The Automotive Comeback Story of the Year?

2010 Chrysler Town & Country Minivan
Chrysler's Town & Country minivan: On top of the charts again.
Not surprisingly, the ongoing saga of the GM bailout and subsequent re-listing of General Motors on the New York Stock Exchange was the biggest automotive news story of 2010.

But in what may be the more surprising comeback story, the Chrysler Town & County minivan is poised to regain the top spot in a segment that Chrysler once dominated, going all the way back to when the first minivan rolled off the assembly line in the early 1980s.

But in recent years, beset by organization troubles along with spirited competition from other domestic and imported automakers, Chrysler had lost its first-rank position to the Honda Odyssey while its overall share of the minivan market declined.

For December, the Town & Country’s unit sales were over 102,000, compared to the Odyssey’s ~98,000. Chrysler’s sister brand, Dodge, racked up minivan unit sales of ~89,000, the same as the Toyota Sienna. That puts Chrysler on pace to lead the minivan pack for all of 2010 and reclaim the sales crown.

It’s no secret that Chrysler considers the minivan to be one of the keys to its brand identity – and a key component of its comeback strategy. “Our goal is regaining leadership. We consider we own it and we need to regain what once belonged to us,” the Detroit News quotes Olivier Francois, head of the Chrysler brand, as saying.

[Another reason Chrysler might have lost its edge over the years in the “minivan derby” was a perception of quality issues and the way its vehicles handled. But speaking as someone whose family has driven Chrysler minivans since 1990 – and currently owns four Dodge Caravans spanning ten years’ worth of model years – we’ve never encountered any major quality issues beyond the expected maintenance requirements for vehicles we routinely run for close to 200,000 miles each.]

If a car maker is making a major push for product sales, it makes sense to place more inventory in the showrooms for consumers to buy. Significant “upgrades” to Dodge and Chrysler minivans are being introduced for 2011, and greater numbers of vehicles will be delivered to dealerships, it’s being reported.

Of course, no one believes that Chrysler’s goal to maintain the sales crown for minivans will be slam-dunk easy. Japanese automakers are introducing their own all-new minivan models in 2011.

And why not? They’re seeing an increase in consumer interest in the minivan segment just like everyone else. While no one expects sales of minivans to return to the stratospheric levels of the late 1990s, stories about the “death” of the minivan that were being published in more recent years have now completely disappeared from the newswires.

One of the interesting questions Chrysler will be facing in the coming years is whether to continue to cultivate two separate minivan nameplates or to consolidate them into one. Chrysler has tended to lavish more “design” attention on the Town & Country and more “performance” focus on the Dodge Caravan. As a result, the Town & Country is now more popular with female consumers and the Caravan more popular with men.

This “gender-focused” targeting finds its penultimate manifestation this year with the introduction of Dodge Caravan’s so-called “man-van” – a high-performance version of the Grand Caravan featuring a “macho” all-black interior with red stitching. Can’t wait for one of these show up in the auto showroom!

Pew Chronicles the Public’s Knowledge of Current Events: A Mile Wide and an Inch Deep

NewsIQ Research from the Pew Research CenterAll right, folks. Are you prepared to be depressed?

The Pew Research Center for People and the Press has just published the results of its annual News IQ survey in which it asks members of the U.S. public a baker’s dozen questions about current events.

A total of ~1,000 people were surveyed by the Pew Research Center in mid-November. The multiple choice survey covered a mix of political, economic and business issues and included the questions shown below. (The percentages refer to how many answered each multiple choice question correctly).

 The company running the oil well that exploded in the Gulf of Mexico (BP) … 88% answered correctly
 The U.S. deficit compared to the 1990s (larger) … 77% correct
 The political party that won the 2010 midterm elections (Republicans) … 75% correct
 The international trade balance (U.S. buys more than it sells) … 64% correct
 The current U.S. unemployment rate (10%) … 53% correct

 The political party that will control the House of Representatives in 2011 (Republicans) … 46% correct
 The state of Indian/Pakistani relations (unfriendly) … 41% correct
 The category on which the U.S. Government spends the most dollars (defense) … 39% correct
 The name of the new Speaker of the House (John Boehner) … 38% correct
 The name of Google’s mobile phone software (Android) … 26% correct

 The amount of TARP loans repaid (more than 50%) … 16% correct
 The name of the new Prime Minister of Great Britain (David Cameron) … 15% correct
 The current U.S. annual inflation rate (1%) … 14% correct

The percentage of respondents who answered all questions correctly was … fewer than 1%. Ten questions? … just 6% answered correctly. Eight of the questions? … only 22%.

