Friday, October 29, 2010

Bundling On-Line With Traditional Radio Nets Big Results!

Radio and the Internet: Radio Sees Continued Growth in Website Visits

According to The Media Audit's National Radio Format Report, 17.7% of U.S. adults have visited a radio station's website in the past month, a figure that has grown by 38% in only three years. In 2006, only 12.8% had visited a radio website in the past month. The latest figure represents more than 25 million monthly unique website visitors across The Media Audit's 80 measured markets.

The study also finds that nearly three-quarters of radio website visitors are considered heavy or moderate listeners, listening to radio for almost three hours per day on average.

The findings also reveal that radio station websites are a strong asset for most radio companies looking to strategically bundle their existing stations with their website audiences. According to The Media Audit, 88% of monthly radio website visitors have made one or more e-commerce purchases on the internet in the past year, compared to 63.1% of heavy radio listeners. Furthermore, 36.7% of radio website visitors make twelve or more online purchases in a typical year, a figure that is 61% higher when compared to heavy radio listeners. As a result, advertisers looking to bolster awareness, online transactions and website traffic could do well by combining radio spots with radio website ads, rather than advertising on radio alone.

Listeners to Adult Alternative stations are the most likely to visit radio station websites. According to the study, 33.8% of all listeners to this format have visited a radio station website in the past month, followed by Modern Rock (31.6), Sports (29.4%), News Talk...i.e. WBAP (27.1%), Rock (26.9%), Public Radio (25.8%), Hot Adult Contemporary (HAC) (25.8%), Classic Rock (25.7%), Contemporary Christian (25%), and Dance CHR (24.4%).

(Source: The Media Audit, 10/26/10)

Sales Of Certified Pre-Owned Vehicles Take Off

The market for certified pre-owned vehicles was down earlier this year as automakers put their energies into selling new cars as part of their recovery plans. Now the CPO market is booming because the market is tight and there's a renewed focus by automakers. That could be good news if it means more potential brand loyalist consumers.

According to Edmunds.com, the average price paid in the U.S. for a used three-year-old vehicle last month was $18,832 -- up $1,471, or 8.5% from the month last year.

Edmunds.com analyst Joe Spina says sales programs around used cars that have been certified by automakers and come with new car-style warranties and service, not to mention ad campaigns, will keep used-car prices high because CPO cars sell for a higher price than comparable non-certified used cars, "raising the ceiling for the entire used car market."

The firm estimates that about 18.5% of used cars bought at dealerships are CPO, versus 13.8% this time last year.

"The used market, in general, is really strong right now with luxury cars in particular," he says. "It's really cars that are three to five years old. Luxury brands historically have pushed CPOs fairly hard because there is so much leasing in the segment that they need the CPO market to sell cars coming off lease; they need that channel."

Spina says the CPO market has suffered, with Toyota's problems and automakers like Chrysler focusing efforts earlier this year on rebranding, and rebuilding awareness by focusing marketing -- and deals -- almost entirely on new vehicles. But now, he says, sales are brisk and prices are strong. "They know consumers need cars and are buying used and they are refocusing those efforts."

Toyota, which has just announced a big recall, has been doing particularly well in CPO in recent months. "They and Lexus have had record-breaking months for CPO; they are doing extremely well because they are refocusing their efforts internally on that channel. And it's a lot of work to administer CPO because it means personally engaging dealers to make sure they are certifying cars and delivering the CPO experience to the customer. When a dealer just sells a used car that isn't CPO, the automaker has nothing to do with it."

It might seem logical that with each sale of a CPO vehicle an automaker loses a new-car customer. However, Spina says that is not the case. "I think they are capturing consumers who were going to buy used anyway and now happen to be certified." He adds that CPO sales, in fact, bode well for a brand because it starts a relationship with a customer.

And that can't happen with a traditional used-car transaction where -- from the owner's perspective -- the brand is just a badge on the car's chassis. "Manufacturers really see CPO as a stepping stone to getting consumers into a new car," he says. "So they want to make sure they can ensure the customer has the best experience possible through things like manufacturer's warranty."

