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Boomers: A $50bn Growth Opportunity

The outlook for the consumer packaged-goods industry gets better with age, according to a report from IRI. While other segments have struggled, the recession has not played a huge a role in baby-boomer food purchasing decisions. More than three quarters of the group, born between 1946-64, maintained their spending on necessity items, and 85 percent continued to make unplanned purchases. This makes the group, which represents half of all total U.S. spending, a $50 billion growth opportunity for consumer packaged-goods companies, per the report.

[Estimated timeframe:Q3 2009-onward]

The study evaluated boomer shopping habits for three age groups: Truman (age 53-62), Kennedy (44-52) and LBJ (34-43). It found that private label popularity increased with age. Sixty-six percent of Trumans purchased store brands, and 83 percent gave the products "excellent" quality ratings. Only 70 percent of Kennedy and 73 percent of LBJ Boomers agreed.

Top private-label products included bottled water, ice cream and nuts. This trend, however, was not reflected in non-food products, such as over-the-counter vitamin supplements and medications, products that Trumans had more of a reliance on than their younger peers.

Nutrition was predictably more of a concern with older consumers. Trumans reported healthy eating as a priority (84 percent) and a means to manage health conditions (61 percent). Healthy beverage options and organic labels were not as important.

Nuts/seeds/corn nuts, ice cream and chocolate candy were the most popular product categories for Trumans. Cold cereals, frozen pizza and salted snack purchases were less common than with Kennedy or LBJ boomers.

"Today's retail and consumer packaged-goods community must work hard to understand the unique opportunities being created by this large and diverse consumer segment," said IRI svp Sean Seitzinger in a statement. "Different micro-segments will define the market growth opportunities in health and wellness and the next generation of products and brands."

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: Adweek.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4505

US Poll Finds Ad People, General Public Out of Sync

If an ad makes you "stop and think," is it apt to be very effective? How about if it gives you "new information"? In a LinkedIn Research Network/Harris Poll, majorities of professionals involved in decision-making about ad campaigns thought such advertising would work quite well. Alas, their opinion was not shared by the general public. For that matter, few kinds of advertising were regarded as highly by consumers in general as they were by ad people.

[Estimated timeframe:Q3 2009-onward]

In the polling, people who are "involved in the advertising decision-making process" at agencies or client companies were asked to assess the effectiveness of a dozen genres of advertising. Two were rated as "very effective" by more than half of these respondents: "ads that make me stop and think" (53 percent) and "ads that give me new information" (51 percent). "Ads that are entertaining" outpointed "ads that are informative" (41 percent to 37 percent). But they'd better be entertaining in a serious way, as "ads that are funny" were regarded as very effective by an underwhelming 32 percent of the ad people. Repudiating an old advertising mainstay, just 27 percent lauded the effectiveness of "ads that have a product demonstration" (27 percent). Twenty-six percent rated "ads that are integrated into the feel of the program" as very effective.

Lagging farther behind among the survey´s ad professionals were "ads that show a before/after" (24 percent) or "ads that reinforce a message I already know" (21 percent). Despite the proliferation of self-mocking ads, just 14 percent of the professionals regarded "ads that don´t take themselves seriously" as very effective. And scarcely any said they´re impressed with the effectiveness of "ads about a serious topic that may leave me feeling slightly guilty" (5 percent) or "ads that are scary" (3 percent).

Respondents among the general public shared the professionals´ lack of enthusiasm for these last two kinds of advertising, with just 3 percent saying scary ads are very effective and 6 percent saying the same about ads that make them feel guilty. But their top choices didn´t closely match those of the ad people. The highest vote among the general public went to "ad that are entertaining" (34 percent) and "ads that are funny" (33 percent). "Ads that make me stop and think," of which the professionals were so enamored, were regarded as very effective by 30 percent of general respondents, and "ads that give me new information" got that rating from 29 percent.

While "ads that are informative" got a relatively good score among the general public (30 percent), the tally for product-demonstration ads was just middling (20 percent). There was scant enthusiasm for before-and-after ads (13 percent) and even less for the not-taking-itself-seriously ilk (11 percent). Whether because of or despite advertisers´ penchant for pounding away at the same selling points again and again, just 10 percent of the general public gave a "very effective" rating to ads that reinforce a familiar message. Fewer still were impressed with ads that adopt the feel of the program in which they appear (7 percent).

