Five Percent of Population Responsible for Half of U.S. Health Spending

About 5 percent of the population is responsible for almost half of all health care spending in the United States and for rising premium rates, according to a new report from the National Institute for Health Care Management Foundation, says the National Journal.

• The report stated about half of the U.S. population accounted for only 3.1 percent of all expenditures.
• But 10 percent of the population hogged 63.6 percent of all health spending, the survey found.
• The top 5 percent of the population accounted for 47.5 percent of all spending, and the top 1 percent accounted for 20.2 percent.
• While the average person incurred about $233 in costs in 2008 for health care services, those in the top half of spending cost insurers, the government or themselves $7,317.
• The top 1 percent cost $76,476.

Adults 55 and over made up a larger proportion of the high-spending group, while those in the lower spending group tended to be younger.  The report also found that people with at least one chronic health condition were two to four times more likely to have spending in the top 5 percent group.

The likelihood increased as the number of chronic conditions rose.  Nearly half of people in the top 5 percent of health care spending had high blood pressure, a third had high cholesterol and a quarter had diabetes.

As health care spending rose, so did private health insurance premiums.  During the 2005 to 2009 stretch in which health care spending rose, premiums for private health insurance increased by nearly 15 percent.

Source: Althea Fung, "Report: 5 Percent of People Account for Half of U.S. Health Care Spending," National Journal, June 27, 2011.  "Understanding U.S. Health Care Spending," National Institute for Health Care Management Foundation, July 2011.

How to Cut College Costs

Over the past two decades, the cost of a college education has risen dramatically.  Tuition and fees have increased at twice the rate of inflation, rising more quickly than market goods or services and outstripping the growth in family incomes.  This dramatic rise in college costs is due to the ways in which traditional colleges and universities organize and allocate resources, and not due to lavish university facilities and extra student services, says Oklahoma State University professor Vance Fried.

The root cause is the high cost of performing the instructional, research and public-service missions of the undergraduate university.  Undergraduate colleges should consider five major cost-cutting strategies:

• Eliminate or separately fund research and public service.
• Optimize class size.
• Eliminate or consolidate low-enrollment programs.
• Eliminate administrator bloat.
• Downsize extracurricular student activity programs.

Rather than focusing only on the big-ticket items that tend to dominate debates about college costs, the real levers for increasing efficiency include rethinking student-faculty ratios, eliminating under-enrolled programs and trimming unnecessary administrative positions, says Fried.

Source: Vance H. Fried, "Opportunities for Efficiency and Innovation: A Primer on How to Cut College Costs," American Enterprise Institute, June 24, 2011.

Branded Apps 1.5: It's About The Content, Stupid

With yesterday's fourth birthday of the iPhone, and about three years into the app phenomenon, it is a good time to see what lessons brands may have learned after so many of their branded apps crashed and burned. Thankfully, we aren't getting that same rush of pointless apps constructed at high cost mainly to satisfy the egos of executives.

There are so many things that are so obvious now about the format -- but weren't obvious even three years ago. While discoverability of apps quickly became the big early challenge (which also became a money sink for a lot of advertisers) durability was really the problem. So few marketers seemed to understand that an app turns a brand into a publisher.  Some early winners at the form, like Kraft, understood that without a real plan for refreshing content and satisfying users over the long haul, a brand apps was just another disposable tchotchke. 

A good example of a branded app that demonstrates the lessons learned from those first generations is the My Beauty Advisor app from P&G. North America Olay Brand Manager Jamal Muashsher tells me that P&G scoped the landscape of apps and focused on the core need in the market. "Women continue to tell us they need guidance to decide which beauty products to use -- and how to use them to get the look they want," says Muashsher.

The most successful part of the app involves piling on the content that gets the user there. The app uses a magazine motif that I expect many devotees of the beauty mags will appreciate. In fact, P&G has partnered with women's content providers to create an attractive splash page of thumbnails and headlines. New issues come out almost monthly, giving the app a regular schedule of content refreshes and a way to float itself back to the user's attention.  

To be sure, all roads lead to a P&G-filled product catalog. You can use voice, bar code scan or search to find products, descriptions and reviews to compile a "beauty bag" of items to check out later. Among the strongest pieces of content here is a consultation tool that walks the user through questions about hair and makeup to provide product recommendations. Jonathan Glanz of Densebrain, which partnered on the app, puts it this way: "An app with a single message of providing marketing information or a concept that only drive product information throws a red flag up for consumers. What My Beauty App does differently is, it brings together several authoritative perspectives -- including bloggers and leading magazines -- and allows the consumer to choose the content she wants to interact with based on how relevant it is to her needs."

While obviously P&G is trying to sell its wares, the depth and utility of the content is often admirables The user reviews appear to be uncensored, for instance, with actual horror stories included. For example, one woman complains that Nice 'n Easy turned her hair green. Kudos to P&G for leaving the customer voices alone and taking the heat. 

Which is not to say that the content piece has melded well with the utility piece. Functionally, My Beauty Advisor needs some work. There is a barcode scanner that seems to deliver scan "errors" when you try to add product into the Beauty Bag, but I can't tell if it just doesn't like non-P&G products. Instructions are badly needed throughout. The Beauty Bag, which is supposed to hold products for later perusal, doesn't say how you actually add products to it. It took me a few stabs at the catalog to get an on-screen prompt telling me to drag the object into the Beauty Bag tab.

To the app's credit, though, it provides clear value without users having to figure out its utility side. In fact, it excels best as a content play that positions the P&G brands as information resources. The app give the user the option at the opening screen to choose the experience: browse products, get advice or just read a magazine. It will be interesting to see whether this open approach offering multiple app experiences works over time, or if P&G will learn from usage metrics exactly what most women want to do with such an app. 

