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How the BEST companies in America are WINNING with their advertising-Despite the Economy
1. How the BEST companies in
America are WINNING with their
advertising –
Despite the Economy…
2. 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
3. Consumers are watching their spending
U.S. Consumer Spending 14-day rolling average
90
80
70
60
50
40
Source: Gallup Daily, http://www.gallup.com/poll/112723/gallup-daily-us-consumer-spending.aspx
4. Unemployment is up
Unemployment
16,000
14,000
12,000
Thousands
10,000
8,000
6,000
4,000
1999 2001 2003 2005 2007 2009 2011
Source: http://www.bls.gov/news.release/archives/empsit_08052011.htm Aug 5th 2011
5. 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
• In August 2011 consumers
became increasingly convinced
that a renewed recession was
likely to occur.
Source: University of Michigan’s Survey of Consumers Report, March, 25 2011 & August 26, 2011
6. 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 2011
Source: University of Michigan’s Survey of Consumers Report, August 26, 2011
7. Who is shopping?
• Our economic recovery has
largely left out the have-nots
• Households that earn less than
$50,000 have been extremely
downbeat
• Affluent households have been
an important element in getting
the economy back on its feet
• Just 18% of households earn
more than $100,000 a year, but
account for one-third of all
household spending
Source: June, 2011: USA Today, Recovery helps affluent families while cash-strapped suffer
http://www.usatoday.com/money/economy/2011-06-26-consumer-confidence_n.htm
7
8. 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
• Lets look at some data…
Source: "How Advertising in Recession Periods Affects Sales," American Business Press, Inc., 1979 , Facts on the value
of marketing during an economic 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.
9. 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
10. 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
11. Where is American Express Investing MOST?
• As American Express’s profits
continue to surge…
• They continue to invest hugely
into Advertising/Marketing
• Quote: “Marketing and
promotion expenses rose 60%
in 2010 to drive customer
acquisition, new products and
brand advertising”
– Kenneth Chenault
• Chairman and CEO American
Express
Source: American Express 2010 Annual Report: http://ir.americanexpress.com/phoenix.zhtml?c=64467&p=irol-
reportsannual
12. 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 poll
Source:
Http://www.marketinginsightstoday.com/archives/1223;http://www.jjhill.org/resources/press_releases/W
omenVenture_03_24_09.pdf;http://mystrategicplan.com/resources/does-your-marketing-budget-makeyou-
look-fat/l;Yankelovich/Harris Study 2008
13. So, it makes sense to continue to
advertise – but there still is a huge
issue to deal with:
14. 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 30,000
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-them
The Washington Post, "Skip Past the Ads, But You're Still Being Sold." 2009; http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/14/AR2009081401629.html
15. 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 Influential's ; Keller & Berry; /sizeofweb.html;
http://www.boutell.com/newfaq/misc; http://news.bbc.co.uk/2/hi/science/nature/1738496.stm; Source: American Society of
Magazine 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 of
Radio, http://www.edisonresearch.com/infinite_dial_presentation_2010_revb.pdf
16. 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
17. 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 $19.74
Source: Nielsen Media Research, February Each
Year, http://www.tvb.org/rcentral/adrevenuetrack/media/media.asp?c=1b
18. 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
19. But . . . more people are paying attention to events
• In 2011 there were 111 million
people watching the
Super Bowl which is a 30% 9,000
increase from 2005 8,000
7,000
• 22 million people watched the 6,000
5,000
Royal Wedding of Prince 4,000
William and Kate 3,000
2,000
Middleton, around 8 million 1,000
more than the Prince Charles 0
and Lady Diana Spencer
wedding
• 6 million more people tuned in
to view President Obama’s
Jobs Speech than his
address on Libya
Source: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=144456&nid=123511, Nielsen 2011;
http://blog.nielsen.com/nielsenwire/media_entertainment/31-million-in-u-s-watch-president-obamas-jobs-speech-on-
television, Nielsen 2011; http://blog.nielsen.com/nielsenwire/media_entertainment/23-million-watch-royal-wedding-in-u-s
20. Fans want to be part of events in real-time
• A strong reason companies want to
be related to live events and
advertise during these events:
• “Appointment TV”… people want
to watch these events in real time
• DVR’s have little impact on people
who are watching these events in
real time
• But we all know that advertising
during marquis events is the most
costly form of advertising a
company can do.
Source: Media Post News, July
24, 2007, http://www.mediapost.com/publications/index.cfm?fa=articles.showarticle&art_aid=64461: Source: ESS
Synovate OOH survey 2005 20
21. 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; and Direct Mail Statistics You Can Use, By Andrew Michaels | Article Abstract,
http://www.articlesphere.com/Article/Direct-Mail-Statistics-You-Can-Use/150454, February 2010.