(Source: Marketing Daily, 10/22/10)

Wednesday, October 27, 2010

Good News For Car Dealers

Auto Industry's New Math Sends Leases Soaring

If there's a silver lining in the weak U.S. auto market, this may be it: Anemic new-car sales will mean short supplies of used cars in two or three years. That has made it possible for automakers to return to leasing in a big way -- with little fear that a glut of returns in 2012 or 2013 will hammer residuals and damage brand images.

Sure enough, leasing activity has begun to soar in recent months.

Leasing climbed to 21.1 percent of U.S. sales through September, compared with 16.6 percent for all of 2009, according to Edmunds.com. And although leasing did fall sharply last year as credit dried up, this year's level not only tops 2009; it is the highest in several years.

"A lot less sales now is a lot less used cars later," Don Esmond, Toyota Motor Sales' senior vice president of automotive operations, said recently in Detroit. "Our arithmetic says leasing is a good deal. It's a good bet that resale values will be a little better later on."

Automakers have jumped in with both feet, offering bigger lease subsidies, lower interest rates for customers and shorter lease terms to get vehicles back sooner, Edmunds.com data show.

All major manufacturers have boosted leasing in 2010. For Toyota Motor Sales, American Honda and Nissan North America, leasing accounted for at least a quarter of all volume through September.

General Motors Co., Chrysler Group and Hyundai-Kia Automotive also have increased leasing sharply this year. For each, leasing accounted for 11 percent of total new-vehicle transactions through September, compared with about 3 percent over the same period last year.

Ford Motor Co. shows the smallest increase this year, to 13 percent of sales, from 11 percent. But dealers say Ford is preparing a fall leasing promotion at least in some regions.

Still, in a wobbly recovery, more leasing has risk, say two analysts.

Kelley Blue Book has factored in lower used-car inventory in its residual-value forecasts but has given it less weight than some manufacturers anticipate, said Eric Ibara, KBB's director of residual-value consulting.

"There are manufacturers doing more leasing now, thinking the 2012-13 market will be more favorable," he said. "But that depends on a stronger economy and more robust new-car environment. We're still being cautious."

A strong recovery is no certainty, said George Magliano, a forecaster for IHS Automotive in New York.

"It all depends on our future forecasts being right," he said.

Future used-vehicle shortages also take some of the worry out of sales to daily rental fleets. Automakers boosted those sales 56 percent to 829,060 vehicles in the first half from the year-ago period, according to Automotive Fleet magazine.

But as fleet volume subsides in the second half of the year -- a normal seasonal phenomenon -- automakers' emphasis has shifted to leasing.

Leasing is more attractive for several reasons: Credit is more available this year, financing costs for manufacturers are cheaper because interest rates are falling, and automakers consider subsidized leases less damaging to brand perceptions than cash incentives.

"If it's just cash on the hood, you are not helping the residual," said John Mendel, executive vice president of American Honda Motor Co. "If it's leasing and you believe the residual will be higher, that plays into the market because you are getting those cars back. Usually cash plays into a lower residual value."

Manufacturers have boosted lease incentives to an average of $3,069 per vehicle this year, up more than $1,000 from 2009. All major automakers raised leasing incentives, but approaches varied. Nissan has bumped its incentives by $495 since last year, the smallest change. But Chrysler Group is spending $3,332 more this year and GM almost $2,000, according to Edmunds.

Interest rates on lease deals have fallen almost a point to 3.2 percent for the industry compared with last year. GM's lease interest rate averages 2.1 percent this year, down from 4.9 percent last year. Chrysler averaged 5.4 percent last year but 2.8 percent this year.

David Wilson Jr., vice president of Preston Auto Group, a Ford, Lincoln, Nissan, Hyundai and Mazda operation in Preston, Md., is embracing leasing.

"Anything that gets customers back to us faster will definitely help out," he said. "Residuals will stay up because there are not as many vehicles available."

Automakers are looking for ways to help dealers cope with used-car shortages, which will get worse through 2012, said Tom Webb, chief economist at Manheim Consulting. But manufacturers must be careful of the interplay between new- and used-car prices, he said.

Current high prices for used cars have helped boost transaction prices on new ones -- and healthy used-car prices support new-car volume, too.

