Category Archives: Internet Trends

Newspaper Ad Revenue Continues to Fall

If you’re involved in retail advertising you have to be interested in how newspapers are doing.   Not very well according to this chart from MarketingCharts.com

Here is what the article reports,

US newspaper advertising expenditures continue to decline, according to the latest figures from the Newspaper Association of America (NAA). In Q2, total expenditures stood at $5.61 billion, down 6.4% from roughly $6 billion a year earlier. Online revenues grew by 2.9%, to $826.7 million, representing 15% share of overall revenues. Print revenues dropped by 7.85% year-over-year to $4.8 billion. The overall 6.4% drop year-over-year in Q2 follows a 6.9% drop in Q1, but this year’s Q2 drop is the smallest year-over-year fall for any quarter since Q2 2010 (-5.55%).

Print ad expenditure decline was most pronounced in national ad sales, which dropped 9.73% year-over-year to $889 million. Classifieds revenue fell 8.39% year-over-year to $1.14 billion, though that was a smaller drop than the 9.85% year-over-year decline from Q1. Retail spending, which represents the majority of expenditures, saw a comparatively smaller decline of 7%, down to $2.75 billion.

The only good news here is that even with the declines there is still a lot of revenue coming into newspapers and there is an increase in digital ad revenue.

The question is, through your ad builder should you be encouraging your retailers to run print ads in newspapers or should you be leading them away from print towards digital.  The answer is that you should continue to be helping them with print, even those these numbers are down there are still a lot of valuable customers reading printed newspapers and plenty of smart advertisers continue to  run ads.  However, you should also be helping your retailers move to digital where consumers are doing most of their product research today and where the cost of the media is very low, if not zero.

 

 

Google Gives Your Dealers a Second Chance

Here’s a good image from the Gannett”s Online Marketing blog  that reminds me of a subject we haven’t mentioned lately, retargeting or remarketing.

The idea is that if a consumer comes to one of your dealer’s sites or landing page, Google can identify that consumer around the Internet and show a banner ad from the dealer no matter where the consumer goes.  In fact, sites like NewYorkTimes.com can show a local dealer’s ad to a local consumer.

Like so many things on the Internet, the cost is very low on a cost-per-click basis, the impressions are high and we can track every click along the way to develop a solid ROI.

The major challenge is to control the dealer’s microsite and landing page, so you can add the proper code and track the results.  The answer to that problem is to build co-branded dealer html pages in your ad builder and host the pages for your dealers.

We’re using this technique now on our dealer sites and landing pages and will be happy to share our results with you.

Local marketing is getting better and better.

Preprinted Inserts are a Bigger Piece of a Much Smaller Pie

This is an interesting graphic from the Newspaper Association of America that I came across while reading a blog post at ReflectionsofaNewsosaur.com

First you can see how newspaper print sales have fallen from $9.8 billion in the first quarter of 2007 to $4.4 billion in the first quarter of 2012.  Ouch!

Secondly, preprinted inserts have grown in importance for newspapers as classifieds have fallen away; as local and national have fallen in equal measure to their importance in 2007.

Preprint advertising has a significant impact on the industry’s profitability. “Preprint advertising accounts for 70% of the Sunday revenues at the average newspaper,” said one industry leader who declined to be named because he is not authorized to speak for his organization. With the Sunday paper producing “most of the profitability” for many publishers, he added, the health of the preprint business has a direct bearing on the bottom line of almost every publisher.

The real bad news is that the preprint business is now in serious trouble for a variety of good reasons.

∷ The digital revolution, which is (a) unraveling the business models of many of the big-box retailers who historically have been the biggest buyers of preprint advertising and (b) encouraging even healthy bricks-and-mortar retailers to shift from high-priced print advertising to targeted and inexpensive digital formats.

∷ A favorable rate cut granted last week by the U.S. Postal Service to Valassis Communications, which will enable the direct-marketing company to mail certain types of  national retail preprints for 42% less than newspapers are required to pay for the same product. The NAA says the Valassis deal could divert no less than $1 billion in advertising revenues from newspapers to the direct-mail company, which generated more than $2 billion in sales in the last 12 months by mailing its Red Plum ad circulars to consumers.

This is real bad news for printed newspapers and therefore has a major impact on the way you should be thinking about retail advertising and your co-op program for your independent dealers.  If you’re going to encourage your retailers to be in the newspaper (it is still valuable) make sure you help them with preprinted inserts to an equal measure of the way you help them with ads.

Final sobering note:  Although the nation’s publishers collectively sold a bit less that $24 billion in advertising in 2011, they are unlikely to do as well this year. The NAA reported that industry revenues fell nearly 6.9% in the first three months of 2012 and reports from individual companies indicate that the decline continued at about the same level in the second quarter, too.

