U.S. auto sales may reach second-fastest rate in 17 months

U.S. automobile sales in January may have reached the second-fastest pace in 17 months, aided by rising business spending and consumer confidence.

January vehicle deliveries, to be released tomorrow, may have run at a 12.4 million annual rate, the average of six analysts’ estimates compiled by Bloomberg. The seasonally adjusted rate in December was 12.6 million, the fastest since the government’s “cash for clunkers” program in August 2009.

Spending on equipment and software rose at a 5.8 percent annual rate in the fourth quarter, showing businesses were investing in a recovering economy. Humphrey & Associates Inc., a family-owned electrical contractor in the Dallas area, added seven Chevrolet trucks and vans to its fleet in December after delaying the purchases during the recession.

“People are beginning to spend a little money they’ve had on the sidelines,” Randy Humphrey, 42, the company’s vice president, said in a telephone interview. “We are dependent on our commercial and industrial clients and their business growth to make ours. When they’re adding, we’re adding.”

U.S. consumer confidence rose more than forecast in January to the highest in eight months, the Conference Board reported last week, while the Thomson Reuters/University of Michigan final index of consumer sentiment fell less than analysts estimated. Gross domestic product grew at a 3.2 percent annual pace in the fourth quarter, the Commerce Department reported.

Analysts at Deutsche Bank AG and J.D. Power & Associates this month raised their estimates for 2011 light-vehicle sales after auto demand topped expectations in the fourth quarter. Gains from General Motors Co. and Ford Motor Co. may push the industry to a second annual sales increase after a 27-year low in 2009.

‘Strong close’

“There was such a strong close in December, and we aren’t expecting an equally strong payback,” said Jeff Schuster, the director of forecasting at J.D. Power who raised his full-year sales estimate to 13 million from 12.8 million. “That sets the year up for a good start.”

Full-year sales in 2010 were 11.6 million, or 31 percent less than the average 16.8 million annual rate before the recession, according to researcher Autodata Corp., based in Woodcliff Lake, N.J.

Ford, which last week announced full-year profit of $6.56 billion that was the most since 1999, may say sales climbed 18 percent, according to four analysts’ estimates.

“Ford still relies heavily on F-150 sales for the profit generation, and that segment is poised to outperform the market this year,” said Jesse Toprak, vice president of industry trends at TrueCar.com, who predicts a 16 percent gain for Ford in January.

Chevrolet pickups

GM may report a 9.2 percent increase in January sales, the average of four estimates. The automaker announced this month it would add a third shift and about 750 jobs to its assembly plant in Flint, Mich., to meet rising demand for heavy-duty pickups.

The largest U.S. automaker said its top-selling Chevrolet brand’s sales to small businesses accelerated in the fourth quarter, including a 54 percent surge in December from a year earlier.

Federal Reserve policy makers last week kept measures to stimulate the economy in place after President Barack Obama reached an agreement with Republicans in December to extend by two years tax cuts enacted during President George W. Bush’s administration.

“Interest rates are low enough, credit availability is improving, and we didn’t get a jolt from tax increases that would have affected higher-income taxpayers who buy a lot of vehicles,” said Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio. “All those things are clear pluses helping to bolster demand.”

Toyota sales

Toyota Motor Corp., the only large automaker to post a U.S. sales decline last year, may report a 16 percent gain for January, the average estimate of four analysts.

The world’s largest automaker suspended U.S. sales and production of eight models a year ago that accounted for more than half its deliveries. The company has recalled more than 18 million vehicles globally for a variety of reasons, including unintended acceleration, since the fall of 2009.

Barclays Capital analyst Brian Johnson predicts a 2.8 percent decline for Toyota, its fourth straight month of a decrease in sales from the earlier year. Deliveries of the top-selling Camry and Corolla cars may decline at least 10 percent, and Lexus sales also may drop, Christopher Ceraso, an analyst at Credit Suisse in New York, wrote in a Jan. 27 research note.

Chrysler estimates

Chrysler Group LLC may have increased sales 27 percent, the average of four analysts’ estimates. The automaker is preparing for an initial public offering this year and has said it can break even on an operating basis with 150,000 fewer vehicle sales annually.

The company is selling about 20 percent of its cars to fleet buyers such as governments and rental-car companies, down from about 50 percent in some months last year, Caldwell said.

Chrysler is considering two new pickups, a seven-passenger Jeep and a smaller minivan as part of a plan to boost global sales to 2.8 million in 2014. Worldwide deliveries gained 21 percent to 1.6 million last year, the automaker said.

Deliveries at Honda Motor Co. may have risen 24 percent, and Nissan Motor Co.’s sales may have increased 14 percent, according to the average of four analysts’ estimates.

Confidence Must Be Restored to Improve Job Market

Although the unemployment rate fell to 9.4 percent in December from 9.8 percent in November, some 14.5 million people are still classified as unemployed by the Bureau of Labor Statistics.  Even if the recovery continues along its current track, some six more years will be needed to bring the job total back to where it was November 2007, when some 146.6 million people were employed in the United States, says Robert Higgs, senior fellow in political economy with the Independent Institute.

• Employment began to fall after reaching its peak in November 2007, reaching its low point in December 2009, when only 138 million people had jobs.
• In the year since, employment has risen by only 1.25 million, or less than 1 percent.

Meanwhile, millions of people have withdrawn from the labor market during the past three years.

• Of the people not in the labor force, an estimated 4.7 million would seek work if they believed they might find a job.
• If these individuals were considered unemployed, along with those actively seeking work, the official unemployment rate would be more than 12 percent today.

Data on the division of employment between government and the private sector tell an even sadder story, says Higgs.

• Between November 2007 and December 2009, some 8.5 million private-sector jobs disappeared in nonagricultural industries.
• By December 2010, only 1.8 million of those lost jobs had been regained, leaving a net loss of 6.7 million jobs.
• In stark contrast, government employment during the same period hardly changed.

With private-sector jobs greatly diminished and government jobs relatively steady, at least for the time being, the ratio of private-sector workers to bureaucrats has moved in an unfavorable direction.  The government's biggest challenge today is to restore lost confidence, says Higgs.

Source: Robert Higgs, "Uncertainty Continues to Depress Jobs," Investor's Business Daily, January 25, 2011.

Food Inflation Knocking at the Door

The global economy is getting back on its feet, but so too is an old enemy: food inflation.  The United Nations benchmark index hit a record high last month, raising fears of shortages and higher prices that will hit poor countries hardest.  So why is the United States, one of the world's biggest agricultural exporters, devoting more and more of its corn crop to ethanol?

• In 2001, only 7 percent of U.S. corn went for ethanol, or about 707 million bushels.
• By 2010, the ethanol share was 39.4 percent, or nearly five billion bushels out of total U.S. production of 12.45 billion bushels.
• Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed.
• This trend is the deliberate result of policies designed to subsidize ethanol.

This is increasing even as global food supply is struggling to meet rising demand.  U.S. farmers account for about 39 percent of global corn production and about 16 percent of that crop is exported, so U.S. corn stocks can influence the world price.  Chicago Board of Trade corn futures recently hit 30-month highs of $6.67 a bushel, up from $4 a bushel a year ago, says the Wall Street Journal.

