Category: Market Research

Advertising Extends Seasonal Sales Cycles

On By RhonaIn Advertising, Advertising Trends, Audience Reach, Auto Advertising, Market Research, Marketing, Rhona BronsonLeave a comment

Being in a seasonal business can mean one of three things:

  1. Your business is seasonal catering to a defined seasonal market. Summer amusement parks fall into this category.
  2. Your business is located in a seasonal market, but isn’t generally considered seasonal. Grocery stores that cater to local residents, but see an increase in sales during tourism seasons share this category.
  3. Your industry is considered seasonal.  Many retail businesses fall into this segment, with high holiday and back-to-school selling seasons.

carlegsRegardless of your category, great marketing helps you either broaden your season length, or create additional seasons. For instance, some category 1 B&Bs previously known only as for summer destinations have successfully positioned themselves as off-season resorts in addition to their regular high season. By advertising these new selling propositions to both standard clientele and new customers looking for different or more cost-effective vacation experiences, these B&Bs have effectively created a second sales season that didn’t exist several years ago.

When in a category 3 business with a seasonal selling cycle, it’s important to stay abreast of ever-changing consumer trends to ensure that what has traditionally been your key selling season hasn’t changed the game. The auto industry is a great example of how consumer shopping patterns have shifted just within a two-year time period.

Take a look at the table below from the US Census, which tracks retail sales by category every year. In 2010, two years after the recession hit high gear, auto sales by auto dealers were highest in December as consumers waited for late year models to go on sale.

Percentage of Auto Sales by Auto Dealers in 2010

Jan Feb Mar Apr May Jun
7.3%
7.2%
8.4%
8.3%
8.5%
8.4%
Jul Aug Sep Oct Nov Dec
8.4%
8.5%
8.1%
8.3%
8.6%
10.2%

Sales in December were 2-3 points higher than any other time of the year with January and February being the off season. Traditional car advertising followed this pattern, tending to run heavier during the holiday seasons and staying low during the early winter months.

But, buying patterns have changed and if a car dealer today is still buying advertising based on the 2010 model, they would be missing a significant amount of  2012 buyers, who are far more consistent in buying cars throughout the year. Check out the buying patterns for 2012 below.

Percentage of Auto Sales by Auto Dealers in 2012

Jan Feb Mar Apr May Jun
8.0%
8.2%
8.2%
8.2%
8.2%
8.2%
Jul Aug Sep Oct Nov Dec
8.2%
8.4%
8.6%
8.4%
8.7%
8.8%

This new data set shows that consumers are actively buying cars all year long with December still being a key buying month, but no one group of months being significantly different from the others. What was once a semi-seasonal business has evened out.

What this means is advertisers not adjusting their media plans to attract consumers all year long are missing those consumers who are actively in the market at any point in time. The data is available from the government for most key industrial codes.

The Walk-away: Assumptions made about key selling times of the year can cause businesses to unnecessarily miss key selling opportunities. The recent past is not always a good indication of current or future buying trends.

SOURCE: Monthly Retail and Food Service Sales, 2012 Sales, census data, http://www.census.gov/retail/mrts/www/data/excel/mrtssales92-present.xls

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Real Estate Study Shows What Advertising Works

On By RhonaIn Advertising, Advertising Trends, Lessons from Leaders, Market Research, Real Estate, Rhona BronsonLeave a comment

In real estate advertising, a recent study shows that print and digital ads are a powerful combination. Seeking to determine effects of both print and digital advertising on effectively selling a home, the study found:

Homes for sale that are advertised in both print and online are 20% more likely to be sold than those that use just one medium.

Furthermore, the study showed that “properties that used a combination of both print and online advertising had lower discount levels and spent less time on the market.” The study, considered the first of its kind,  was conducted by News Limited, the majority owner owelcome matf Australia’s website realestate.com.au,  to determine what marketing worked in moving more than a half million properties within a 12 month period.

Previously, realtors swapped information on what they thought worked or didn’t in advertising campaigns, but the field was sorely lacking in valid statistical data. The industry in the U.S. is great at tracking metrics on homes for sale, homes listed, and prices achieved, but has a lack of information on what fosters the sale. The Australian study starts to shed light on advertising effectiveness that can be insightful not only for American realtors, but other small to medium-sized retail operations in the U.S, namely:

  • Inventory that sells fast tends to not to have to be discounted.
  • Using a combination of print and digital advertising increases exposure for items you have to sell.
  • The added exposure can increase your advertising return by up to 20%.

