyou-look-fat/l;Yankelovich/Harris Study 2008
Long term advertising creates a lasting impression • In 2007, 100 year old Avon Co. increased its advertising by 21%. The result? • A 2008 record-breaking revenue of $9.9 billion and 20% increase in sales. • Sales have continued to increase approaching $11 billion in 2010 • “We won’t manage this company for the short-term. We all know how that movie ends.” Andrea Jung CEO, AvonSource: http://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=75872
Even luxury brands flourish in difficult financial years • New York based Tiffany & Co. did not cut its marketing spend at all during the 2001 recession. • Sales have increased 100% since that time. • “Tiffany is about things that last. And that perspective is perhaps more important today than at any time in our history.” Michael J. Kowalski CEO, Tiffany & Co.Source: JCK-Jewelers Circular Keystone 11/1/08
So, its makes sense to continue toadvertise – but there still is a huge issue to deal with:
The commercial noise today is almost deafening • In the 1970s, consumers were exposed to about 500 ads per day. • Today, the average consumer receives up to 20,000 commercial messages each day. • And since consumers have a lot more media options, your audience is much harder to reach. • This is called fragmentation, and it’s affecting every business in the world.Source: QRS: “Don’t Interrupt Your Consumer; Engage Them.” 2011. http://www.qsrmagazine.com/outside-insights/don-t-interrupt-your-consumer-engage-themThe Washington Post, "Skip Past the Ads, But Youre Still Being Sold." 2009; http://www.washingtonpost.com/wp-dyn/content/article/2009/08/14/AR2009081401629.html
The number of media vehicles has increased dramatically Consumer magazines are up 52% since 1998. The number of web sites has skyrocketed by 6,381% since 1997. 75% more AM/FM radio stations exist than in 1990. New online radio stations go live every minute. There are 300% more television stations than in 1999.Source: Arbitron Infin http://www.fcc.gov/mb/audio/totals/bt050930.html; The Influentials ; Keller & Berry; /sizeofweb.html;http://www.boutell.com/newfaq/misc; http://news.bbc.co.uk/2/hi/science/nature/1738496.stm; Source: American Society ofMagazine Editors. “Number of Magazine Titles: A Magazine for Everyone” (database accessed 5/24/2010)http://www.magazine.org/ASME/EDITORIAL_TRENDS/1093.aspx, ite Dial 2010: Digital Platforms and the Future ofRadio, http://www.edisonresearch.com/infinite_dial_presentation_2010_revb.pdf
Cutting a path to your customer• With all these advertising messages, it’s a challenge to reach your customers.• Almost every form of media is experiencing challenges with consumer engagement.
Viewing habits and costs over 30 years: a cost per thousand home increase of 499% Households Cost per Cost per Viewing 30 Seconds 1000 Homes Average Minutes 1980 15,240,000 $57,900 $3.79 1990 12,540,000 $122,200 $9.74 2000 6,134,000 $82,300 $13.42 2005 6,043,000 $129,300 $21.45 2009 4,562,000 $103,700 $22.70 2010 5,248,000 $103,600 $19.74Source: Nielsen Media Research, February EachYear, http://www.tvb.org/rcentral/adrevenuetrack/media/media.asp?c=1b
They’re not watching your ads even when they are watching programs • Commercial skipping costs TV advertisers $4 billion dollars per year. • 70% mute commercials. • Time-shifting machines in 40% of U.S. homes. • 50% of DVR subscribers skip commercials.“TV Ads Hit $69B In 10, Digital Viewing Up.” April 21, 2011:http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=149150&nid=126025Source: “The DVR Dilemma: Managing Consumer Behavior”; www.jupiterresearch.com, http://www.ehomeupgrade.com/2006/05/05/dvr-commercial-skipping-could-threaten-8-billion-in-tv-advertising/; http://blogs.zdnet.com/ITFacts/?p=10466
Television advertising costs are UP while viewership is DOWN• The average TV audience in 2009 was 54% smaller than 1965, yet average cost of advertising increased 426%.• 78% of advertisers say TV advertising has become less effective. Source: http://tvbythenumbers.com/wp-content/uploads/2007/09/broadcastnetworksharebyseason0828.jpg; Television Bureau of Advertising, 2009, TV Costs and CPM Trends. http://www.tvb.org/rcentral/adrevenuetrack/media/media.asp?c=1b
But . . . More people are paying attention to events • In 2011 there were 111 million people watching the Super Bowl which is a 30% increase 5,000 4,500 from 2005. 4,000 • The first game of the NCAA 3,500 3,000 Men’s Basketball Tournament 2,500 posted 1.2 million 2,000 viewers, 13% more than 1,500 2010. 1,000 500 • The Golden Globes had 0 21,000 more viewers in 2011, increasing to 17 million. • Grammy Awards had almost 26 millions viewers, an increase of 800,000 from 2010.Source: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=144456&nid=123511, Nielsenhttp://blog.nielsen.com/nielsenwire/media_entertainment/academy-awards-who-will-win-how-many-will-watch,http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=146983&nid=124897
News Audience Trends Audience Percentage Change from 2009-2010Source: State of the News Media 2011: http://stateofthemedia.org/2011/overview-2/key-findings/
Social Media Scoops Every Major Story Worldwide: but there are challenges• Details are scarce.• Credibility is questionable.• Information is contradictory.• It’s all happening real-time.• Not seeing big wins reported.
Average click rates on ads for most websites are dismal • Time on the Internet is Percentage of people who click on increasing, but people Internet banners on average just aren’t clicking on 1.20% the ads. 1.00% 1.00% • “I think it’s interesting 0.80% (that) in the digital age, a number of 0.60% people are 0.40% 0.40% connecting, but not Less than 0.20% necessarily 0.02% connected.” - Mary Beth 0.00% West, CMO Kraft Foods 1997 2001 TodaySource: Source: ZSmart Business, Imedia Connection, 2010
Paywalls are being added every day • Paywalls are popping up at publishers worldwide. • Actually showing a decrease in visitors. • “NYT Pay Wall Cuts Online Traffic By 5%- 15%.”Source: MediaPostNews April 12, 2011: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=148517&nid=125672
iPad Magazine Apps are all over the board • Cost structures are being created and modified. • Uncertainty still exists. • Same content and layout as print version or modified for digital platform? • Who’s advertising and what are the guarantees? • “Many of these apps are evolving so quickly that todays flaws could be erased with tomorrows update.” – Barb PalserSource: American Journalism Review, March 3, 2011: http://www.ajr.org/Article.asp?id=5027
A lot of people talk about digital advertising • Spending on digital surpassed newspapers for the first time in 2010. • But … digital still does not have proven ROI and many think it never will.Source: Internet Ad Revenues Rebound to Record High in 2010. http://www.marketingprofs.com/charts/2011/4847/internet-ad-revenues-rebound-to-record-high-in-2010?adref=nlt041511
Step back and take a look at one company’s case study • 2009 – Company pulled all National TV Advertising to move to digital. • Hoped to catch attention of home buyers. • Didn’t see results and ended up changing overall ad spend. • “We thought it was time to clarify what we are and what consumers feel about us. So it was time to go back into the consumer space with all media.“ – Beverly Thorne, Chief Marketing Officer, Century 21Source: Advertising Age, March 28, 2011: http://adage.com/article/news/century-21-back-big-tv-buys-2012-super-bowl-spot/149615/
Internet advertising still unproven • Time on the Internet is increasing, but people just aren’t clicking on the ads. • In 2009, companies spent about $22.7 billion on Internet advertising, yet click-through rates are averaging only 0.2% of viewers. • Internet ad CPMs have decreased over 50% since last year, acquisition costs are high, and most websites aren’t even achieving a 2% conversion rate.Source: Source: ZSmart Business, Imedia Connection,2010 http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=100504;; Grab Stats:http://www.grabstats.com/statcategorymain.asp?StatCatID=4; http://www.i-advertising.com/
Direct Mail is tougher than ever • The average American receives 560 pieces of direct mail each year. • 44% goes in the garbage unopened. • 97% to 99% of recipients never respond.Source: Proven Ways To Increase Sales And Boost Direct Mail Response Rates, August 2009, Articlesbase, by Andrea Ratajczak; andDirect Mail Statistics You Can Use, By Andrew Michaels | Article Abstract, http://www.articlesphere.com/Article/Direct-Mail-Statistics-You-Can-Use/150454, February 2010.
