Strong piece of design from Kyle, a member of The Creekbed.
In a follow up to one of my earlier posts, research conducted by Hart Research Associates for Citi has shown that consumers in the U.S. have made what they are calling “permanent spending and savings changes” as a result of the current recession.
According to a tidbit in today’s edition of the USA Today, 63% percent of the people contacted by Hart stated emphatically that the way they handle their personal finances has been changed forever and only 29% plan on going back to the old way of doing things.
If this research proves out to be prophetic, and I believe it will, all marketers will have to hope they can get a piece of what will be a much smaller pie.
Combine the brand strength of UPS with their trusted driver network and you just might have the best way to date to deliver your message to a promising audience.
By Stuart Elliott
Since 1907, United Parcel Service has been delivering packages ordered by consumers. Next week, the company plans to deliver packages they have not ordered, in a test of an effort to expand into direct marketing.
Beginning on Monday, U.P.S. will experiment in five major markets with a service it calls Direct to Door, giving advertisers and retailers a chance to provide offers and product samples to U.P.S. customers. The marketing materials will come inside small boxes labeled Direct to Door Paks, and will be delivered to customers along with merchandise they actually ordered.
The test, to run through Oct. 2, is intended to gauge whether there is interest in having U.P.S. serve as an alternative to marketing mail delivered by the United States Postal Service or by companies like Valpak.
If Direct to Door goes forward, the added revenue could help United Parcel offset declines in demand for its mainstay package delivery service since the recession started.
In July, U.P.S. reported its sixth consecutive quarter of lower package volume in this country. The decline in the second quarter was 4.6 percent compared with the period a year earlier, which Bloomberg News described as the worst result since United Parcel went public in 1999.
“I wouldn’t say it was developed as a result of the economy,” said Lisa Lynn, marketing director for new-product research and development at United Parcel in Atlanta.
Rather, she said, it stems from “some opportunity we saw at the heart of what we do every day working off our delivery network.”
The test is also meant to see if U.P.S. customers welcome unsolicited packages or dismiss them as some new type of junk mail.
One effect of the economy is that “people are very receptive to offers right now,” Ms. Lynn said.
An experiment in figuring out how to better aim traditional, tangible marketing materials at consumers may seem quaint when so much of the buzz along Madison Avenue is about aiming virtual pitches at them online.
But direct marketing remains a lucrative business. According to the Direct Marketing Association, it accounted for $176.9 billion in ad spending last year in the United States — 52.1 percent of the total, by the association’s tally.
“We did some focus-group research and it really indicated that people were receptive to receiving offers from U.P.S.,” Ms. Lynn said. “What we heard was, ‘If U.P.S. brings it to me, it’s not junk.’ ”
Still, the company is taking several steps to try to ensure that a Direct to Door Pak is received more like a gift than another application for another credit card.
For one thing, the offers inside each box are intended to be special rather than “mass offers distributed through other channels,” Ms. Lynn said.
For another, no Direct to Door Paks will be delivered unaccompanied by packages ordered by that household, she said.
And the boxes will not bear the addresses of the recipients, Ms. Lynn said. Rather, they will carry phrases like this one: “Inside are premium offers from some of America’s best-known brands.” They will also include a photograph of the familiar brown United Parcel truck next to the words “Delivered to you by U.P.S.”
About a dozen companies — advertisers and retailers that use United Parcel to deliver orders to customers — are taking part in the test, Ms. Lynn said. They include the Finish Line; Men’s Wearhouse; Sephora; two Williams-Sonoma home furnishings brands, Pottery Barn and West Elm; and Zappos.com, the online retailer of shoes and housewares recently acquired by Amazon.
“It’s an interesting way to reach out to our customers and partner with one of our closest business partners,” said Aaron Magness, director for business development and brand marketing at Zappos.com in Henderson, Nev.
“We are an online retailer,” he added, “but we want to maintain a high-touch relationship with customers, constantly trying to find different ways to interact with them in whatever means they’re comfortable with.”
Mr. Magness said he liked the idea that the boxes would not arrive “out of nowhere, from random people knocking on your door.”
The offer to be made by Zappos.com during the test will invite recipients to “become a member of our V.I.P. program,” he added, entitling them to “free next-business-day shipping on every order.”
