Tuesday, March 02, 2010

Mixed Signals on Economy, Media Consumption Patterns

All mixed up with somewhere to go. The question for marketers is where and when to place their bets.

Internet, Web TV gain. Plus straight talk on tablets.
For those of you fond of marking “tipping points” in the American media psyche, consider adding this one: More Americans now get their news from the Internet than they do from newspapers or radio according to a survey of 2,200 adults nationwide by the Pew Internet and American Life Project. More on this in a minute.

Mixed economic indicators

Consumer spending increased for the fourth consecutive month, the government announced yesterday, and while the 0.5 percent increase was modest at best, it set the table for cautious optimism about Friday’s monthly jobs report. In January, employment reached its highest level in five years, with the measured unemployment rate falling below 10 percent for the first time since August. While myriad factors come into play in our complex economy, economists are ultimately waiting for improvement in the job market to boost both consumer and B2B spending.

That may be a challenge. The Conference Board’s widely watched Consumer Confidence Index®, which had increased in January, declined sharply in February. The CB Index now stands at 46.0 down from 56.5 in January (the Index is pegged to a 1985 benchmark of 100). Not only is a separate CB measure – the “Present Situation” Index at its lowest level in 27 years, but the Board found that almost half (43%) of gainfully employed workers are dissatisfied with their jobs. Further, they don’t see much relief from excessive workloads, reduced perks and paychecks and the pessimism that pervades many workplaces as a trap rather than a road to opportunity. And that’s never good for spending.

Survey: More Americans get news from the Internet than newspapers or radio

Not only are more American’s tuning into the Web as their go-to source of news, but three-fourths say they hear of news via e-mail or updates on social media sites and 61 percent say they get at least some of their news online. Compare that to 54 percent who told Pew Institute researchers they listen to a radio news program and 50 percent who say they read a national or local print newspaper. The Pew survey suggests social networking sites like Facebook and Twitter have made news a more participatory experience than ever before as 37 percent of online users said they've reported news, commented on a story or shared it on sites like Facebook and Twitter, the survey said.

And with all due respect to branding experts, most Americans say they use between two and five online news sources, and 65 percent said they don't have a single favorite Web site for news. That’s pretty telling when you consider that about one-third of the study respondents were OLDER than age 50. Can any medium still compete with the immediacy of the Web? Yep. Good ol’ TV. Television news still outpaces the Internet, with 78 percent of respondents saying they watch local news and 73 percent saying they view a national network or cable news channel like CNN, Fox News or MSNBC.

However, when you compare real-time, undistracted appointment viewing to the rising share of time shifted viewing and multi-tasking viewing, the gap really narrows (see study below):

Online TV viewing climbs

According to Nielsen Company’s online panel data of U.S. visitors to online TV sites in the last 30 days, Americans are consuming more and more video on TV, Web and Mobile according to the recent Nielsen A2/M2 Three Screen Report, but the broader usage patterns suggest that online video is a replacement of DVR use, or used by those who do not have immediate access to TV. TV network content online is used to catch up with programming, and not typically as a replacement for TV viewing, as results from the email survey showed.

Top reasons for watching TV shows on the Web
(ranked by percent of respondents who agree)
• 54% forgot to watch a specific episode when it aired on TV
• 47% are catching up on the current season of programming and missed past episodes
• 33% are catching up on a past season of a program before the next season
• 32% forgot to record a specific episode with their recording device when it aired

Source: The Nielsen Company http://en-us.nielsen.com

US ad spend down nearly 10 percent in 2009

Those were the few bright spots from a Nielsen Co. report on U.S. ad spending, in which overall revenues tanked more than nine percent or $11.6 billion to $117 billion last year. Nielsen says this continues the trend of six straight quarters of declining ad revenue. Bleak to be sure, but at least Q4 2009 ad spending was down just two percent year-over-year, “and that helped soften the full-year decline,” said Terrie Brennan, senior VP for new business development at The Nielsen Company in a company news release. “In fact, most of the top advertisers showed increased spending late in the year. These are encouraging signs for an ad market that’s still trying to stop the bleeding.” Before the fourth quarter rally, many forecasters had expected 2009 to come in closer to 15 percent lower than 2008, and ’08 wasn’t exactly a banner year, either.

A few sectors did show positive year-over-year growth: Cable television grew 14.8 percent and free-standing-insert coupons climbed nearly 12 percent in 2009 versus 2008. Internet advertising remained flat (+0.1%), but Nielsen’s Internet ad expenditures are pulled from the AdRelevance database and account for CPM-based, image-based advertising only. Nielsen data overlooks some pretty big revenue pots such as paid search advertising, text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns, or house advertising activity.

As expected, most traditional media took big hits:
• Network TV - 9.9%
• Local Newspapers -10.4%
• National Newspapers – 13.7%
• National Magazines - 19.3%
• B2B - 32.7%
• Local Sunday Supplements -44.9%

Digital Shift in Marketing Budgets

According to a recent Econsultancy survey, conducted in association with ExactTarget of more than 1,000 marketers, the shift of marketing budgets from traditional channels to digital channels will continue to rise in 2010. Nearly half (46%) of companies plan to increase their marketing budgets in 2010, says the study, and two thirds (66%) will increase their investments in digital marketing channels. Only 13 percent of companies expect to decrease their budgets overall and only one in 25 (4%) plan to decrease their digital budgets.

Additional budgeting highlights:
• 70 percent of responding companies plan to increase their budgets for off-site social media (i.e. Facebook, Twitter)
• Only 17 percent of respondents are increasing their print media budgets, compared to 41 percent who are decreasing spending.
• More than half of companies plan to increase their budgets for mobile marketing(56%), email marketing (54%), and paid search (51%)

Summary findings can be found here

What Apple and other tablet need to learn about consumers

Finally, kudos to Forbes.com Senior Editor, Lee Gomes, for a poignant piece this week about the Apple iPad’s strengths and shortcomings. If you’re in the business of making – or marketing – technology solutions to consumers and business people, I recommend you read Lee’s piece on any device you choose. Click here

Whether or not you’re an Apple devotee, Gomes points to three key criteria for evaluating any new gadget you’re contemplating: (1) How much mental and physical energy is required to lug it around? (2) What’s the turn-on time? And (3) How do you talk to it?

The devices that continue to get the most usage (and consumer eyeballs) are compact and so light you don’t know you’ve got them on your person; they’re always on and they’re easy to type on or communicate with. In iPad’s case, Gomes says’ Apple’s batting one-for-three.



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