pricewaterhousecoopers

Post-recession shopping, PriceWaterhouseCoopers

In “The New Consumer Behavior Paradigm: Permanent or Fleeting?” PriceWaterhouseCoopers gives us a look at the world of U.S. shopping after the current recession. The report also gives publishers and broadcasters several tips about who and how to target as prospective advertisers and audience.

Perhaps the most important point that was made throughout the study was that Baby Boomers, unlike prior recessions, are not going to be the merchant saviors this time around. Despite their numbers, this age group got burned financially by the downturn in the economy at a time when losing money no longer meant giving up toys. Now boomers are struggling to save for their impending retirement and toys are the last things on their mind. Insightful as well was the fact that Generation Y (ages 10-28) is actually a larger group of U.S. residents than are boomers, and these are the folks PriceWaterhouseCoopers is projecting will lead the U.S. out of the recession.

Knowing that, we have a word of advice for broadcasters and professionals: games. We’ve mentioned the power and draw of games before, and right now we’ll segue a little from the report to point out those insights of our own, and posts about gaming products and vendors: MySpace and social gamesWhat the New York Times can learn from the online gaming industry, Scion playing games with its Facebook fans, DFW BlastOff Network launches, Consumers will spend $1.6 billion on virtual goods in 2010, and Playing Games with your publication?

While games probably aren’t going to be an ad-supported revenue-producing darling for publishers and broadcasters, they do lure the audience that’s projected to spend the most with the merchants that do the advertising on your offline and online pages and in your broadcast commercials.

In the PWC report 72 percent of the surveyed shoppers said they have significantly changed their shopping habits, with purchases going forward “deliberate and purposeful – conspicuous consumption will give way to more conscious or practical consumerism. Rampant deal-seeking will be replaced by more purchase selectivity and the use of shopping techniques and tools discovered during the recession.”

In other words, if your media group isn’t engaging your local consumers online and via mobile with coupons, special deals, and savings resources you’re sending these savvy, cautious consumers eleswhere.

Here’s what PriceWaterhouseCoopers says are the tools that U.S. consumers learned about, grew comfortable with, realized gave them great ROI, and will be using extensively from now on:

  • list-making and meal-planning tools
  • online and mobile coupons
  • opt-in e-mails
  • comparison shopping sites
  • stepped-up loyalty and rewards programs.

The report emphasizes the increasing interest in search-engine shopping – i.e., shopping with specific products in mind rather than browsing to see what’s out there. This habit, says PWC, potentially reduces the chances of specific retailers and manufacturers being considered, and makes upselling, impulse selling and cross selling more difficult as fewer consumers take part in less targeted searches. What’s crucial, here, says the report, is that retailers and manufacturers optimize their search engines and paid search vehicles decisions. AIM Group suggests, then, that media groups focus on helping them do just that.

Boomers will lead the way down the path of buying fewer things and shopping less often. And, rather than increasing the market for lower-priced, lower-quality non-brand items, this recession has increased all shoppers’ interests in buying quality products that hold their value longer. Green products have an increasingly larger audience as well, and consumers will pay a premium for them. This is especially true in areas where they can directly benefit, such as energy-saving appliances and light bulbs.

Some other important points:

* Not yet at the point of frugal fatigue, shoppers are beginning to grow weary of sacrificing. Ways to combat the sacrifices are do-it-yourself alternatives

* There are 82 million Baby Boomers, making up 37 percent of all households

* Gen X, ages 29-45, is in a big “spending life stage.”

* There are 85 million Gen Y’ers but they only account for 6 percent of all households and 4 percent of all household spending, though this will change. Right now, it’s simply that most of this generation is not heading a household yet. They are also demanding and expecting of a tech lifestyle. Technology is a need, not a want, for this group.

Media groups should absorb this entire report and work to offer retailers and merchants not only the tools to reach these consumers the way they want to be reached, but the insight about what these U.S. consumers want – and demand.

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 Newspaper Web ad revenue won’t replace print dollars, says WAN

There is no excerpt because this is a protected post.

How much will consumers pay for online content? 62 percent

One more tidbit from last week’s World Association of Newspapers confab in Barcelona: a study by PricewaterhouseCoopers on exactly how much consumers will pay for news online.

