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The current state of our economy – and what that means to us as Advertisers.
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How the BEST companies in America are WINNING with their advertising –
Despite the Economy…
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
Source: Gallup Daily, http://www.gallup.com/poll/112723/gallup-daily-us-consumer-spending.aspx
Nov-0
8
Jan-
09
Mar
-09
May
-09
Jul-0
9
Sep-
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Nov-0
9
Jan-
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-10
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-10
Jul-1
0
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-11
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-11
Jul-1
140
50
60
70
80
90
U.S. Consumer Spending 14-day rolling average
Unemployment is up
1999 2001 2003 2005 2007 2009 20114,000
6,000
8,000
10,000
12,000
14,000
16,000
Unemployment
Thou
sand
s
Source: http://www.bls.gov/news.release/archives/empsit_08052011.htm Aug 5th 2011
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
Index of consumer confidence
Source: University of Michigan’s Survey of Consumers Report, August 26, 2011
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 201140
50
60
70
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100
110
120
U.S. consumer confidenceaverage since 1978
Inde
x va
lue
(106
6=10
0)
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
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.
Maintained marketing spendthrough 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
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
Consumers feel advertising is a sign of stability
Executive poll
• 48% of adults believe lack of advertising during a recession indicates the business must be struggling
• 86% of executives agree advertising in a down economy keeps a company at the front of the audience’s mind
86%
Advertising in down economy keeps company top of mind
Source: 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
So, it makes sense to continue to advertise
– but there still is a huge issue to deal with:
FRAGMENTATION
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-themThe 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
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
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%
Source: Nielsen Media Research, February Each Year, http://www.tvb.org/rcentral/adrevenuetrack/media/media.asp?c=1b
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
Television advertising costs are UPwhile 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 theSuper Bowl which is a 30% increase from 2005
• 22 million people watched the Royal Wedding of Prince William and Kate Middleton, around 8 million more than the Prince Charles and Lady Diana Spencer wedding
• 6 million more people tuned in to view President Obama’s Jobs Speech than his address on Libya
01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000
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
Fans want to be part of events in real-time
20
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
• 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.
Direct Mail is tougher than ever
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.
• The average American receives 560 pieces of direct mail each year
• 44% goes in the garbage unopened
• 97% to 99% of recipients never respond
News Audience Trends
Source: State of the News Media 2011: http://stateofthemedia.org/2011/overview-2/key-findings/
Audience Percentage
Change from 2009-2010
Average click rates on ads for most websites are on the decline
• Time on the Internet is increasing, but people just aren’t clicking on the ads
• “I think it’s interesting (that) in the digital age, a number of people are connecting, but not necessarily connected” - Mary Beth West, CMO Kraft Foods
Percentage of people who click on Internet banners on average
Source: Source: ZSmart Business, Imedia Connection, 2010
1997 2001 Today0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.00%
0.40%
Less than 0.02%
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 TontoSource: 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/
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/
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?
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 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.
•47.8 million unique visitors
2004
•83.7 millions unique visitors
2010
•110.8 million unique visitors *through Q2 of 2011
2011
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
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
newspaperSource: Scarborough USA+ 2011 Release 1; Gfk MRI Spring 2011
Newspapers Create a Halo Effect
• 73% of readers visited Web sites, used online search, or made an online purchase in following up on advertising they saw in a newspaper in the previous month.
• In 2009 the number was 39% but in less than two years people have become much more engaged in the online research and taking action based on seeing advertisements in the paper.
• That’s a 94% increase in two years!
Source: How America Shops & Spends 2011 Prepared by Frank N. Magid Associates and NAA
20112009
0
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Percent of consumers act-ing on print ads
There’s one medium you can use to take full advantage of your media budget:
Newspapers
33
Know your audience
Source: Kim Skildum-Reid, 2010 “Last Generation Sponsorships”
• 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?
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?
34
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)
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?
35
Source: Newspaper Association of America, Daily Newspaper Section Readership Report, 2008.http://www.naa.org/docs/Research/Daily-Readership-Active.pdf
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
36
Source: Newspaper Advertising - Advantages & Disadvantages, by Mike Brassi, http://www.websitemarketingplan.com/small_business/newspaper.htm
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
37
Source: Newspaper Advertising - Advantages & Disadvantages, by Mike Brassil http://www.websitemarketingplan.com/small_business/newspaper.htm
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
Source: How America Uses Advertising 2009 Prepared by MORI Research and NAA
Regularly check Sunday inserts from store categoriesGrocery or food stores 80%
Department stores 69
Discount stores 63
Drug stores 53
Home electronics stores 49
Home building centers 43
Office supply stores 39
Computer stores 38
Home furnishings stores 33
Sporting goods stores 33
Appliance stores 25
Cell phone stores 11
Base = Adults who ever read or look at
newspapers advertising inserts (87% of
sample)
Question: Please tell me if
you regularly check Sunday
inserts from any stores from the
following general categories.
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
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
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 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
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
45Source: Business impact of outsourcing—a fact-based analysis, IBM Global Services, 2006 [ABA2 100]
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 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
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!
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
Just a few of our other clients
Best PricingBest Placement
Best TargetsBest Service
GUARANTEED!