The radio audience is increasingly fragmentedSource: Arbitron, “The Infinite Dial 2010: Digital Platforms and the Future ofRadio,”http://www.arbitron.com/downloads/infinite_dial_presentation_2010_reva.pdf; Bridge Ratings, “Satellite Radio BrandAppeal,” November 2009 http://www.bridgeratings.com/; Federal Communications Commission, Licensed Broadcast StationTotals (1990 to Present) http://www.fcc.gov/mb/audio/totals/index.html
As radio advertising becomes less effective, revenues slideSource: Radio Advertising Bureau, “Radio Revenue Trends,” http://www.rab.com/public/pr/yearly.cfm
There’s one medium you can use to take fulladvantage of your media budget? Newspapers
We all need media that reaches our audience • Would you like to advertise in media that reaches more than 50% of U.S. adults every day?Source: Clark, Martire & Bartolomeo, Inc. Survey October 2007,http://www.nynewspapers.com/Libraries/PDF_s/Newspaper_Drives_Online_12-7.sflb.ashx, MRI 2009, : “Scarborough: Most Americans Still Read Newspapers” Newspaperproject.org 11/18/2009) 34
Reach customers who can afford your products • Would you like to advertise in media that reaches 57% of the population with incomes over $75,000?Source: Newspaper Association of America, Daily Newspaper Section Readership Report, 2008.http://www.naa.org/docs/Research/Daily-Readership-Active.pdf 35
Pinpoint specific local audiences across the country • Look for a media vehicle that reaches the majority of homes... • A media that enables you to reach people both locally and across the country.Source: Newspaper Advertising - Advantages & Disadvantages, by Mike Brassi,http://www.websitemarketingplan.com/small_business/newspaper.htm 36
Reach your audience when they are receptive • Look for a media where your ad can be examined at leisure without limited exposure. • Where your audience can take their time.Source: Newspaper Advertising - Advantages & Disadvantages, by Mike Brassilhttp://www.websitemarketingplan.com/small_business/newspaper.htm 37
People take their time reading the paper • Time spent reading Sunday print paper – Over 60 minutes: 45% – 30 to 60 minutes: 32% • Time spent reading daily print paper – Over 30 minutes: 45% – 16 to 30 minutes: 34%Source: Newspaper Association of America, http://www.naa.org/docs/Research/newspaper-reader-engagement-06.pdf
Survey respondents who read newspaper preprints account for 87% of all adults Regularly check Sunday inserts from store categories Grocery or food stores 80% Question: Department stores 69 Please tell me if Discount stores 63 you regularly Drug stores 53 check Sunday inserts from any Home electronics stores 49 stores from the Home building centers 43 following general Office supply stores 39 categories. Computer stores 38 Home furnishings stores 33 Sporting goods stores 33 Base = Adults who ever Appliance stores 25 read or look at newspapers advertising inserts Cell phone stores 11 (87% of sample)Source: How America Uses Advertising 2009 Prepared by MORI Research and NAA
People read on-page advertising as they browse • As a matter of routine, 8 in 10 newspaper readers scan on-page ads as they page through the newspaper. • Two-thirds (63%) of newspaper readers say they usually read advertising as they page through the newspaper. • Scanning becomes reading when they come across something that is relevant to them in a substantive way, or has interesting creative content, or both.Source: How America Shops & Spends 2011 Prepared by Frank N. Magid Associates and NAA
Associated Context can be very effective• You can tie your ad to the content on the page.• Health, sports, travel, beauty are all possibilities.• Positive associations trigger better response rates and recall ability among consumers.
While doing your planning, know that print and the Internet work well together • Time after time, marketers have proven that even when Internet advertising is appropriate, print is the “push” that complements the web’s “pull.” • A print piece not only drives additional traffic to the website, it increases the amount that people spend when they arrive.Source: Deliver magazine, July 2010
Newspapers are driving online traffic • Newspaper websites continue to grow rapidly, reaching 83.7 million unique visitors in April 2010, a 57% increase from 2004. • “As the industry continues to expand its digital portfolio, readers are visiting newspaper websites in record numbers for in-depth news and information as well as hyper-local information.” -John F. Sturm, CEO & President, Newspaper Association of AmericaSource: 2010 - “Newspaper web Traffic in Top Markets Leaps To An All-Time High.” http://www.nnnlp.com/news/news-05-24-10.php, Newspaper Association of America. Newspaper websites Custom Chart. http://www.naa.org/TrendsandNumbers/Newspaper-websites.aspx . BizReport.com “record visitor numbers,” July 24, 2007http://www.bizreport.com/2007/07/online_newspapers_experience_record_visitor_numbers.html#, Newspaper National Network.