The Walk-away: When creating your media plan to sell inventory, don’t just think of one medium. Print and digital are a strong combination. Because of their strong local reach, the print/digital combo should be the foundation of any local advertising program, with other medium added for effect.

Why Market Research Can Be Misleading

On By RhonaIn Advertising, Lessons from Leaders, Market Research, Rhona BronsonLeave a comment

If it’s true that “Numbers don’t lie,” how come so much data is misinterpreted? According to Nate Silver, now popular political data blogger and tracker for the New York Times, numbers can be misleading when analysts don’t have the historical context for interpreting them. For instance, in retrospect, Silver in his book The Signal and The Noise, notes that although data existed to strongly suggest the 9-11 attack on The World Trade Center, humans did not have the experience to correctly interpret the signals. Silver writes, “the 9/11 Commission deduced, the most important source of failure in advance of the attacks was our lack of imagination.” In other words, we could not imagine or conceive of such a horrendous attack, so no matter what the data indicated, the intelligence community could not see it.

In business, false interpretations of data are not as critical as with the intelligence community, but ignoring trends and/or the failure to imagine possibilities can lead to businesses going out of business long before their times. It’s why market research is important in making business decisions from next year’s color trends for fashion houses to the copy and graphics choices in an ad. If we always produce the same ads, or always stock the same inventory as the year before, our business will appear stale to our consumers, and we will ultimately fail to be positioned correctly in the near or longer-term future.

How can you get data? Trade associations are always a key source as are consumer surveys you do on your own. The value of the former is that the data is usually analyzed by a credible industry executive. The danger in the latter is bias or misinterpretation.

One of the best customer surveys is done by GoDaddy, the url management and web hosting service. After every service call a simple questionnaire is sent to each customer with just two short questions. Was your question or issue answered to your satisfaction? Would you recommend our service to others? Each question has a ranking from 1-5, with 5 being strongly agree.The simplicity of the questions allows for little misinterpretation of the data and doesn’t allow GoDaddy to determine new products or services, but does allow them an ongoing benchmark of their customer service. It highlights how highly GoDaddy considers it’s customer service as key differentiating factor, and gives clues to effective market research.

  • Only ask questions that supply meaningful answers – those you know you can interpret and use the data to change behavior. In Go Daddy’s case they can use the scores to easily understand which CSRs are worth promoting, or weeding out.
  • Don’t ask too many questions, or consumers will jump ship. No one has enough time to take more than a few seconds to answer questions.
  • Don’t ask questions if you won’t do anything with the data. It’s a waste of everyone’s time. When framing a question, ask yourself, “what will I do with this information once I know it?” If the answer is “nothing,” abandon the question.

The Walk-away: When it comes to using data for determining advertising decisions, don’t go it alone. Ad effectiveness depends on many factors including but not limited to resulting sales. The questions, research methodology, and analysis are best left to experts.

Market Research: More Lessons from Political Campaigns

On By RhonaIn Audience Reach, Lessons from Leaders, Market Research, Marketing, Rhona BronsonLeave a comment

Presidential elections always bring out the big guns in terms of pundits, pollsters and politicos. As always, there are many things to be learned for business marketing from political marketing – both good and bad. Here are some take-aways on market research.

Pundits are wrong 50% of the time. Opinions matter, which is why opinion leaders and early adopters are so important in marketing plans. But the opinions that matter are those who either vote or can influence a voter. People pay attention to pundits because of their perceived ability to influence, but the truth is New York Times blogger Nate Silver has conclusively proven that pundits are wrong 50% of the time. His new book, The Signal and the Noise, finds that pundit predictions are as consistent as a coin toss. In your business, who are the real opinion leaders that can drive traffic to you? It’s more likely a PTA president than a political leader.

Pollsters also get it wrong. Pollsters are the market research arm of many campaigns, so how come with modern models and algorithms they also don’t always get it right? According to Sarah Dutton, Deputy Director of Surveys for CBS news, most polls are “snap shots in time” rather than predictions. See her explanation in this video from CBS Sunday Morning.

For businesses, the moral is to be careful of research results. If the questions aren’t right, the answers won’t give you what you need for future planning. Here’s a case in point. Years ago, when asked if they needed a fax machine, most businesses said “no.” Within 1-5 years of that survey, fax machines were critical to day-to-day business. The reason for the missed predictions was that the people asked had no experience of fax machines to know they even desired one. Today, the question is moot.