"Fewer car owners are upside down on their loans when they come into dealerships, and more can afford to buy a new car," Webb said. "Conversely, manufacturers offering $199-a-month leases hurt used-car values."

But Tony Schnurr, CEO of the Larry H. Miller Automotive Division, a 39-dealership group based in Salt Lake City, is optimistic.

"It will all work out," he said. "If we don't have used cars, then manufacturers will have programs out there to boost new-car sales."

(Source: Automotive News, 10/18/10)

Monday, October 25, 2010

Cause Marketing Trends

In the midst of an uncertain economic climate that has the industry hopeful for a rebound, yet nervous enough not to expect it, the Association of National Advertisers celebrated its 100-year anniversary at its annual convention last week with a record-breaking 1,600 attendees. And based on the tone of much of the discussion, the organization might want to consider a new name for the next century: the Association of Purposeful Advertisers.

On and off the podium, marketers from Procter & Gamble Global Brand-Building Officer Marc Pritchard to Coca-Cola Chief Marketing and Commercial Officer Joe Tripodi and Dell's former CMO, Erin Nelson, evangelized about purpose-driven marketing. The concept is, at its core, a return to the basics of intensely engaging customers and creating a culture where the corporation can benefit by giving back or enabling its consumers to do so -- and profiting in the process.

Mr. Pritchard might have put it best: "There's a lot of cynicism and distrust in the world of big institutions, and companies really need to share with people what they value, what they care about," he told fellow marketers. He showed off programs from Tide's Loads of Hope, which helps launder clothing for disaster victims, P&G's program in Nigeria to encourage young girls to stay in school by offering them feminine protection, and the company's multi-brand Winter Olympics campaign that was themed around athlete's moms; P&G even paid to transport 250 of their moms to the Games. "We decided to say we're in the business of helping moms, and it hit an emotional chord with people and also had a great halo effect on the rest of our brands." The effort, though, also paid off: The Olympics program brought in $30 million in incremental sales, he said.

"Purpose isn't just good for the soul, it's actually really good for the bottom line," said Dell's former CMO Erin Nelson, who presented alongside her successor, Karen Quintos. "The purpose can become the filter that says 'do I or do I not invest the resources in getting this done, is it going to help me achieve the purpose for which my company exists every single day.'"

Jim Stengel, the former Procter & Gamble Co. Global Marketing Officer who became the guru of "purpose brands" at P&G during his seven-year tenure in that post, which ended in 2008, is now one of the chief movers of the concept as a consultant (for Dell among others). He was registered but couldn't make the conference, he said, apparently pinned down in Cincinnati with a bit of work on purpose-branding consulting. But he said the frequent references to purpose, which he was following via Twitter, were "gratifying."

Coca-Cola, meanwhile, is trying to help consumers "live positively" around the globe, Mr. Tripodi said, talking about LOHAS, which stands for "lifestyles of health and sustainability." To that end, it is aligning with water-preservation projects and recycling pushes. He showed a YouTube video called "Hand Revolt" created in-house that shows people with cans stuck to their hands -- until they hold their hand over a recycling bin. "We have to move from impressions to expressions," said Mr. Tripodi. "Above loyalty is advocacy." Via this strategy, Coke has a lofty goal to double its sales over the next decade.

Cindy Gallop, who has founded a purpose-driven venture called IfWeRanTheWorld, went so far as to call it the "future of advertising" and argued it would help reverse the bad connotation the discipline has among consumers. Advertisers must engage with a project that has meaning for consumers or helps them change the world, she said, adding that "action is transformable and bonding."

Others discussed the issue of bonding with consumers in more general terms. Marilyn Mersereau, senior VP-corporate marketing for Cisco -- a tech marketer not usually seen as warm and fuzzy -- displayed the consumer-friendly Umi device as a means of connecting families. The key, she said, is discovering "what is the emotional connection that my brand has to its customers." Said Target exec VP-CMO Michael Francis: "Expect more, pay less" isn't just a tagline, it is our emotional connection to our guests."

