An interesting article on Google advertising.



Google Online Advertising versus Yellow Pages

Posted on Apr 29, 2009 | PPC Advertising

While most companies have cut back on newspaper and Yellow Page advertising because of the economic downturn, an increasing amount of advertising dollars that are being spent are going to the online search engine Google.

Much of Google’s success is fueled by small businesses. Take Bananas at Large, a music store in San Rafael, Calif., that sells pianos, amps, guitars and just about anything a musician might need.

According to J.D. Sharp, who handles sales and marketing for the store, Bananas isn’t advertising in the local paper or the Yellow Pages. Instead, Sharp says, someone looking for a guitar is more likely to go online and use Google.

“It’s the new Yellow Pages,” he explains. “I know that if they’re located in this county and they’re looking for a guitar and they put in ‘guitar, Marin County’ or something (like) that, that’s a search that’s worth paying for.”

The power of Google’s online advertising, also known as “AdWords” or “PPC” (pay-per-click) is that small business owners can control who was sees their ads by using key words like ‘Gibson guitars’ and much more specific (terms).

Google wants Bananas to find the right key words because they want the ads on their site to be relevant and not annoying; when customers are looking for electric guitars, Google doesn’t want them to see ads for wrinkle cream and flowers. No matter how much an advertiser is willing to pay, Google won’t put up an ad when it isn’t related to a specific search. In fact, Bananas pays Google only when someone actually clicks on its ad.

Google also allows small businesses to write and display multiple ads to see which gets the best results. So, they can test ad headlines that says “Guitars in Marin” and another that says “Bay Area Electric Guitars” and Google will tell the store which one gets more clicks.

It isn’t just small businesses that are flocking to Google — even the struggling automakers are spending a larger portion of their budgets on Google. Matt Van Dyke who heads up U.S. marketing for Ford Motor Co. says the company is one of the automaker’s most important outlets because that is where customers are researching cars.

“In an era where marketing budgets are under pressure, search is a pretty powerful tool,” says Van Dyke.

(Source: NPR’s All Things Considered, 05/05/09)

At a time when the economy is demanding that most people cut back on frivolous spending, it seems that teenagers are also being affected.

-Neal


Teens, Too, Are Tightening Budgets
Demo Is Cutting Back on Food and Excursions, Still Spending on DVDs and Music in Recession

By Natalie Zmuda

Published: April 27, 2009

NEW YORK (AdAge.com) -- In a recession, one group can usually be counted on to keep spending: teens. Their parents often pick up the tab for necessities, leaving them free to spend the income they earn from part-time jobs and birthday money from grandma on themselves. But in this downturn, a rather surprising phenomenon is emerging: tight-fisted teens.

According to research from Piper Jaffray, teens are becoming more attuned to the pinch on household budgets from the economy, which is having a "dramatic impact" on the $125 billion the demographic spends each year. Teens generally have about $5,000 a year burning a hole in their pockets, but they are spending about 14% less this spring than in spring '08.

A study from Euro RSCG Discovery found that 92% of females ages 13 to 21 said they are at least somewhat worried about the economy, while 87% of males are. Teens are now asking themselves, "Do I need that?" and "Can I wait to have that?" Those are questions that historically have been of little concern to an age group that spent money as fast as they made it.

A grim unemployment picture for those ages 16 to 19 years old is also hampering spending. Unemployment rates in that age group have been rising, hitting nearly 22% in March, the highest rate seen in more than a decade. The national average was 8.5% last month. "Teens, like their parents, are coming up against a tough job market. The standbys of restaurant and retail are trimming their ranks, not hiring," said Candace Corlett, president of WSL Strategic Retail, a consulting group. "It's going to be a tough summer for teens."

So what are they scrimping on? According to Piper Jaffray, they are cutting back on apparel, beauty and food, and excursions to movies, concerts and sporting events. Of course, there are limits: Teens are not willing to live without things such as music, DVDs, video games and video-game systems, and spending in those areas has been less affected.

