These news items are brought to you by Kuk & Baldwin:
MAJOR APPLIANCES. The US major appliance market shrank 5.1% in 2011, down to $19.1 billion – but appliance retailers appear to be bulking up on their inventories, especially on high-end units such as $7000 refrigerators and $1200 washing machines, but also on lower priced units as well. This all seems counter-intuitive – but according to the source article, although sales are down, prices are holding steady and still offer dealers relatively high margins, enough to do a lot of promotional selling. While promotions are a large part of the appliance industry, retailers should not forget that many prospective buyers have a need when there’s no promotion on and will check the YP (Wall St. Journal, 8/1/12).
CHILD CARE INDUSTRY. It’s close to a $50 billion-a-year market in the US. The trend seems to be moving toward franchising, but it’s still composed mostly of independent providers. The fact is, both segments are likely to grow, as experts predict a 9.2% annual growth rate. Right now, some 14.4 million US children are in some form of child care, and 65% of US mothers with children under age 6 are in the workplace. Finally, even though US birth rates have been down the last few years, there are still 3.94 million births per year – so there’s still good reason for child care centers to advertise (Entrepreneur, 8/12).
CONFIDENCE FACTORS. Based on the truism that a rotten apple can taint the others in the barrel, advertisers in some of the most important YP categories may do well to beef up the reliability or confidence factors in their advertising. Specifically, from 2010 to 2011, written complaints rose 32% for attorneys, 29% for restaurants, 26% for real estate agents, 22% for specialist physicians, and 17% for movers. Regarding the latter, the biggest complaint was charging substantially more than the estimate and then “holding the householder’s belongings hostage” until they pay the charge. Legislation against this tactic has already been passed, but the taint remains (Smart Money, 8/12; USA Today, 7/30/12).
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Other recent media/advertising news: You will notice this version of News U Can Use is very digital centric. There seems to have been an explosion of media advertising news recently, and it is just about all focused on the online, mobile, and social spaces. So, here are some of the more important ones for this industry:
U.S. digital-ad revenue projected to rise 16.6% this year
According to an eMarketer estimate based on Interactive Advertising Bureau/PricewaterhouseCoopers data, Google is leading an expected 16.6% rise in digital ad revenue this year. The top five players which include well know entities such as Yahoo!, Microsoft, Facebook and AOL, will account for about two-thirds of the year’s projected $37.31 billion. Search and display will continue to dominate the ad formats through 2016, per eMarketer. (Source)
U.K. small businesses don’t understand their social successes either
It really just isn’t a US SMB issue. According to a Constant Contact survey owners of many U.K. small and medium-sized businesses have unrealistic expectations for their social media campaigns. For example, almost a quarter of those polled said they’d consider a piece of content on Facebook a success only if it sparked 500 or more interactions. But Constant Contact’s Annette Iafrate says tangible results can be achieved with far fewer interactions. (Source)
Company finds 80% of Facebook ad clicks come from bots not people
Another company has indicated it is pulling its ads from Facebook and moving some to Twitter. Why? The company, Limited Run, has found evidence that 80% of ad-clicks were being generated by automated “bots” rather than human users. The company built a custom analysis tool to monitor its ad campaigns after becoming frustrated with the limits of Facebook’s own tools. The company says its custom tool found that only 1 in 5 clicks on its ads appeared to come from legitimate sources. (Source)
BIA/Kelsey: Daily deals are a $3.6B industry
At its recent SMB 2012 conference, BIA/Kelsey projected that Americans are expected to spend $3.6 billion on digital daily deals this year, up 87% compared with last year. The analyst group indicated they project the industry should swell a further 23% next year, en route to $5.5 billion in 2016. Vice President and Program Director Peter Krasilovsky said that “after astronomical growth in 2012, the online deals marketplace is showing signs of maturity.” (Source)
Twitter to offer interest-based ad targeting
Coming to a tweet you read, target based advertising. Brands will soon be able to target ads to Twitter users based on the interests they reveal in their tweets and in the network of other users that they follow. Advertisers will be able to use that data to target ads, in much the same way that Facebook advertisers can target promotions based on a user’s likes, officials said. “This has been one of the most interesting things that Facebook has had to offer to advertisers. For Twitter to do their own version makes sense,” says Jonathan Strauss of Awe.sm. (Source)
MediaMind: Video ads have killer click-thru rates
A MediaMind study is indicating that online video ads are generating remarkably high click-thru rates, with some formats proving more than 28 times more effective than standard banner ads. In-stream VAST-format video ads had a click-thru rate of 2.84%, versus 0.22% for rich-media ads and 0.10% for a standard banner, researchers found. (Source)
Mobile is the current advertising media rage. Here are three recent news items:
U.S. is emerging as global leader in mobile ad spending
The U.S. is poised to overtake Japan this year as the world’s leading market for mobile ad spending, reaching $2.29 billion in total outlays, compared with $1.16 billion in 2011, according to eMarketer. Mobile advertising is growing faster in North America than in the Japanese markets, because the Japanese markets are more mature. The Canadian market is expected to be worth about $110 billion this year, the firm notes. (Source)
Mobile advertising is limited by small screens, weak tracking tools
However, despite all the excitement about mobile, advertising on smartphones leaves plenty to be desired, experts say. The NY Times reported that tracking tools for mobile are far less effective than their desktop equivalents, and tiny screens aren’t well-suited to creative ad campaigns. “Size absolutely does matter,” says Christine Chen of Goodby Silverstein & Partners. “If you look at the real estate available on a smartphone, it’s really sad compared to not just banner ads on the Web, but also to TV, print and outdoor advertising.” (Source)
Study: Ads to account for 23% of mobile-app revenues
Apps are the really, really hot thing within mobile right now. Dig a little deep and you find some interesting things: Advertising will account for 23% of mobile-application revenues this year, an increase from 18% last year, according to a Flurry study. Ad revenues from mobile apps will total $2 billion in 2012, more than double the 2011 figure, the study reports, although most revenues will continue to come from paid apps and in-app purchases. (Source)
The last word:
Merged company headquarters will be located in Dallas
To wrap things up, here is some late breaking industry news. Not surprisingly, the News & Observer newspaper has reported that the upcoming merger between North Carolina-based Dex One and SuperMedia will cost the Raleigh area a corporate headquarters.
The two yellow pages publishers, which announced their merger last month, have decided that the combined company’s headquarters will be based in Dallas, the home base of SuperMedia, according to an internal announcement obtained by The News & Observer.
“Working together, the leadership teams of Dex One and SuperMedia have determined that the best location for our headquarters will be at the current SuperMedia headquarters complex at the Dallas-Fort Worth airport,” stated an e-mail message that went out to employees recently signed by the CEOs of the two companies, Dex’s Alfred Mockett and SuperMedia’s Peter McDonald.