Super Bowl spending expected to set record $202 Million

The Fort Worth/Dallas area is expected to see a record number of visitors and related spending for Super Bowl XLV, according to PricewaterhouseCoopers U.S., with an expected spending total coming in at approximately $202 million.

 

Spending by the National Football League, businesses, visitors and the media on area lodging, transportation, food and beverage, entertainment, business services, hospitality and other tourism activities is estimated based on characteristics such as the participating teams, the local market, national economic conditions, corporate and ancillary activities and other factors.

 

This year’s event is estimated to generate a level of spending slightly higher than the previous record of $195 million during the 2007 Super Bowl in South Florida.

 

“Dallas/Fort Worth appears ready to capture much of the fan and corporate spending that might have stayed away over the past two years.  Major parties and other events such as the NFL Experience have returned and are poised to prove the adage that everything's bigger in Texas,” said Robert Canton, director, sports and tourism sector, PwC U.S., in a release.

Super Bowl Consumer Spending to Hit $10 Billion

Consumers Will Purchase Plenty of Food and Beverages -- but also TVs and Team Apparel

Americans are planning to take a break from their spendthrift ways, at least for Super Bowl Sunday.

According to a new survey out from the Retail Advertising and Marketing Association, conducted by BIGresearch, total consumer Super Bowl spending is expected to reach $10.1 billion, the highest in the survey's eight-year history. More people also plan to celebrate the event by throwing a party, attending a party or watching at a bar or restaurant.

Likewise, consumer sentiment toward advertisers also appears to be improving. In the depths of the recession more consumers said advertisers should bypass pricey Super Bowl spots and pass the savings onto them. This year 17% expressed that sentiment, down from 21% in 2009 and 19% in 2010. Fox, which is broadcasting the game on Feb. 6, is reportedly seeking between $2.8 million and $3 million for 30 seconds of commercial time in this year's game.

"The consumer is feeling more optimistic," said Mike Gatti, executive director at RAMA. "Spending is starting to come back, and it's on these little splurgy things. It's not crazy. But people are saying we're going to crack open the wallet and do something."

Of the 83% saying they will purchase Super Bowl-related items, including food, beverages, TVs, furniture, team apparel and decorations, the average person will spend $71.51, up from $64 a year ago and in line with 2007 spending. Mr. Gatti said he expects to see a lot of promotion around the Super Bowl, with retailers looking to the event as the first opportunity to stimulate sales post holiday.

While the majority of people plan to purchase food or beverages, plenty are still looking to bigger-ticket items, like TVs. The number of consumers saying they'll purchase a TV jumped 25% this year to 4.5 million people.

That's good news for electronics retailers, which saw tepid TV sales over the holidays. Best Buy, for example, reported that for the month of December, consumer electronics sales fell 8% at stores open a least a year, primarily because of a low double-digit decline in TVs. Best Buy and Sears are already aggressively promoting high-definition TVs for the big game.

"Our customers tell us that this is an ideal time of year to upgrade or invest in new big-screen televisions, so we wanted to give them a great excuse to come into Best Buy by offering deals on some of the best and largest TVs we carry," said Mike Mohan, senior VP-home theater at Best Buy.

With the New York Jets' and Chicago Bears' Super Bowl dreams dashed, some sporting goods execs have speculated that apparel and accessory sales could be lackluster. The Green Bay Packers and Pittsburgh Steelers represent smaller markets. But, Mr. Gatti pointed out, both are storied teams. "Maybe sales would have been a little higher, based on the teams, but Green Bay and Pittsburgh are both pretty strong, popular teams," he said.
_____________________________________

What consumers plan to purchase for Super Bowl Sunday:
-- Food/Beverages, 69.5%
-- Team apparel or accessories, 7.3%
-- Decorations, 6.0%
-- Television, 4.5%
-- Furniture, 2.0%

Agency Survey Shows 'Rebirth' of Buyers' Interest in Radio

A survey of advertising agency buying teams finds fewer are cutting radio budgets, and client interest in the medium is growing. STRATA executives say the top three media -- television, Internet and radio -- also appear to be the breakout hits of the advertising recovery.

"It's looking very bright for radio," STRATA marketing chief J.D. Miller told Inside Radio. The firm's quarterly survey of buyers found 24% of agencies' clients are more focused on radio, up from 17% in the prior quarter. The number of agencies reporting they are spending less on radio is off by half -- 17% say they're trimming radio budgets compared to 34% who said that three months ago.

When it came to classifying the advertising avenue that agency clients are most focused on, the STRATA survey found TV remains at the top with 44%, followed by digital at 21%. But even the survey takers were surprised with #3: radio. The results show 16% of clients rate radio as their top pick, compared to 9% who said that in the prior quarter's survey. Miller says, "Something good is happening for radio."

Beyond the top three, there's a "considerable drop off" of interest in other media. Print ranks fourth, with 7% of clients making it their top pick. Miller says that could be considered good news for newspaper publishers. "Print has a pulse -- it was almost nonexistent, now it has a pulse," he says.

Agencies Grow More Confident in Recovery -- and Old Media Friends

By their nature, media buyers are a tough crowd not known for gushing optimism. So when a survey shows a steady uptick in client activity, it's worth taking note.

More than half (51%) of buyers surveyed by STRATA say their agency is seeing improving business, up from a low of 23% during the 2008 economic meltdown. STRATA president/CEO John Shelton says, "Advertisers are finally feeling more confident about the economy."

That confidence is manifesting itself in a surprising way. As budgets come back, buyers appear to be more interested in traditional advertising like television and radio -- with demand for digital advertising going in the other direction.

"We see that the focus on digital has fallen off a bit," Shelton says. "While still hot, it is used more in a solid media mix than more dollars heading its way."

The most popular digital menu items are website display ads, social media and search. Mobile may have buzz, but just 29% of buyers say they're buying mobile ads. Among those who are, mobile display is the preferred format with SMS text ads fading fast. Just 15% of agency buyers say they're on their radar in 2011.

(Source: Inside Radio, 01/21/11)

Assisting the Poor While Preserving Work Incentives

As Republicans in power work to create a strong, affirmative agenda, they would do well to revisit a policy proposal devised by the late Milton Friedman, say Guy Sorman, a contributing editor at the Manhattan Institute's City Journal.

In his 1962 book "Capitalism and Freedom," Friedman acknowledged that some form of welfare was necessary in capitalist societies; the trick was to improve it.  His answer was the negative income tax (NIT).
As Friedman pointed out, no one pays taxes on the first few thousand dollars of income, thanks to personal exemptions and deductions.  Most earners pay a fraction of their "positive taxable income" -- that is, the amount by which their earnings exceed that first few thousand dollars.  In Friedman's plan, the poor would similarly receive a fraction of their "negative taxable income" -- the amount by which their earnings fell short of that level.  This direct cash grant would replace all other welfare programs for the poor, says Sorman.
To limit the disincentive, Friedman argued, the NIT should be progressive.

