FINDING CUSTOMERS WITH MONEY, REVISITED

I’ve blogged on this before, but a story in the Medford Mail Tribune by Greg Stiles, one of the most prolific and best business reporters I know, shared a variety of Bureau of Labor Statistics (BLS) that should be important to people who are selling goods and services. The marketing takeaway in Greg’s story is not that we have a lot of broadcast technicians, but how low wages are overall in Southern Oregon.

Yes, you can find high paying jobs here. As Greg reported, “the average wage for health care practitioners and technical occupations in the Medford area are 15 percent higher than the national average.” In talking to my physician friends, they are paying top dollar to attract practitioners (and their reluctant spouses) to a rural area. But BLS reports that the bulk of jobs in the area; health care staff, office and administrative workers, and retail jobs, all pay less in Medford.

David Kong, a statistician with the BLS in San Francisco, stated, “In general, wages are lower in Medford for some reason. I think it has to do with the mix of occupations and concentrations.”

David, I agree, but the “some reason” could be that our school system is creating a lot of unskilled workers who want to stay here and they have to accept less. Also, many educated workers that want to live here are willing to be under-employed (college grads working below their pay grade, as they say). The real reason is that our local economy is driven by very, very small businesses (with less than 20 employees) that find it hard to pay big city wages.

Finding and targeting consumers with money to spend has always been a critical marketing goal; in Southern Oregon it is downright essential. They may be one reason why my research division, DCG Research, has seen a 150% increase in local research projects over the past year. More businesses are using research tools to find these people.

BRAND LOYALTY BY GENERATIONS

Following up on my April Millennials post, there are now six living generations in America that you need to target with your marketing:

• GI Generation – People born between 1901-1926
• Mature – People born between 1927-1945
• Baby Boomer – People born between 1946-1964.
• Generation X – People born between 1965-1980*
• Generation Y/ Millennials – People born between 1981-2000*.
• Generation Z/Boomlets – People born after 2001*

The dates for GI, Mature, and Baby Boomer and the beginning of Gen X are set and do not change. However, the dates for the end of Gen X, Gen Y and Gen Z fluctuate depending on what data source you are using.

Baby Boomers have driven consumer buying for more than 50 years. But they are now being replaced, not by Generation X, but by Millennials. These two generations, Baby Boomers and Millennials, drive marketing today and they see brand loyalty differently.

When asked how they think about brands, 64% of Millennials said they are more brand-loyal or as brand-loyal as their parents Baby Boomers and Gen X parents. Here’s more Millennial stats from the MediaPost report;

* 39% of Millennials think that brands that don’t advertise through mobile channels, smartphones, and tablets are outdated and undesirable.

* 32% of Millennials said social advertising lends the most credibility to influencing their brand decisions, compared to 35% who indicated TV as the most influential advertising channel.

* 26% said social is the most likely channel to introduce a new product that they will consider for 77% said they are evaluating brands on a different set of criteria than their parents.

* 55% said that a recommendation from a friend is a strong influence in getting them to try a new brand. 47% consider brand reputation to be almost as important. Product quality ranks fourth at 35%, while price has the most sway at 62%.

* 36% believe digital advertising is the most effective method of influencing their brand decisions, with traditional advertising as a standalone showing markedly less influence at 19%.

* 52% want brands that are willing to change based on consumer opinion and feedback to maintain future relevance.

* 44% want to have open dialogue with brands through social channels, and 38% want brands to be more about the consumer and less about the brand.

WHAT WE LEARNED FROM THE CES

Every December thousands show up in Las Vegas to attend CES (the Consumer Electronic Show). So, what did we learn about the future of media at the show?  As reported by Advertising Age: “For all the hype around second screen, streaming video and online TV… TV is still king, according to agency executives at a TV of Tomorrow panel hosted by AOL and Omnicom.”

While some national ad dollars are moving to digital from TV, people are still watching more than four hours of live TV a day on average. Even millennials are watching TV, but more on a time-shifted basis. College kids, once they get a job, typically become cable or satellite users. What will change is what is considered TV. Streaming direct will be the King.