On average, respondents answered just five of the 13 questions correctly. Even college graduates scored relatively weak, with an average of just seven questions answered correctly.

The public appears to be best informed on basic economic issues such as the unemployment rate and the budget deficit, while nine in ten respondents correctly identified BP as the corporate culprit in the Gulf of Mexico oil spill event. Not surprisingly, these were among the biggest news stories of the past several quarterly news cycles.

The worst scores were recorded on the TARP program and the current inflation rate, which fewer than one in five respondents answered correctly (about the same as the David Cameron/UK question which people could be forgiven for answering incorrectly).

You can view detailed results from the survey, including breakouts by age, gender, race and political party affiliation. Not wishing to step into a thicket by editorializing on these differences, I’ll leave it to you to see for yourself by clicking through to the Pew findings on your own.

Pew concludes that while Americans are aware of “basic facts” regarding current events, they struggle with getting a good handle on the specifics.

Might this be a byproduct of how people are consuming news these days? After all, there’s far less reliance on newspapers or news magazine articles … and more emphasis on “headline news” and short sound bites.

That’s the sort of recipe that results in people knowing the gist of a story without gaining any particular depth of understanding beyond the headlines.

Now that you’ve seen the correct answers to the questions, you won’t be able to test yourself against the public at large, so I’ve kind of spoiled the fun. But a little honesty here: how well do you think you would have scored?

More Insights on Online Display Ad Effectiveness

Ad clickthrough rates
Clickthrough rates are only part of the story in online display advertising.
Last week, I blogged about the low level of clickthroughs on online display ads – basically a cipher at 0.09%.

In a conversation with a business colleague of mine who is with one of our healthcare client accounts, she mentioned that it’s also important to consider the branding aspects of online display advertising. The idea that people may not click through at that precise moment in time, but are favorably disposed to pay a visit later on.

This got me to looking for additional research into the matter. What I found from several advertising digital media marketing and data reporting companies – MediaMind (Eyeblaster) and comScore – confirms this impression.

An analysis by comScore of consumer clickthrough behavior covering ~140 online display ad campaigns found that only about 20% of the conversions came after clicking on a banner ad. The remaining 80% of conversions happened among those who had seen the ad but not clicked through at the time. Instead, they converted at a later date.

Other interesting points from comScore’s analysis include:

 Online display ad campaigns yielded nearly 50% improvement in advertiser website visits as measured over a 30-day period.

 Users who were exposed to the online advertising were ~38% more likely to conduct an advertiser-related “branded” keyword search in the subsequent 30-day period.

 Users who were exposed to the online advertising were ~17% more likely to make a purchase at the advertiser’s retail store.

Similarly, MediaMind’s analysis of ~100 million conversions from thousands of online ad campaigns has found concurring results – namely, that only ~20% of conversions are the result of a clickthrough, while the vast majority of the conversions happen at some point after viewing the banner ad without clicking on it at that moment.

The takeaway from all this: It’s a mistake to consider online advertising clickthrough rates in a vacuum. Because at best, it’s only a partial measure of the effectiveness of an online ad program.

The “Skinny” on 2010 Holiday Spending

Consumer Holiday Spending
Holiday spending on the rise? Yes, but ...
The “early returns” from this year’s Black Friday retail sales are quite encouraging. Online retail sales are experiencing an even bigger bump in activity. The question is, do these positive early results foreshadow a strong holiday season overall?

Each year, Gallup attempts to answer that question in advance by conducting a poll every November in which it asks U.S. consumers for a prediction of the total amount of money they plan to spend on holiday gifts. This year’s poll findings were published this past week.

And the results? The good news from the consumer economy’s standpoint is that the average personal spending expectation has risen to $714 for 2010, which is ~12% higher than last year’s $638.

The not-so-good news is that we’re still in the doldrums when measured against most of the previous decade. In fact, only in the years of 2009, 2008 and 2002 has expected personal spending been lower than it is this year.

If we take an average of the ten years covering 2000-2009, the expected personal spending found by Gallup’s survey is $747, which means that 2010’s dollar amount doesn’t even come up to the average of the past decade.

Here’s another interesting finding from the survey: Evidently, the increase in expected holiday spending compared to last year is being driven by only a small percentage of consumers. Half of the Gallup respondents reported they would be spending “about the same” this year, whereas one third reported they would actually be spending less.

