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Market Data
(This month we focus on the USA)
US Population Reaches 300 Million
The population of the USA grew to 300 million people, crossing this landmark number in mid October 2006, according to US Census Bureau estimates. The population has increased by 50% to 300 million in just 39 years - it hit the 200 million mark in 1967.
The USA is only the 3rd country to have a population greater than 300 million. The other two countries are China (1.3 billion as at mid-2005) and India (1.1 billion).
106.5 million people in USA watched Online Video in July
Three in five US web surfers watched an online video in July 2006. On Yahoo! sites, 37.9 million people watched 812 million video streams, compared to 37.4 million people on MySpace, who watched 1.5 billion streams. This equates to 21 clips per Yahoo! video viewer, versus 39 clips on MySpace.
(comScore Video Metrix)
Baby-Boomer Purchasing Power tops US$2 trillion
There are 77 million baby-boomers in the USA (people currently in their mid-40s up to 60 years old), and by 2010 nearly one in three Americans is expected to be aged over 50. American baby-boomers' annual spending power is estimated to be US$2,100 billion, and they control approximately three-quarters of the USA's financial assets.
One third of US baby-boomers have been using the internet for over 10 years, and recent consumer research shows that propensity to switch brands is as high in boomers as it is among Generation Y or Generation X. (Focalyst and AARP Services)
12% of the US Population Born were born outside the USA
Only 35 million, or about 12% of the current US population were born overseas (this includes illegal immigrants). Current US perceptions about a high immigration rate have been shaped by the contrast with a historical low around 1970, when only 5% of people in the USA had been born overseas.
The USA's current proportion of overseas-born is much lower than a number of other countries - particularly Australia and New Zealand (where just under half of the population of both countries was either born overseas or has at least one parent born overseas). As such, Australia and New Zealand have a population in which first generation migrants comprise a huge chunk of the population.
The US thinks of itself as having a similar first generation migrant profile, but it does not. Even during the peak of the USA's "send me your huddled masses" migration period (1860 to 1920) only between 13% and 15% of the US population was born overseas. (US Population Reference Bureau)
The Typical American Family in Decline
In 1967, 40% of all US households comprised of married couples with children. This has now declined to about 20%. The low figure reflects a strong increase in single person households - both among the young and among the elderly.
An increasing number of people now find themselves living alone as they enter old-age. In previous generations, they would have formed part of a multi-generation household (as a grandparent living with the family of one of their children). (US Population Reference Bureau)
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What Happened..
(Marketing News in recent weeks)
Google bought YouTube
Google has paid US$1.65 billion to acquire the online video site YouTube. The site plays more than 100 million videos a day and holds nearly 50% of the online video market. It is not entirely clear how Google intends to recoup its investment, though the basic motivation seems to be about building even greater audiences to create more advertising inventory (space where they can place paid advertising and search results).
Yahoo! invests in Indian Matrimonial Portal
Yahoo! has invested US$8.65m together with private equity firm Canaan Partners in an Indian matrimonial portal called Bharatmatrimony.com. The portal has 7.5 million members and has high brand recognition in India. The move represents ambitious expansion plans by Yahoo! in the Indian market.
Google Custom Search Engine
Google are due to announce a customisable search engine which blogs and website owners can place on their sites. Bloggers and webmasters will be able to restrict the websites they want to be included in searches, and can add to the list by tagging any additional websites which they come across and would like to include. Google paid search revenue (from context-relevant adverts which will also be displayed) will be shared with the website owner. The idea is that blogs and websites can add very specific vertical search capabilities to their sites.
Big Business goes into Second Life
Reuters and SUN Microsystems have joined a growing list of companies who have ventured into cyberspace via the virtual online world of Second Life.
Reuters has opened a news bureau and embedded a reporter called "Adam Reuters" who in reality is veteran technology and media journalist Adam Pasick. Reuters aims to play an active role in the virtual community by bringing news of the outside world into Second Life and vice versa. They have constructed the Reuters Atrium inside Second Life, a multi-story venue where avatars can watch news videos and discuss events. Reuters giving away a free feature called Reuters News Centre, which is a display panel which when activated will stream the latest news, both real and virtual.