Muashsher says that P&G will be promoting the app across the major brands with heavy emphasis on digital channels: social, search, mobile. It is interesting that P&B Beauty is bringing its many brands under the umbrella of this app that leads with content rather than a mess of individual product apps. Some aspects of My Beauty Advisor suggest a positive evolution in the ways in which marketers are conceptualizing an app and taking on the role of publisher, not just pitchman.  

Steve Smith , Thursday, June 30, 2011

Tips For Mobile Lead Generation

It's no secret -- smartphone adoption won't be slowing down anytime soon. Boston-based research firm IDC pegs domestic smartphone shipments at nearly 100 million for the first quarter. As more consumers find themselves upgrading their handset and joining the current generation of mobile devices, marketers will find themselves with even more opportunities than ever to connect with consumers. The next battle in the war for the hard earned income of consumers won't be fought on television or on the browser -- it will be (and already is, in burgeoning metropolitan areas) waged on mobile devices.

And as advances in mobile technology bring these devices closer to the experience provided by the standard computer, there will be an opportunity for marketers to bring consumers richer advertising experiences.  Through the power of mobile applications or clever use of the mobile web, marketers will have several channels to try and generate solid leads. But before you launch that next campaign, perhaps take the tips below into account.

Interactivity

One of the keys to any mobile campaign is interactivity. Provide your users with an experience that they'll remember. More important, give them an experience that they won't be able to replicate on a web browser or via their TV screens.

One company providing consumers with immersive, interactive experiences is Shazam, known for its song recognition app, which has begun leveraging the application to connect marketers with their audience, offering users deals or other incentives for using the application during certain commercials or even YouTube videos

Don't Be Afraid to Leverage New Technology

This goes hand-in-hand with the example I mentioned above. Marketers may not have initially expected Shazam to be used as a marketing tool, but more companies already seem poised to at least experiment with the app to see what potential benefits will result. It's most certainly a good thing -- we need more marketers willing to take risks for the benefit of the entire industry. 

For instance, QR codes were once looked upon as a quirky marketing stunt that was being utilized by some of the earliest of early adopters. Today, I see them leveraged more frequently in lead-gen campaigns and traditional campaigns than ever. When you see a QR code on advertising in a train car, you know that a marketing technique may very well have arrived.

Concise Messaging

If you choose to launch a campaign exclusively on mobile devices, recognize that you will only have the attention of a user for a short period of time. The key is to deliver your message in a clear and concise fashion that catches the attention of your target user. Otherwise, you'll lose their attention back to their game of "Angry Birds."

Adam Boyden , Thursday, June 30, 2011

Why Now Is The Time To Shift TV Ad Dollars To Online Video

The advertising industry's focus is dramatically shifting. Just a few years ago, ad buyer options were limited to print, mail, radio and TV advertising. Today, few campaigns can be considered even remotely relevant or complete if they don't include online, video, social, mobile and more. This is putting a lot of pressure on both advertisers and publishers to create successful online advertising campaigns and programs with measurable return on investment (ROI) and visibility into exactly where ads appear.  
Online video viewership is reaching new highs each month, presenting a perfect opportunity for media buyers to tap into the massive video audience. New research from Nielsen revealed that during April 2011, Americans streamed 14.7 billion videos, a record for the most streams in a month. In addition, non-premium video site YouTube's usage was at an all-time high in April 2011, with viewers watching 8.7 billion streams, up seven percent from the previous month. Yet most advertisers are still only comfortable buying the 10% of premium online ads that offer comprehensive data about their content.
Media buyers commonly believe that online videos can't be measured with traditional TV metrics such as Target Rating Point (TRP) and Gross Rating Point (GRP). Recently, new technology has emerged that can provide the same rating points and can also accurately determine the content of the video, offering a chance for ad buyers to take early advantage of the 90% of non-premium online video inventory, yet to be claimed.
 
Advertisers are also becoming more rigorous in how they target social or viral online video ads and are beginning to turn to more detailed data than audience impressions for measurement. Viral and social online videos often have a much higher niche audience engagement, with successful videos achieving several million views. This content is non-premium, and is therefore much more affordable to advertisers than expensive premium videos. Social media can also offer more detailed metrics than traditional TV advertising, such as how often an ad was passed along on social networking sites and social engagement including tweets, Facebook "likes" or comments.
 
In summary, ad media buyers have been reluctant to buy ad space for online videos as this content hasn't offered the same level of transparency. As a result, ads could potentially run alongside inappropriate or controversial videos, with potentially devastating results for the brand.
 
Now advertisers can have total clarity about online video content and total control through custom channels that allow them to select the exact online videos where they'd like to advertise. From specific subjects such as extreme sports or wine tasting, to exact channels such as ESPN and TNT, advertisers can now target their ads and engage audiences with the same precision for online video that they have with traditional TV spots.
 
A clear opportunity exists for innovative media buyers to shift ad dollars from TV to online video, and claim these devoted, loyal and highly focused online audiences first.

by Mike Sullivan , Wednesday, June 29, 2011

Location-Based Ads Hit $6B By 2015

Location-based service advertising -- which ties in consumer locations with restaurants, retail shops and other locations through mobile devices -- will grow to over one-third of all mobile advertising in four years.

By 2015, location-based advertising will be $6.2 billion, according to Pyramid Research. In 2010, location-based advertising was $588 million -- 18.5% of all mobile advertising. Location-based advertising will generate 60% of all location-based revenue in four years.
 
"The different components of mobile advertising (including search, display and messaging) are all growing," stated Jan ten Sythoff, analyst at large for Pyramid Research. "However, local search will be the most important driver of location-based advertising revenues."
 