Newspapers drive online action • 73% of readers visited Web Percent of consumers acting on print ads sites, used online search, or 90 made an online purchase in 80 following up on advertising 70 they saw in a newspaper in 60 the previous month. 50 • In 2009 the number was 39% 40 but in less than two years 30 people have become much 20 more engaged in the online 10 research and taking action 0 based on seeing 2011 2009 advertisements in the paper.Source: How America Shops & Spends 2011 Prepared by Frank N. Magid Associates and NAA
Summary of Findings:• The best companies of our time continue to advertise, regardless of the economy.• To break through fragmentation and manage your budget, you need to use the vehicles that reach your ideal client.• Unproven advertising vehicles need time to prove themselves and when used right, prove to complement traditional media• The right advertising in the right medium is key to building successful campaigns• As digital continues to grow, smart companies are using traditional vehicles to increase impact, create more traffic, and strategically grow their business
Who is Mediaspace?• Mediaspace Solutions is a privately-held company headquartered in Norwalk, CT. We also have offices located nationwide in Atlanta, Chicago, Los Angeles, Minneapolis and New England.• With expert service and custom-built technology systems, we help national and regional advertisers maximize their print and interactive advertising budgets.• We have an experienced and sophisticated management team focused on serving you and negotiating the best possible rates and placements. 46
We help companies keep their eye on the ball • 75% of companies who outsource important functions to other companies “significantly outperform their peers on three key business metrics:” – Reduced administrative expenses – Increased growth in return on assets – Higher growth in earnings before interest and taxes • No one knows your business better than you. But by focusing on your core strengths and your customers, you have time and resources to stay on top of your customers’ needs. 47Source: Business impact of outsourcing—a fact-based analysis, IBM Global Services, 2006 [ABA2 100]
Why wouldn’t you rely on experts?• A good advertising solutions partner already knows the ropes, the organizations and the personalities.• Is it really worth the training time, personnel and resources to do all this yourself?
American Express Success Study• Newspaper programs used in past for AMEX proved ineffective at producing desired results and they needed a change – They called Mediaspace.• We implemented a new approach using newspapers and delivered more highly visible, guaranteed ad placements – where their clients were reading.• We also saved them $300,000/drop.• A year later, they raised their newspaper spend by 1,000%; within 18 months, over 1,500% - and are now well into an 8 figure spend.• Clearly, this change in strategy is working.
Jessica Birk says it best…“As the leader in accountable mediasolutions, ID Media looks forpartners like Mediaspace Solutionsthat can save our clients likeAmerican Express over 85% off ontheir media while finding ways toprovide added value, exceptionalpositioning, and improved ROI.”Jessica BirkVice President of ID Media
U.S. Census Success Study• This critically important newspaper plan in 2010 required both deep analysis and deep discounts to achieve their required results.• They needed to reach everybody – in large and small markets, with a tight budget.• Plan recommendations involved both large and small market newspapers, often with comprehensive ZIP analysis.• Newspapers contributed to their overall success – 72% response vs. 64% in previous campaign.• Newspapers proved to STILL be their key vehicle for success!
Takeda Success Study• Takeda’s largest competitor was about to receive an FDA warning announcement which was sure to make big news• Actos wanted its brand’s safety message in key markets ASAP as consumers read headlines/looked to switch Rx• Within 48 hours of getting go- ahead, a 150+ newspaper plan was fully executed with low CPMs/100% FDA compliance
Let our Total Solutions Team work for your success• When clients work with us they are assigned an entire Total Solutions Team – Account development – Ad operations – Finance• You will receive regular and clear reports on your advertising activity.• You can call anyone on your team directly for any answers you need.• We provide customized solutions for YOUR business.
Suggested next steps…• For a limited time, Mediaspace Solutions is offering a complete audit of all of your newspaper and advertising activities.• Our experts will reveal what we believe to be your opportunities, and advise you on areas that you could be doing even better.• We will show you our detailed Case Studies, and explore where we can create similar success for you and your company.
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Share of total ad spend by medium in 2010 Percent of Total Ad Spend 40.00% 35.00% 30.00% 25.00% Print is 23% of 20.00% 15.00% all ad spend 10.00% 5.00% 0.00%Source: Forecast: TV Regains Hefty Ad Levels; http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=147613&nid=125220, March 2011