22. News Audience Trends
Audience
Percentage
Change
from 2009-2010
Source: State of the News Media 2011: http://stateofthemedia.org/2011/overview-2/key-findings/
23. Average click rates on ads for most
websites are on the decline
Percentage of people who click on
• Time on the Internet is Internet banners on average
increasing, but people 1.20%
just aren’t clicking on 1.00%
1.00%
the ads
0.80%
• “I think it’s interesting
(that) in the digital 0.60%
age, a number of 0.40%
0.40%
people are Less than
0.20%
connecting, but not 0.02%
necessarily connected” 0.00%
- Mary Beth West, CMO Kraft 1997 2001 Today
Foods
Source: Source: ZSmart Business, Imedia Connection, 2010
24. A lot of people talk about digital advertising
• Spending on digital
surpassed newspapers for
the first time in 2010
• But … as a stand alone
advertising vehicle digital
still does not have proven
ROI
• “The problem with metrics is
that we have too many of
them. And many of them
don’t prove anything”
– Greg Satell, Digital Tonto
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
The (Mis)Measurement of Marketing : January 2011. http://www.digitaltonto.com/2011/the-mismeasurement-of-marketing/
25. 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 21
Source: Advertising Age, March 28, 2011: http://adage.com/article/news/century-21-back-big-tv-buys-2012-super-
bowl-spot/149615/
26. We all agree that it’s important to
know how to get the HIGHEST
return on your advertising
dollars. But what is research
showing us?
27. 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
28. Newspapers are driving online traffic
2004 • 47.8 million unique visitors
2010 • 83.7 millions unique visitors
2011 • 110.8 million unique visitors
*through Q2 of 2011
• Newspaper websites continue to grow rapidly, reaching 110.8
million unique visitors in the 2nd quarter of 2011, 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
America
Source: 2011: Newspaper Websites Post… http://www.naa.org/News-and-Media/Press-Center/Archives/2011/Newspaper-Websites-Post-
Consecutive-Quarterly-Traffic-Increase.aspx 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, 2007
http://www.bizreport.com/2007/07/online_newspapers_experience_record_visitor_numbers.html#, Newspaper National Network.
29. Newspapers drive online action
• Online direction has become
a substantial response
category for newspaper ads.
• Consumer actions from print
newspaper advertising:
– 47% of readers made a
purchase online or visited a
website to learn more about
that product/service.
– 26% searched online for
more information after
reading a newspaper.
Source: How America Shops & Spends 2011 Prepared by Frank N. Magid Associates and NAA
30. Print and digital come together with
mobile devices
• 52.6% of people who own a
mobile device (tablet, iPad, e-
reader, Smartphone, etc) read the
daily electronic newspaper
• 77.4% of the same individuals also
read the daily print newspaper
• 55.3% of people who own a tablet
or e-reader like to look at
advertising and/or feel that brands
that are advertised are better in
quality than brands that do not
• 73.5% of people who made a
purchase online in the last 30 days
own a tablet device or e-reader
and read the daily newspaper
Source: Scarborough USA+ 2011 Release 1; Gfk MRI Spring 2011
31. Newspapers Create a Halo Effect
• 73% of readers visited Web
Percent of consumers
sites, used online search, or
acting on print ads
made an online purchase in
following up on advertising 80
they saw in a newspaper in the
previous month. 60
• In 2009 the number was 39% but
40
in less than two years people
have become much more
20
engaged in the online research
and taking action based on
0
seeing advertisements in the
paper. 2011
2009
• That’s a 94% increase in two
years!
Source: How America Shops & Spends 2011 Prepared by Frank N. Magid Associates and NAA
32. There’s one medium you
can use to take full
advantage of your media
budget:
33. Know your audience
• If the ultimate goal is to connect with
your buyers in ways that create
meaningful and long-lasting
relationships, the first thing you
need to understand is who your
target markets are…not “what,” but
“who.”
• What are the psychographics…their
motivations, self-definition, peer
influences, opinions
• And more importantly, WHERE do
you know they are looking?
Source: Kim Skildum-Reid, 2010 “Last Generation Sponsorships”
33
34. We all need media that
reaches our audience
• Would you like to
advertise in a
medium 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
35. Reach customers who can
afford your products
• Would you like to
advertise in a
medium 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
36. Pinpoint specific local
audiences across the country
• Look for a media
vehicle that reaches
the majority of
homes...
• A medium 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
37. 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 Brassil
http://www.websitemarketingplan.com/small_business/newspaper.htm
37
38. 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
39. 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
40. 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
41. 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
42. Integrated marketing across media amplifies your message
• A comprehensive
marketing plan ensures
your target audience
receives the same
message from a variety of
media
• It brings together a whole
range of channels into
one, blended campaign, all
sharing a consistent
message
42
43. 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
44. Who is Mediaspace?
• Mediaspace Solutions is a
privately-held company
headquartered in Wilton, CT. We
also have offices located
nationwide in Chicago, Los
Angeles, Minneapolis and New
England and New York City.