There were just two kinds of ads regarded as "not at all effective" by double-digit percentages of the respondents with professional involvement in advertising: scary ads (32 percent) and guilt-inducing ads (18 percent). Reflecting the consistently lower regard for ads on the part of the public at large, six genres were rated "not at all effective" by double-digit proportions of these respondents: scary ads (41 percent), guilt-inducing ads (27 percent), ads that don´t take themselves seriously (18 percent), ads integrated into the feel of the program (14 percent), before-and-after ads (12 percent) and ads reinforcing an already-known message (12 percent).

Conducted last month, the polling found ad professionals and consumers slightly more in sync on the matter of how advertisers are dealing (and should deal) with the recession. One question asked the ad people whether they´re taking any of several steps in their ad strategy as a way of "actively addressing the economic downturn." Sixty-one percent said they´re featuring "value propositions," such as lower price tags, sales and coupon discounts. Thirty-nine percent said their strategy now features "empathy -- i.e., we understand what you are going through." Twenty-five percent said they´re going with "cheerleading -- i.e., we´ve made it through tough times before, we´ll do it again, and we can help you do it." Eighteen percent said they´re including a message of "luxuries for less -- i.e., don´t give up your luxuries, get them for less."

When respondents in the general public were asked to say which of these strategies is most effective in selling products and services in today´s economy, "value propositions" was also their top choice, cited by 57 percent as working "well" or "very well." But while few of the ad professionals said they´ve adopted the "luxuries for less" approach, it was the runner-up among the general public, cited by 34 percent. Consumers were less impressed with "empathy" (24 percent) and "cheerleading" (19 percent).

There was considerable variation in how different age cohorts among the general public regarded the effectiveness of these methods. While the "value proposition" was seen as effective by 65 percent of the 18-34-year-olds and 66 percent of the 35-44s, it scored less well among the 45-54s (55 percent) and those 55 and older (48 percent). The split was even wider with regard to the "empathy" approach, rated as working well or very well by 51 percent of the 18-34s but just 19 percent of those 55-plus. "Cheerleading" had its highest score (32 percent) among the 35-44-year-olds, while "luxuries for less" did best among the 18-34s (27 percent).

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: Adweek.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4507

Kids' Virtual Worlds Gain Traction in US

While virtual worlds like Second Life still represent a fringe activity in the general market, more than half of the kids who use the Internet will be regular visitors to virtual worlds in just four years, predicts researcher eMarketer.

[Estimated timeframe:2009-2013]

Virtual worlds -- game-like Web environments where users can create avatars in a fantasy landscape and interact with other users -- have become particularly popular among young children. Currently, eMarketer estimates that there are 6 million kids age 3-11 who visit virtual worlds at least once a month, representing 37 percent of that Web demographic. By 2012, there will be 8.7 million kids 3-11 using virtual worlds -- or 50 percent of the entire kids´ online universe.

Teens are also fans of virtual worlds, though the penetration numbers are lower. In its new report, "Kids and Teens: Growing Up Virtual," eMarketer estimates that 3.7 million kids 12-17 log on to virtual worlds each month. That represents 18 percent of the teen Web population. By 2013, a quarter of the teen demo will be regulars in virtual worlds vs. 54 percent of the 3-11 group.

According to the report, the adult market has yet to gravitate to the virtual world segment in meaningful numbers. Therefore, potential virtual businesses have focused on the youth market. eMarketer cited a report by Virtual Worlds Management reporting that as of January, there were 112 virtual worlds aimed at the under-18 crowd live on the Web. Another 81 were said to be in development.

However, advertising is nascent in this space (most kids worlds rely on microtransactions for revenue). And given the current economy, many analysts predict a shakeout

That’s also the assessment of eMarketer analyst Debra Aho Williamson, who authored the report. “The rate of development in virtual worlds targeted to the youth audience will slow as economic pressures mean less money for venture capital and for advertising to support new worlds,” she said. “But there is no denying that creating avatars and exploring virtual worlds are growing activities for many children and teens.”

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: Adweek.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4104

Facebook's App Revenue Is Poised to Surpass Site's Own Income

More than a social phenomenon, Facebook harbors a lively and growing ecosystem of game and other application makers, ad networks and retailers of virtual goods. What happens when businesses running on Facebook become bigger than Facebook itself? That could very well be the case in 2009. Facebook, which just surpassed 200 million global users, is expected to bring in about $500 million in 2009 revenue, mostly from advertising. Tech blog Venturebeat estimated that Facebook developers make a combined $500 million on the platform. Ad Age estimates the collective revenue from Facebook of developers to be between $300 million and $500 million. All in all, numbers big enough that Facebook is looking to cash in.

[Estimated timeframe:2009-onward]

Not all the developer revenue is from advertising. San Francisco-based Zynga, the top developer on Facebook with more than 41 million users, according to AllFacebook.com, makes much of its revenue from the sale of chips for its Texas HoldEm Poker or weapons in Mafia Wars. Zynga is expected to break the $100-million-sales mark in 2009, split between Facebook and MySpace. In addition to Zynga, there are at least a half dozen other companies in the $10 million to $50 million range, as well as many smaller players.

"It wouldn't surprise me if apps on Facebook generate more revenue this year than Facebook," said LivingSocial CEO Tim O´Shaughnessy, whose app is Facebook´s most popular at the moment, thanks to its "Pick Your Five" feature. "The overall platform is in the hundreds of millions of dollars."

Lisa Marino, who runs West Coast business development for RockYou, estimates developers will earn $300 million from Facebook this year primarily from three streams: virtual currency, branded sponsorships and ad-network inventory. "These are three strong revenue models that Facebook isn´t participating in but that might overall be bigger than what Facebook brings in revenue," she said.

No charge for developers
Unlike News Corp. unit MySpace, which took a hard turn toward commerce in 2008, Facebook has stressed ubiquity of its platform over revenue. Its strategy is to become a conduit for as much of the world´s communication as possible and part of that has been to not charge developers to use the platform, no matter how much revenue they generate from it.

That´s about to change. Facebook is testing a payments system with some of its developers that would enable one-click buying of virtual goods and services on the Facebook platform, with Facebook taking either a percentage of the transaction or a flat fee. In addition, Facebook is testing a service to allow users or advertisers to buy and trade "credits" or a virtual currency to facilitate commerce. Spokesman Brandon McCormick said three tests of the system will commence in the coming weeks.

That the developer community will soon overshadow the platform in revenue is a sign that Facebook is growing up as a platform, but it also presents a conundrum as it attempts to develop its own advertising business. Facebook profile pages, and the stream of social connections and information they contain, have proven a tough environment for advertising. Display ads in social networks are some of the cheapest inventory in the business. Facebook is pushing "engagement ads" -- surveys, quizzes or games that encourage interaction, but a big chunk of its revenue comes from a pre-existing ad deal with Microsoft.

Applications, on the other hand, have proved fertile ground for commerce. "Once the user goes from their profile into the app platform, whether to play a game, send a virtual gift or check stocks, then its not about connecting with people; it´s about having fun or saving time and money," said Buddy Media CEO Michael Lazerow. "There are a lot of different ways to monetize that."

Pennies add up
While there are plenty of ad networks and companies making branded applications and games, the biggest source of revenue in the applications come from small payments people make, say in games like Mafia War to restore health more quickly. Unlike advertising, the payments business has grown internationally along with Facebook´s audience. Players in Singapore are plunking down pennies along with users in the U.S. As a game gets big, it starts to add up. The top five "megahit" games make between $1 million and $3 million a month.

Adding a payments system would allow Facebook to dip a toe in the developers´ strongest source of revenue, and for the first time create a business relationship between Facebook and its developers. "In the past they´ve made it hard to give them money even if we wanted to," Mr. Lazerow said.

Max Levchin, founder and CEO of Slide, creator of SuperPoke, Top Friends and Funspace, believes there probably should be a commercial relationship between Facebook and the developers that rely on its platform for their business. "As long as they add to the bottom line, developers will pay the price."

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAge.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4071

Changes to UK Food Labelling Would Be “Premature”, Claims British Retail Consortium

A British Retail Consortium report found that the presence of different types of FOP [Front of Pack] labelling schemes in the UK make it more difficult for shoppers. It also found that overall, the strongest FOP label is one which combines use of the words “high, medium, and low”, traffic light colours and percentage of Guideline Daily Amount (GDA), in addition to levels of nutrients in a portion of the product.

[Estimated timeframe:Q2 2009-onward]

The BRC says the new research is only one piece of available information which will need to be analysed with the “mass of evidence retailers already have before any decisions are made”.

The retail body adds that research is also underway as part of a European Union review.

BRC director general Stephen Robertson (pictured), says: “Until a final decision about a front-of-pack labelling scheme is taken at a European level, it would be premature for the UK to adopt any new regime of its own. Changing and then changing again would just produce extra costs and customer confusion.”

The Food and Drink Federation has echoed the BRC’s view. Julian Hunt, FDF director of communications, says: “This is only one research study that will need to be considered carefully by policy makers both here and Brussels.”

In light of the report, the FSA will now take the findings to the UK Government, which has already signalled that it wants a single labelling system for the entire food industry.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: mad.co.uk
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4043

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