Chasing The Elusive Consumer Using Out-of-Home Media

As options for consuming news and entertainment have expanded beyond traditional mediums (i.e., TV, radio, newspaper, and magazines)and into new media such as the Internet, podcasts, mobile devices, and others, advertisers find consumers more difficult to reach. The days of reaching a majority of America on one of the major TV networks is a fond memory. With audiences so fragmented, the challenge is to leave no stone unturned in finding mediums to deliver ad messages.

This challenge has led to the growth of new forms of out-of-home media. Out-of-home is a broad class of media that was once primarily billboards and transit advertising. Today, the category has grown to other high-traffic areas where marketers can reach their target audience. Malls, arenas, and even schools are targets of this form of advertising.

An advantage of out-of-home media is that advertisers often face less competition for the audience’s attention than when using traditional media. It is an effective way to break through advertising clutter. However, a fine line exists between getting attention and being intrusive. Out-of-home media can be used to create brand awareness or keep familiar brands on the minds of consumers. This benefit must be balanced against the possibility of alienating people who might be put off by being subjected to ad messages in what have usually been “marketing free” zones such as movie theaters or public restrooms.

Link: The New York Times – “You Are Here (and Probably Seeing an Ad)”

Olympics a Tipping Point in Mobile Media Usage?

The popularity and lower prices of Apple’s iPhone and other smartphones appeared to set the stage for a dramatic increase in consumption of mobile media. As more people had wireless devices with technology capable of accessing the Internet, expectations were that they would be using their smartphones for many of the same purposes they use desktops and laptops. Widespread use of mobile devices as a medium for receiving information and entertainment has yet to occur, but the 2008 Olympics may provide a tipping point for people to shift more of their media consumption to their mobile devices.

Early returns from NBC on the use of cell phones to access content shows how the Olympics is shaping the behavior of many consumers. NBC reports that just under 500,000 people per day attempted to access Olympics content via their cell phones on August 17 and August 18. While that number is very unimpressive compared to the massive television audience the Games draw, the number of people who are using cell phones to access content is noteworthy. NBC says that 50% of the the people requesting content over a mobile device are first-timers (including yours truly).

The ability to retreive results and news from the Olympics on-the-go and on demand will demonstrate to new mobile media consumers the benefits of always being connected. As we become more adept at using our wireless devices in the same way we use other media, a natural extension will be to utilize as a tool in consumption decisions. Whether it be to locate directions to a restaurant, read reviews about it, obtain coupons, or chat with others, wireless devices are becoming a more important communication channel for consumers. Now, marketers must figure out how to meet customers where they are yet again and avoid missteps that many companies made in the early days of the Web, email marketing, and social networking.

Link: The Washington Post – “NBC Sees New Media Habits Form with Olympic Games”

Tough Times Mean Big Business for Web Coupons

The benefits of coupons are enjoyed by marketers and consumers alike. Manufacturers and retailers are inclined to offer coupons because they provide an immediate call to action for consumers. Moreover, the ability to measure the effectiveness of a coupon offer creates accountability for marketing expenditures that is often lacking in mass media advertising. Also, it is a way to encourage trial of a new product by reducing the cost of making a first-time purchase. Consumers benefit from the reduced price contained in a coupon offer. Another benefit of coupons for consumers is that they provide much needed relief during a time when costs for many purchases are rising.

These factors are among the influences in the greater use of coupons delivered via the Internet. A recent survey commissioned by Coupons, Inc. found that among people who use printable coupons delivered online, the Internet was the number one source of coupons. For this audience, a larger percentage of them use web coupons than coupons delivered through newspapers.

While the Sunday newspaper still newspaper is still the number one source of coupons among all consumers, the Internet is growing in importance. This trend will likely continue going forward if consumers utilize search engines more frequently to search for coupons. It will be in marketers’ best interests to step up their coupon offerings delivered online as price-conscious consumers look to save money any way they can. This prescription applies not only to consumer packaged goods giants and national restaurant chains, but it has just as much relevant to businesses with a single geographic market, too.