United Parcel plans to deliver about 250,000 Direct to Door Paks in about 150 ZIP codes in Chicago, Dallas-Fort Worth, Miami, Phoenix and Washington.
Those chosen to participate in the test are “high-opportunity consumers,” Ms. Lynn said, meaning that they often order merchandise delivered by United Parcel Service.
“Our drivers have relationships with these people because they deliver to them frequently,” she added. “There’s a lot of trust in the driver and the brand.”
Mr. Magness also cited the trust factor as a reason Zappos.com was interested in the test.
Ms. Lynn described the customers to receive Direct to Door Paks as ages 35 to 54 in households of two persons or larger and living in single-family, owner-occupied homes.
As for what the service will cost marketers, “I can’t go into specific pricing,” Ms. Lynn said, “but the pricing model is similar to other media.”
The goal is for the cost to reach each 1,000 consumers — a common media measurement known as cpm — to be “comparable or less than an equivalent piece of direct mail,” she added.
By Mark Walsh
As expected, Yahoo Tuesday formally unveiled its new global brand campaign centered on the theme of catering to all aspects of consumers’ online lives and carrying the tag line “It’s You.”
The ambitious marketing effort, announced at IAB Mixx Conference and Expo and aimed at breathing new life into the Web portal’s image, will launch in the U.S. on Sept. 28 and in the U.K. and India on Oct. 5 before rolling out to other countries in 2010 including Brazil, Canada, France, Hong Kong, Indonesia, Korea, and Taiwan.
“We want to celebrate the (Yahoo) brand once again in the marketplace,” Elisa Steele, Yahoo’s executive vice president and chief marketing officer, told a packed room at the IAB conference in introducing the company’s new ad campaign tabbed at more than $100 million and expected to run through next year.
While the differences between Webmail properties such as Yahoo! Mail, Gmail, AOL and Hotmail may seem subtle, their user bases do not behave alike. A study of success metrics for marketing e-mails sent through MailChimp’s distribution service showed that Gmail users were most likely to open and click on e-mails.
Open rates varied from a low of just over 20% for e-mail sent to AOL users to a high over nearly 31% among Gmail users. The click rate on e-mails sent to Gmail accounts was more than 7.4%, compared with rates between 4% and 5% for Yahoo!, AOL and Hotmail users. Messages sent to Gmail accounts also had the lowest hard bounce rate, though other data indicates Gmail’s spam protection may be so stringent that messages disappear without producing a bounce.
A 2009 Return Path study, for example, found a 23% nondelivery rate for marketing messages sent to Gmail. According to comScore, Gmail is the third-most-popular e-mail property among US Internet users, though it posted the highest growth rate between July 2008 and July 2009.
Unique visitors to the service rose 46% to nearly 37 million. Yahoo! Mail and Windows Live Hotmail had significantly more visitors, at about 106 million and 47 million, respectively.
MailChimp suggests that demographic factors could be at work when it comes to the willingness of Gmail users to open and click on marketing e-mails, so the service’s continuing growth could bring its metrics closer to the average.
But for now, the user base may be particularly friendly to e-mail marketing.
A smart idea by P&G.
By Laurie Burkitt
Justin Breton, a 21-year-old senior public relations major at Boston University, spends a lot of time talking about PUR, a water filtration system from Procter & Gamble.
Breton is among 100 college “ambassadors” P&G is paying to pitch the company’s brands–namely, PUR, TAG deodorant and Herbal Essences hair products–at 50 colleges and universities year-round. Through a program P&G calls ReadyU, these students create their own marketing plans for promoting the company’s products to fraternities, sports teams, and extra-curricular groups.
P&G pays the students to work 15 hours a week, meaning some kids can earn up to $2,500 a semester. (P&G will pay around $500,000 to kids before graduation next spring.) To make sure students are putting in their time on behalf of one or two brands they are assigned, P&G and RepNation, a unit of marketing outfit Mr. Youth, organize daily conference calls and require ambassadors–65% are women–to file reports every two weeks that include 25 pictures of their academic advertising attempts.
The ReadyU program is part of P&G’s move to dabble in new types of marketing, including online retailing and sports sponsorships. Now, at universities, it’s letting go of its tight grip on brand messaging and allowing students to craft pitches.
