What's the Big Idea? Leveraging Consumer Trends & Insights

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1 What's the Big Idea? Leveraging Consumer Trends & Insights Pittsburgh AdFed Presentation September 19,

2 What We ll Share Today Why trends are important 4 key consumer trends A selection Relevant stats Examples Implications for advertising 2

3 Why is Consumer Trend Awareness Important? Trends are deeply rooted in consumer s needs, wants and desires Customer Centricity By understanding these core behaviors you will be inspired to create more effective advertising for your customers And you will be focused on the FUTURE!! 3

4 2013 Consumer Trends Impacting Advertising TRENDS BEHAVIOR 1 MESSAGE ME AGAIN THE FATIGUED AND DISTRACTED CONSUMER 2 SHOWROOMING A NEW WAY FOR TRIAL 3 THE RISE OF SOCIAL TV REINVENTING THE RETAIL EXPERIENCE 4 REDEFINING CELEBRITY LOOKS LIKE ME 4

5 1. Message Me Again Fatigued and easily distracted consumers are seeking a seamless cross-channel experience for key messages.

6 Why Are Consumers Fatigued And Distracted? According to the Annual Time Use Survey, Americans are sleeping less, working more and having difficulties accomplishing tasks. More consumers listen but do not hear; memory/recall of ads is at all-time low # of Contacts Source: Top Advertising publications and blogs. Media fragmentation: consumers are using more devices across a common set of platforms. Key is to distribute advertising across as many types of media and platforms that your budgets can allow. Digital content will have to be smarter, more creative and more visual to connect and engage with today s audiences. PepsiCo leading way with food brands. 6

7 Reinventing Differentiated Campaigns In 1999, W.F. Kellogg Foundation funded the first differentiated buy local advertising campaign that leveraged multiple cross-channel vehicles. Local radio, signs on buses, signs on bus stop, point-of-purchase materials, door hangers, public access TV, ads in local newspapers and numerous partnerships. Multichannel advertising is not new; it s the types of channels that have changed. Look at number of registered users of each platform and focus on the customer experience of each. Facebook Growth ,200,000,000 1,000,000, ,000, ,000, ,000, ,000,000 0 Twitter Growth ,000, ,000, ,000, ,000, ,000, ,000,000 0 Pinterest Growth: ,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 The Message Me Again trend suggests that there is a need for renewing seamless cross-channel experiences that deliver messages across platforms. 7

8 2. Showrooming 58% of adult smartphone users regularly engage in showrooming, the practice of checking out products in stores while comparing prices on smartphones. 8

9 What s Causing Showrooming Behavior? Research provides clues about consumer behavior: Consumers are still focused on increasing their savings and paying down debts. Persistently high unemployment levels and a difficult environment for job seekers are reducing retail spending. Price-sensitive consumers will continue to be more conservative. When they do spend, they want to feel like they are buying merchandise that is fairly priced, if not a significant bargain. Meanwhile, competition among retailers has never been tougher. Superstores are battling each other on every major corner, while Internet marketers are stealing customers from stores. Thus, many consumers are using stores as showrooms where they can touch and feel the merchandise, and then making their purchases at a lower cost online at sites like Amazon.com or at a competitor. 9

10 Showrooming Statistics Armed with their smartphones, shoppers can do their research while they're in the store Get more information about the product they're interested in. Read other customers' reviews. Compare prices. ForeSee research shows that last holiday, 70% of mobile users used their mobile phones while in a retail store 62% visited that company s website and 37% a competitor s web site. Customers are often finding the same item cheaper at an online store or at a competitor s store. Reasons to Use Smartphones While Shopping Compare prices Find nearest store Check for discounts Read reviews View competitive product Check availability Compare features 38% 37% 48% 46% 58% 58% 66% Source: E-Marketer 10

11 Leveraging Showrooming Punitive messages such as restricting Wi-Fi access or penalizing consumers do not work. What has proven successful is: Interactive point-of-purchase displays that take customer to company s web site. Customer sales people to establish one-on-one connections by helping customers order online and sign customers to loyalty programs. The personal face-to-face interaction is different because the resource person represents a new sales person experience. Digital sales people that connect customers back to the store can help thwart showrooming behavior. 11