Most importantly, make sure your ad builder and your co-op rules help and encourage retailers to go digital.  That’ where the smart money is heading.

 

Mobile Works for Couch Potatoes Too

Local advertising is continually changing and mobile should be a big part of your plans going forward.  Most often we think mobile is powerful because we envision consumers moving around a city looking for a dealer that sells your product.  That certainly is one reason why mobile should be a part of your strategy.  But, here is a study that will make you think a little differently about the need for mobile.

This chart is from Pew Internet study on “The rise of the Connected Viewer” and there you’ll read that a good percentage of consumers use their cell phone while sitting in front of a television.

 Television’s solitary screen is being supplemented by multi-screen interactivity. Half of all adult cell owners (52%) have used their phones recently for engagement, diversion, or interaction with other people while watching TV. The Pew Research Center’s Internet & American Life Project measured the prevalence of these multi-screen viewing experiences by asking the 88% of American adults who are cell owners whether they had used their phone to engage in several different activities while watching television in the 30 days preceding an April 2012 survey. We learned that:

  • 38% of cell owners used their phone to keep themselves occupied during commercials or breaks in something they were watching.
  • 22% of cell owners used their phone to check whether something they heard on television was true or not.
  • 6% of cell owners used their phone to vote for a reality show contestant.
  • Three more questions were asked of the 57% of cell owners who download apps, use the internet, or use email on their phones:
  • 35% of cell owners who use the internet, email or apps on their phone used their phone to visit a website that was mentioned on television (that works out to 20% of all cell owners).1
  • 20% of cell owners who use the internet, email or apps on their phone used their phone to see what other people were saying online about a program they were watching (that works out to 11% of all cell owners).
  • 19% of cell owners who use the internet, email or apps on their phone used their phone to post their own comments online about a program they were watching(that works out to 11% of all cell owners).

So in addition to helping your retailers build mobile sites so they can address consumers who are “showrooming” and to reach consumers who are literally driving around looking for your product, think about consumers who may be sitting at home watching tv and surfing via a smartphone.

The best way to help your retailers reach these consumers is to enable them to build  mobile landing pages on your online ad builder.  Let a dealer enhance your product information with their local input, then host and maintain the mobile landing page on their behalf and you have a great system for reaching mobile and not so mobile consumers.  It’s a cheaper, better and faster way to reach today’s shoppers.

Dealers Believe in Digital Advertising, Do You?

We still get asked about what independent retailers think about digital advertising as opposed to traditional advertising.  Here’s a chart from emarketer.com that helps us answer that question.

The source of the survey was Constant Contact, they specialize in email marketing so we may take a little salt with the results.

The research found that email, website and in-person interactions were considered the most effective marketing techniques by SMBs. B2C and B2B businesses found email and website marketing to be effective in about equal numbers, but a gap opened up when it came to the effectiveness of face-to-face interactions.

Maybe Constant Contact only surveyed their customers who had already determined that email was very effective.   That being noted, it is still a long way down the list before we see traditional advertising.

The point we always make with our clients and others is that when you look at your marketing digital asset management system and/or ad builder for your retailers, how much do you favor traditional advertising over digital?  Most major brands today still favor traditional over digital in these systems.  Most often the reason given is that, “our dealers still think traditional advertising works for them.”

Survey like the one above and the many, many discussions we’ve had with retailers tell us a different story.  Retailers live in a digital world and really understand the need for digital advertising but don’t know how to do it, or what is the most effective way to us digital.

We think many ad builders out there today slow down the dealers move from traditional advertising to more effective digital when they should be doing the opposite.  Does yours?

 

 

 

Google Thinks Newspaper Ads Still Have Value

Here is an interesting tidbit from Mashable.com  It seems that Google is running newspaper ads like this in Canada.

The message is that Google search works better than a newspaper ad.   The irony is clear.

The takeaway is that as much as we write about how local advertising is moving toward digital, the move won’t be complete for many years to come.  And, as long as there are printed newspapers, there will be value for local retailers to use those pages to reach consumers.  Even though most often the printed message will be to go to the Internet to learn more.

Your online ad builder and marketing digital asset management system needs to address both print and digital if you want to give your dealers the best opportunity to be effective.  The need for digital advertising has been proven many times over, as for the need for newspaper advertising, I trust Google.

 

 

Retailers Need Help in Selling to Consumers Who are Showrooming

Showrooming is the word that describes consumers who use their smartphone, while they are in a store, to search the web for the product they are interested in and, often times, buying from an online retailer or another nearby store at a better price.   If you’re a retailer, you naturally think this is a problem.

This chart from an article on eMarketer.com shows how quickly showrooming has grown in the last few years and now most retailers believe that this is a way of life and they have to adjust to meet this challenge, they just don’t know what to do.