Online technology publisher CNET opened an office in September 06 in a building which looks like the CNET offices in San Francisco. In October 06 Sun Microsystems held a press conference inside Second Life that was attended by avatars representing about 60 journalists, product developers and industry analysts.
Concerning Australians
A survey of 2,000 people in Australia has found that terrorism, health care, and retirement top the list of Australian's fears. 90% of people surveyed believe job security is a thing of the past and over two thirds are worried they will not have enough money to support themselves when they retire. Almost 60% say that technology is making their lives more stressful, and 88% say that life should be lived at a slower pace. Only 34% agree that the local arms of global companies offer increased job opportunity - well below a global average of 47%. (The Australian Report by STW Communications Group)
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Random Thoughts
The Decline of Customer Loyalty and the Need to Continuously Renew Brand Relevance
People are more inclined to experiment, are better informed, are researching and becoming much more sophisticated, and are searching for alternatives more than ever before. This is largely because of the growth of the internet. In such a world it is not surprising that customer loyalty is becoming less dependable.
The ability to continuously refine your understanding of what represents good value (in terms of what you can get for your money - not just the price), means that fewer people just settle for the same familiar product or service.
This is likely to accelerate as Generation Y (currently teenagers through to people in their mid-20s) grow in their importance to the economy. While it is not an exclusive skill of Generation Y, these people have only ever known a world where the internet is at their fingertips. They have become accomplished self-taught researchers from an early age.
As such, Generation Y understand that they have choice. It is second instinct to them to seek out their alternatives and educate themselves on anything new that is of interest to them.
Less brand loyalty and the rapid flow of information and opinions means that brands need to continually "prove" their relevance to customers.
Ages ago, branding was a tool to guide the uninformed and inexpert. That's no longer of any value.
To acquire new customers (and keep existing ones) today's brands need to continuously refine and communicate their relevance to customers as needs, sophistication and attitudes evolve.
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Interesting New Link
Population Reference Bureau
The Population Reference Bureau (PRB) is a Washington-based organisation, largely funded by non-government contributors, which aims to inform people around the world about population, health, and the environment. It provides a wealth of data and research into key issues that impact people across all parts of the world.
The PRB is an authoritative source of statistical information. It analyses complex demographic data and research to provide highly objective, accurate, and up-to-date information in a format that is easily understood by policy makers, advocate groups, and journalists.
PRB's country pages provide quick access to essential information on population, health, and the environment for over 200 countries. The PBS website currently features an extensive analysis around the USA's population reaching 300 million.
www.prb.org
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Just for Fun
Our New Word
(non-essential Marketing vocabulary)
Digital Brand Integration
Producers of made for TV movies and drama series have come up with a new way to "monetise" their investments and generate advertising revenue. Production companies are now able to virtualise product placements: rather than having to include a sponsor's product during filming, it is now possible to drop products into scenes digitally. The technology has advanced to the point that these products (for example, a box of a particular breakfast cereal on a table) can be represented in 3 dimensions, and appear totally realistic as camera angles change and follow the movement of actors around the scene.
Called "Digital Brand Integration" this technique provides considerable flexibility to advertisers. For example, packaging and graphics could be varied to reflect differences in packaging or branding across different markets. Slightly more sophisticated, would be the updating of packaging - or the substitution of completely new products or branding as a program moves through different phases of its life. For example, branding could be change as the program moves out of "premiere" and "first run" to syndication across 2nd tier networks, and be changed again as the program is released on DVD or online download.
Jokes
(essential marketing mind-flexing exercises!)
A three-legged dog walks into a saloon in the old west. He slides up to the bar and announces: "I'm looking for the man who shot my paw."
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Two wrongs don't make a right; but three rights make a left.