Link: eMarketer Daily – “Economy Gives Web Coupons a Boost”

Ambush Marketing in Full Swing in Beijing

Despite proclamations that ambush marketing would be monitored closely, the Beijing Olympics may become another heavily ambushed top-tier sporting event. Ambush marketing is a tactic used by companies to associate their brands with an event or property to create the perception of an “official” relationship. Ambushing is a thorn in the sides of legitimate sponsors that pay rights fees for the “official sponsor” designation. The ambusher enjoys the marketing benefits without paying the price to be an official sponsor.

In the case of the Beijing Games, official sponsors such as Adidas, Budweiser, and China Mobile have been upstaged by competitors that either created a presence in Beijing away from the event venues or partnered with teams or athletes. While the Beijing Organizing Committee of the 2008 Olympic Games (BOCOG) has issued anti-ambushing rhetoric in the months leading up to the games, it appears that policing ambushers will not be a high priority over the next two weeks. It appears that the International Olympic Committee will need to be more proactive in calling on BOCOG to protect the investments official sponsors have made in the Beijing Olympics and beyond.

Some sponsors have spent an estimated $70-80 million on rights fees alone, plus millions more on advertising and other forms of communication about their Olympic involvement. If the IOC wants its sponsorships to retain the current level of value, steps must be taken to protect sponsors’ significant investments. Ambush marketing on any level is distasteful and unethical; when it involves tens of millions of dollars it can be financially devastating, too.

Link: AdAge.com –“Let the Ambush Games Begin”

Online Retailers the Exception for Bleak Holiday Shopping Season?

A follow up to a post about the challenges facing retailers in the coming months. Traditional brick-and-mortar retailers may have more to worry about than consumers with less money to spend. It appears that more consumers are going to spend their money online, which would come at the expense of traditional retailers. Shopping online is a viable alternative to spending money on gas to drive to stores. If I can save gas money AND avoid the crowds in December, I am all for that! However, if predictions about retail sales this holiday season come to fruition, there may be smaller crowds at the mall!

Link: DM News – “Happy Holidays Forecast for E-Commerce”

Retailers Challenged to Get Shoppers into Stores

The impact of rising prices for gas, food, and many other products is being felt by many different industries. Perhaps one of the hardest hit is the retail industry. Weakened consumer buying power is a direct hit to the business of stores that count on us to buy clothes, electronics, home products, and much more. Retail sales for stores open at least one year rose 2.6% in July, the lowest gain in four months, according to the International Council of Shopping Centers. The sales trend could be hurt further as business created by economic stimulus checks begins to wane.

The unimpressive sales results from the back-to-school selling season do not bode well for the 2008 Christmas season. Retailers will most likely win customers over with a steady diet of sales as well as special promotions to spur store traffic. Low-price retailers like Wal-Mart and Costco are positioned to weather a tough shopping season, but other retailers will be forced to get creative to convince consumers to let go of their money. This year, it will not be enough to have the right products at the right time. The right price will be as important, if not more important to consumers this holiday season.

Link: Blomberg.com – “U.S. July Retail Sales Slow, Hurting Back-to-School”

NFL Extends Behavior Expectations to Fans

Under the leadership of Commissioner Roger Goodell, the NFL has been proactive in establishing guidelines for players’ conduct off the field. Now, the league is setting standards of behavior for fans attending their games. The “Fan Code of Conduct” sets expectations of fan behavior in parking lots before games as well as during games. Among the behaviors deemed unacceptable are visibile intoxication, abusive language, offensive gestures, and interfering with the game by throwing objects on the field. Fans violating the Code of Conduct are subject to ejection from the stadium and revocation of ticket privelges for future games.

It is unfortunate that the NFL had to go to the lengths of drafting a Code of Common Sense… I mean Conduct. Unruly fans in tailgating areas outside stadiums and in the stands detracts from the enjoyment and experience of other fans. Personally, I have little interest in attending an NFL game because I have been to enough games and encountered idiots who thought buying a ticket gave them license to go out of control. The cost of attending games is too high to allow a small minority of patrons to create negative experiences for others.