Mohammad I Sheikh, a senior studying advertising at the University of Texas at Austin, another PUR pitchman, says he spends up to 15 hours a week teaming with active campus groups that care about boosting water quality in developing countries. They plan to attend international student fairs and events near dorms, Sheikh says. Emily Kieczykowski, a junior majoring in business at Wake Forest University in Winston-Salem, N.C., says she passes out coupon books while walking from class to class. When football season is in full swing, Breton says he’s considering plugging TAG deodorant by holding a body odor contest to find the stinkiest college athletes.
“This was a big risk to put the branding power in someone else’s hands,” says P&G spokesman Glenn Williams, “but we know it’ll be successful.” While the Cincinnati company relinquishes some marketing control to students, it still requires them to execute corporate ideas. On freshmen move-in day, each of the schools’ ambassadors was asked to organize groups of movers to help hoist futons and boxes into rooms and pass out samples of PUR. Over Labor Day weekend, P&G required students to arrange free bus trips to Target, where students could buy P&G products with coupons they had been given.
P&G tested the program last year at three universities–University of North Carolina at Chapel Hill, University of Tennessee at Knoxville and the University of Texas at Austin–and decided to expand based on increased regional sales results, on which the company declined to disclose, and the creativity of the students. One Tide ambassador, for instance, held a campus mud battle and offered to wash dirty clothes (with Tide, of course) to anyone who participated.
To talk up PUR to BU students, Breton is organizing free concerts featuring popular campus musicians who will drink PUR-filtered water on stage and have samples on the sidelines for the audience. He works with one other ambassador on campus and meets with her a few days a week to hash out marketing ideas that they pitch daily to RepNation.
Still, pitching filtered water can be challenging, confides Breton. “It makes me wish I had gotten Tide as my brand,” he says.
By Julia Boorstin
Buying a magazine at a newsstand is quite the impulse purchase. These days you can get most magazine content online, for free, or at least something pretty comparable. And if you really want to flip through those glossy pages every week, but you’re looking to save money, a subscription saves as much as 90 percent off newsstand prices.
Needless to say it’s no surprise that newsstand magazine sales dropped 12 percent in the first half of the year compared to the first half of 2008; over the previous six month period that drop was 11 percent. While subscriptions did increase slightly, not enough to compensate for the decline at newsstands, and total circulation was down 1 percent for the period.
The decline in newsstand magazine purchases may be an indicator of consumer confidence – people are watching their discretionary spending – but I’d argue that newsstand magazine revenues are unlikely to recover when consumer spending does.
There are too many free, online options and people are getting increasingly accustomed to consuming content on their mobile devices and laptops. As content companies figure out how to distribute more content to your iPhone or cell phone people may not need to shell out $5 as frequently for their glossy fill of celebrity gossip and photos.
That’s not to say that the magazine business will go away. People will still buy magazines, they may just get used to this reduced magazine spending level we’re at now.
Of course magazines’ struggles with circulation come on top of the advertising decline that’s hit the entire print journalism business. Take a look at the magazines at the newsstand or in your mailbox this month. September is supposed to be a big month for ad sales, but you’ll notice that the magazines will be remarkably skinny. If they don’t fatten up by the end of the year we’re sure to see more magazines shut down. Last month Time Inc. stopped publishing “Southern Accents” magazine, jut the latest magazine closure in the home decor space where ad revenue has fallen more than 20 percent.
It’s not just the commercial magazine business that’s suffering, business-to-business magazine ad pages fell 30.15 percent in the first half of the year, compared to the year-earlier period, according to Business Information Network data. And the trends didn’t improve over that 6-month period. In June ad pages were down nearly 33 percent from the year-earlier month.
By John Swansburg and Jeremy Singer
After examining some 300,000 Twitter accounts, a Harvard Business School professor reported last week that 10 percent of the service’s users account for more than 90 percent of tweets.
The study dovetails with recent analysis by the media research firm Nielsen asserting that 60 percent of Twitter users do not return from one month to the next. Both findings suggest that, thus far, Twitter has been considerably better at signing up users than keeping them.
For years now, I have recommended to my clients that they invest in sports packages tied to their regional teams.
For example, if you have a medium-sized business in Georgia, Alabama, Tennessee, Florida and the like and you have not considered running thirty second television with some SEC package available at your local station, you might be missing a great opportunity. Of course, it’s not perfect for every business, but it will work well for many businesses.