12 3. The Rise of Social TV The use of devices while watching TV is rapidly expanding. Retailers like Target and American Express are the first to act. 12

13 The Psychology Behind It We are a nation of multi-taskers and multi-screeners. Most consumers' media time is spent in front of a screen: computer, smartphone, tablet and TV. Consumers now seek out interaction between the sender and content. Recall of passive ads is declining. The use of second screen provides a parallel path, whereby the user can become an active agent in the broadcast content or in just some other activity, rather than interrupt playback. Psychologists say consumers tend to remember more details on the second screen because they feel involved. Nielsen and Google have published studies that demonstrate a strong tendency of the user to use a device while watching television and consumers having stronger recall of ads and stronger purchase behavior when consuming content via multiple devices. Multiple screens also make us feel more efficient because we can act spontaneously and get a sense of accomplishment, resulting in a feeling of found time. 13

14 Social TV Statistics The Market Half of U.S. households have smartphones; 20% have tablets. 40% of Americans use them while watching TV at least once a day 62% do it multiple times each week. Over one-third of Active Twitter users tweet about TV. Right now consumers are buying featured products. Tablet or Smartphone Activities While Watching TV (among those with devices) Looked up general information 76% 63% Surfed Web 68% 55% Visited social networking site 53% 52% Looked up information about program 49% 34% Read conversations about program 21% 18% Buy product/service that is advertised 20% 13% Vote/send comments on program 13% 13% Purchased coupons/deals (program) 13% 9% Tablet Smartphone 14

15 Social TV and Advertising Companies are aligning TV advertising with online strategies. Large retailers are associating themselves with consumers making purchases based on what they see in their favorite TV programs. Second-screen marketing enables viewers to buy items curated from select programs. Consumers are less upset about marketing messages being properly placed on new screen when they accompany something that benefits the fan. 15

16 4. Redefining Celebrity Consumers are seeking validation from messengers with celebrity status within their own circles.

17 Consumers Want Someone That Looks Like Me Many consumers resent bad celebrity behavior and feel duped: Michael Phelps (marijuana), Serena Williams (foul-mouthed, spoil sport), and Kayne West (bullying) are just a few examples. Consumers are less naïve as steroid scandals tar baseball stars and shoplifting celebrities go in and out of rehab. Polling on celebrities shows decline in favorability and trust. Brand vs. Brand attack ads are on the rise Celebrities like Jared feel the heat (Dominos vs. Subway). Social media has allowed people to find regular people online who are experts on subjects and conversant in issuing advice. The new influencer looks just like me, but just a little better; not so much like a celebrity. 17

18 Redefining Celebrity Today s consumer is more likely to be influenced by someone in their social network than a weak celebrity connection. They are informed, time-compressed and difficult to impress. Influenced by ads that have a strong, watchable, creative message high on attention, relevance, information and desire. Resist products being pushed at them from typical celebrities. Research* into effectiveness of celebrity ads and online influencers suggest: Celebrity ads performed either below average or merely equaled noncelebrity ads (e.g. regular people). Generation X, Y and Z especially gravitate to ads with influencers, defined by reach, resonance and relevance. 18 *Source: The Many Faces of Influence (Traackr)

19 Choosing a Messenger Celebrity endorsements aren t dead, and many are successful. But increasingly a messenger must be: Relevant and provide targeted information. Create a genuine and authentic connection to the brand. Offer a logical and meaningful interaction with a product. Be a recognized expert or influencer within the more narrow field. These brands eschewed celebrities and were successful: 19

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21 So What...? Do these trends mean to you as account managers, strategists, creatives, media planners and digitalists? You have a fatigued and distracted consumer, creating new ways to see and try a product, reinventing the retail experience and increasingly influenced by looks like me spokespeople. How is your agency addressing this? 21

22 Thank you!