Six years on … and the U.S. ad economy is still in recession?

September 20, 2015September 20, 2015 Phillip Nones Advertising, Business, Economics, Marketing Communications, Media, Media Consumption Ad Industry, Ad Revnues, Advertising, Advertising Revenues, Economic Recession, Economy, Kantar, Media, Media Consumption, U.S. Ad Market Tracker, U.S. Economy

Two reports from advertising research sources released in the past month reveal that the advertising field doesn’t appear to be rebounding in strongly – at least not to same degree as the economy as a whole.

One report, from U.S. Ad Market Tracker, is an index that pools electronic media buys processed by major agency holding companies and their brand marketers.

It’s true that this report shows an increase in the overall ad activity index year-over-year of about 18 points (it’s 184 today … 166 a year ago … and 100 back in the recession year of 2009).

But when we look at the breakdown where most of the advertising growth is coming from, it’s nearly all from a handful of categories: social media advertising, advertising on video, Internet radio, plus ad network marketplaces.

By contrast, search advertising is growing at a much slower rate, and the most “commoditized” segments – particularly online display advertising – are doing little better than treading water.

This isn’t the robust rebound that many business and ad industry observers were expecting to see by 2015.

Over at Kantar Media, the statistics are even less encouraging.

In fact, Kantar projects that the 2015 ad economy will underperform U.S. economic growth for the fifth straight year.

Considering how lethargic in general the U.S. economy has been over that period, to be growing at less than the average is almost an indictment of the industry.

That’s what Kantar Media Chief Research Officer Jon Swallen suggests: a “streak that might have once seemed unimaginable, but now would seem par for the course.”

Second-quarter 2015 data released by Kantar estimates annualized measured media ad spending declines in the neighborhood of 4%.

More to the point, Kantar is seeing increases in just 7 of the 22 individual ad media categories it tracks, led by the same categories U.S. Ad Market Tracker identifies as the most healthy ones.

Perhaps a surprise — considering the overall disappointing numbers — is that Kantar has tracked two analogue categories as experiencing growth: radio and out-of-home advertising.

But print continues to decline at pronounced rates, and Internet display advertising has also officially joined the ranks of media segments that are contracting.

Is the disappointing performance of advertising a function of a weak market overall? Or is it the result of structural changes and the reallocation of promo dollars into different, in some cases non-advertising MarComm vehicles?

I’m not completely sure. It’s true that certain advertising categories that are “newer” ones are attracting more attention (and more dollars). But Kantar’s 2nd Quarter reporting of advertising expenditures by major industry category finds just one – one – segment that has experienced an overall increase year-over-year — pharmaceuticals:

When just one industry segment out of ten is showing an increase, it suggests more than just some restructuring or re-jiggering is going on. Instead, it’s just as likely that the U.S. advertising economy remains stuck in a recession, even if the overall economy has finally emerged from it.

What are your thoughts on the tepid advertising results? Please share your views with other readers.

What’s the Latest with Employee Satisfaction?

May 2, 2011 Phillip Nones Uncategorized Business, Downturn, Economic Recession, Economy, EFM, Employee Relations, Employee Satisfaction, Employees, Enterprise Feedback Management, HR, Human Resources, Job Hopping, Jobs, Market Tools, MarketTools, News, Nones, Nones Notes, NonesNotes, Phillip Nones, Recession, Thoughts, Unemployment, Worker Benefits, Workers

Coming off the worst recession in memory, just how happy are Americans in their jobs today?

An online survey of ~450 American adults conducted in late February by enterprise feedback management and research firm MarketTools has found that only ~34% consider themselves “very satisfied” in their current job positions:

 Very satisfied: ~34%
 Somewhat satisfied: ~40%
 Neither satisfied nor dissatisfied: ~10%
 Somewhat dissatisfied: ~10%
 Very dissatisfied: ~5%

Those results would seem to portend that a significant number of people will be looking to change jobs in the near-term future.

And in fact, nearly 50% of these respondents reported that they’ve “considered” leaving their current positions – and more than 20% have actually applied for another job within the past six months.

What’s causing dissatisfaction among employees? They’re the usual things, beginning with salary, although many respondents cited multiple contributing factors to employee dissatisfaction:

 Salary level: ~47% of respondents
 Level of workload: ~24%
 Lack of opportunity for advancement / career development: ~21%
 Relationship with manager / supervisor: ~21%
 Medical benefits issues: ~20%
 Work environment: ~14%
 Length of commute / distance from home: ~14%

It shouldn’t be too surprising to witness an increase in job-hopping behavior following economic downturns. For those lucky enough to have held onto their positions during the recession, the working environment has likely been more stressful, as employers required more productivity from fewer workers.