• Say the government drew the income line at $10,000 for a family of four and the NIT was 50 percent, as most economists recommend.
• If the family had no income at all, it would receive $5,000 -- that is, 50 percent of the amount by which its income fell short of $10,000.
• If the family earned $2,000, it would get $4,000 from the government -- again, 50 percent of its income shortfall -- for a total post-tax income of $6,000.
• Bring in $4,000, and it would receive $3,000, for a total of $7,000.
• So as the family's earnings rise, its post-tax income rises, too, preserving the work incentive.

Yet another NIT advantage is a freer labor market.  No minimum wage would be necessary, since a minimum income would now be guaranteed, says Sorman.

Source: Guy Sorman, "Why Not a Negative Income Tax with Cash Subsidies to the Poor?" Investor's Business Daily, January 20, 2011.

The Coming Doctor Shortage

Recently, the President's National Commission on Fiscal Responsibility and Reform proposed cutting Medicare funding to train doctors by $60 billion through 2020.  If this cut is enacted, the current doctor shortage would get far worse, says Herbert Pardes, president and CEO of New York-Presbyterian Hospital.

• Already, 30 percent of hospitals lose money, according to the American Hospital Association, and even more barely break even.
• Health care reform will add an estimated 32 million people to the ranks of the insured, driving them to seek medical attention that in the past they may have avoided due to expense.
• The aging population will also create much greater demand: The number of seniors who need more medical care is expected to soar to 72 million by 2020 -- nearly double today's number.
• But doctors are aging, too: Almost a third of doctors in the country -- about 250,000 -- are over the age of 55.

According to a 2010 report by the Association of American Medical Colleges, the increased demand means that our nation will need an additional 130,000 doctors, both general practice physicians and specialists, 15 years from now.  That's about 20 percent more doctors than we have currently.  Right now we train roughly 16,000 doctors a year.  To keep pace with demand, this nation will need to train an additional 6,000 to 8,000 each year for the next 20 years, but without Medicare reimbursements, many hospitals will not be able to afford to maintain critical training programs, says Pardes.

Source: Herbert Pardes, "The Coming Doctor Shortage," Wall Street Journal, January 19, 2011.

Survey Finds 51 Percent of Men Are Primary Grocery Shoppers

Mom is losing ground to Dad in the grocery aisle, with more than half of men now supposedly believing they control the shopping cart. The implications for many marketers may be as disruptive as many of the changes they're facing in media.

Through decades of media fragmentation, marketers of packaged goods and many other brands could take solace in one thing -- at least they could count on their core consumers being moms and reach them through often narrowly targeted cable TV, print and digital media.

But a study by Yahoo based on interviews last year of 2,400 U.S. men ages 18 to 64 finds more than half now identify themselves as the primary grocery shoppers in their households. Dads in particular are taking up the shopping cart, with about six in 10 identifying themselves as their household's decision maker on packaged goods, health, pet and clothing purchases. Not surprisingly, given that such ads long have been crafted for women, only 22% to 24% of men felt advertising in packaged goods, pet supplies or clothing speaks to them, according to the Yahoo survey.

The Great Recession has thrown millions of men in construction, manufacturing and other traditionally male occupations out of work and by extension into more domestic duties. At the same time, gender roles were already changing anyway, with Gen X and millennial men in particular more likely to take an active role in parenting and household duties.

Of course, in the survey, men could be overestimating their own role in shopping for the family. Lauren Weinberg, director-research and insights for Yahoo, acknowledges that could be possible -- and that women don't see them making as much progress on that front. But she said the fact that so many men now see themselves as masters of the shopping cart not only reflects real shifts but also means any stigma once attached to men as shoppers is fading fast.

Yahoo's interest in the subject is obvious: The portal has a lot of inventory geared toward men, such as page after page of fantasy-sports content, that could use more advertisers. But its research on men nonetheless seems to describe a new and disruptive reality.

Behavioral research of shoppers shows a number more like 35% of grocery and mass-merchandise shoppers are now men, said Mariana Sanchez, chief strategy officer for Publicis Groupe's Saatchi & Saatchi X. That number has been growing thanks to the economy and changing gender roles, she said.

And while that figure may be far from a majority, the fact that a third of a brand's shoppers are male is an awful lot to ignore. As a result, shopper-marketing efforts are increasingly gender-neutral rather than targeted for female shoppers, Ms. Sanchez said.

A subtle case in point came during the latest Procter & Gamble Co.-Walmart collaboration on "Family Movie Night," Jan. 8 on Fox. The program itself, "Change of Plans," did show a new dad more domestically impaired than a mom when unexpectedly thrust into adoptive parenthood. But in the commercial pod "story within a story" via Martin Agency, Richmond, the dad made a shopping trip to Walmart to load up on P&G and private-label Great Value products.

Such scenes could be a wave of the future for more categories as consumer packaged brands must elbow their way past car insurers, pickup trucks and erectile-dysfunction drugs into one of the surest and most-DVR-proof forums for reaching men: football.

P&G's Head & Shoulders and Prilosec already have become deeply involved in NFL marketing. But most P&G brands still primarily target moms, and it's not always easy to please both. While last year's tear-jerking "Behind Every Olympic Athlete is an Olympic Mom" Winter Olympics ads for P&G from Wieden & Kennedy were generally well received, the Twitter stream about them included an undercurrent of resentment from dads, who still make up the vast majority of volunteer coaches for youth sports.

The shift toward male shoppers, of course, didn't happen overnight, and that may also help explain why some brand managers for years have privately said more broadly focused network prime-time programming delivered better for their brands than more female-focused cable buys, regardless of the cost and what media optimizers indicated.

Perhaps favorably for marketers, Yahoo research finds men are more brand-loyal and less focused on promotions than women shoppers, Ms. Weinberg said. In advertising, they do more product research in packaged-goods categories than women, she said, and, because they're often newer to the categories, prefer ads with more information.

John Badalament, author of "The Modern Dad's Dilemma" and operator of ModernDads.net, does see more ads that speak to men, including recent ads for P&G's Old Spice and Kimberly-Clark Corp.'s Huggies. But many ads featuring men still portray them as hapless domestically, which he doesn't believe helps marketers. He likens such ads to the once laughable, now anachronistic grocery scene from 1983's "Mr. Mom."

"Men," he said, "need to be something other than invisible or buffoons in advertising."

(Source: Advertising Age, 01/18/11)

Consumers Planning to Spend More, Save Less, Pay Off Debts

According to the latest American Express Spending & Saving Tracker, more than half of adults are planning to spend more (14%) or the same (40%) in 2011 than they did last year, with the majority of that spending focused on themselves.

Personal savings rates are still well above pre-recession levels and consumers will remain focused on saving, but they will set aside less than they did in 2010. After setting aggressive savings goals for 2010, $14,000 on average, consumers are paring back their savings target this year to a more modest $2,600.

Pamela Codispoti, senior vice present and general manager of Cardmember Services, American Express, says "...it's encouraging to see that (consumers) feel more optimistic about their finances...they're setting more realistic savings goals and...gained some financial breathing room to spend a bit more than in 2010."