Of course, the economy reared its ugly head in hallways and on stage. In a very gloomy and much-discussed presentation, economist and New York Times columnist Paul Krugman offered this sober assessment: "History tells us that we should not count on any kind of recovery anytime soon," he said. "The economy is depressed because people don't want to spend."

And much of the event, as reflected in talks from Mr. Francis, Fidelity Investments Exec VP-CMO Jim Speros and Geico VP-CMO Ted Ward, was also centered on how to get them to spend. That's as purposeful as it gets.

(Source: AdAge.com, 10/18/10)

Thursday, October 21, 2010

It's Time for the Auto Industry To Get FULLY Dynamic

With some of the largest budgets for online advertising, automotive brands have historically played a major role in advancing advertising technology and best practices. Video and dynamic creative represent two significant growth areas of online display advertising, and once again auto marketers are well positioned to lead the charge. But will they?

With myriad car models that appeal to a variety of demographics and multiple layers of distribution and promotion, automotive advertisers are faced with infinite ways to slice and dice a single ad -- sometimes leaving them stuck. The most common mistake is relying on time-intensive efforts to build multiple versions of rich media creative, or simplistic real-time content feeds in FLASH ads to create a sense of immediacy and relevancy with the viewer. Every time automotive advertisers use these antiquated methods, they miss the real opportunity of dynamic advertising.

Auto brands represent the largest category for TV ad spending: $6 billion in H1 2010, according to Kantar Media -- and already understand the power of video. Their display advertising can be fully dynamic by delivering different videos, graphics, functionality and text based on the audience, all from the same ad. For example, tailor video to audiences based on age, use location-based elements to drive interested buyers to the closest dealer, present video messages in sequence to show different features of a new car model, and the list goes on. The intent is to drive measurably higher performance, maximize ad spend and ultimately create better audience experiences.

Why is this particularly critical to the auto industry? Auto advertisers know that sight, sound, and motion work in their advertising. With dynamic video advertising, they can leverage a single video creative with different features or calls to action to meet two separate goals online -- brand advertising and in-market, or demand generation, advertising. They can maintain consistency in their campaigns and, when using existing television assets, create a fully integrated, powerful video strategy across TV and online. Recent Yahoo analysis of Nielsen data shows that if a user views one online exposure before the TV ad, brand recall increases by 18%.

When focusing on branding, the key is to make ads relevant, personal and exciting to increase viewer engagement. That requires presenting different creative and core messages based on age, sex, location, and the user's preferences. It's impossible to do this with a simple dynamic text feed in a banner ad.

In-market advertisers can benefit from the same dynamic elements by swapping out key manufacturer incentives or rebates, presenting different calls to action, integrating social media or offering the opportunity to telescope deeper within the ad to specific features. Based on the audience and how they interact with a video ad, in-market auto advertisers can dynamically present additional video to be viewed within the same ad experience.

Successful automotive applications of dynamic video advertising technology share key attributes. First, they are user-initiated, which puts the user in charge of their ad experience -- and provide elevated performance around consideration and intent metrics. In-banner video ads deliver 25 times the number of views compared to clicks for standard banners. Second, they use dynamic elements that range from text, to graphics, to additional video to create a highly relevant and personal experience. Auto advertisers are the most sophisticated in media targeting, so targeting creative to their audiences is crucial to increase overall campaign performance. Third, they use smart technology to optimize the experience so the ads learn and perform better over time and provide valuable insights to the advertiser about which creative engages viewers most effectively. Finally, they are easy to execute.

The auto industry needs to be on the vanguard of this movement toward fully dynamic video advertising. With some of the most compelling video-based advertising content available and the media dollars to make a difference, auto advertisers can take the lead to show that the combination of TV and online provides a smarter mix. It would be a shame to spend online budgets on static banners, or "dynamic" ads that are limited to simple FLASH creative and content feeds, when fully dynamic video advertising leverages the power of sight, sound and motion to engage potential car buyers more easily and effectively than ever before.

~Anupam Gupta is president & CEO of Mixpo.