Sythoff added that navigation applications are moving to a search-funded model, while many companies are "looking to capitalize on the growth of local search, including start-ups, (such as Poynt and Yelp), local business advertising specialists (such as Yellow Pages) and vertical aggregators (such as toptable and HotelBooker)."
 
Foursquare is probably the best-known dedicated location-based service with around 10 million users, and handles about 3 million user check-ins daily.
 
Analysts believe the continued growth of smartphones and mobile tablet GPS-based devices -- which allow tracking of consumer movements and locations --- will push more location-based advertising business.
 
North America is the largest region for this advertising growth because of the high penetration of GPS handsets. Japan and South Korea GPS are also high; while European services generally have lower GPS penetration, according to Cambridge, Mass.-based Pyramid.

Sales Tip: Be Human!

Be Human!
 People buy from people, not from institutions. Advertisers often forget this, and are more concerned about their perfect "image" than about relating to their audience as fellow human beings.

It's not a perfect world, and listeners recognize this, so a commercial that tries to portray the advertiser as perfect, doesn't ring true.

Let the audience in on your little faults, the chinks in the armor. For example, the car dealer who says, "We have the best deals, the biggest selection, the friendliest salespeople, but...our coffee's not so good," allows the listener to discover his embarrassing secret. Don't be afraid to joke about your hard-to-find location, the tacky sign you inherited from the former owner, the boss's idiosyncrasies.

A little self-effacing humor can go a long way. Give listeners something to smile about. If a listener can say "Yeah, that's me. I've done that," you've established a bond. Now your audience is involved.

Poke fun at yourself and punch up sales.

QR codes and Microsoft Tags can boost your bottom line - Six Tips to Get Started

QR codes, which are popping up everywhere, can boost your business and reward your customers.

Do you know what a QR code or Microsoft Tag is?

As a small business owner, you may not have heard about them yet, but you will very soon because they are popping up everywhere these days. Major brands like Kraft Foods, Procter & Gamble and Macy’s have embraced them in their marketing campaigns.

QR or Quick Response codes are two-dimensional bar codes, similar to ones you would find on a price tag at the clothing store. Using a scanner or reader available on any smartphone, your potential customers can scan the code and see where it takes them. Major brands use QR codes to take customers to discounts, freebies and special promotions. A Microsoft Tag works just like a QR code, but can only be scanned with a Microsoft Tag Reader.

So how can your business use QR codes and Microsoft Tags to boost its bottom line? To find out, BizBytes enlisted the help of Matthias Galica, founder and CEO of ShareSquare, a platform that allows anyone to create and share QR codes.

“QR codes first appeared in Japan back in the early ’90s,” said Galica. “The goal was to be able to scan a product and pull up all the information about it, such as price. That technology has been used in stores when you need to look up the price of something at the cash register for years. But now it’s moved beyond just something that looks up the price of a product to a useful marketing tool for business.”

Rose Harris, a Realtor at ONE Sotheby’s International Realty in Miami, has been using QR codes to educate clients about the properties she sells. “We use them to drive traffic to our single listing websites,” said Harris. “Our clients love them because they can simply scan the code and find out everything they need to know about a property without having to go to a computer to search for it. It’s right there in the palm of their hand.”

To start adding QR codes and Microsoft Tags to your company’s marketing mix, follow these simple steps:

STEP ONEDetermine whether you’ll use a QR code or a Microsoft Tag to market to customers. Because Microsoft Tags can only be read with a proprietary Microsoft Tag Reader, you may want to use a QR code so that your promotion can be accessed by a larger pool of potential customers. Once you’ve decided whether a QR code or tag is right for you, it is time to focus on creating the promotion that will be linked to it.


“The goal with QR codes is to get people at the point of interest, which is when they see the code,” said Galica. “And turn that into a point of action where you get them to do something and then hopefully, turn that into a point of purchase.”

STEP TWODetermine your customer call to action. What do you want your customers to do when they scan the QR code or tag? Do you want them to sign-up for something? Do you want them to like your company’s Facebook page and then receive a 20 percent discount on your products because they did it? Determining your customer call to action is crucial to the success of your campaign.


“There are so many uses for QR codes in marketing,” Galica said. “What you’re basically doing is taking a real-world experience such as seeing a QR code on a flyer and connecting it to a worthwhile online experience that hopefully will translate into increased sales or awareness for your company.”

STEP THREEDetermine what kind of promotion customers will receive when they scan the code or tag. What are you going to offer the person who scans your QR code or tag? Are you offering a 30 percent discount on your products exclusively to those who scan the code or tag?


“You never want your customer to feel like they went to the trouble of scanning your QR code and they got nothing in return,” said Galica.

STEP FOURDetermine where your customers will see the code or tag. Where are you going to place the QR code or tag? Will customers see it in your storefront, on your brochures, on a billboard or in your direct mailers?

“Marketers and business owners have gotten quite novel in their use of QR codes,” Galica said. “The only limit to their use is really your own imagination.”

STEP FIVEDetermine how you will deliver the code or tag to current and potential customers.


“Don’t wait for your customers to find the QR code,” Galica said. “Tell them about it. Send an announcement via email, tweet it or put it on your Facebook page.”

STEP SIX
Create a custom QR code or Microsoft Tag for your promotion. Now that you know what your promotion is about and how it will be delivered to your customer base, it is time to actually create the QR code or tag that you’ll be using. You have several options for creating free QR codes that are available online including BeQRious, ShareSquare and Bitly.

“It’s important when using QR codes to make sure the person who scans it has a good experience,” said Galica. “The code should lead them to something that’s going to make their lives better, calls them to action or rewards them.”