In terms of where consumers will spend in 2011, maintaining their appearance is king. Top categories for "more" consumer spending in 2011 include:

• Grooming (73%)
• Health/fitness (70%)
• Clothing for themselves (61%)

Categories at the bottom of the list include:

• Video game systems and games (34%)
• Jewelry (34%)
• Portable media players (32%)
• Tablet computers or e-book readers (30%)

Similar to 2010, consumers cited "exercising more" and "losing weight" as their top three and four New Year resolutions, respectively, behind saving money and spending more time with friends and family. However, 28% of consumers who are starting the year with a savings strategy would sacrifice a portion of their savings to achieve their goal weight.

Forty-seven percent of consumers plan to spend more on health and fitness in 2011, primarily on:

• Gym memberships: average of $131 per month
• Fitness equipment: average of $127 per month
• Personal trainer: average of $127 per month
• Eating programs: average of $75 per month
• Fitness-related video games: average of $60 per month

While saving money was the top New Year's resolution for 2011, fewer are setting financial goals: 83% in 2011, down from 89% in 2010. For those who set financial goals, significantly reducing or paying off debt before the end of the year tops the list at 17%. Other financial goals include:

• Save a percentage of household income each month (15%)
• Only buy what they can afford (14%)
• Find a better or higher paying job (10%)
• Save enough money to travel (6%)

The research was completed online among a random sample of 2,025 consumers aged 18+.

(Source: The Center for Media Research, 01/18/11)

Pay For Your Next Latte With Your iPhone!

Starbucks is rolling out a new pay-by-phone service at coffee counters across the country, delighting caffeine addicts who can now pay for their Trenta iced coffee with their BlackBerry or iPhone.

The pay-by-phone service has been in testing at Starbucks locations in Seattle and New York for some time and the company is rolling out the option to pay with your smart phone to 6,800 Starbucks stores, including an additional 1,000 stores located inside Target stores.

Unlike many pay-by-phone programs that require a special phone or a special case, the Starbucks solution is an app for the iPhone, iPod Touch and select BlackBerry devices. The app allows users to manage their Starbucks cards and with the push of a button, choose to pay with a card that is tied to their account.



The Starbucks Card Mobile App will display a barcode that the barista can scan to deducting the cost of your purchase. The app will not allow you to connect to a credit card for payment, so you will need to keep funds on your card, funds can be added with a credit card or by PayPal.

Starbucks isn't the first company to bring this type of functionality to your phone with an app. Target launched a gift card app in early 2010 that allows users to carry their gift cards on their phones and use the barcode to pay for in-store purchases.

While Apple and Google are pushing to include Near Field Communication (NFC) support in future versions of the iPhone and Android devices, which would make it easier to pay by phone in a method similar to how some credit cards currently work, the use of apps and software solutions means that users can enjoy the convenience of paying by phone without the need to buy a brand new device.

Hopefully, we'll see more retailers add this functionality to their apps. Who knows, it could cut down on gift card spoilage that comes from always leaving your Best Buy gift card at home.

Rising Gas Prices Expected to Impact Consumer Behavior

With gas prices rising to their highest mark in two years, consumers can be expected to repeat many of the same shopping and spending patterns they employed when the average price of gas reached $4.11 per gallon during the summer of 2008, according to Todd Hale, Nielsen senior vice president, consumer and shopper insights.

Although the price of gas settled back to $1.61 per gallon by the end of that year, fuel prices have crept back up to $3.05 per gallon, and some analysts expect the price to rise to near 2008 levels, said Hale in a blog on NielsenWire.com.

At the time of the gas price peak in 2008, consumers responded by reducing shopping trips, eating out less, buying for value and using more coupons, according to Nielsen research.

"It was during that year that the 'staycation' came into existence as consumers cut-back on unnecessary travel and did more at home in an effort to save money," wrote Hale. "We saw a flurry of meal deals from food retailers and manufacturers as they aggressively fought to win trips that restaurants were losing."

Hale expects past consumer reactions to gas prices to come into play in 2011.

"A number of the habits consumers formed in response to the high gas prices then have remained in place, and are likely to accelerate if gas prices go much higher, including buying gas linked to spending levels at grocery stores and purchasing gas at outlets offering other incentives," wrote Hale.

Hale continued: "While it's not yet clear how high gas prices might go, any further rises coupled with elevated levels of unemployment are likely to drive consumers to take additional steps to save money. It's never too early to have the strategy in place to respond."

The Four Essential Phases of Social Media Adoption

When discussing social media with business executives, I'm frequently reminded of the fable of the elephant and the blind men. In the story, six blind men, hearing that an elephant has been brought to their village (and having no idea what an elephant is), go to the village square to investigate. One feels the elephant's side and proclaims that an elephant is like a wall. A second, feeling one of the elephant's legs, says it is like a pillar. A third, touching the tusk, describes the animal as being like a solid pipe.

Although each man's description was accurate, each perceived only part of the elephant; none had a perspective of the entire beast.

It's the same with many business executives and their views of social media:

"Social media? Twitter isn't appropriate for our market."

"Our company already has a Facebook page!"

"We don't have time to maintain a blog."

"Several of our people use LinkedIn."

Such statements reflect perceptions of "parts of the beast" -- components (tools) of social media. But using one or more of those tools, with no clear objectives for benefiting the company, doesn't constitute a strategy.

Here is a four-phase adoption model designed to reveal the entire elephant that is social media.

Phase I: Observation

As Yogi Berra famously noted, "You can observe a lot just by watching." A bit of research and observation up front will make your participation later much more productive and prevent false starts and missteps.

Some of the questions to answer in this phase:

• Where are people talking about our company, industry, and competitors? Which social media platforms do they congregate on?
• What are they saying? What are the hot topics?
• Who's doing the talking? Which voices seem to have the most influence?
• What opportunities do we have to respond and participate? What kind of content seems to be most popular?
• What questions are people asking that we can answer?

Social media monitoring tools are very helpful in answering those questions. Among free tools are Social Mention and Alterian's trial version of SM2. A wide range of tools is available with differing levels of cost and sophistication.

Phase II: Preparation

Every company with more than a handful of employees is already involved in social media -- whether those running the company know it or not. That's because nearly half of all Americans are now active on at least one social network, including two-thirds of 25-34 year-olds. And though employees may be using these networks primarily to share pictures of the kids or to plan which clubs to hit next weekend, most will bring up the workplace at some point:

"Our new CEO, John Doe, is an incompetent jerk."

"I sure hope our new product works because we've really skimped on the testing."

"If I owned any stock in this company, I'd dump it now before the earnings announcement next week. Last quarter was a bust."

Though employees may share positive thoughts about your company with their friends, family, and followers, they may also post comments like those above, leading to bad PR, reduced sales, and even legal action.

One common objection voiced by executives about social media is that it can't be controlled. That's true, but when it comes to what a company's employees are saying, it can, at least, be guided. Developing a social media policy is a crucial first step toward making social media a constructive, rather than dangerous, communication channel.