Apple, Xbox and Electronic Arts can rest easy -- as can Nike and Starbucks.

Beauty takes hit
Though apparel has seen one of the most dramatic declines in spending, slumping 22% year over year, teen spending on accessories is flat, and outlays on shoes have increased 4%, according to Piper Jaffray. The beauty category has seen a 12% decrease year over year.

Ellen Davis, VP at the National Retail Federation, said the recession has coincided with a sea change in teens' spending habits. The latest gadgets have replaced trendy jeans and designer duds as must-haves. "Today's teens are so focused on communication that iPhones are becoming the new jean," she said.

Teens have also been trimming expenditures on eating out, spending some 20% less compared with fall 2007. Nicole Miller Regan, senior research analyst at Piper Jaffray, said one of the most interesting findings of the survey is the increasing importance of value to the group. Chipotle and McDonald's are gaining market share, though Starbucks remains the teen favorite.

"Key influencers have always been taste and convenience, but now value is trumping that," she said. "They're eating more at [quick-service restaurants] than they are at casual dining. It's all about value, value menus, dollar menus and a lower average ticket."

There are a few bright spots, however. As a percentage of teen spending, video games have increased to 8% from 7% last spring. The Piper Jaffray study also found that teen gamers are far from price-sensitive, with 54% of all purchases ringing in at $50 or more. Music and DVDs also saw an increase to 11% of teens' budgets from 8% last spring, despite the rise of music and media downloading.

Keeping up appearances
"Peer pressure is still peer pressure. When they're with their friends, they're not willing to cut back on things that give them a badge," said Zain Raj, CEO-Euro RSCG Discovery. "And spending on things that allow them to connect with their peer set are not as affected."

Teen spending
Survey of 600 students, with an average age of 16.3 years. Source: Piper Jaffray Investment Research
But, increasingly, teens are tuning in their parents, as opposed to tuning them out. Experts say teens are taking cues from parents who, even if they haven't been directly affected by the recession, are at least stressed. Many parents are also bringing the recession to the dinner table. A survey from CoolSavings, a division of Q Interactive, found that 84% of heads of household are discussing saving and budgeting with kids. And 81% say kids are aware of the recession and the impact it is having on household budgets. Kids are even beginning to pitch in, using coupons for things such as movies, music, museums and theme park trips, the survey found.

That's in keeping with data WSL has cultivated showing teens are being more empathetic than apathetic. "It's startling. At the risk of stereotyping, we did see teens as sort of self-absorbed," said Ms. Corlett. "But teens are sensitive to what their parents are going through."

Today's teens are also more plugged in than their predecessors, a key differentiation from the recessions of the early 1980s, 1990s and, even, 2001. The rise of social networking has enabled teens to have hundreds of "friends" through services such as Facebook and Bebo. And that has made this recession much more personal for them.

"Teens have hundreds of friends on Facebook, so they're hearing about someone's dad losing his job or someone who has to move because their parent's company is downsizing," said Ms. Davis. "They're seeing the impact of the recession first-hand, even if it's someone they barely know."

Notice all the Filet o' Fish Commercials ?

Have you noticed all the Filet o' Fish Commercials on TV lately from the likes of McDonalds & Wendy's ?

Did anyone make the connection that it's during the season of Lent... just another example of proactive marketing segmenting niche demos to move the sales needle.

Jim

'Buy American' Still Resonates

'Buy American' Still Resonates
More people say they'd only consider cars from U.S. companies
March 5, 2009

-By Mark Dolliver


NEW YORK As U.S. automakers struggle to stay alive, buy-American consumer sentiment is one of the factors they have going for them. In USA Today/Gallup polling released this week (and fielded late last month), 37 percent of respondents said they'd "only consider cars from an American company" when in the market for a new vehicle.