Tasha Cunningham-Miami Herald 05/30/11

Billion-Dollar Boys' Club

Restaurants That Woo Men with Attractive Waitresses, Big Beer Selections & Giant TVs are Winning Loyal Customers -- and Raking in Revenues

Franchises inspired by the Hooters model -- such as Celtic-themed sports bar chain Tilted Kilt Pub & Eatery and faux mountain sports lodge chain Twin Peaks -- have expanded rapidly over the last half decade, while corporate-owned chains like Brick House Tavern + Tap and Bone Daddy's House of Smoke are picking up steam regionally.

In fact, for the next couple of years, this segment (often referred to as "breastaurants") is poised to be one of the fastest-growing restaurant categories.

Sales figures for this specific niche aren't available, because they are lumped in with the broader casual dining segment -- and numbers for the privately held companies aren't publicly reported -- but sales at Hooters alone have increased in the last couple of years and average $1 billion annually.

The concept has grown in spite of the recession by focusing equally on upscale comfort food, full bars with extended beer choices, a full menu of sports on TV, and waitresses in tight shirts and short shorts. But the most important aspect of these restaurants is the same element that powers most successful eateries: customer service.

Why is this segment so popular? "It starts with comfort," says Darren Tristano, executive vice president of Technomic, a food-industry consulting firm in Chicago. "These concepts are growing by offering a different level of service and attentiveness. "They provide a service to men who may not have a person at home to take care of them in the same way. That's important to a number of people, and it drives them back."

It's hard to say exactly why these public man caves took hold in the last few years. Some think a shift away from political correctness or toward a more sexualized culture made the concepts more acceptable. Others believe that as Hooters sales flattened and expansion stalled, like-minded entrepreneurs saw a niche that wasn't being filled.

Ron Lynch, CEO of Tempe, Ariz.-based Tilted Kilt, thinks his concept has been well-received because customers were ready for something new.

"Friday's, Chili's -- those kinds of concepts came to be very similar in menu and look because they were chasing the same dollars," Lynch says. "When we sprang up, people were looking for something different."

That's what attracted Lynch to Tilted Kilt in the first place. In 2003, Harrah's in Las Vegas asked restaurateur Mark DiMartino if he had a concept for a space in the Rio Casino. He came up with the Hooters-goes-to-Scotland concept that is still the restaurant's theme. When Lynch -- an area developer for Schlotsky's Deli -- saw the place in 2005, he was hooked, and approached DiMartino about buying the franchise rights. By 2006, there were three Tilted Kilt franchises in the system. The concept has doubled each year. Lynch estimates Tilted Kilt will have 80 units open by the end of 2011, with another 70 deals for new spots in the pipeline.

There's a lot more going on at the Kilt than just men watching women, Lynch says, pointing out that one of the company's key offerings is "sports-viewing excellence," which translates to 50-inch plasma TVs throughout the restaurant, a full bar with a minimum of 24 beers on tap and a menu that ranges from inexpensive snacks to $19 steaks.

But he acknowledges that the cornerstone of the restaurant is the Tilted Kilt waitress. "We make no bones about it -- that's what brings people in," he says. "We sell on sex appeal, but we are sexy classy, sexy smart or sexy cute. Not sexy stupid or sexy trashy."

Randy DeWitt had the same idea back in 2004. After growing his Rockfish Seafood Grill franchise too quickly in the Dallas area, he was faced with having to shut down stores. But instead of writing the locations off, he drilled down into the data and realized that while casual dining was tapering off, Hooters and similar concepts were doing well.

That's when he came up with Twin Peaks, a franchise based on a mountain lodge theme, where the girls wear plaid tops, suspenders and hiking boots.

"I knew guys like me would like a man cave where the waitresses are pretty and friendly, and we thought we could create a concept sufficiently differentiated from Hooters," DeWitt says. "I thought Hooters had taken the low-brow route, and we're taking the high road. We have higher-quality food, and the uniforms on our girls are more finished. Hooters is more blue collar. We do well where Hooters isn't accepted."

DeWitt's experiment worked, and he soon began converting more of his seafood restaurants into mountain lodges. Now Twin Peaks has 14 locations, with two under construction and five more in development.

What makes the restaurant stand out, besides the waitresses, DeWitt says, is its commitment to quality. All mugs are frozen, and a special draught system ensures that every beer pours at 29 degrees. They have a full line of top-shelf whiskey, and their skilled bartenders know their booze. The food is all fresh -- even fryer items like mozzarella sticks, which are hand-cut, breaded and cooked to order.

But as restaurant consultant Tristano indicates, the true differentiating factor of the modern "breastaurant" is service. Most customers aren't satisfied with brusque service -- they want a conscientious server and a meaningful connection.

"Everybody else is rushing toward technology with kiosks that you order off of and servers who slip food to you around the corner. We're going the other way," Lynch says. "One of our mantras during training is that we want to make a connection with our guests. We practice 'touchology,' which means touch the table often, and make guests feel at home. Sometimes waitresses are providing the best part of a guest's day."

Twin Peaks' DeWitt agrees that fostering connections is the key to a restaurant's success, especially when it breeds repeat customers. In fact, some waitresses become mini-entrepreneurs on their own, using Facebook or Twitter to let regulars know what shifts they'll be working or what specials the restaurant is offering.

"When we see regulars walk in the door for lunch, the hostesses and waitstaff greet the guy by name," DeWitt says. Regular customers often ask for certain employees to wait on them, he says, and waitresses are instructed in how to connect with guests.

"We have a certain language and we train that among our waitstaff," DeWitt says. "If you ask for a beer, the waitress will ask 'Do you want the man size or the girl size?'"

Tristano confirms that the servers drive the concepts. "The increased service is absolutely the core, not the food," he says. "I suspect a lot of this segment's success has to do with server training and hiring the right people."

