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Monthly Archives: October 2013

ImageFah who for-aze! Dah who dor-aze! Welcome Christmas, bring your cheer…

For every Who down in Who-ville, Christmas was going to get worse before getting better. As in Who-ville, we may have our own Grinch to deal with:

With the 2013 holiday season of 25 days a short one (compared to 2012 where there was 31 days between Black Friday and Christmas), the bitter taste of the 16 day government shutdown and a temporary budget deal that will only hold the nation over until February 7, the Consumer Confidence Index (CCI) isn’t expected to be a strong one this year.   And with all of this coming shortly after a lackluster Back-to-School season where sales missed Wall Street expectations, things aren’t boding well for the retail industry.

Last year:

According to the NRF’s recently published Survival Guide, the retail bread winners for 2012 were the Jewelry sector for racking up the highest percentage of annual sales (29%) during the holiday season and Food & Beverage sector which brought in the most (over $110 million) in sales during the same two months.

This year:

NRF predicted (pre-shutdown) holiday sales to increase 3.9%, and Shop.org (also pre-shutdown) estimated online sales to increase 13-15% over 2012 figures.

The LA Times reported mid-shutdown:

In a public letter to Congress on Oct. 9, National Retail Federation Chief Executive Matthew Shay said the government shutdown had had far-reaching consequences for retailers, adding that “only the collapse of Lehman Brothers … has done more damage to consumer confidence in such a short period of time.”

After the shutdown ended, Luke Duecy of komonews.com reported NRF’s holiday sales estimates dropped to -2% from 2012 on gifts and decorations — yes, that’s negative 2%. So what does this mean for retailers?

Shop.org seems to have the most thorough analysis so far, with these 6 takeaways from a recent survey:

  • Consumer sentiment is wavering…
    U.S. consumers continue to be concerned about the state of the economy, with half indicating that this uncertainty will impact their holiday spending plans. These shoppers expect to spend less overall, shop for sales, comparison shop, and use coupons more often, among other measures. Almost three out of five women say that they focus more on what they need versus what they want, while half note that they have become more practical and realistic in their purchases. Retailer messages communicating value, quality and other key product attributes will resonate well with consumers looking to stretch their holiday budgets.
  • …But holiday shopping is off to an early start.
    More than 40 percent of holiday shoppers surveyed said they started their shopping in October or even earlier this year. Two-thirds of online holiday shoppers who started early did so to spread out their budget. Another half want to avoid the stress of last-minute shopping and the crowds that come later in the season. Many have attributed this to seeing prices and promotions earlier, with more than two out of five noting that these offers have been “too good to pass up.”
  • Online holiday shoppers expect to spend 20 percent more than other holiday shoppers…
    Online shoppers expect to spend a net average $884.55 on gifts, decorations, food and more this holiday season, compared with an average $737.95 among all holiday shoppers. And those who own smartphones and tablets will use them to research products, compare prices, look up retailer information, redeem coupons – and actually buy.
  • …And “self-gifting” is on the list again.
    Online holiday shoppers anticipate spending an additional net average of $159.73 on themselves as well, so retailers shouldn’t hesitate to craft some marketing messages to appeal to this sentiment. The online “self-gifting” budget compares with $129 for all holiday shoppers.
  • Retailers are preparing with marketing plans and investments…
    As we saw in the first part of the 2013 eHoliday retailer survey this summer, retailers have been investing in many aspects of their digital retail business to be ready for the holiday season. In this update, 68 percent of retailers said they’re increasing their use of Google Product Listing Ads (PLAs) for the holidays. Another one in five will also increase their use of SMS marketing compared with last year. Retailers should test PLAs to ensure they are competitive on the search results page before the Thanksgiving rush and test text messaging calls-to-action and offers to opt-in subscribers.
  • …As well increasing inventory and staff.
    Seven in 10 retailers also noted that they expect to carry higher inventory levels this year, while another 18 percent are increasing access to inventory via drop-ship. Staffing is also top of mind for retailers: one quarter expect to increase in-store staff compared with last year, while one-third will increase staffing for their customer service operations.

The morals of the story are:

  • A strong online presence and “too good to pass” deals on “need items” (vs. want) are going to be key.
  • And don’t just display those deals: show comparison shoppers why they’re better than those offered by competitors.
  • Most important of all – don’t wait!  Shoppers are already out making purchases to spread out spending and minimize last minute stress.

Remember the 2013 holiday season is still young — and even the Grinch turned things around before Christmas was over.

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It’s hard to pass up an article that opens with:

When the guy who ruined the Internet with banner ads tells you that a new kind of advertising might destroy journalism, it tends to get your attention.

It certainly grabbed mine! Regardless of your opinion of banner ads, no one really wants journalism take another hit.

The new kind of advertising referenced here is native advertising.  So what is native advertising? Wikipedia defines it as: “a web advertising method in which the advertiser attempts to gain attention by providing content in the context of the user’s experience. Native ad formats match both the form and the function of the user experience in which it is placed.”

You may say, “That sounds like an old marketing method called an advertorial, what’s the problem?”

Good question, the hang-up isn’t with the concept of native advertising (see Wikipedia’s article on how it differs from advertorials), but with the execution. Some sites, like Huffington Post, keep their sponsored content separate, while others like The Atlantic, have run the risk mixing it in with regular content and have gotten caught. Chances are the general public has forgotten about mistakes like The Atlantic’s, but how many readers have they lost for good? Maybe that number is insignificant, but what about the level of influence The Atlantic holds over its readership – that’s not something you can grow with a subscription campaign.

Ben Kunz breaks down native advertising executions:

‘The Frame’ is the most innocuous of sponsored content, where an article has an intro or ending noting it is sponsored by a marketer. The sponsor acts as a wooden frame, holding the content up for your view but not in the picture. No real issues here.

‘The Insertion’ is where the actual content is produced by a marketer and mirrors real stories or videos. Examples include Quartz.com or The Huffington Post’s entire section of sponsored content, where Chevron writes about the future of energy or IBM notes it is a platform for sharing comments about vampire movies. Such native insertions can cause trouble, because even when the source is disclosed, the attempt of the content to look native confuses readers…

‘The Misdirection’ is a deeper level of trouble, where content is specifically designed to misdirect the source. Facebook Beacon was a classic example, in which Facebook broadcast your commercial purchases on other websites to friends. Beacon scared the wits out of Facebook users… IZEA has washed over similar rocky ground with its past paid posts, or acquisition of Be-A-Magpie, which helped marketers buy the minds of tweeters. All of this could be disclosed, but the intent is clearly to misdirect the recipient.”

Separation of journalists and advertisers was arguably more distinct during the earlier days. Davis “Buzz” Merritt notes that “At McCormick’s Chicago Tribune building, there were even separate sets of elevators for newsroom people and business people. The editor’s business-side partner, the general manager, spoke only to the editor among newsroom employees.” Lori Luechtefeld, and many others argue that the line has thinned quite a bit and has definitely been pushed too far in the wrong direction.

In an effort to present a somewhat balanced perspective on native advertising, please refer to the piece: Why content marketing should be going native, by Paul Keets, London Bureau Chief of White Light Media (http://www.the-cma.com/news/why-content-marketing-should-be-going-native). While the title suggests he is of the opposing view compared to Lori, a closer read will show that he just pushes the line of what’s acceptable further than Lori.

At the end of the day, they say honesty is the best policy, and finding a happy a happy medium is key. Marketing isn’t black any white anymore, if it ever was!