The NFL has taken many steps to protect its brand reputation by ratcheting up the personal conduct expectations of players. But, those efforts would be negated somewhat if the fan stakeholder group was ignored. People attending NFL games this season should take comfort in the fact that if inappropriate conduct or behavior takes place, there is recourse to involve security and address the problems. Thanks, NFL!

Link – USA Today: “NFL Unveils New Code of Conduct for its Fans”

Today’s Special: $7 Naps on Jet Blue

Jet Blue Airways has found another way to attempt to offset the rising costs of doing business these days: charge passengers for pillows and blankets. Disposable pillows are being replaced by a pillow and blanket package that will cost passengers $7. The change is cited in part as an environmentally driven decision, with paper pillowcases no longer destined for the trash.

When will the reach into passengers’ pockets end? Consumers are being hammered with higher fuel prices, rising grocery costs, and greater expenses in many other categories. There is nothing wrong with a business covering its costs through the price charged for products, but the airline industry has chosen to charge for a wide variety of different services and amenities offered. The perception of price could be positively impacted if an all inclusive fare was charged that covered baggage, pillows, and any other “extra” that airlines now feel obliged to charge as an รก la carte item.

What’s next? Here are some possibilities… although let’s hope not:
– Pay to use the lavatory. Water is expensive, you know. Pay per flush model makes sense.
– Extra charge to recline seat. When you recline, you are using additional space on the plane. It’s really no different than charging a large person for two seats.
– Air consumption fee. Providing air at high altitudes is not cheap.

Perhaps we should not give airlines any ideas. Given the new charges introduced in recent months, they do not appear to need our help, anyway!

Link: Washington Times – “JetBlue Puts to Bed Its Policy of Free Pillows and Blankets”

Terminating Cell Phone Contract Termination Fees?

A California court ruled earlier this week that early contract termination fees charged by Sprint were illegal and in violation of state law. This issue is far from over, but the involvement of courts in the matter could raise the issue in other states and with the FCC. Wireless carriers have used the leverage of 1 or 2 year contracts and low cost handsets to lock in customers. Early termination fees discourage customers from exiting a contract and switching to a competing carrier.

The ability to move about freely would certainly be a win for consumers in terms of greater choice and freedom to switch carriers if dissatisfied with current service. However, it could have an unintended consequence of driving up costs for handsets. Carriers often sell phones at low prices or even give phones to subscribers in return for a 2-year commitment. If contracts could not include early termination charges, carriers would likely withdraw the carrot of inexpensive phones.

Another way to look at this situation is that wireless carriers should take the prospect of greater customer mobility as a challenge to deliver great service. If customers are satisfied with the quality of the service network, billing, and customer service, there would be fewer reasons to consider switching carriers. Also, if customers have the ability to switch with less financial pain, companies offering innovative products, like the AT&T-Apple iPhone partnership, could gain market share as customers opt to have the latest technologies.

Link: Yahoo! Tech – “California Judge Rules Early Cell Phone Termination Fees Illegal”

EMail Marketing Bloats Inboxes

Email is a highly used communications tool by marketers because it gives them an inexpensive channel for sending messages to an audience. Moreover, the audience has usually indicated a willingness to receive messages by opting-in to get emails from a company. The messages can be personalized to deliver the types of information the recipient wants such as info on sales and new products, and decline to receive info that is of no interest. For these reasons, email marketing has been a blessing. But, will it one day become a curse?

The widespread use of email marketing campaigns has led to a swelling of our inboxes. A recent study by Forrester Research found that U.S. retailers and wholesalers will send an estimated 158 billion email messages in 2008. By 2013, that number is expected to reach 258 billion. This alarming growth could lead to more consumer frustration with the volume of messages received (even with companies that they have opted-in to get their emails). Too much frustration may prompt calls for a National Do Not Email registry, similar to the popular Do Not Call registry implemented by the FTC and about 3 dozen states.

If email marketers want to avoid strict government regulations, they must become more adept at sending relevant messages. The goal should be to improve the quality and reduce the quantity of messages. The ability to access customers via their inbox should be viewed as a privelege that should not be abused with too many sales offers.

Link: Internet Retailer – “Marketing Emails Will Grow 63% by 2013 Despite Weary Conumers, Study Says”