Though this segment of the market is definitely heating up, none of the concepts thinks they are in danger of saturation, especially since their numbers are fairly small and they're not targeting the same geographical areas. Instead, they worry about competition from sports-oriented concepts like Buffalo Wild Wings. In fact, DeWitt says today's market is similar to the one from which Hooters emerged in 1983.

"It seems like Hooters had the whole segment to itself back then, but if you do the research, they had a raft of competitors that popped up -- often with really crass names like Mugs 'N Jugs -- before Hooters emerged as a clear national leader," he says.

DeWitt is wagering that most of his competitors in the male-bastion market will try to grow too fast and flame out at the regional level.

"Every concept wants to grow and be nationwide, but you have to lay in the infrastructure for growth before going into build-out," he says. "You have to bring in highly talented operators that can manage rapid growth. We're not trying to grow faster than we're capable."

The concept is still evolving. Brick House Tavern + Tap -- owned by Ignite Restaurant Group, the company behind Joe's Crab Shack -- touts itself as the ultimate man cave, with more than 70 beers, alcoves filled with theater-style seats outfitted with trays where customers can watch the game with friends, and special 100-ounce beer bongs with their own taps. So far, the concept has opened in seven states.

As innovative as they might be, can these concepts survive if they cater only to half the population (and the one that doesn't always choose where to dine)?

"I think these concepts have to target women to be successful," Tristano says. "One third of their customer base is female, and they have to make an effort to make women feel comfortable."

Lynch thinks Tilted Kilt, at least, is succeeding with the female demographic. "I characterize ourselves as very PG-13," he says. "When a guy empties his pockets on the dresser and his wife sees a Tilted Kilt receipt, it's going to be fine. I was surprised when franchisees started asking for high chairs. We are no threat to women, and we train our servers to make a connection with women at the table first."

Although the women may be on board, there's no question that these concepts cater first and foremost to manly appetites.

"Why do regular customers come in three times or more a month?" DeWitt asks. "What more could a guy ask for: great food, sports, beer and a cute girl to look at. We don't go real deep."

(Source: Entrepreneur, 05/24/11)

Display on Trajectory to Surpass Search Ad Spending

Increasing focus on branding

Search advertising still takes the greatest share of online ad dollars by far, but display spending is posting solid gains. The steep growth in online video ad spending, combined with solid increases for banners, will help display ads eventually top search spending.

Total online display ad spending, including online video, banner ads, rich media and sponsorships, has already brought the category in close range of search. This year, US advertisers will spend $14.38 billion on search ads and $12.33 billion on online display, up 19.8% and 24.5%, respectively, over 2010.
Display will continue to grow at a faster pace than search throughout eMarketer’s forecast period, and is on track to surpass search by 2015.

“The rebalancing of ad budgets across the board, among companies both large and small, national and local, will be pushing more brand-oriented dollars on to the web,” said David Hallerman, principal analyst at eMarketer.

eMarketer benchmarks its US online ad spending projections against data from the Interactive Advertising Bureau and PricewaterhouseCoopers, for which the last full year measured was 2010.

The rise of display advertising, in particular online video, goes hand in hand with a rise in usage of digital advertising for branding. Online advertising, long considered primarily for direct response, still leans in that direction. But branding is increasing in importance as better ad vehicles develop for this purpose and market dollars flow.

This year, eMarketer projects 39.4% of online ad dollars will be devoted to branding by way of banner ads, rich media, sponsorships and video. All other ad formats, including classifieds, embedded email ads, lead generation and paid search, are typically classified as direct response.

Spending on branding-oriented online ads will grow more quickly than direct-response spending throughout the forecast period, and by 2015, 44.4% of online advertising spending will be devoted to branding.

”While the traditional breakdown between branding and direct response is still useful, digital marketing also tends to blend the two,” said Hallerman. “For instance, search ads increasingly drive traffic to brand websites, where further engagement takes place. Or small banner ads on Facebook convert when users click on them.”


eMarketer - June 9, 2011

Using Online Tools to Cultivate In-Store Customers

How Scotts Miracle-Gro Uses Online Tools to Cultivate In-Store Customers

Customers who buy Scotts Miracle-Grow products cannot click and order online. They have to go to stores to pick up the company's fertilizers, weed inhibitors, plant foods, and other products. So why has Scotts invested so heavily in a state-of-the-art website, an e-newsletter, and even smart phone applications that deliver advice about lawn and garden care?

The answer is that Scotts is using digital outreach to bring customers into stores as part of its business development strategy. Let's see how these strategies can work for you:

• Scotts ties its marketing to seasons. Through its digital communication points, Scotts delivers advice and information about garden and lawn care. Yard care is seasonal -- each time of year affords an opportunity to advise customers to use different products.
  What you can do: Decode usage cycles for your products and services. Whether you're an accountant, or own a construction company, spa, or painting company, your customers' needs vary according to the time of year -- and you can deliver information timed to those cycles.
• Scotts uses its e-newsletter to bring customers to a full-featured informational website. This is the second part of the Scotts digital strategy -- a terrific landing page that is jam-packed with blogs, articles, videos, and a rich array of tools like a bird identifier, a grass type identifier, and problem-solvers for pests and weeds. So even though customers can't order products, this full-featured website really pulls them in, showcases products, and builds loyalty.
  What you can do: Whether you own a car detailing company, tree service, gourmet food store, or karate dojo, you can provide your expert advice online as a way to capture customer interest and build loyalty for your brand.
• Scotts is rolling out new services that flow logically from what it already does. On the Scotts website, you'll notice that the company now offers a lawn service through which certified technicians apply Scotts products to customers' lawns and provide other yard-care services. That's a logical extension built on the trust that the company has established through its products and marketing outreach.
  What you can do: If you analyze how you're meeting your customers' current needs, chances are you can develop new products and services that build on that platform and that will offer a new entry point to speak with customers about something new.

