Transcript The Consumer

The Power of the Consumer
May, 2007
Learn, Live and Hope
Learn from yesterday
Live for today
Hope for tomorrow.
The important thing is not to
stop questioning.
Albert Einstein
2
Today’s Discussion
•
The Power of the Consumer
– Choices
– In Control
– Important Consumer Segments
• The State of Mass Media
•
What’s New in Digital?
• Conclusion
3
In Control and Making Choices
Shaping the Future of Media
The Power of the Consumer
+
=
…and 15% Sales increase for Mentos Product
5
The World is Changing
YESTERDAY
TODAY
(Marketer-Driven)
(Consumer-Driven)
Consumers were
dependent
Marketers take direction
All Business
Very Personal
Control was elusive
Control belongs to the
consumer
6
Yankelovich Monitor, 2007: US News & World Report Subscriber Study
Time’s Person of the Year - YOU
YOU
7
Ad Age Agency of the Year
– The Consumer
• A Brand has only been as good as consumers’ experiences
of it
• The 2006 Advertising Age Agency of the Year was “The
Consumer”
There are lessons to be learned from the consumer, and
agencies need to learn them quickly
Old Way
Talk AT
Broad Reach
New Way
Talk WITH
Precision Targeting
Exposures
Engagement
8
What really matters to consumers?
Early
90s
2003
Today
Being satisfied with my life
63%
80%
86%
Being in control of life
63
76
80
Having a good marriage
62
70
76
Having a balance between
work and family life
NA
57
72
Being able to take a day off
42
51
57
Owning an expensive car
35
23
13
Having a large, expensive home
25
19
13
* All data among consumers age 16+
Yankelovich Monitor, 2007: US News & World Report Subscriber Study
9
The World of “I”
• The “i” Generation
–
–
–
–
Individual
Independent
Inquisitive
Internet
• iGoogle: Google’s enhanced personalized homepage
services
–
–
Allows users to share their own creative work
Personalizes web page view based on search history and
geography
The new world must surround the “i” consumer
and fulfill their individual needs and desires
10
Creating the “I” for Me
11
Choice and Control
• The average consumer gets between 254 and 5,000
commercial messages each day.
• The consumer is in control & choosing media that allows
them that control
–
–
–
–
–
–
Satellite Radio & Personal Media Players
DVR
On Demand Programming
User-Generated Content
You Tube
Podcasting
12
Second Life
• Called the “Future of the Internet”
• 7 million users
–
–
$1.5 Million U.S. dollars exchanged daily
40 Hours spent per month
• Users by Country
–
–
–
–
45% North America
38% Europe
11% Asia
6% Latin America
13
Multi-Tasking or Interrupted?
• The brain can only handle one task at a time
• Multi-Tasking is not always effective or efficient
• 61% of middle/high school students multi-task while doing
homework
–
Time Spent Multi-Tasking 1999 to 2006: 16% to 28%
• Study by UC Irvine of Investment Group employees
showed:
–
–
Spent 10.5 minutes per project at a time
Spent 2 minutes per document or device
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Simultaneous Media Usage
Percent of People Who Use Other Media While…
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Watching TV
Listening to Radio
Reading
Newspapers
Surfing the
Internet
Advertising messages are competing not only against clutter, but against simultaneous
media vehicle usage.
Connect with the RIGHT consumer at the RIGHT time with the RIGHT
message!
15
The Open Source Revolution
• “Open Source”: any creative work that is not treated as
proprietary by its originators
• Consumers have a lot to say, and advertisers are putting
the consumers in control so they can listen
16
The Media Re-Evolution
• New and emerging media vehicles
• Endless programming choices
• The people choose how they want to “interact” with media
• There is a TWO-WAY flow of content between media and
consumers
17
Important Consumer Segments
Understanding Consumers
• For any successful marketing plan, we must first
understand the target consumer.
–
–
–
–
–
–
What is this consumers’ mindset?
What is important to this consumer?
How does the consumer interact with media?
How can we build a relationship with this consumer?
How can we get the consumer to interact with our
brand/product?
How can we create loyalty with our consumers?