Again, as Ad Age reported: “Most experts agree that the broadcast model will fundamentally change and tech companies will be the winners. AOL Networks CEO Bob Lord, who moderated the panel, said that while content providers have more options, big events will still provide an anchor. “Video reach still isn’t there yet for curated content,” he said.”

So, don’t cancel that local TV or cable media buy just yet. But do look at online video ads, especially cooperative programs that let you test online video ads at a fraction of the cost. Contact me if you are interested in an online video campaign I’ve got going in Oregon in May, 2014.

A MEDFORD CASINO – GOOD OR BAD FOR PEOPLE?

Although some of my marketing friends have taken sides in the casino battle for Medford, I’m staying on the sidelines. Although I am not a big fan of gaming, if you do gamble, I like the idea of you leaving your money with Native Americans instead of Donald Trump, given the way we’ve treated Indians for 200+ years.

One of the misconceptions about gaming is that every customer loses big time. The truth is casinos, like almost every business, live by the 20-80 marketing rule I cover in my marketing book; i.e. a small group of customers create the majority of profits (in this case, losers).

A recent two year study of 4,222 Internet gamblers using a European online company, which was reported in the Wall St. Journal, clearly supports this 20-80 rule. Of course, online gamblers are different from U.S. casino users, but their win and loss patterns should be roughly similar according to Robert Hannum, a University of Denver specialist in gambling mathematics.

On any given day, gamblers win money on 30% of the days they wagered. Of the top 10% of bettors—those placing the largest number of total wagers — about 95% ended up losing money, some dropping tens of thousands of dollars. Of the 4,222 casino customers, just 2.8%—or 119 big losers—provided half of the casino’s take, and 10.7% provided 80% of the take.

So, like all businesses, casinos are extreme reliant on a small number of gamblers. Casinos don’t like to talk about this fact. Again, I don’t have a dog in this fight, but a new casino would create new jobs and it would dramatically impact a small number of people that are addict to gambling.

DEALING WITH YOUR CHALLENGES

I used to read Time Magazine every week. But like many of you, I stopped subscribing to it a decade ago. Now, I am one of the “lobby readers” trying to find it when I am in various waiting rooms. With the failure of US News and World Report as a print and then as a digital magazine, I was wondering what is happening with Time?

It looks like it is still growing. Nancy Gibbs was just named the magazine’s new managing editor. She is a long-time veteran of the magazine, joining as a fact checker back in 1985. In various media interviews Gibbs has revealed that Time’s total readership is bigger than at any point in its history as a result of digital readership. Gibbs recently told Ad Age she doesn’t foresee the title going digital-only.

The question remains; however, who will pay for Time Magazine, since advertisers continue to ditch print. This is the core question facing every magazine and newspaper in the next 12-months. Can a business model be developed that allows digital and print to survive as partners? What challenges are you facing in the next 12 months? Are you dealing with them?

DOES EDUCATION IMPACT LIFE EXPECTANCY?

In my post about treating students as customers (South Korea’s unique tutoring world). I mentioned that high school graduation rates in Oregon, where I live, are around 60%. So what is the impact of living a less educated life? You don’t live as long.

While people are living longer overall, studies show that life expectancy has been declining for people without a high school diploma. What accounts for these divergent trends? Most likely, adverse selection. As more Americans graduated and go to college, high school dropouts became less like the average American. Unlike today’s average American, dropouts are burdened with problems that lead to higher mortality rates. Back in 1965, half of women aged 25 or older had not graduated from high school. By 2012, the figure was just 12 percent.  Today the least educated is the exception, not the rule.

This data is from one of my favorite online newsletters, American Consumers Newsletter by Cheryl Russell. Do you have a favorite resource for marketing intelligence? If you do, I would like to know about it so I can add it to the 50+ I monitor. What is your favorite online resource? Let me know. Have a great Labor Day weekend.