The answer: 62 percent of what they pay for news in print. The interviews were done with 5,000 people in seven countries. The research found Americans willing to pay the most (68 percent) and Dutch the least (38 percent), with consumers in Canada, France, Germany, Switzerland and the UK falling in between.

The categories with the highest potential for charging online: financial (97 percent said they’d pay) and sports news (77 percent).

Surprisingly, mobile ranked low. According to PWC: consumers are currently unwilling to pay for online content on mobile devices. The respondents to our survey indicated that this was mainly due to the difficulty of reading the information on screen. However, additional studies also identify the data transfer charges made by telecom providers as a major factor.

Other findings:

– Since consumers “will choose the cheapest available product with comparable value,” the potential to capture even two-thirds of what’s charged for news in print is severely limited by widespread availability of free news online.

– Although most consumers say they’re most interested in general news, that’s not the news they’re inclined to pay for. Highest potential for paid-for news involves “specialized, targeted and relevant information.”

– Consumers are more inclined to pay for news provided by “high value, topic-specific publications (as opposed to) newspapers providing general news only.”

– Readers of online news “expect to be part of the intellectual debate and to be able to contribute to ‘their’ newspaper, both in terms of commenting on stories and in providing content.”

– Although there is a huge potential for growth online, print remains the largest source of revenue generation for newspaper publishers, and will continue to be so for some time.

– Use of video in online news sites gives the feel of a ‘TV-like’ experience (consumers’ favorite medium for news) giving newspaper brands the opportunity to secure online audiences beyond their print readership and into the television audience more generally.

The full report makes for fascinating reading – highly recommended. You can download it for free here.

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U.K. online advertising to grow in 09, but less than 10 percent

We’ve been reporting on online ad spend estimates in the U.S. Now EMarketer weighs in on what’s happening in the U.K.

Earlier this year, the research firm’s prediction was that U.K. online advertising would hit £3.36 billion ($6.41 billion) in 2008—a rise of 27.1 percent over the previous year.

Indeed, according to the Internet Advertising Bureau U.K., PricewaterhouseCoopers, and the World Advertising Research Center, the Internet’s share of all U.K. ad spending rose from 2.5 percent to 18.7 percent in the last five years.

That was then. This is now.

The International Monetary Fund predicts that the U.K. will experience a deeper recession than any other developed nation in 2009, with the economy shrinking by 1.3 percent, and struggling to reach 0.4 percent growth in 2010.

As a result, EMarketer trimmed its projections for U.K. online ad spending in 2008 and 2009 to £3.34 billion ($6.15 billion) and £3.58 billion ($5.30 billion), respectively.

“The good news is that even though advertising in traditional media is down sharply, online is bucking the trend,” says Karin von Abrams, a senior analyst at EMarketer. Online ad spending will still grow in 2009, but at a lower rate of under 10 percent.

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Ad spend up in H108…but where will the second half of the year find us?

The report was released yesterday but it already seems out of touch with the reality on Wall Street. The Interactive Advertising Bureau and PricewaterhouseCoopers released figures on ad spending for the first six months of 2008 and the results were positively glowing.

For H108, ad revenues reached $11.5 billion, a 15.2 percent increase over the nearly $10 billion during the same period last year. That was a gain of 26.6 percent over the first half of 2006.

Dig a little deeper and all is not rosy: Although Q2 grew 12.8 percent year-over-year, it showed a slight sequential decline of 0.3 percent from Q1.

Search ads did better than display. Revenue for search totaled almost $5.1 billion for the first six months of 2008. That’s a gain of 24 percent over last year’s $4.1 billion, although not as strong as last year when search ads were up 41 percent.

Display ads were strong though not quite as impressive: H108 saw revenue up to $3.8 billion from $3.2 billion in the same period in 2007, a 19 percent increase.

Performance based deals edged out CPM in 2008. The performance model grew 50 percent in the first half of 2008 while CPM deals’ growth declined slightly with 44 percent gains this year compared to a 45 percent increase the year.

What remains to be seen, of course, is how online advertising will fare in the second of half of 2008 when spending, due to the financials markets, is expected to be down.

The full report with graphs can be found here.

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