Fortunately, there's no need to start from scratch, as there are dozens of social media policies from major companies available online to serve as examples. Outlines vary greatly, but here are a few of the essential elements:

• The company's approach to social media. What are the goals, limits, and rules? A small restaurant will use social media much differently than a heavily regulated financial services company.
• Guidelines. What's acceptable and what's not? Don't rely on "common sense." Spell it out.
• Consequences and questions. Let employees know what will happen if guidelines are violated, and point them to someone who can answer questions for any "gray area" issues.

Once the decision is made to embrace social media, companies need to establish plans. Based on the research conducted in the Observation phase, the plan should address issues such as these:

• What are the objectives?
• Who will be involved?
• Which social media platforms will be used?
• How will results be measured?
• What types of content will be produced?
• Who will create the content?
• How will content be optimized across platforms? (e.g., executive profiles on LinkedIn link to the company blog; blog posts are tweeted and posted to LinkedIn Groups)

Phase III: Participation

With the groundwork laid, monitoring in place, and plans developed and approved, the company can begin "officially" participating in social media -- or, more likely, reassessing initiatives already in place, as many firms have already jumped into the social media fray without proper planning.

Less than one-third of companies in the Americas have a social media policy in place, and only half have a formal strategic plan.

Participation can take a variety of forms, from simple monitoring of and responding to brand mentions to actively creating thought-leadership, informative or entertaining content, and promoting across social media venues.

For companies that produce content, a blog is often at the center of the effort. More than half of B2C firms and nearly three-quarters of B2B vendors maintain company blogs. But blogs aren't the only option for sharing content through social media; among the content types are video on YouTube or Vimeo, presentations on SlideShare or myBrainshark, photos (Flickr, Photobucket), and PDF documents (Scribd, Docstoc).

Once posted, content can be promoted through microblogging sites (Twitter, Jaiku, Identi.ca), social-networking sites such as LinkedIn and Facebook, and social-bookmarking sites such as Digg, Mixx, and Reddit.

The key to successful social media participation is engagement. Sharing content shouldn't be viewed as broadcasting to the market but rather as seeking to start conversations. The point is to draw in interested parties, key influencers, and ultimately sales prospects by engaging them in discussions and building business relationships.

Phase IV: Integration

Most companies think of social media first in terms of marketing and PR activities, and they begin their social media efforts in those areas. But those at the highest level of social media maturity and integration are using social media for a variety of purposes across the organization.

Just as it would make no sense to provide telephones only for the sales force, or email access only to accounting, there's no need to limit social media interaction to the marketing department.

At this advanced stage, companies may be using social media not only in marketing and PR but also in a variety of other areas, including the following:

• Human Resources. HR departments use social media to recruit and prescreen candidates, improving new hire quality while reducing recruitment time and cost. Three-quarters of US corporations already use LinkedIn to conduct background checks, and nearly half do so on Facebook.
• Customer Service. While no organization should overly rely on social media to resolve customer-service issues, it can shorten the "time to answer" some customer queries and reduce costs. Large enterprises that have incorporated social media into their customer service options include Verizon, Intel, Best Buy and Dell.
• Sales. Social media has changed the buying cycle. Prospects are now much more informed before they even begin a dialogue with sales; they've researched alternatives, developed a short list of vendors, and know what key features they're after. The ability of buyers to do all of this before ever contacting a vendor has increased their expectations of salespeople as well; they expect sales pros to know what their company does and what challenges their industry confronts. Social media is valuable to the sales force not only for prospect research but also for generating leads and building credibility.
• Product Development. Whose input could be more valuable to product development efforts than your customers' and prospects'? The Wall Street Journal has described social networks as the new focus groups because of the high value and relatively low cost of use. Because of potential legal issues involved in using someone else's ideas, firms often use public networks for basic research and rely on their own branded online networks, with clear rules spelled out, for more direct suggestions.

Ideally, companies at the integration stage not only use social media across departments but also ensure that efforts and information are coordinated. For example, HR should be communicating the same value proposition to recruits that Marketing uses with prospective customers. Product designers should understand customer-service issues to help improve products or make them easier to use. Sales and Marketing should align social media activities to avoid duplicated efforts or inconsistent messages.

When it comes to cross-organizational alignment of social-media use, perfection can't be achieved. But as Lexus constantly reminds us, it can be pursued.

(Source: Tom Pick, Marketing Profs, 01/13/11.)

Shoppers to Spend More, Stay Thrifty

Shoppers will continue to spend more this year, spurred by a slowly improving job market and an uptick in income, but enough shoppers are still struggling with their finances that any increase will be modest, a retail industry expert said.

Consumers returned to stores en masse in 2010 and gave retailers their best holiday season since before the recession.

But December sales at top retailers such as Macy's Inc and Kohl's Corp disappointed Wall Street as shoppers proved to be more sensitive to prices than expected and showed they were ready to take a break from shopping now that Christmas has passed.

"For those consumers that have jobs and are not underwater with their mortgages, there could be a slight uptick in spending," said Ira Kalish, director of global economic at consulting firm Deloitte.

The International Council of Shopping Centers expects same-store sales to be up between 3 percent and 3.5 percent in 2011.

"To the extent they spend, they will be very price sensitive and more apt to spend more on small things rather than big items," Kalish told Reuters on the margins of the National Retail Federation conference in New York this week.

Discount chains such as Target and dollar stores will continue to win shoppers so long as unemployment remains high, while home retailers, such as Home Depot, will struggle until the housing market rebounds, he said.

U.S. retailers' profits margins rose by 1 percentage point to 3.4 percent in the 2009 fiscal year, according to a Deloitte study released on Sunday. But just as their prospects seem to be improving, retailers face a major threat to their gross margins: the doubling in cotton prices in the past year that may force them to push up the pricetags on clothes even though shoppers are still very price conscious.

"They don't have much wiggle room," Kalish said of retailers who cater to modest income shoppers such as J.C. Penney Co Inc.

The National Retail Federation conference, which concludes today, featured chief executives of top retailers who discussed the prospects for retail spending in 2011 and how to contend with higher production costs.

(Source: Reuters, 01/09/11)

Pizza Chains Hope to Get a Bigger Piece of the Pie

A large pizza loaded down with toppings for 10 bucks.

An iPhone app to order your favorite pie.

A new recipe touting a tastier sauce, better cheese combination and flavored crust.

These are the latest weapons concocted by America's top pizza chains in what is becoming an epic pizza battle.

Papa John's, Domino's, Pizza Hut -- and all the big names in between -- are duking it out across counters and doorsteps, as ever-budget-conscious people still recovering from the recession continue to look for cheap fast food.

"They are intensive competitive marketers. They're going to try to mimic each other and one-up each other's offerings, whether they're competing on quality of ingredients and formulation or the latest deals," said Nancy Childs, professor of food marketing at St. Joseph's University in Philadelphia.

Americans are eating it up, especially at a time when they are watching their wallets.

In 2009, Americans spent close to $38 billion on pizza, remaining virtually flat compared with the year before as other restaurant sectors took a nose dive. To lure in some of that dough, pizza chains stepped up to the plate.

Little Caesar's in November introduced its Pizza! Pizza! Pantastic: Two Hot-n-Ready pizzas, one supreme and one pepperoni, for $9.99.