Economy Still Impacting Shoppers, but Glimmers of Holiday Hope Appear

Shoppers to Spend on More Discretionary Items, Non-Gift Purchases
Though Americans are still operating with the recession in the back of their minds and many have fundamentally changed their shopping habits, some findings from NRF's first holiday survey imply consumers won't only be focusing on low prices and basic necessities this year. According to NRF's 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S. consumers plan to spend an average of $688.87 on holiday-related shopping, a slight rise from last year's $681.83.

As in years past, most holiday gift-givers will spend the largest portion of their budget buying gifts for family ($393.55) and friends ($71.45), though they'll still carve out room in their budget for small tokens of appreciation for both co-workers ($18.26) and others ($34.82). Total spending on gifts ($518.08) is expected to rise 2.1 percent from last year, which is in line with NRF's 2010 holiday forecast. Americans will also spend an average of $41.51 on decorations, $26.10 on greeting cards and postage, $86.32 on candy and food, and $16.86 on flowers.

"Consumers will still shop with the economy in the back of their minds, but we're starting to see shoppers take baby steps toward a new normal," said NRF President and CEO Matthew Shay. "As Americans open up their wallets for more discretionary gifts like jewelry or take advantage of sales to buy for themselves, retailers will begin to truly believe that the worst may be behind them."

According to the survey, 61.7 percent of shoppers say the economy will impact their spending, down from last year's 65.3 percent. Many shoppers say they will compensate by spending less (81.5%), comparison shopping online (30.9%) or with newspapers and circulars (28.1%), shopping for sales (54.1%) or using more coupons (40.6%). Although the economy continues to impact shoppers, a number of survey results indicate that shoppers may be ready to emerge from their shells this holiday season.

When asked which one factor will be most important when shopping this holiday season, the majority of shoppers said that sales or price discounts (41.8%) or everyday low prices (12.7%) were most important. While those factors either declined or remained flat this year, two other categories rose in importance. The number of people who counted customer service as the most important factor rose from 4.4 percent last year to 5.3 percent this year, while shoppers who touted quality as the overriding factor rose from 11.8 percent to 12.7 percent.

"Price is paramount during any recession, but when the economy begins to recover other factors take on greater importance," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "When shoppers consider other factors like customer service and quality in buying decisions, retailers have the ability to highlight a variety of other features to help their company stand out from the competition."

While many traditional categories like clothing (48.2%) and books (47.3%) will appear on a majority of wish lists this year, one item will appear more often than a year ago: jewelry. As a potential sign that discretionary gifts may become more popular, 23.0 percent of people will ask for jewelry this year, a significant 10 percent jump from last year’s 20.8 percent. Gift cards will remain the most requested holiday gift this year with 57.0 percent of people asking for plastic.

As another sign that shoppers feel a bit of breathing room in their budget, the number of people who say they will make a holiday purchase from a discounter dropped from 70.1 percent last year to 65.1 percent this year. Popular holiday shopping destinations will include department stores (54.5%), grocery stores (46.7%), the Internet (43.9%) and clothing stores (33.6%).

Americans aren't only shifting where they're shopping – how they're shopping is changing, too. Mobile devices like iPhones and Androids are becoming more popular among consumers, and many shoppers plan to use these devices this holiday season to look for gift ideas, compare prices and find items in nearby stores. According to the survey, over one-fourth of American adults with a smartphone (26.8%) will use these devices to research or make holiday purchases, and that number jumps to 45.0 percent among young adults 18-24. Retailers are expected to take advantage of this trend by offering more robust mobile apps and websites, along with enhanced features like mobile reviews, to cater to Americans looking to shop from their phones.

Yet another hopeful indicator: the number of people who plan to take advantage of holiday sales to make non-gift purchases for themselves will rise 8 percent this year (52.9% in '09 to 57.1% this year), with the average holiday shopper spending $107.50 on themselves, up from $101.37 last year.

Though the holiday season won't kick off for many retailers until at least November 1, a sizeable number of shoppers are already planning ahead. According to the survey, 37.2 percent of Americans will begin holiday shopping by Halloween. Women are the most likely to begin shopping by the end of October (42.1%) while young adults 18-24 are among the least likely (27.7%).

NRF continues to expect holiday sales to rise 2.3 percent to $447.1 billion.

(Source: National Retail Federation, 10/19/10)