(Source: Ken Beaulieu, Getting New Customers, 04/01/11)

Online Coupons Reach Nearly Half of Web Users

88.2 Million U.S. Adults Will Redeem an Online Coupon This Year

A digital revolution in couponing coupled with the belt-tightening of the recession have combined to make coupons cool among more than just those clipping the Sunday circular. Digital coupon usage is now firmly a part of the online shopping experience of millions of US consumers.

eMarketer estimates that by the end of 2011, nearly half of US adult Internet users, or 88.2 million people, will have redeemed an online coupon or code for use either online or offline in the past year. By 2013, 96.8 million adults will redeem an online coupon.

"Consumer brands are accustomed to promoting their products in stores and in newspaper inserts," said Jeffrey Grau, eMarketer principal analyst and author of a forthcoming report on online couponing. "But as more shoppers make purchase decisions online before taking a shopping trip, brands are following them onto the Internet."

The growth rate for online coupon users is expected to gradually decline through 2013, as most online consumers predisposed to using digital coupons already do so.

Already, household usage of digital coupons has nearly doubled since 2005. Experian Simmons reported that 12% of households redeemed coupons from email or the web that year; it expects that figure to reach 22% in 2011.

"Today's online coupon users tend to be affluent, highly educated and over the age of 55," said Grau. "This is valuable input for marketers shaping the different elements of a promotional campaign, such as what products to promote with coupons, where to place the offers and what marketing messages to use."

(Source: eMarketer, 06/01/11)

The New Media Mix

Things are changing in the high-tech world of "New Media," and there's a good reason why. Pepsi lost its #2 ranking in the cola wars last year. Many are blaming its reliance on "New Media" for "likes," warm fuzzy feelings and "the buzz" created around the Refresh Project.

John Sicher, the editor/publisher of Beverage Digest, was quoted as saying that in addition to Refresh, the company needs "more product-oriented advertising and marketing. I think that the 2010 results are probably a wake-up call for Pepsi."

During the initial rush to Social Media, we all had clients telling us they were cutting their budgets and focusing on the new "free media." Some went so far as to tell us they would never need to buy Radio ads again because Facebook could do it all for their stores.

What's happening now? Listen to what former GM Social Media Chief Christopher Barger said about the need for Traditional Media, along with Social Media, in his interview with Ad Age: "Social is a tool in the arsenal, an arrow in the quiver. It's not a panacea and not a replacement for anything. I don't believe that traditional media is less important because of the emergence of social. I think social can enhance what happens on the traditional side, but the thing to remember is, increasingly, it's all blending."

Amazing as it sounds, even major companies continue to throw money at the Social Media altar! All but one of 24 marketers surveyed in a new report from the World Federation of Advertisers and WPP research firm Millward Brown are committed to increasing the time and money they spend on social media in the next 12 months, even if they don't think they can accurately measure the results.

Years ago, people were busily preaching a "media mix" that allocated dollars to Newspaper, TV and Radio for "an integrated ad campaign." Newspaper is near death and local TV is getting fragmented to smithereens. Radio continues to be the growing, thriving local advertising medium that reaches mass audiences day in and day out.

That's why it's time for local advertisers to embrace what I like to call "The New Media Mix" -- Local Radio PLUS Social Media. Radio's great strength is building Awareness in the target audience and that leads to Interest. The next step is Desire and at the point of purchase there's a real and profitable Action -- A.I.D.A.

Our clients need us to help them get back to a healthy mix of successful advertising -- Radio advertising and all the help we can give them in their Social Media efforts. That's "The New Media Mix!"

(Source: Charlie Ferguson, General Manager, WKLT)

How Small Businesses Are Using Mobile

Small and medium-sized businesses rely heavily on mobile technologies. In fact, our smartphones and other mobile devices have become so critical to day-to-day operations that a majority of small companies around the U.S. say they couldn’t run their companies without mobile technologies.

These businesses are using mobile apps like Square and Foursquare for a wide range of specific tasks, from processing payments to conducting marketing campaigns.

In more general terms, SMBs say that using mobile technologies helps them gain a competitive advantage, increase productivity and efficiency, and allow their employees to work remotely — something that might lead to 50% of the SMB workforce working from home or remotely by next year.

In addition to using mobile apps, many SMBs are making their own. Mashable has a ton of resources for businesses wanting to make apps. Check out our how-to for building mobile apps of your own as well as our mobile development tips for SMBs.

Editor's note...Congrats Dallas/Fort Worth for being 4th best market for small businesses using mobile!

Black, White and Red All Over: Newspaper Ads Dive

Black, White and Red  DEAD All Over: Newspaper Ads Dive DIE

The first quarter of 2011 brought no relief for the newspaper industry, which suffered another round of declines in print advertising revenues.

The first-quarter results from the Newspaper Association of America stand out against a general recovery in ad spending for other media, and suggest that newspaper print ad revenues are locked into a permanent, long-term decline.

Total print advertising revenues fell 9.5% from $5.25 billion in the first quarter of 2010 to $4.75 billion in the first quarter of 2011, according to the NAA -- the lowest first-quarter revenue figure since 1983.

Those stats are down 55% from 2006, when total first-quarter print revenues came to $10.5 billion. This marks the 20th straight quarter of year-over-year print revenue declines.

As in previous quarters, the losses were spread across all of the main advertising categories. National advertising fell 11% from $1.04 billion to $924 million; retail fell 9.5% from $2.95 billion to $2.67 billion; and classifieds fell 8.15% from $1.25 billion to $1.15 billion.

