Friday, July 01, 2011

Mid Year Review: Companies Thriving, Wage Earners and Homeowners Still Suffering

How smart B2B marketers thrive in this schizophrenic economic climate

U.S. stocks rose sharply today, on pace for their biggest weekly gain in a year. Strong readings of manufacturing activity lifted spirits ahead of the long holiday weekend and investors may feel confident that no major “fireworks” are forthcoming from the euro zone and Greece debt crisis to ruin their barbecues and parades. Industrial, financial and tech stocks have led the rally, which is good news for many of you readers who work in—or sell into—those sectors. The market registered sharp gains after data released by the Institute of Supply Management showed the U.S. manufacturing sector expanded briskly in June. The ISM's manufacturing purchasing managers' index rose to 55.3 in June from 53.5 in May. Experts say readings above 50 indicate expanding activity.

If you’re wondering how the financial markets and corporate profits can be so high at a time when the jobless rate, housing market and energy prices are in the dumps, researchers at Northeastern University may have some clues. In their newly released study, (PDF file) “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth. The study, said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery. The study called that $27 billion loss in aggregate wages and salaries during the seven quarters after the recovery began “the first ever such decline in any post-World War II recovery.”

“Aggregate employment still has not increased above the trough quarter of 2009, and real hourly and weekly wages have been flat to modestly negative,” the report concludes. “The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders.”

Our Take: Consumers are still very pessimistic about their home values and job security, so if you depend on luxury goods, discretionary spending for travel and entertainment, then you’ll have to pick and choose your marketing spots very carefully. But, if you’re targeting decision makers in the heavy equipment or large corporate sector, then you need to get on their radar ASAP as they’re setting budgets for long-term capital expenditures right now.

Here are some key marketing trends to watch for the second half of this year

First two non-events: the new HP tablet and the Zynga billion dollar IPO. These are not game changers as much as late arriving “me too’s.” Don’t be fooled by the hype

Location infiltrates the advertising market

Location-based advertising is set to triple its percentage of mobile advertising in the next four years. The increase will partially be due to the US’s high adoption rates of mobile devices with GPS capabilities. Revenue for this advertising market is projected to increase ten-fold in the same time period, according to Pyramid Research.

Our Take: Consumers will have greater access to this type of advertising in the near future because of technology progression. Advertising companies at the front of location-based services could see much higher demand from businesses in the near future.

eReaders on the rise, tablets cool off

The ownership of eReaders has surpassed that of tablets largely due to price differences and improvements in technology. The entry price for eReaders undercuts tablets by a few hundred dollars, and eReaders are taking up a share of the tablet market as they begin to incorporate internet-based applications, like browsing the web and checking mail.

Our Take: The rise in eReader adoption will lead to a shift in support and resources from companies appealing to consumers. In part because of their lower price point and lesser technology, eReaders are cheaper to develop applications for than tablets. As many industries are probably in a hurry to try and capture the market opening caused by the iPad craze, it actually may be wiser to focus on the rapidly expanding eReader market. eReaders are also more literature-focused, which could lead to higher adoption rates in the corporate world. Additionally, recent reviews for products such as the nook and kindle have been raving according to CNET , while their price factor helps them beat out the iPad in a recent CNET head to head comparison.

A new approach to banner ads

New Google studies show that the average rate of users who click on ads is 0.1 percent. A separate study, conducted by Real Media, shows that the main reason people ignore ads is because they did not want to leave the web page they were currently on. In light of this information, startup Adkeeper has put a new spin on ads, one that increases that click rate by 34 times—that’s right, 34 times higher! Adkeeper is making advertisements ‘less interruptive’ as company founder, Scott Kurnit, told the NY Times on Tuesday.

Our Take: Although the articles take on adkeeper is heavily skewed towards entertainment and consumer-oriented industries (and not B2B), there is still a strong possibility that Adkeeper can help businesses. If a company is targeting the right audience and advertising on the right sites, then consumers will save these ads. For example, many may be reading an article and see an ad that they do not necessarily want to click on right away. However, if the ad appeals just a tiny bit to them and their industry, they can easily save and go back to it later.

Have a great Independence Day Weekend and remember what a great (and resilient) country this is despite all our current challenges.


No comments: