These news items are brought to you by Kuk & Baldwin:
AUTO MARKET. Sales and leases of all passenger vehicles, new and used, fell significantly between 2007 and 2009 – with new cars dropping 36% and used cars 14%. The figures for 2010 are being compiled but are not expected to show any turnaround. But in spite of the statistical decline in used car sales, there is now a strong demand for used cars. One big reason is that people are keeping their cars longer. Also, smaller, more fuel-efficient models less than 10 years old have increased in value, some 20% to near 30%. All of this is good news for the repair business, since increases in value can better justify decisions to do major repairs rather than trade (Auto Body Repair News, 11/18/11).
2011-2012 COST/VALUE REPORT. With the housing market still in the doldrums, the figures for cost recoupment of remodeling jobs are still lagging way behind their peaks in 2005. For example, the highest recoupment within 2 years is now siding replacement with fiber-cement, at only 78%. Other recoupment percentages include: siding replacement (vinyl), 70%; roofing replacement, 58%; “minor” kitchen remodel up to $20,000, 72%; window replacements (vinyl), 69%; window replacements (wood), 66%; and bathroom remodels, 62%. As you might expect, most of the highest recoupment projects are exterior and/or add curb appeal to make the property more saleable (Remodeling, 11/11).
THE FINAL PARTY. The National Funeral Directors Association says that the US average cost of a complete funeral is now about $7800. But new data from an AARP survey of people over 50 suggest that more people are deviating from tradition: (1) only 23% have prepaid at least part of funeral expenses for themselves or someone else; (2) 34% have planned part of their own or someone else’s “final party”; and (3) 79% have done no comparison shopping for professional funeral services. Indeed, as more people take matters into their own hands, the funeral services market will likely become more and more specialized and may require some ad targeting in the YP (Wall St. Journal, 10/31/11).
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Other recent media/advertising news:
Sorrell and Nadal Project Ad Growth in 2012
Though the U.S. economic outlook is still pretty grim, the prospect for ad spending is brighter for the coming year, according to leaders of WPP Group and MDC Partners. Martin Sorrell of WPP said his company’s figures for November were better than expected, and “we continue to see good momentum.” And MDC’s Miles Nadal said that in a low interest-rate environment, companies are concluding they’ll see a “superior rate of return” from spending on marketing. (Source)
Online Spending Growing & Almost Ready to Surpass Newspapers
Online spending rose from $15.1 billion to $19.5 billion from Nov. 1 to Dec. 4 compared with last year, according to comScore. But that may dip temporarily as “online retailers typically reduce their promotional activity as they attempt to restore their margins,” warns comScore’s Gian Fulgoni. Upper middle class earners led the early charge, possibly experiencing what Fulgoni called “austerity fatigue.” (Source)
Add to that, this chilling reality: Newspaper advertising may be overtaken by online platforms as the leading spot for local ad dollars in 2013, according to a projection by Borrell Associates. Currently, digital accounts for 17.5% of local ad spending while newspapers hold 22.7%. But online growth of 20%, led by 66% growth in mobile ad spending, is expected to outpace the 5% growth across all media next year. (Source)
More newspaper horrors: Gannett’s third-quarter results showed an uptick in nonpolitical TV ad revenues, a 27.5% gain in digital advertising revenues at TV station properties and a 26.7% gain in retransmission fees. On the print side, national advertising at USA TODAY and other Gannett properties dropped 17%. Overall, digital gained 10%, totaling $272.6 million for the quarter. (Source)
Here Fido: Americans continue to ramp up spending on pets
U.S. spending this year on pet products is expected to be a little more than $50 billion, per American Pet Products Association data, a record-setting figure for the industry. Meanwhile, Mintel predicts that spending in this sector will grow 33% over the next five years. (Source)
For Digital Giants, It’s Been A Long Road to Revenue Land
Yellow Page publishers would do well to note this most recent article: For both Google and Facebook, the road to significant revenue has been a long one along which the digital giants having to make numerous adjustments along the way. Common to both has been opportunities in catering to smaller local and niche businesses looking to target consumers based on interest and location. (Source)
Population Shift – Heading to the Cities
Almost all of the U.S. population growth between 2000 and 2010 was urban, according to an analysis of the latest census data. Marketers are responding to this trend by ramping up products and services aimed at city dwellers. For example, Ikea is putting more of a focus on furniture designed for small spaces, while some big-box retailers are scaling down their store size to fit city centers. (Source)