Papa John's, just last month, launched a free iPhone app that lets customers order everything on its menu no matter where they are.

Pizza Hut, the top-selling chain in the U.S. with $5 billion in sales in 2009, offered diners $10 pizzas any way they wanted them.

And Domino's revamped its pizza recipe in a much-discussed ad campaign that has translated into higher sales. Its 2010 third-quarter same-store sales were up 11.7 percent from the same period in 2009.

Brandon Solano, Domino's vice president of innovation, called the bad economy a headwind in Domino's gains but also stressed that the marketing campaign about his company's updated flavor profile impressed customers with its honesty.

"The pizza industry has seen a lot of competitors following one another," he said. "Coming out with a new recipe speaks to leadership, not followship. There were a lot of people who were looking for something better, and we gave it to them."

Plenty of consumers are turning to pizza, and a sluggish economy is enlarging the food's appeal beyond the traditional three C's -- college students, cheapskates and Cub Scouts.

"This is a good value meal, and people are looking for that," said Professor Childs. "If people can't afford a restaurant out, they can still afford the pizza to take them out of the kitchen. This is the time when you're looking to expand your market share to get more customers, so it makes it even more intense."

There are nearly 65,000 pizzerias in business. The 42 percent owned by the top 50 chains control 48 percent of the sales.

All the competition is promoting lots of ad spending by pizza chains to get the word out on deals. The U.S. pizza restaurant and delivery services industry, as a whole, spent more than $545 million on advertising in 2009, according to Kantar Media, a marketing and analysis firm.

And there will likely be more to come this year.

"It's going to remain a very competitive sector," said Mark Kalinowski, a research analyst specializing in restaurants for New York-based Janney Capital Markets. "Pizza's probably held its own in terms of total market share as compared to the rest of the restaurant industry. All in all, pizza's not in a bad place at all."

(Source: Indianapolis Star, 01/03/11)

Asian Brands Dominate Preference Among Hispanic Auto Buyers

Toyota, Honda and Nissan dominate new vehicle preferences among Hispanics in the U.S., according to a recent study by Polk.

The three companies account for 46.4 percent of the Hispanic market based on an analysis of new vehicle registrations for the first nine months of 2010. Toyota leads the market by far with more than 20 percent share of the Hispanic market, and 46 percent greater volume in registrations than its next closest competitor. Hyundai, Mazda and Kia are also included the top 10 list based on registrations by volume to Hispanics.

Only three domestic automakers are in the top 10, according to Polk. Chevrolet, Ford and Dodge represent a combined 21.2 percent of the Hispanic market. European brands have mixed performance with Hispanics, led by Volkswagen, with 2.8 percent of the Hispanic market.

Asian brands have grown in popularity among the Hispanic market over the past 10 years and many are growing their sales to Hispanics faster than sales to the overall population, representing a significant development.

Manufacturers have been engaging in increasingly important marketing programs geared specifically toward this audience, according to Polk.

"Toyota, Honda and Nissan all have specific Hispanic marketing strategies and agencies that focus their marketing efforts to Hispanics," said Mark Pauzé, senior solutions consultant at Polk.

"Tracking sales to this growing demographic and their loyalty, coupled with a specific marketing strategy, has an impact."

The Hispanic automotive market in the U.S. increased 6.5 percent during the first nine months of 2010, according to Polk, outpacing the overall U.S. auto market, which grew just four percent in the same time period.

Hispanic purchases now account for 8.7 percent of the total U.S. vehicle market, up from 8.5 percent just a year ago. Hispanics reached 10.6 percent of the market in 2006, but their share and volume decreased with the collapse of the automotive market in 2008. The Hispanic market was recovering more quickly than the overall market in 2010.

Buick's sales to Hispanics increased 83 percent in the past year, according to Polk. "Buick has focused on Hispanics because they prefer comfort and amenities in a family car at a reasonable price -- a sweet spot for Buick. Their attention to this market is paying off for them," said Pauzé.

Growth within this market is significantly higher than Buick's overall growth of 49.7 percent, and Chevrolet, Hyundai, Mazda and Kia also experienced more growth within the Hispanic market than overall for their respective brands. In addition, Cadillac, Hyundai, GMC, Kia and Infiniti also experienced more than 25 percent growth in their sales to the Hispanic market. Ford and GMC are not keeping pace in the Hispanic market, with overall growth for those brands exceeding Hispanic growth.

Half of the major European brands are growing or maintaining their sales to Hispanic consumers, Polk's analysis shows. Volkswagen, MINI and BMW lead, and Audi increased its sales to Hispanics 23.4 percent in the past year, though it continues to represent less than one percent of the market. About half of the European manufacturers are declining in Hispanic market share and none are growing more with Hispanics than the general population.

The top 15 brands, based on their share of the Hispanic market through the first nine months of 2010, were: Toyota, 20.3%; Honda, 13.9%; Nissan, 12.2%; Chevrolet, 9.1%; Ford, 8.9%; Hyundai, 4.1%; Dodge, 3.2%; Mazda, 2.9%; Kia, 2.9%; Volkswagen, 2.8%; GMC, 2.3%; BMW, 2.2%; Mercedes-Benz, 1.9%; Jeep, 1.9%; Lexus, 1.6%.

(Source: Polk, 12/15/10)

Stuck in the Middle, Big Grocers Make Changes

Companies Face Pressures From Discount Chains, Upscale Markets

Call it the big squeeze.

Traditional grocery stores, facing increased competition from discounters and upscale players, are caught in the middle.

There's pressure from cost-conscious consumers, who have gotten used to depressed prices during the downturn. Other shoppers are demanding higher-quality products, including organics, but want to save on those, too. On top of this, higher food prices are being instituted and could encourage more consumers to shop discount. So some big chains are having to adjust.

Jewel-Osco parent, Minneapolis-based SuperValu Inc., announced last week that it will close about 20 underperforming stores around the country. The company also confirmed that it has asked corporate employees to take unpaid time off between the beginning of this month and Feb. 26, when the corporation concludes its fiscal year.

Earlier, the company unveiled plans to double the number of its Save-a-Lot dollar stores, to 2,400 locations, over the next five years.

"We're in a very competitive industry and we're looking at every area of the company to lower our operating expenses," a SuperValu spokesman said, adding that "while the decision to close stores is always difficult, SuperValu has to respond to what's best for the long-term success of the overall company."

Going into 2011, shoppers are clinging to promotional prices instituted at the low point of the recession, and major food companies, including Kraft Foods Inc. and Sara Lee Corp., are hoping to pass along higher food costs to consumers.

Lee Peterson, executive vice president of creative services at WD Partners, a Dublin, Ohio-based consulting firm, said traditional grocery stores are seeing increasing competition from discounters such as Wal-Mart and Target, with Walgreens also moving into food and grocery. Meanwhile, Whole Foods and Costco are providing upscale alternatives.

That's forcing changes, Peterson said. "You can almost picture the industry on some kind of ledge, walking into the fog."

Traditional grocery stores "are not the cheapest, they're not the most organic or sustainable, and many of them are set up for the way people used to shop," Peterson said.