Don’t fall into the trap of thinking that the demos for football are all male. Just not true. You will reach a very large and diverse audience with your buy.
Don’t worry that the season has started. The stations will prorate any type of package and there are still a bunch of them out there. Stations are hungry.
Take advantage of some pricing weakness and negotiate a great deal for yourself. Or call us and we’ll help you put it together for you.
By Jenna Wortham, The New York Times
Slim and sleek as it is, the iPhone is really the Hummer of cellphones.
It’s a data guzzler. Owners use them like minicomputers, which they are, and use them a lot. Not only do iPhone owners download applications, stream music and videos and browse the Web at higher rates than the average smartphone user, but the average iPhone owner can also use 10 times the network capacity used by the average smartphone user. “They don’t even realize how much data they’re using,” said Gene Munster, a senior securities analyst with Piper Jaffray.
The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&T’s cellular network strains to meet the demand. Another result is outraged customers.
By Joseph Young
So are you a Marvel, or a Disney? The more and more I think about it, I’m a Marvel guy. Just can’t get enough of Iron Man. My wife Lin, is a Disney, without a doubt.
The acquisition of Marvel Entertainment by The Walt Disney Company was announced yesterday to great fanfare. It was just all over the map. You have to congratulate the PR folks. The whole introduction was very well done.
To think: the amount of collective creative talent that will be put in place upon the completion of this deal will be just incredible.
But is the deal weak? From today’s news, consider this:
- Sony Corp.’s Columbia Pictures is developing the next three “Spider-Man” sequels, starting with “Spider-Man 4″ set for a May 2011 release.
- News Corp.’s 20th Century Fox has the long-term movie rights to the “X-Men,” “Fantastic Four,” “Silver Surfer” and “Daredevil” franchises.
- Viacom Inc.’s Paramount Pictures has a five-picture distribution deal for Marvel-made movies, the first of which will be “Iron Man 2,” set for release next May. Paramount said it expects to continue working with Marvel and Disney.
Add to that, Sony and News Corp maintain their rights in perpetuity unless they fail to make more movies.
If these terms are true, that’s a BIG ouch to me. This can’t all be about merchandising, theme park rides and retail store locations, can it?
UPDATE: It looks like the comment above just might be true. According to BusinessWeek, Walt Disney CEO Robert Iger has stated that the deal is all about Marvel’s 5,000 plus characters, combined with Disney’s success with consumer products, theme parks and rights and license fees. The movies are going to have to wait.
By Sharon Jayson
College students say social networking makes them more narcissistic, a national survey reports today — and they also believe their generation is the most narcissistic of all.
That’s what a majority of 1,068 college students said when asked about narcissism in a poll on social networking sites in June by Ypulse.
More than half (57%) said their peers used social networking sites such as MySpace, Facebook and Twitter for self-promotion, narcissism and attention-seeking. And 92% said they used MySpace or Facebook regularly. Two-thirds said their generation was more self-promoting, narcissistic, overconfident and attention-seeking than others.
The survey was done with Jean Twenge, associate professor of psychology at San Diego State University and co-author of The Narcissism Epidemic.
Other researchers, however, say self-promotion doesn’t have to be a negative.
“We all kind of put on our best face when presenting ourselves in social situations, online or offline,” says Nicole Ellison, an assistant professor at Michigan State University in East Lansing who studies social networking. “When good things happen to me, I put that on Facebook, and when bad things happen, I also put it on Facebook. It’s a structure to receive emotional support.”
Houston Dougharty, vice president for student affairs at Grinnell College in Grinnell, Iowa, says today’s students are altruistic and care about helping others, which doesn’t say “narcissism” to him.
“I think there’s a negative connotation to narcissism that I would not want to promote as a description of this generation.” Social networking is “a celebration of individuality and sort of promotion of one’s own personality,” he says.
But Twenge says her research suggests growing narcissism in Generation Y, based on 40 questions used for decades. Scoring 21 or more indicates more narcissistic traits, she says. In the 1980s, one of seven scored in that range; now it’s one in four. “We see this change over time in narcissistic traits, but I was very interested to hear whether young people saw that in their generation,” she says.