Within the classifieds category, automotive slipped 4.7% to $266.5 million and real estate tumbled 19.3% to $197.7 million. Only recruitment increased, ticking up 4.3% to $165.7 million. All other types of classifieds fell 8.5% to $520.8 million.

(Source: Media Daily News, 06/01/11)

Fiat takes majority control of Chrysler

Italian automaker to pay $500 million for U.S. Treasury stake

TURIN, Italy -- Fiat S.p.A. will pay $500 million for the U.S. government's 6 percent stake in Chrysler Group. With the move, Fiat boosts its Chrysler stake to a controlling 52 percent from 46 percent.

Fiat-Chrysler CEO Sergio Marchionne said the agreement marked the complete exit of the U.S. Treasury as a Chrysler Group shareholder.

The proceeds of the deal also include the sale of the U.S. government's call option on the UAW's retiree health care trust, the Treasury said.

The Treasury's announcement of the deal late Thursday came on the eve of President Barack Obama's scheduled visit today to a Chrysler plant in Toledo, Ohio, where he is expected to tout the success of the auto bailout that saved American jobs and historic auto nameplates like Chrysler.


The Obama administration invested $12.5 billion in Chrysler under the Troubled Asset Relief Program in 2009 as part of an auto industry bailout that eventually brought both Chrysler and General Motors Corp. through bankruptcy court.

After the transaction with Fiat, the Treasury will have received some $11.2 billion back in principal repayments, interest and canceled commitments from Chrysler. The "Treasury is unlikely to fully recover the difference of $1.3 billion," it said in a statement.

'Improbable turnaround'
Treasury Secretary Timothy Geithner said the administration bailout had enabled automakers to mount "one of the most improbable turnarounds in recent history" that is now creating jobs as domestic automakers gain market share.

Fiat agreed to pay the Treasury $500 million for the Treasury's 98,461 shares of Chrysler. The Treasury also had an option to buy shares held by the UAW retiree trust and Fiat agreed to buy that for $75 million -- with the Treasury to get $60 million and the government of Canada $15 million.

Since the 2007-2009 financial crisis ended, the Treasury has been making every effort to sell off interests it acquired in industry as part of the rescue effort during those troubled years.

Before Thursday's announcement, Fiat held a 46 percent interest in Chrysler. That will rise to 52 percent when the transaction is completed and thus give the Italian automaker majority control, which was one of Marchionne's overarching goals for 2011.

Fiat has made swift work toward that goal in the past six months after meeting certain performance targets and repaying its $7.6 billion in loans owed to the United States and Canada last week.

Chrysler filed for bankruptcy protection in 2009 after the credit crunch and recession pummeled auto sales. June 10 will mark the two-year anniversary of Chrysler's emergence from bankruptcy under the management of Fiat.

Target of 6.6M sales
As the two companies deepen their financial ties, they are also drawing closer together operationally. Earlier this year, Marchionne left open the possibility of a full merger of the two companies with a single headquarters.

Marchionne's revival strategy for both automakers hinges on boosting combined sales to 6.6 million vehicles by 2014, an ambitious goal considering that Fiat and Chrysler together sold just over 3.6 million vehicles globally last year.

An initial public offering for Chrysler is also losing appeal, as Marchionne said this week the timing and possibility of an IPO would depend on the level of interest of the healthcare trust affiliated with the UAW.
"I don't think there's a 100 percent guarantee of the fact that there is an IPO," Marchionne said this week at an event in Windsor, Ontario, just across the border from Detroit. But he added an IPO would be the "easiest way" to create value.

Max Warburton, senior analyst at Bernstein Research in London, said: "The previous assumption was that Chrysler would make an IPO, but this now looks unlikely and a full takeover by Fiat Auto seems more probable."



He noted that Fiat is moving far faster and more decisively than expected to increase its interest in Chrysler. The part of the deal for Fiat to take over the U.S. government's rights to buy UAW shares means Fiat "is effectively in a position to buy the whole company," Warburton said.

Fuel efficiency target
Fiat is expected to receive another 5 percent stake in Chrysler by year-end when it homologates a new Dodge model capable of 40mpg on the highway, boosting its stake to 57 percent.

Launching this fuel-efficient model is the third performance target imposed on Fiat by the U.S. Treasury.
The first was to build a fuel-efficient engine in the U.S. This was reached in January when production of the Fiat 1.4-liter MultiAir engine began in the Dundee plant, Michigan. The second target was to export from North America $1.5 billion of Chrysler vehicles and open up Fiat's dealer network in Europe and Latin America to Chrysler products. This target was reached in April.

Every performance target was worth a 5 percent further stake of Chrysler on top of the 20 percent the Italian automaker received in June 2009 when the new Chrysler Group was created after bankruptcy of the old Chrysler.

The United Auto Workers' Voluntary Employee Beneficiary Association (VEBA) holds 41.5 percent of Chrysler and the Canadian government the remaining 1.5 percent.

Luca Ciferri Automotive News -- June 3, 2011

 

Record Number of Americans Rely on Food Stamps

By the way...look at the image to the right and see why I'm personally anti food stamp! CM

Congress is under pressure to cut the rapidly rising costs of the federal government's food stamps program at a time when a record number of Americans are relying on it, says ABC News.

• On May 31, the House Appropriations Committee reviewed the fiscal year 2012 appropriations bill for the Department of Agriculture (USDA) that includes $71 billion for the agency's "Supplemental Nutrition Assistance Program" (SNAP).
• That's $2 billion less than what President Obama requested but a 9 percent increase from 2011, which, critics say, is too large given the sizeable budget deficit.
• A record number of Americans -- about 14 percent -- now rely on the federal government's food stamps program.
• More than 44.5 million Americans received SNAP benefits in March, an 11 percent increase from one year ago and nearly 61 percent higher than the same time four years ago.
• Nearly 21 million households are reliant on food stamps.