The remainder – fewer than 15% — reported they would be spending more.

And all of that activity on the Internet? We can be sure a goodly amount of it is driven by the desire to find the very best price available. And to prove that out, the latest online holiday shopping report survey from rich media firm Unicast finds that more than half of consumers are using the Web to research and compare deals between online stores and retail outlets.

The bottom line on all this: It’s a mixed picture with a slight lean on the scale in favor of optimism. Which is a darn sight more positive than what we saw in 2008 and 2009.

Happy Chris-kwanz-ukah, everyone.

Online Display Ad Clickthrough Rates Finally Bottom Out … Near the Bottom

Online Display Ad Clickthrough Rates Bottoming Out
Online display ad clickthrough rates have stopped declining ... bottoming out at 0.09%.
The latest news in online display advertising is that ad clickthrough rates have now leveled off after an extended period of decline – one that was exacerbated by the economic downturn.

So reports digital media marketing firm MediaMind (Eyeblaster). According to a report released this past week, one key reason for the decline being arrested is the greater sophistication of advertisers in targeting online advertising to audiences and groups that are more likely to be interested in them.

That being said, the overall clickthrough rate has leveled off at an abysmal 0.09%.

That is correct: less than one tenth of one percent. In any other business, this would be a rounding error.

If that statistic seems difficult to believe, consider this factoid: The average Internet user in America is delivered more than 2,000 display ads over the course of a single month. We might think that users would be inclined to click on more than just two or three of these ads during a month’s time.

But it’s important to realize that when users are in the mood to shop and buy, they’re typically going straight to the sites they like … or they’re using Google, Bing or some other search engine to find their way.

And it turns out there’s really no such thing as an “average” Internet user, anyway. Research conducted by digital marketing auditing and intelligence firm comScore, Inc. has found that around two-thirds of people on the Internet never click on any display ads during the course of a month. Moreover, only 16% of Internet users are responsible for around 80% of all clicks on display ads.

All the more reason why search marketing continues to be the online advertising powerhouse that it is. And why not? It’s putting your business in front of the customer when s/he is in “search-and-buy” mode … not when s/he’s doing something else.

Google’s Instant Search: Instant Irritation?

Google's Instant Search is a Non-StarterHow many of you have been noodling around with Google’s new Instant Search functionality since its unveiling earlier this month? I’ve spent the better part of a week working with it, trying hard to keep a “completely open mind” as to its benefits.

I’ve finally came to the conclusion that … I can’t stand it. I’m a pretty fast typist, and generally know what I’m searching for. I really don’t need Google “pre-anticipating” search results for me, and find the constantly jumping search results window extremely off-putting to the point of distraction.

I gave Instant Search a full week … and couldn’t take it anymore. I’ve now elected to turn it off completely.

Wondering if I was the only one with this view … it certainly didn’t take long to find out that there are a great many people out there who feel the same way. You can use Google search (either the “instant” or “traditional” will do fine) to find any number of blog posts and user comments about Google Instant Search that are just one notch shy of mutinous — and hardly genteel in their choice of language. (A few examples can be found here and here and here.)

If the comments by disgruntled users are to be believed, Bing/MSN may find itself with a nice little bump in search volume market share by the end of September.

And if that actually happens, Google Instant might die a quiet death – which wouldn’t be the first time Google laid an egg in its “throw-everything-against-the-wall-and-see-what-sticks” approach to product development.

But if Google Instant does gain traction … there are some negative implications for search marketers as well. Many companies seek to structure their online marketing campaigns by determining the optimal amount of spending on search advertising, display ads and social media. The key to success in this endeavor is undertaking a process that examines the millions of cookies and billions of clicks that are made by web users, along with factoring in other elements like geographic location and time of day.

All of this information is weighed against the cost of various ads and the likelihood of success as they are served to the user. That’s determined by running regular models of millions of keywords and word combinations, judging the relative costs to determine the optimum frequency. For some of the most aggressive marketers, these models are run once or twice daily.

The advent of Google’s Instant Search scrambles all of that, because it makes the process even faster and more hectic than before. As those of you who have experimented with Instant Search know, you start seeing “suggested” search results with just the first one or two keystrokes … and those choices continue to change with each new keystroke made or movement of the cursor down the list of Google’s suggestions. For marketers, the result is a lot more velocity on the ad side – and more price changes.