In the past, households made one trip for a week's worth of food. Now, he said, it's common to grab staples at one store, additional items at a specialty market and even make quick trips to another grocery store during the week. All these trips may be supplemented by a quarterly trip to a club store for bulk items like toilet paper or trash bags, Peterson said.

Still, the big chains represent the bulk of grocery sales. But that is expected to be tested, and Chicago, home to four of the nation's largest chains, is a key battleground, Janney analyst Jonathan Feeney said.

"If the large alternative players and formats are going to expand share gains, they will have to do it first in Chicago, where Costco, hard-discounter Aldi and Whole Foods each have a meaningful presence," Feeney noted in a December research note.

The Chicago market accounts for 3.3 percent of U.S. grocery sales, he said, adding that the recession has "highlighted the strengths of some of the alternate formats, including both Wal-Mart and Aldi, which were already growing faster in Chicago than other large (markets)."

Signs of trouble have been mounting for some time. Nearly a year ago, Jewel-Osco said it would cut 110 store management jobs. Stores had traditionally operated with two managers but are down to one.

SuperValu appears to be lagging its rivals. In the fiscal quarter ended Sept. 11, SuperValu's same-store sales declined 6.4 percent as the company cited a "difficult operating environment."

Dominick's parent, Pleasanton, Calif.-based Safeway Inc., reported a 2 percent same-store sales decline in October, citing lower prices.

Other chains are faring better. Last month, Cincinnati-based Kroger Co. reported same-store sales up 2.4 percent for its third quarter. Kroger CEO David Dillon said customers were looking for lower prices.

On the upper end, Austin, Texas-based Whole Foods reported an 8.7 percent increase in same-store sales. Chief Executive John Mackey cited progress made in pricing and programs for animal welfare and sustainable seafood.

In a research note last week, Erica Chase, an analyst with Barclay's Capital, commended SuperValu for the store closures but suggested a long recovery awaits.

"The company is making significant changes to its go-to-market strategy to improve both prices and its product offering," she wrote. "Since this will take multiple years to implement, we do not expect to see meaningful upside to earnings or in the stock in the near term."

SuperValu appears to be examining which of its many grocery formats will best serve customers for the short and long term. The company has committed to value pricing with its Save-a-Lot dollar chain expansion.

(Source: Chicago Tribune, 01/06/11)

Identifying the Real Objection

When customers say they want to "think over" their buying decision, it's often safe to assume that they have an objection they're not sharing.

Asking "What do you want to think over?" can seem intimidating, and probably won't help you uncover the real problem. Instead, ask, "Is it a question of price?" Then quietly wait for a response.

By guessing a specific objection, you'll encourage prospects to correct you by stating their true concern. If your suggestion is correct, you probably found out what's making your buyer hesitate. You might be surprised at how much this strategy improves your closing ratio.

In Video Ad Effectiveness, Targeting Trumps Length

When it comes to video ad campaigns, targeting has a far greater impact on ad performance than ad length, according to a new study from video ad tech firm TidalTV. According to a recent online study, TidalTV found that 30-second ads can far "outperform" 15-second ads, without negatively impacting consumers' experience.

Contradicting previous research, the study also found that advertisers can achieve what TidalTV calls "30-second creative performance" with 15-second video creative.

The study confirmed that 30-second video ads surpassed 15-second video ads in click-through rates by 11%, but this improvement comes at the cost of consumer satisfaction, as evidenced by a 10% drop in video completion rates.

While it is well documented that 15-second video ads have higher completion rates, the new study revealed that 15-second ads drastically improved in performance when they were targeted to the desired demographic audience.

The ads saw a 110% increase in click-through rates compared to 30-second untargeted ads, while also maintaining a 29% lift in video completion rates.

The study also found that with proper targeting, advertisers can use higher-performing :30 second ad units without compromising customer satisfaction.

Not only did the results show a 201% lift in Click-Through-Rate (CTR) for targeted 30-second ads, they also demonstrated a 7% increase in completion rate compared to 15-second untargeted ads.

According to TidalTV, the data proves that ad relevancy does impact consumer favorability and satisfaction, and illustrates that what matters is not only what video ad length you serve, but also that marketers using targeting to place the right ad in front of the right audience will see higher performance.

"This just helps to resolve the ongoing debate that marketers and agencies face -- 'Can we repurpose TV creative?,' or 'Is 15 seconds the online standard?,'" said Kevin Haley, chief scientist at TidalTV. "The bottom line is that combining both targeting and the right creative video length can really have a significant impact on campaign performance."

The research evaluated 28 ad campaigns across a range of demographics and marketing categories, and included a mix of both 15-second and 30-second video advertisements. In total, the 28 campaigns generated around 62 million impressions.

Asking for the Sale

Here are some things to keep in mind to help you remember the importance of asking for the sale:

If you've done a good job explaining the benefits of your product or service, you have every right to ask the prospect if they'd like the opportunity to enjoy those benefits by purchasing what you're selling.

People aren't naïve; they know when someone's trying to sell them something. It's both odd and even a little rude when a salesperson makes a pitch and doesn't follow through by asking for the business. The customer can be left wondering, "What's the point of this? Does this salesperson really think I have nothing better to do with my time than hearing about this product?"

Asking for the sale is the efficient thing to do. If you truly believe in what you're selling, you'll want to successfully meet the needs of as many prospects and customers as possible. Asking for the sale helps you do this by encountering any concerns or objections to overcome in this sale, or by giving the customer the right to say "no" and letting you move on to the next potential customer.

Remember, selling is a process of matching the needs of your customer with the benefits of your product. That process isn't finished until you ask for the sale.

Turning Failure Into Success

When you fail and it starts to look like success to your peers, you know that you are a high-performance seller.

Look. Let's get real frank, real fast. Life isn't a competition with anyone other than the rock star that you were intended to be. If you think that I am advocating that you look around and compare yourself to anyone else, you are dead wrong.

You know better than that already. That's a complete waste of time.

Here is what I'm trying to say: High performers look at failure as a step closer to success. It's not an act, it's a way of life.

Rejection and loss are not end points. They are guideposts.

High-performance selling requires the discipline to look at each opportunity and say, "What could I have done differently?" Here's a reality -- sometimes there is nothing you could have done better. But I have always found 3-4 (to a dozen) tiny mistakes that all contributed to my failure.

It was by adjusting and relaunching that I was able to turn that failure into outrageous success.

Master your failures.

Weighing Costs, Companies Favor Temporary Help

Temporary workers are starting to look, well, not so temporary.

Despite a surge this year in short-term hiring, many American businesses are still skittish about making those jobs permanent, raising concerns among workers and some labor experts that temporary employees will become a larger, more entrenched part of the work force.

This is bad news for the nation's workers, who are already facing one of the bleakest labor markets in recent history. Temporary employees generally receive fewer benefits or none at all, and have virtually no job security. It is harder for them to save. And it is much more difficult for them to develop a career arc while hopping from boss to boss.

"We're in a period where uncertainty seems to be going on forever," said David Autor, an economist at the Massachusetts Institute of Technology. "So this period of temporary employment seems to be going on forever."