Opponents of the program argue that money from the food stamps budget -- with what they call its increasingly lax requirements -- needs to be shifted to other programs such as education and child nutrition. The program's supporters argue that at a time of economic decline, such welfare programs are even more important to try to keep Americans from spiraling into poverty.

• The cost of the food stamps program has increased rapidly since it was established by Congress in 1964.
• It cost taxpayers more than $68 billion last year, double the amount in 2007.
• Nutrition assistance now accounts for more than half -- or about 67 percent -- of the USDA's budget, compared with 26 percent in 1980.
• That shift in focus, critics say, is ineffective because it hasn't put a dent in poverty or hunger in the United States while taking away money from other programs, specifically agricultural programs that should be the main focus of the agency.

Source: "Congress Mulls Cuts to Food Stamps Program amid Record Number of Recipients," ABC News, May 31, 2011.

Phone-Book Delivery Disappearing

Phone books, long a staple of U.S. life, are fading quickly as lawmakers and phone companies see green benefits in limiting their delivery.

Most targeted are the residential white pages that list home numbers.  An increasing number of states are approving requests by phone companies, which want to stop delivering these unprofitable, generally ad-free books unless requested by land-line customers.

The result:   Many customers in half of U.S. states will soon no longer hear that multipound thud at their doorstep.

• Verizon has received the OK to cease automatic delivery from 11 of 12 states where it has land-line customers and expects permission from California and the District of Columbia by the end of September.
• AT&T expects, by the end of this year, to stop unsolicited delivery in 14 other states where it does land-line business.

The ad-packed Yellow Pages that list businesses are also a target.  To reduce paper waste and recycling costs, two U.S. cities recently passed ordinances restricting the delivery of Yellow Pages and at least five states are considering the same.

The lucrative Yellow Pages industry sued Seattle after it passed an ordinance in November allowing customers to opt-out of delivery.  It plans to sue San Francisco, which approved a law last month banning delivery unless residents ask for the books, according to Neg Norton, president of the Local Search Association, formerly known as the Yellow Pages Association.

"Directories are a form of free speech," Norton says.  A federal judge denied its request for a preliminary injunction in Seattle but the industry has appealed.

Norton says the laws are also unnecessary.  His group has set up yellowpagesoptout.com -- akin to the "do not call" registry -- that allows customers nationwide to stop delivery.  He says few people use the residential white pages, but 75 percent use the Yellow Pages.

Source:  Wendy Koch, "Phone-book delivery disappearing," USA Today, June 2, 2011.

Sales Tip: Creating a Value Proposition

To develop a winning value proposition, first think about why customers buy. These reasons typically fall into three buckets --we call these the three legs of the value proposition stool:

1. Resonate: Resonance is all about cutting through the never-ending chatter of the marketplace and speaking to prospect needs and wants. A buyer must quickly understand how to fit you into the "how can they help me" bucket or they move on. You have but one chance to capture someone's attention, so avoid describing what you do or the tasks you perform. To resonate, make it all about them, and speak to the needs of the marketplace. Be straightforward, clear, and concise. It's not time to get cute with clever language as you want to be quickly understood.

2. Differentiate: You want buyers to see you as the best possible option in your space. Your area of distinction may be many things: your products and services, customer experiences, operations, point of view, or even the way you are structured. As you work to distinguish yourself, be sure to position yourself as the best possible resource for solving the prospect's need. This may lead to different areas of distinction for different prospects, so don't think in terms of just one differentiator. Think of the prospect first and how what you do and how you do it benefits them.

3. Substantiate: You made the claim; now it's time to show your cards and prove you're not bluffing. Prospects are inherently skeptical, so walk them through a case study, show them research you've published, schedule a demonstration, or discuss likely results based on work you've done with similar customers. Proof mitigates risk and erases skepticism, two major obstacles in any sale.

Charging for Public Schools

Yet one more reason to consider private school vouchers!  CM

Public schools across the country, struggling with cuts in state funding, rising personnel costs and lower tax revenues, are shifting costs to students and their parents by imposing or boosting fees for everything from enrolling in honors English to riding the bus, says the Wall Street Journal.

Though public schools have long charged for extras such as driver's education and field trips, many are now asking parents to pay for supplies needed to take core classes -- from biology-lab safety goggles to algebra workbooks to the printer ink used to run off grammar exercises in language arts.  In some schools, each class comes with a price tag, to be paid at registration.  Some schools offer installment plans for payment.  Others accept credit cards -- for a processing fee.

The proliferation of fees comes at a time when the cost of public education has been soaring.

• After adjusting for inflation, average spending per pupil has increased 44 percent over the past two decades, according to the U.S. Department of Education.
• Personnel costs -- which amount to about 80 percent of expenses in many school districts -- have driven some of the increase, along with increased costs for utilities and technology.
• The average salary for a public-school teacher nationally has jumped 26 percent since 2001, though that growth didn't quite keep pace with inflation.
• Large additional cuts are on the table this fiscal year in many states, among them California, Texas, Florida and Colorado.

At the same time, school revenue has plunged, mostly due to cutbacks in state funding.  Squeezed by lower tax revenue and higher expenses for programs such as Medicaid, states have cut education funding by a collective $17 billion in the past two fiscal years, though some of that was backfilled by the federal stimulus, says the Journal.

Source: Stephanie Simon, "Public Schools Charge Kids for Basics, Frills," Wall Street Journal, May 25, 2011.