In the article they reference a study from Deloitte,

Deloitte also found that the in-store conversion rate for shoppers who used a retailer’s own app or site was 20% higher than for those who used an app belonging to another business, such as an aggregator like shopkick.

That is the answer.  A retailer today needs a great site and a mobile version of that site to close consumers who are in their store and online.  Unfortunately, if you’re a brand manager responsible for retail advertising, you don’t have enough budget, time or talent to build sites for all of your retailers let alone a mobile version, too.

However, you do have enough money, time and talent to add a mobile microsite output option to your digital asset management system and/or ad builder.  Once you make this option available to your retailers they can customize your great content with their local spin and deliver an in-store mobile presentation that blocks their competitors and helps close the sale.  Because our system also hosts the mobile landing page you can track, learn and adjust to every situation, in near real time.  Retailers will make it a part of their current site and, if not, Google will still find a way to present it in mobile search results.

Here’s how they end the article,

Retailers that use showrooming behaviors to their own advantage reason that mobile consumers are a fact of life now. Failing to cater to them will only create more challenges down the line.

We agree!

 

 

Who Using Social Media in 2012? The Fortune 100

There are some very interesting statistics in this 2012 Research on the F100′s use of social media from Burson-Marsteller. For our clients in the Fortune 100 – benchmark where you are compared to your peers. For those aspiring to the F100, note how quickly usage has grown across and within specific platforms.

Burson-Marsteller Global Social Media Check-Up 2012 from Burson-Marsteller

 

What is conspicuously absent in this review is how these F100 companies are helping their reseller channel partners to understand and leverage these powerful tools. Large enterprises like these are uniquely able to use their resources to help their channel partners use branded content and promotions to reach consumers where they buy: locally.

Make Mobile Ads More Relevant by Making Them More Local

Here’s another study that confirms what I think is obvious.  If you want a digital ad to be more relevant simply make it more localized and the best way to do that is to collaborate with your local dealers.

This chart is from an IAB study where they first of all learned that 70% of smartphone and feature phone users viewed mobile ads as  ”a personal invitation” as opposed to  ”a personal invasion”.

The study then went on to ask about making mobile ads more relevant.

The easiest way to localize a mobile ad is to collaborate with your local dealers to give consumers brand and local information on one landing page.  Our ad builder, in addition to helping dealers build brand friendly newspaper ads, also lets dealers customize your brand content with their local offers and testimonials to build a more persuasive presentation.

We host the ads too, to make it easier for dealers and so you can track and react to what is happening in every one of your local markets.

From the report’s summary comes this message,

Mobile Commerce is not just about digital downloads but is really linking digital
marketing with real world commerce.  In tough economic times consumers are
searching for the best deal. The mobile internet is allowing consumers to search and
find this in the best price in the best location, be that on mobile or in the physical retail
store. This leaves retailers with no where to hide, giving consumers true price
transparency.  Mobile advertising is a huge influencer in this
new phenomenon

You can download the entire study here.

Majority of Sales will be “Web-Influenced” in 2015

Forrester Research has a new forecast out that covers all retail sales – delivering the news that 2015 will be a watershed year in retail. In 2015 more sales will be either Web Influenced & Web Only…versus Non-Web Influenced. The report is titled “US Cross-Channel Retail Forecast, 2011 – 2016“.  For manufacturers and their local retailers who sell those goods, this should have a profound impact on your actions.

 

 

 

 

 

 

 

 

 

 

 

Doing the math: $1.856 Trillion in 2015 retail is the combination of ecommerce and web-influenced sales — beating out the $1,780 Trillion in “old fashioned retail”.  The other way to phrase this is : “All Newspaper/TV/Radio/Direct Mail/POS/Sky-writing only” influenced retail will be in the minority in a short years. 

As most things are in life, this is a double-edged sword. 

The downside for manufacturers and their retail channel partners caught flat-footed will be fewer sales and higher costs sunk in traditional “paid” media.  Retailers will be “showroomed” by consumers who browse in your retail aisles but buy elsewhere — either online or down the street.  I recently bought a laptop and accessed specs and reviews on my smartphone while in 3 different stores — ultimately buying in the last store.  How many of you have spent a few hours researching a product online, and knew more than the salesperson when you visited the store?

The upside of this trend will be more sales at lower costs for those who embrace this new technology-enabled consumer at every phase of the  process.  Depending upon your product category: Dreaming/Inspiration >Casual Research > Retail and Online Investigation > Purchase > First Use > Ownership.

Consider: What content and assistance do you offer online to help consumers at each of these phases? Are you reaching these consumers with your paid media as well as your owned (i.e. free) media?  Is your online product selection and experience consistent to your retail environment?  Manufacturers, are you syndicating your content and making it easy for your retailers to use it in their websites and social media?

There is still time to get ready for 2015 if you start soon.