As proof of this, within the first few days of Instant Search’s launch, sites that Instant Search recommends after the first one or two letters are typed into the search box – “Mapquest,” “Ticketmaster” and “Pandora” are three useful examples – were experiencing significant increases in traffic, whereas their hapless competitors were not.

If that’s what is happening with the big boys, where does this put smaller businesses? The answer is obvious: They’re going to get squeezed big-time … and as a result, their search advertising costs are going nowhere but up.

Mighty sporting of you, Google.

Signs of the Times

Divine, aka Harris Glenn MilsteadIt absolutely had to happen.

Reports from Japan are that facial-recognition technology is now being incorporated into mall signage wherein the age and gender of passersby are discerned before displaying “demographic appropriate” advertisements to them as they walk by.

NEC, a multinational electronics firm, is experimenting with biometric technology. the ability to scan faces to detect gender and age within a range of 10 years. Not only is the technology being tested in mall signage, but also in vending machinery where “helpful suggestions” will be made to consumers based on their presumed age and gender.

And of course, Japan today means the U.S. tomorrow. In fact, other companies are already testing “gender-aware” technology for outdoor billboards and mall signage here in the United States. Intel has partnered with Microsoft in such an endeavor to design the Intel Intelligent Digital Signage Concept.

Joe Jensen, a manager at Intel’s Embedded Computing Division, sums it up like this: “As stores seek more competitive advantages over online retailers, digital signage has become a valuable technology for dispersing targeted and interactive content to shoppers.”

If gender-aware technology proves to be effective, does this mean that gin & tonics will be now offered to older consumers? At the end of a long day at the office, that could be a tantalizing option for businesspeople hitting Grand Central Station to catch the Long Island Railway home.

Or consider this picture: Legions of “Divine” impersonators (see above) descending upon malls or food kiosks, just to test how well the signage and vending machines can determine true age and gender!

Kidding aside, it’s really no surprise that digital technology with its ability to serve highly targeted, relevant content would eventually work its way into billboards and signage, historically the most “mass” of mass communications. Marketers crave statistical results, and they’re naturally going to gravitate to anything that provides those metrics – no matter how imprecise they might be.

Updating the Marketing “4 Ps”

The Four Ps of MarketingIn business, we like our checklists and concise bullet points. It’s all part of our impulse to distill ideas and principles down to their essence … and to promote economy and efficiency in whatever we do.

In marketing and communications, it’s no different. Most everyone who’s studied business in school knows about the “4 Ps” of marketing: Product, Place, Price, and Promotion.

Today, that listing seems woefully incomplete and inadequate – even quaint. Stepping in to fill the void are additional attributes that have been proffered by marketing specialists. Several of these newer lists — one coined by Robert Lauterborn, a professor of advertising at the University of North Carolina, and another from technology marketing specialist Paul Dunay — consist of a group of marketing “Cs”: Consumer, Cost, Convenience, Content, Connection, Communication, and Conversion.

But I like a new group of “Ps” as popularized by Jennifer Howard of Google’s B-to-B market group. She offers up five new “Ps” of digital marketing, and they go a long way toward filling the yawning gaps in the original list.

These new digital marketing attributes are Pulse, Pace, Precision, Performance, and Participation.

Beyond the fact that fair dues should be given to anyone who manages to come up with an additional set of five new attributes that likewise begin with the letter “P,” they happen to be worthwhile additions to the original list, and they help bring it into the interactive era.

The new set of marketing “Ps” can be further described like this:

Pulse – active listening and attention to customer, brand and competitor insights.

Pace – the speed at which marketing campaigns are carried out is critical. “Slow and steady” usually doesn’t cut it.

Precision – assuring that marketing messages are delivered to the right customers … at the right time … and place (e.g., PC or mobile device).

Participation – creating conversations with customers via rich media ad formats and social media platforms to enable them to “join the conversation.”

Performance – meeting expectations for results that notch ever higher, via measurable and accountable marketing and media tactics.

In the world of digital marketing and e-commerce, marketers like to borrow a term from the realm of traditional retailing. It’s the “moment of truth,” and it was first coined by Procter & Gamble executives to describe those critical 10 to 20 seconds when someone is standing in a store aisle and making decisions on what to purchase and what to pass by.

In the online world, Google refers to this phenomenon as the “zero moment of truth” (ZMOT) – when a potential buyer interfaces with a brand or a product on a computer, smartphone or other digital device. Why zero? Because instead of 10 or 20 seconds, many people take only a split second to decide whether they’ll stay and engage … or whether to ditch and switch.