Numbers guys get trendy. Aggregators such as Nate Silver tend to get closer to the truth because they combine all the polls and crunch the numbers to figure out actual odds. There’s a reason bookies make money. They understand odds. It’s the reason aggregators also do well. They can compile the wisdom of everyone else and figure out trends and patterns. For businesses, the lesson is to differentiate between one snap shot of feedback from an emerging trend. It’s the trends that will tell you your odds of success or failure.

The Walk-away: In a place like Atlantic City that runs on odds and gambling stakes, it’s interesting to know that a semi-pro poker player and baseball statistician aficionado, Nate Silver, has a current better track record in predicting elections than pundits. It shows that numbers matter, and whether you’re counting cards, runs batted in, electoral votes, or foot traffic – you need to be working with a full deck to understand your odds for interpreting outcomes in business as well as politics and poker.

Credible Ads are Placed in Trusted Media Sources

On By RhonaIn Advertising, Advertising Trends, Audience Reach, Lessons from Leaders, Market Research, Media Buy, Media Comparisions, Rhona BronsonLeave a comment

When it comes to consumer trust, traditional media still rules the day. A digital report released this summer by Triton Digital, shows that newspapers, radio and TV each outweigh internet-only news sources in terms of trust. Reported in e-Marketer under the title “Traditional Media Still Most Trusted Sources of Info,” the article concludes … “with time and attention –and trust—still focused on traditional media, TV, radio and print are not to be neglected.”  Both Triton Digital and eMarketer are services dedicated to digital growth trends, giving the report significance as one of those “eating crow” times when digital gurus formally admit the power of print and broadcast.

In this increasingly digital world, people have frequently confused news with news delivery trends. Findings from a January Pew Research study note: “People are no longer taking one path to access news.” Consumer appetites for news today are extremely healthy, but instead of reading three newspapers as their grandfathers did, today’s consumers gather news from three or more platforms frequently including print, desktops, and mobile devices as sources for their daily news consumption.

The Pew survey also reported in e-Marketer found: “ that when seeking news, the highest percentage of consumers went directly to a news organization’s website or app, which suggests that pre-existing relationships are what drive readers to particular news outlets.” The reason boils down to trust.

A new business book,The Trust Edge,by David Horsager delves into the elements needed for businesses of any type to gain consumer trust.  Not surprisingly, he finds that  trust is not built overnight. Hence, it should be  no surprise in the higher level of consumer trust  in more established news sources who have honed their reporting skills over time.

How does this affect advertising? By affiliation, an advertiser associated with a credible media source has higher perceived “trust” value with consumers. Is it any surprise then that Google just reported it’s average cost per click has fallen by 15% compared with the same time last year?

The Walk-away: All that glitters is not gold. New devices are engaging for games and email, and also give consumers greater access to news. But when news and information is wanted over Angry Birds, consumers use those devices to find credible, trusted news sources. These landing pages are the places you should consider for ad placements, so you, too, can be found by consumers actively seeking credible resources.

Is It Worth Paying for Color in Print Ads?

On By RhonaIn Advertising, Market Research, Rhona BronsonLeave a comment

What’s the value of color for a print ad?  For most publications, color is an up-charge from as low as $2 per inch to sometimes more than double the base charge. How can you determine if it’s worth the additional investment?

In general, research consistently shows that color ads out pull black and white ads of the same size with the same message. One 2009 study on color ads in US Newspapers conducted by Research and Analysis of Media found the following:

Color helps readers remember ads.

  • Full color increased ad recall (readers who remembered seeing an ad) by 23%.
  • Spot color increased ad recall by 15%.

Color helps ads of all sizes, but has the most impact  on full page ads.

  • Recall went up by 6% in quarter page ads, 8% in half page ads, and 23% in full page ads.

Color makes an advertiser appear interesting and fresh.

  • 15% found the ads more interesting and 29% said the ads communicated a fresh approach.

Color drives traffic and a reader’s potential to buy from the advertiser.

  • When compared with the same ad in black and white, 6% more said they would seek more information,while 8% more said they would visit the advertiser.
  • 12 % more said they either have bought or plan to buy from the advertiser.

These are compelling reasons to consider color, but as with all ad techniques, there are no hard and fast rules. If you’re a high-end, luxury retailer advertising in an artsy magazine, you could make the case that a glossy black and white ad makes the statement you need.  It this case, the black and white choice is not about budget, but a desired image. For most small to mid-sized businesses, the  data on color indicates you should try to present your message through rose, if not multi-colored glasses.

The Walk-away: Color in print helps readers see you more clearly. It generally makes them more willing to engage with you rather than stepping aside and letting you pass  by.