This year, temporary workers have represented a significant part of hiring. In November, they accounted for 80 percent of the 50,000 jobs added by private sector employers, according to the Labor Department. Since the beginning of the year, employers have added a net 307,000 temporary workers, more than a quarter of the 1.17 million private sector jobs added in total.

One worker who has been forced to accept temporary jobs is Jeffrey Rodeo, 43, who was laid off 14 months ago from his job as an accounting manager at a produce company in Sacramento. He has applied for nearly 700 full-time positions since then, but has yet to receive an offer. Meanwhile, to stay afloat and keep his skills fresh, he has worked on short-term stints at four different employers.

Mr. Rodeo figures his peripatetic work life will last at least another year. "Companies are being more careful," he said. "It just may take longer to secure a permanent position."

To the more than 15 million people who are still out of work, those with temporary jobs are lucky. With concerns mounting that the long-term unemployed are becoming increasingly unemployable, those in temporary jobs are at least maintaining ties to the working world.

The competition for them can often be as fierce as for permanent openings, and there are still far too few of them to go around. Indeed, the relative strength in temporary hiring has done little to dent the stubbornly high unemployment rate, which rose to 9.8 percent in November.

"With business confidence, particularly in the small business sector, extremely low," said Ian Shepherdson, chief United States economist at the High Frequency Economics research firm, "it's not surprising that permanent hiring is lagging behind."

The landscape two or three years from now might look quite different, of course. Many economists and executives at temporary agencies say there are signs that more robust permanent hiring is coming in the new year. Business confidence is up, and temporary agencies report that the percentage of interim workers who have been offered full-time jobs is also up from last year.

Nevertheless, there are signs that this time around, the economy could be moving toward a higher reliance on temporary workers over the long term.

This year, 26.2 percent of all jobs added by private sector employers were temporary positions. In the comparable period after the recession of the early 1990s, only 10.9 percent of the private sector jobs added were temporary, and after the downturn earlier this decade, just 7.1 percent were temporary.

Temporary employees still make up a small fraction of total employees, but that segment has been rising steeply over the past year. "It hints at a structural change," said Allen L. Sinai, chief global economist at the consulting firm Decision Economics. Temp workers "are becoming an ever more important part of what is going on," he said.

Several factors could be contributing to the trend. Many businesses now tend to organize around short- to medium-term projects that can be doled out to temporary or contract workers.

Donald Lane, chief executive of Makino, a manufacturer of machine tools near Cincinnati, said his company would increasingly outsource projects to contract firms that pull together temporary teams. When installing a large machine, for example, Mr. Lane said the company could appoint one full-time supervisor to oversee a number of less skilled short-term workers.

Mr. Lane said he hoped to raise Makino's share of temporary employees from 10 to 15 percent now to about 25 percent in the future.

Flexibility is another factor. Corporate executives, stung by the depth of the recent downturn, are looking to make it easier to hire and fire workers. And with the cost of health and retirement benefits running high, many companies are looking to reduce that burden. In some cases, companies wrongly classify regular employees as temporary or contract workers in order to save on benefit costs and taxes.

Certainly, Americans who have never held anything but a full-time job have sought out temporary posts because they were the only jobs available. And even before the recession, workers were learning that lifelong employment was disappearing along with phone booths and Filofax organizers.

But people still tend to prefer jobs with some sense of permanence, and with full health benefits and some form of retirement contribution.

According to a survey by Staffing Industry Analysts, a Mountain View, Calif., research firm, 68 percent of all temporary workers are seeking permanent employment.

But the whole notion of what constitutes a permanent job may simply be changing. Workers "need to expect that their lives and jobs will change much more often than they have in the past," said Jonas Prising, president of the Americas Manpower. Some people have discovered they prefer the freelance life.

Antonia Musto lost her job as a staff accountant for a newspaper in Wilkes Barre, Pa., more than two years ago. She signed on with oDesk, a company that matches contract workers with employers online.

She has since worked for several different businesses and even turned down a full-time offer last November. "I just think I've gotten very accustomed to working very fast and working with many different people," Ms. Musto, 38, said. She said she had fully replaced the income she was making at the newspaper and buys private health insurance.

Of course, businesses that can now hire talented workers for temporary jobs may find that when demand picks up, they will need to offer full-time positions with perks and benefits. But it could take a long time to reach that point.

That indefinite stretch worries workers who fear that future employers will look askance at a résumé filled with short-term engagements. Others worry that they will lose valuable years of saving for the future.

Mr. Rodeo, the Sacramento accounting manager, said he made anywhere from 10 to 50 percent less while working in temporary jobs than he did at the produce company. He has also been without health insurance all year. None of the interim employers or temporary agencies have contributed to a 401(k) plan, nor has he been able to save much on his own.

"That's the scariest part," said Mr. Rodeo.

He is confident he will eventually land a permanent post, but until then, he knows he is losing ground in planning for retirement. "Of course, for my generation, you can't plan on Social Security," he said. "Most likely, I will have to work longer."

Others are starting to face the prospect that they could move among temporary assignments for the rest of their careers.

Jose Marin, 50, known as J. D., lost his technology job in Miami in February and moved to North Carolina to live with his sister. After months of looking for a permanent job, he signed on with Modis, a unit of Adecco, and in August began a temporary assignment for a financial services company in Cary, a town west of Raleigh.

While grateful for the job, he longs for a permanent position. "I'm still old-fashioned and I still want to work for a company where I make a difference and I'm going to be there to retire," said Mr. Marin. "I know that's wishful thinking."

(Source: The New York Times, 12/19/10)

Supermarkets Made Radio's Registers Ring in 2010

The radio industry has long been the medium that reaches consumers closest to purchase. In today's fast-paced world, it's become a big advantage to reach supermarket's key female customer. Radio has become the go-to place for grocery stores, spending more on radio advertising than television stations or newspapers.

Radio supermarket advertising was up 24% to $139 million in the first half of 2010 according to Kantar Media. When convenience and liquor stores are added to the mix, RAB data shows the broader category has grown 16% to $686 million through September.

Radio's biggest supermarket customer is Safeway, which spent $146.3 million on radio through September according to RAB. That's up 32% compared to last year. The rapidly-expanding Aldi chain is a prime example. "As we continue to grow and emerge in new markets we will continue to use a combination of radio, TV and print advertising," Aldi spokeswoman Katherine Davis says.

"Traditionally Aldi has limited our marketing efforts which have allowed us to keep advertising costs down and prices low."

Aldi spent $6.3 million on radio during the third quarter, up from just $250,000 during the same period one year ago. So far this year, it's spent $19.1 million on radio. That's a big increase for a chain that bought its first TV commercial just two years ago.

The supermarket sector is a low-margin business, with a fine line between making and losing money. As a result, most chains won't talk about their marketing -- or use of radio. But Food Lion went public with news of its marketing plans earlier this year, announcing it would take to radio, print, online and outdoor to promote "new, lower prices" across the 11 Southeast and Mid-Atlantic states it operates. VP of marketing Ken Mills says they believe the ads will "set us apart from other grocery retailers."

(Source: Inside Radio, 12/13/10)