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Baby Boomers
• 78.5 million consumers born 1946 – 1963
–
44 – 61 Years Old
• Used to be considered “undesirables” by advertisers, but
they have enormous Spending Power
–
$2 trillion spent annually on goods and services
• Smart Consumers
–
80% of Boomers use the internet to research products/services
• Life isn’t Over Just Yet
–
Empty Nesters going back to school, taking on new jobs, relocating,
pursuing new hobbies, staying healthy while aging
20
Generation X
• 50 Million Population born 1964 – 1980
–
27 – 43 Years Old
• All about “ME”, the Individual
• Most educated generation, Affluent
–
However, they are starting to save for retirement later – they
live in the “NOW”
• Getting married/having children later in their lives
• Enjoy life experiences, work-life balance, humor,
quality
21
Alpha Moms
• First Soccer Moms, then Yoga Moms, now ALPHA MOMS
–
•
5.6 Million Stay-at-Home Moms
• 18-39, HHI > $75,000
Educated, tech-savvy, Type A, multi-tasker, kid-centric,
hands-on
• “A Hip Mom who wants to be involved in her childrens’ lives
but who doesn’t want to give up her identity”
• High Social Networking Factor
–
Wired – Online 87 minutes per day
22
Generation Y
• 81 Million Consumers, born 1981 – 2001
–
6 – 26 Years Old
• The “Overstimulated” generation
• Loyal - Social Networking is the fabric of their lives
–
Strong bonds with family
• Strong need for instant gratification and immediacy
• Truly Connected – Linked by Technology
• Workplace Re-Evolution
–
As Boomers retire, companies are faced with changing the way they
treat the Gen Y workforce
23
Hispanics
• Fastest growing population segment in the United States
–
–
41.3MM Hispanics in the US (US Census, 2005)
Expected to double by 2040
• Top DMAs for Hispanic Advertising
–
L.A., Miami, NY, Houston, Chicago
• Hispanic Online Usage Growing Rapidly
–
–
–
Total number of Hispanics online grew 11% vs YA
61% have broadband connection
Social Networking Sites usage up 200%
24
What do these consumers mean to
us?
• Baby Boomers
– Not the demographic to be ignored anymore
•
•
Spending power leads to increased advertising importance,
especially in Health and Beauty, Travel and Leisure, and Finance
categories
Increase reach by utilizing online media
• Generation X
– Continues to focus on the “Me”, but is now a stronger, more
educated and affluent consumer group
•
•
•
Brand experiences and relationships are important to this generation
Word-of-Mouth is an extremely powerful medium
Looking for relevancy and engagement in brand relationships that
improve quality of experiences
25
What do these consumers mean to
us?
• Generation Y
– A “connected” generation that is changing the way that
media is consumed
•
•
•
Multi-Media usage is the norm
Online Media must be included in communications – no distinction
between traditional and non-traditional media
Traditional media vehicles are still impactful, but messaging needs
drive engagement
• Hispanics
– The growing generation is starting to make an impact on
various industries
•
•
Digitally connected to their communities
Similar to Baby Boomers, spending power leads to increased
advertising importance in the Automotive, Retail, Entertainment,
Telecom and Finance categories
26
Mass Media
Imagine a World without Mass Media
One man’s view of the future…Ad Age’s Bob Garfield
• Over-the-air network TV is gone
• DVRs are in every household, as is a broadband connection
• CPM has been replaced by ROI, VOD, Engagement &
Effectiveness
• Branded Entertainment burned out quickly due to consumer
frustrations at blatant product placements
• Newspaper and Magazine print versions no longer exist
• Satellite Radio is just another “8-Track” story, replaced by free
podcasting and HD Radio
• “Micro Media” and “Permission Marketing” are the new buzz
28
2005 vs 2006 U.S Ad Revenue
Revenue by Media 2005 v 2006
$60,000.00
$50,000.00
$40,000.00
2006 revenues
2005 revenues
$30,000.00
$20,000.00
FSI
Outdoor
Internet
Radio
Magazines
$0.00
Newspapers
$10,000.00
Television
Advertising Revenues
are up across most
mediums
– Newspaper saw a 2.4% decrease in
advertising spending
– Internet and Outdoor
saw the biggest
increases (17.3% and
8.6%)
– Spending in Spanish
Language media is
also up significantly
Spending $(000)
•
$70,000.00
Medium
29
Zenith Optimedia U.S. Spending
Predictions
• U.S. ad spending for 2007 should be around $189.6 billion
–
Up 3.5% from YA
• Television will be up because of Olympics and Political
Advertising
• The internet is expected to overtake radio by 2008
• Publishers are beginning to invest in online properties
more than print
–
–
No growth expected for newspapers
Minimal growth expected for magazines
30
Advertising Age, 4/2007
Zenith Optimedia Global Spending
Predictions
• Global ad spending expected to grow 5.2%, or $454.9 billion
–
–
–
–
–
Television: $167.8 Billion
Radio: $36.3 Billion
Newspaper: $126.2 Billion
Magazines: $56.4 Billion
Internet: $31.3 Billion
• Internet expected to account for nearly 9% of global ad
spending by 2009
• Olympics and European Football expected to boost
spending
31
Advertising Age, 4/2007
The Digital Evolution
The U.S. Internet User
Male/Female
: 48%/52%
Age
18-24: 21%
30-39: 18%
40-49: 20%
50-64: 22%
White: 75%
Black: 11%
Hispanic:
13%
Household Income
Education
HHI < $25K: 19%
< High School:
47%
HHI $25K-$50K: 24%
HHI > 50K: 44%
ZDNet Research, 2007
Race
Some College:
27%
33
Internet Usage by Country
Online Populations (Age 15+)
160
140
Users (000)
120
100
80
60
40
20
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34
ComScore, March 2006
ComScore, March 2006
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Internet Usage by Country
Online Populations (Age 15+)
160
140
120
100
80
60
40
20
0
Average Monthly Hours Online per Unique Vistor (Age 15+)
70
60
50
40
30
20
10
0
35
Who are the Internet Refusers?