It’s also likely that benefits packages were reduced to some degree. So it’s only natural for people to nurse some residual negative feelings about the situation and to possibly consider jumping ship to another employer.

But would that be the best move?

Often, moving to a new employer doesn’t result in the improvements the employee expected to find. And smarter companies will use the improving economic climate (such as it is) to reward those employees who hung in there when times were tough. After all, these are their better workers!

Salary and benefit increases are always going to be appreciated … but so is the opportunity for continued growth and career development.

It’ll be quite interesting to see what the job-hopping statistics show a few months from now.

Valentine’s Day Spending: All Hearts and Flowers?

February 13, 2011 Phillip Nones Uncategorized American Economy, BIGresearch, Business, Consumer Intentions, Consumer Intentions & Actions, consumer spending, Consumers, Economic Recession, Economy, Greeting Cards, National Retail Federation, News, Nones, Nones Notes, NonesNotes, NRF, Phillip Nones, Recession, Retail, Retail Trends, Spending, Thoughts, Trends, Valentine's Day

With the recession finally receding, are we now seeing an uptick in spending for Valentine’s Day — arguably the most romantic day on the calendar?

According to a January Consumer Intentions & Actions questionnaire conducted among ~8,900 participants for the National Retail Federation by survey firm BIGresearch, American adults over age 18 will spend an average of ~$115 on traditional Valentine’s Day merchandise this year. That’s up more than 11% over 2010, and collectively represents spending of nearly $17 billion.

But we have yet to return to the levels of Valentine’s Day spending that were reached in 2007 and 2008 – the highest on record.

Jewelry appears to be the big item on the Valentine’s Day shopping list. Approximately $3.5 billion is expected to be spent in this segment this year, which is up more than 15% from the ~$3.0 billion spent in 2010.

Dining out is another popular category, but its growth is not expected to be nearly as big as jewelry’s – just 3%. The six most popular categories as determined in the NRF study include:

 Jewelry: $3.5 billion
 Dining out: $3.3 billion
 Flowers: $1.7 billion
 Clothing: $1.6 billion
 Candy: $1.5 billion
 Greeting cards: $1.1 billion

[I was surprised at the greeting cards figure. True, cards are a lower-price item compared to the other categories, but the number still seemed pretty meager. It turns out that only about half of the consumers surveyed reported that they planned on purchasing a Valentine’s card, which was lower than I thought would be the case.]

Not surprisingly, younger adults (age 25-34) are expected to spend significantly more than their older counterparts. They’re projected to spend an average of nearly $190 on Valentine’s Day merchandise compared to only about $60 spent by adults over 65.

But it’s not just because of “sweet, fresh young love” versus “tired, worn-out old love.” It’s because young couples and young parents are often buying not only for each other, but also for their co-workers … their children … their children’s friends … and their children’s teachers as well.

And here’s another statistic that won’t surprise very many people: Women will receive Valentine’s Day gifts averaging around $160, which is double the value of gifts for men.

Now, that’s a dynamic that’s likely never changed … and probably never will!

The e-Commerce Hiccup

February 15, 2010February 16, 2010 Phillip Nones Uncategorized Business, Business Recession, comScore, Consumer Confidence, consumer spending, E-Commerce, e-Retailing, e-Tail, ecommerce, Economic Recession, Economy, etail, Internet, News, Nones, Nones Notes, NonesNotes, Online, Online Marketing, Phillip Nones, Recession, Technology, Thoughts, Web

One of the bigger surprises of business in the year 2009 was how big of a hit U.S. e-commerce has taken. According to digital marketing intelligence firm comScore in its just-released report 2009 U.S. Digital Year in Review, e-retail spending in America decreased about 2% during the year to come in just under $210 billion.

This represents the first decline in e-commerce spending ever recorded.

Obviously, the economic recession was the culprit. But considering that e-commerce growth has charted above 20% annually in every year leading up to 2009, seeing an actual fall-off has raised more than a few eyebrows.

Where was the e-commerce decline most pronounced? It was in travel-related services, which saw revenues drop by 5% to ~$80 million. Not that all sectors saw decline. A few continued to experience growth during the year, including the books/magazines category which charted gains of ~12%. Online computer software purchases were also up by about 7%.

What does comScore see on the horizon for U.S. e-commerce? Is continued softness predicted … or a return to robust growth?

Analyzing the last few months of e-commerce activity during 2009 provides clues to the future: Growth looks like it’s returning. In fact, the 2009 holiday season marked a return to positive growth rates when compared against the same period in 2008.

[Granted, this comparison is made against “down” months of November and December in 2008, after the recession had already kicked in. But the pace of e-commerce activity is clearly picking up again.]

But whether it will go back to a 20%+ annual growth is still an open question.