Changing the Subject (Line)

One of the reasons e-mail marketing has become so huge is because it’s so darned cheap. Compared to postal mail, e-mail costs just pennies. That means most marketers can achieve a better ROI for just a mediocre e-mail campaign compared to even the most successful direct mail effort.

However, a common complaint about e-mail versus postal mail is visibility. Since most viewers choose not to have their preview pane feature turned on, they must physically open an e-mail before they can view any of its contents.

This “one-step removed” dynamic means that many people never get to see and read a marketing message that would otherwise stand out if it showed up in someone’s postal mail delivery as a postcard or self-mailer promo piece.

In this scenario, the e-mail subject line becomes a huge “gatekeeper” element. What the subject says and how it’s said can make a difference in e-mail open and clickthrough rates. But just how much?

A new E-mail Marketing Metrics Report from MailerMailer, a firm providing e-mail marketing and newsletter services, provides some interesting clues. MailerMailer has been producing these reports since 2003. This report, the tenth one issued, was developed by analyzing a sampling of ~900 million e-mail messages sent through MailerMailer throughout the year 2009.

Among the elements tracked were the words used in e-mail subject lines. MailerMailer found that the most popular terms contained in the subject lines were:

 Coupons
 Daily
 Free
 News
 Newsletter
 Report
 Today
 Update
 Week (weekly)
 Year

Notice how each of these terms conveys a sense of WIIFM (“what’s in it for me?”) and/or a sense of time sensitivity. Interestingly, despite a prevailing concern that using the word “free” in the subject line risks more spam filtering, MailerMailer found that this term was one of the ten most popular terms used in subject lines during 2009.

And what about subject line length? The report found that shorter subject lines (containing less than 35 characters) outperformed longer ones. That’s generally just four or five words along with the corresponding spaces between them.

And the difference MailerMailer observed was significant: E-mails with shorter subject lines experienced an average open rate of ~17.5%, while those with longer subject lines had an open rate of only ~11.5%.

The same differential was found with clickthrough rates. For the e-mails with shorter subject lines the average clickthrough rate was ~2.7% … versus ~1.6% for e-mails with longer subject lines.

The MailerMailer report concludes that while composing shorter subject lines may be difficult to do (well), going through that exercise is well worth the extra effort. The results from ~900 million e-mails prove it.

China overtakes Japan … and who’s surprised?

Chinese + Japanese FlagsThe somewhat breathless headlines earlier this week reporting that China had nudged past Japan to become the world’s second largest economy behind the United States, didn’t particularly grab me.

In fact, it seems almost anticlimactic that Japan has finally been overtaken. Hasn’t Japan’s economy been in the doldrums for years?

In some sense, it seems like Japan has hardly mattered now for the better part of 20 years. By contrast, economies like those in Brazil, India and the Far Eastern countries have been the ones shining brightly and getting most of the business coverage.

Actually, I’m old enough to remember a time, back in the 1980s, when the rise of Japan’s economy was of huge concern to American and European manufacturing and banking organizations. “Japan, Inc.” was a continuing topic in the pages of BusinessWeek and Fortune magazines. Japanese managerial styles and its participatory worker groups were the focus of many a management seminar and how-to business book.

What happened? During the 1980s, Japan’s economic miracle turned into a massive real estate bubble before imploding in the early 1990s. What came next was a “lost decade” – a stagnant economy from which the country has never really recovered.

And today, demographics and other factors are catching up with the country. Things like low population growth (and an aging population to boot), weak domestic demand for goods, slow growth in exports, a strong currency and even deflationary pricing forces … these are the characteristics most observers assign to the Japanese economy.

Some economic miracle, huh?

Meanwhile, China keeps chugging away, charting 10%+ annual growth rates even as the average Chinese citizen continues to earn just one-tenth of what American and Japanese workers make.

But if we look a little more closely at Japan’s experience, there may be lessons for us here in the U.S. In fact, some characteristics are uncanny in their similarity. More ominously, some economists believe that China is on course to overtake the U.S. and become the world’s biggest economy inside of ten years.

That seems startling on the face of it. But when you consider the symbiotic relationship between the U.S. and Chinese economies – we’re China’s largest export customer and they hold a ton of our dollars – it becomes easier realize just how much our two countries need one another.

“Accidental allies,” it turns out.