That's up from 30 percent saying the same in a December poll. There was a slight decline (from 15 percent to 12 percent) in the number who said they'd only consider buying from a foreign car company. Half the respondents said they'd be open to either sort.

There was wide variation among different age groups in the incidence of buy-American-only sentiment. While 45 percent of the poll's 55-and-older respondents said they'd only consider American cars when making a purchase decision, the number fell to 37 percent among the 35-54-year-olds and to 27 percent among the 18-34s.

Given the geography of the American car business, it's not surprising that there's much regional variation as well. Fifty-two percent of respondents in the Midwest put themselves in the buy-American-only category, vs. 34 percent of those in the South and 31 percent in both the East and the West.

A breakdown by household income suggests Detroit will have best luck selling low-end rather than high-end cars through an appeal to national loyalties. Respondents with household income under $30,000 were almost twice as likely as those with income of $75,000-plus to say they'd only consider buying from an American automaker (49 percent vs. 26 percent). Those in the $30,000-74,999 bracket fell in between, at 37 percent.

Older Folks Worry Less About Money

Poll: Older Folks Worry Less About Money
Feb 27, 2009

-By Mark Dolliver


NEW YORK It's often said that marketers are foolish to neglect older consumers as much as they do. That may be all the more true these days, as recession-frightened consumers tightly rein in their spending. Gallup's tracking poll this month finds old folks much less likely than their younger counterparts to say they'd worried about money on the day before being questioned.

In February polling through this Tuesday, the incidence of previous-day worry about money was highest among the 40-49-year-olds (46 percent) and 30-49s (44 percent), and wasn't much lower among the 50-59s (41 percent) and 18-29s (39 percent). But it dropped off sharply among the 60-69-year-olds (29 percent), and even more so among those 70-89 (17 percent).

You might think older people worry less about money these days because they're less likely to be in the workforce -- and, hence, less likely to be worried about getting thrown out of work. "But in general, the decline in worry among older Americans occurs regardless of employment status," says Gallup's report on the findings.

Overall, the percentage of respondents saying they'd worried about money on the previous day is averaging 37 percent so far this year -- a bit higher than for the same period in 2008, but lower than October's peak of 43 percent.

Women were a bit more likely than men to say they'd worried about money on the previous day. The gender gap was largest in the 40-49 age bracket, with 43 percent of its men and 49 percent of its women reporting previous-day worry. The 30-39-year-olds were a (slight) exception to the general trend, with 44 percent of the men and 43 percent of the women reporting such worry.

TV Ads More Effective Than Ever

Study: TV Ads More Effective Than Ever
ARF analyzed 388 case histories from seven different research agencies
Feb 25, 2009

-By Kenneth Hein, Brandweek


NEW YORK There has been no shortage of articles questioning the effectiveness of TV ads in the digital age. And more than one expert has proclaimed: "the 30-second spot is dead." However, a massive study conducted by the Advertising Research Foundation begs to differ.

An analysis of 388 case histories from seven different research agencies found that TV is not only as effective as ever, it is possibly even increasing in effectiveness when it comes to building sales.

"Marketers need to be more confident in the fact that there are different ways that their brand messages add value to people's lives. [TV ads] help simplify the [buying] decision. As people's lives become more complicated, there is great value to that, said Joel Rubinson, ARF's chief research officer. "They want to zone out and watch TV and relax and let the communications wash over them. It's an extension of the brand experience."

Data from Point Logic, for example, found that among 25 touch points measured between 2004 and 2007, TV moved from seventh to fourth in terms of people impacted per $1,000 spent.

TV was No. 1 in terms of raising awareness. ARF also reviewed research from IRI, ARS, PM Group, Dratfield, Marketing Evolution and Millward Brown/Dynamic Logic. The case studies spanned from 1990-2008.

Rubinson said the findings show that "units sold numbers increased as a result of increased TV impressions. [When you see it] across 388 case histories, I think you've got to believe it."

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