BIGGER IS ALMOST NEVER BETTER

When I owned an ad agency I always thought making it bigger was better. I would have more resources to provide clients more help, and I could also make the business stronger with more money. Wrong. As I point out in my book, the basic challenge with size is that it doesn’t help put your client’s business head of yours.

That’s why the proposed merger of the second- and third-biggest advertising companies, Omnicom Group and Publicis Groupe is a bad idea. It is good for a few bankers, lawyers and top executives. The Wall St. Journal reports that the deal highlights “how Big Data is transforming the advertising industry, turning Madison Avenue into a version of Wall Street, with its emphasis on data-driven analysis” and it allows them to sell their own media options. This is true, but nothing about creating a bigger, more bureaucratic organization is good for clients or staff.

Because most of my readers work in the small business world, this merger will have no impact on them, so why comment on it? It shows the relentless drive of big business to make more money at the top of the pyramid. It also allows me to remind readers that as you grow, you need to constantly shift more focus on your customers. What are you doing this week to make sure you and your staff are placing the customer’s interest first?

CONSUMERS LIVE IN TWO DIFFERENT WORLDS

Two mega-generations, with roughly the same number of consumers, are driving the marketing world today: Baby Boomers (49 to 67 year olds) and Millennials (19 to 36 year olds). Boomers are still the wealthiest generation, controlling 70% of disposable income in the U.S. They account for nearly 50% of all consumer packaged goods sales, 77% of prescription drug sales, 80% of leisure travel spending and 41% of new car purchases.

Millennials spend 82% of their income every month and are driving technology sales. Most (76%) own a smartphone, 73% own a laptop and 68% own a game console. But they are facing hefty student loan repayment. The average student loan for the graduating class of 2011 was $26,600. That’s why many are still living at home even after graduation.

All these stats are from a new Nielsen study, Boomers and Millennials, which I explore in my new seminar – The New Rules of Marketing. I will be covering some more findings in future posts. The bottom line is that understanding how to reach these two groups by capturing their hearts with appropriate creative is crucial today. My pet peeve: Most advertising for Boomers is created by Millennials who have no clue about what will appeal to older consumers.

NEWSPAPERS BRAVE NEW WORLD – ONLINE

Newspapers have struggled with declining print circulation, but their websites continue to be the most visited sites in most cities. The Associated Press recently reported that executives speaking at the American Society of News Editors (ASNE) convention are finally seeing the “pay to read” online subscription model working.

The McClatchy Co. reported generating an additional $25 million in revenue this year from subscriptions. New York Times also reported success. Several executives at the ASNE convention said digital content would not take the place of their printed editions, at least for the next five years, but don’t believe them.

Every age group is getting more comfortable with online reading and research clearly shows that people under 35 prefer getting their news via the internet. That’s one reason The Oregonian is shifting more to digital delivery, reducing home delivery to four days a week. Now, if someone could just bundle a variety of newspapers into one package, so I didn’t have to sign up for five different newspapers, that would really be popular with news junkies like me.

CHEERIOS – THE GOOD, THE BAD AND THE UGLY

The recent controversy over the Cheerios mixed-race family commercial “Just Checking” shows the power of advertising to be good, bad and ugly. Millions of people thought the commercial was cute and General Mills placed it on You Tube, but ugliness and/or hatred under the You Tube comment section got so out of control that Cheerios disabled it.

The flip side of this bad news is from May 28 (when the spot launched) to June 5, cross-Web brand exposure for Cheerios was up 77% compared to the week before according to Kontera, which is an ad network that provides online ads and research. So seemingly the spot was good for cereal marketing.

But the ugly truth is that most advertising needs to stay safely within social boundaries, even if we live in a country led by a president who is himself a product of an interracial marriage. While the top-rated TV show Modern Family shows that today’s “TV family” is very different from the time of Ozzie and Harriet, interracial, single-parent, and same-sex partner families are not necessarily accepted in every home.

Product Warning: If you take risks in advertising you can create major brand awareness and social media buzz, but it may come with the ugliness that still prevails in much of our country.