• 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.
44
45. 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
45
Source: Business impact of outsourcing—a fact-based analysis, IBM Global Services, 2006 [ABA2 100]
46. 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
47. Jessica Birk says it best…
“As the leader in accountable media
solutions, ID Media looks for
partners like Mediaspace Solutions
that can save our clients like
American Express over 85% off on
their media while finding ways to
provide added value, exceptional
positioning, and improved ROI”
Jessica Birk
Senior Vice President of ID Media
48. 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!
49. 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
Source: University of Michigan’s Survey of Consumers Report, February 19, 2010
UPDATE w/new 2010 report
Add rice krispies box or bowl of rice krispies
Note to presenter: 20,000 messages per day as of August 16, 2009 Istock 3688476 and 11534101Nothing about the 1970’s in this article: “The market research firm Yankelovich estimates that the average American living in a city 30 years ago saw up to 2,000 ad messages a day. Today, estimates range from 5,000 to 20,000 ad impressions a day. To hone in on a more accurate number, one would have to determine what exactly constitutes an ad in today's ambiguous media environment. Print, radio, TV and online pop-up and banner ads are easy to tally. But what about Internet search results, recommendations on Amazon, subtle product placements in film, music and TV, and, of course, spam? “
Note to presenter: There are 23,329 licensed television stations in the United States.Source: FCC, Media Bureau, http://www.fcc.gov/mb/audio/tvq.htmlFrom 1997 to 2006 the number of magazine readers increased from 171.4 million to 184.1 million Source: 10-Year Magazine Readership Trend 1997-2006, Mediamark Research, Inc.In 1990 there were 10819 radio stations in the US. Today there are 14420.Source: FCC Radio Licenses, accessed August 23, 2010, www.fcc.govhttp://website101.com/define-ecommerce-web-terms-definitionsA January 2010 survey showed 206,741,990 sites active online from 0 in 1995, Source: Website 101, accessed August 23, 2010, Note to presenter: “Today” for magazines is as of April 2010, for web sites is as of February 2007, radio is as of December 2009, and TV it is September 2005.IT DOES NOT INCLUDE Internet RADIO STATIONS.
Change the picture on this one
Note: 2008 figures: average minutes were 4,384,000, cost per 30 seconds was $114,900, CP 1,000 homes was $26.22Started to go down in 2009 but we used because more current2010 figures are lower still so did not use: 5,248,000 viewing minutes, $103,600 cost per 30 second and $19.74 cost per 1,000 homes.
2010 Super Bowl – 106.5 million viewers
: DoubleClick DART for Advertisers, a cross section of regions, January – December 2008, www.interactcongress.eu/.../8_7_The_Proof_for_Branding_Online_F_Gian_Fulgoni.ppt
Note to presenter: Print breakdown In millionsNewspapers: $23,434Magazines: $9,182Direct mail: $52,305Business papers: $2,664To see other types of advertising, see source.
Integrate audience numbers for end of 2010 going to 2011 (how many more readers you hit by using both media)
Up from 39% in 2009.-Visited a website to learn more about an advertised product or service – 37%-Used the search function online for more information about an ad in the paper – 26%-Bought something at an Internet website – 10%
Up from 39% in 2009.-Visited a website to learn more about an advertised product or service – 37%-Used the search function online for more information about an ad in the paper – 26%-Bought something at an Internet website – 10%
Change lead-in
Pull this or portray it as timeless research
Note to MSS: We looked into this and found some stories, but we didn’t find anything that was easily recognizable or had a big wow without a lot of explanation that would drag this down. We think the better way to go would be to put one of your own success stories about this in here. DK ; terrific panel. Dk – see if can find specific companiesAre there a couple of example companies that we can refer to and drop into the script?
Note to MSS: Please provide the figures you want here. Scott Miraldi- dimensionalize bullet point three, remove percentages and look at another number (total dollars etc.)
Note to MSS: Please provide the figures you want here. Scott Miraldi- dimensionalize bullet point three, remove percentages and look at another number (total dollars etc.)
MSS says they will consider what logos to use and do themselves.-> CW Suggestion: Please add Fifth Third Bank or TIAA-CREF (as banking/finance is a growth category for MSS and both are among our larger accounts at MSS); on this list, I would replace CIT with Fifth Third Bank (or TIAA-CREF). Bill Aiello- The Borders Books logo should be replaced – it’s been quite awhile since they have been relevant or ran through us. Windstream is a great example of our ability to execute preprints (along with ROP) in C and D markets. The strength of MSS data allows this client to buy newspapers above and beyond local dailies Randy – we need to make a bunch of changes to this logo page so we’ll do it on our end.