•
29% of U.S. households do not have internet
access at home
– 44% Web of no interest
– 22% Economic factors
– 17% Don’t know how to use
– 14% Have it at work
•
Age is not necessarily a factor
– 40% > 65
– 30% 35-54
– 13% < 34
36
Park Associates Study, 2007
Top Online Activities
1. Used e-mail
2. Obtained the latest news/current events
3. Made a purchase online
4. Paid bills online
5. Used Instant Messenger
6. Obtained financial information
7. Obtained sports news/information
8. Played games online
9. Made personal or business travel plans
10. Obtained medical information
37
Top Sites by Category
•
•
•
•
•
•
•
•
Automotive: eBay Auto
News/Research: Yahoo Finance
Career Services: CareerBuilder
Entertainment (Music): Yahoo
Music
Entertainment (Movies): IMDB
Health: WebMD
Retail: eBay
Social Networking: MySpace
•
•
•
•
•
•
•
•
Classifieds: Craigslist
Blogs: Blogger
Sports: ESPN
Travel: Expedia
Personals: Yahoo
Personals
Gambling: PCH
Games: Yahoo Games
News/Information: New York
Times
38
What’s New In Mobile
•
Cell phones have evolved from simple
communication devices to into multimedia devices
•
Consumers are now using their mobile phones to
listen to music, watch television, and even to buy
things
–
–
–
–
–
–
–
Personal Media Player
Camera
Mobile Video
Mobile Web
Content Sharing (Videos and Photos)
A Payment Device
GPS Technologies
39
Demographic Profile of Mobile
Subscribers
•
•
•
•
215 million mobile phone subscribers in the US
Gender: 48% Male/52% Female
Age: 68% are 18-54
HHI: 43% earn less than $50k year, 39% earn $75k+
M:Metrics, January 2007
40
But what about Mobile Advertising?
•Consumers’ willingness to watch Mobile ads is
still low
•But there are some that are still undecided
Scale 1-7, 1 not willing at all, 7 very willing
60%
50%
40%
30%
20%
10%
0%
1
2
3
4
5
6
7
41
Mobile Advertising Revenue
Mobile Advertising in the U.S. is still behind the rest of
the world, but ad spending here is expected to increase
over 700% by 2010
$12,000
$10,000
$8,000
Worldwide
U.S.
$6,000
$4,000
$2,000
$0
2006
2007
2010
42
What does this mean for us?
Yesterday…
• Media Fragmentation change the way consumers used
media
• Used to be a one-way flow of content
• Technology options were limited
• Push instead of Pull Marketing strategy
• Advertisers bought “eyeballs”
44
Today…
• New Emerging Technologies like the Internet, Personal
Media Players and DVRs are changing the way media is
consumed
• Traditional consumption of media is changing
• Consumers are also content-creators
• Now a two-way flow of content
• Pull instead of push strategy
• Measurement Sources are scrambling to capture all media
consumption
• Advertisers are starting to question the “quality” of the
eyeballs
45
Media’s Tomorrow…
• A successful advertising campaign needs to:
– Blend the line between “traditional” and “nontraditional” media
•
Consumers don’t differentiate between the mediums, so neither
should marketers
– Create a relationship with the consumer
•
Tell the brand/product story through multiple touchpoints
•
Provide a relevant and engaging message for the consumer,
not an interruption
– Break through the advertising clutter
– Provide better measurement tools
•
Need to measure not only impressions, but things like
simultaneous media usage, engagement, relevancy, and return
on investment
– One-to-One marketing
•
Marketers need to find a way to speak directly to their customer
– Precision Targeting –and eliminate wasted impressions
46
What does this mean for Marketers?
•
What can help improve marketing effectiveness?
– Better communications with C-Level Peers to the realities
–
–
of marketing
Expansion of role from one only directed to marketing
objectives to one that understands vision of the overall
company
Bridge the gap between Strategy and Creativity
•
Help the agency understand the overall strategy of company and
the core Brand “DNA”
– Understand the Ecosystem of Consumer Demand
•
•
•
•
Understand the realities of consumers’ daily lives
Explore consumer motivations
Reframe the opportunity space
Find the Sweet Spot
47