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3 Engineers are debating about God. The 1st engineer says, "God must have been a mechanical engineer because of how the whole muscle/skeletal system is designed." The 2nd engineer says, "No, God must be an Electrical Engineer because of how the Central Nervous system is designed." The 3rd engineer says, "You're both wrong. God must have been a Civil Engineer... because only a Civil Engineer would run a sewer line through a recreational area."
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A man was touring a nursing home with the head administrator, when he asked a question: "What criteria do you use to determine when a person has lost his faculties enough to require institutionalisation?"
"Well, we have a simple test," said the administrator. "We put them in a room with a bathtub full of water, give them a teaspoon, a teacup, and a bucket, and tell them to empty the bath."
"I see," said the man, "a rational person would use the bucket, so that the job would get done quicker."
"No," said the administrator, "a rational person would pull out the bath plug. Would you prefer a bed near the wall or near the window?"
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Quote of the Month
When the going gets weird, the weird turn pro.
Hunter S Thompson (Author of "Fear and Loathing in Las Vegas")
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Minds Eye Article
The Brand Architecture challenge of 2006: Google says "no" to Googling
Google has started a campaign to try and stop people using the word "google" when they mean "search". Recently the company has issued a few legal warnings to cease and desist from this practice. On October 25th 2006, the company even posted a note about this on the official Google Blog (http://googleblog.blogspot.com/2006/10/do-you-google.html).
Has Google gone mad? Most companies would love their product or company name to enter common usage, just as Hoover and Xerox did in years gone past. Such usage in everyday speech reflects a brand's total dominance of its product category.
This product category leadership is probably what Google is worried about (though we are not privy to Google's motivations and thinking). Why would they care if they only wanted people to think of Google as being a search engine? One only has to glance at the Google's current product and service roster to understand that they have ambitions way outside the search engine category (www.google.com/intl/en/options/).
They may find other revenue streams in the future, but Google currently makes its money from selling online advertising space. Google's rough strategy is to grab a high "share of eyeball". Ideally, whenever a consumer is using a computer they should have some Google-mediated service or information on screen.
Google is therefore trying to find as many ways to engage with consumers online as possible. Because it does not really know where this will end up, it is trying to stop itself being "boxed in" and only thought of as a search provider, hence Google's attempts to protect the usage of its name.
We can understand why they are doing this, but it does not mean they are well advised to do behave in this way. They need a well thought-out brand architecture. Of all the companies in the world, it is not as if they don't have the money to invest in developing associated brands!
Like it or not, Google has become synonymous with search. Google should be grateful, and should not let their first experience with creating a brand for Social Networks colour their thinking too much (Google's Orkut.com has taken off only in Brazil). Google's marketing team should google King Canute.
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They Wouldn't Do That... Would They?
Market Research sold as Segmentation
Recently Minds Eye attended quite a good seminar on segmentation. The presenters were keen to point out that it is vital to keep things grounded in the real world and remember that you have to be able to target and reach people in your segments, and not just come up with really cool sounding psycho-demographic groups that look good on PowerPoint.
In fact, we also recently spoke with a senior advertising agency executive who commented that it was amazing how many times consumer businesses come to them with a voluminous segmentation analysis which stands no chance of being acted on or targeted effectively in the real world ("we usually find we can make them happy with a nice slogan or tag line" was the ad-agency's very off the record comment).
Another disturbing practice is the inverse of this: when fairly conventional market analysis is sometimes dressed up as "segmentation".
Companies can charge higher fees when they are segmentation consultants, rather than market researchers (or even "consumer insights" businesses). A segmentation analysis can also command a higher price than a customer survey or a research report. So guess what? That's how some marketing services suppliers position themselves.
The ultimate, of course, is when a big name strategic consulting company gets called in to do the work ("That will be $300,000 a month, thanks!").
Some suggestions on this subject:
- Know what you are trying to do. If you are not trying to distinguish between groups of people (or businesses) and adjust your marketing accordingly, then you are not segmenting - you are probably researching customer needs, customer satisfaction, trends or the like.
- If you are trying to segment, know why. Is your objective to restructure the organisation around a new go-to-market model? Are you revisiting your brand architecture? Are you trying to prioritise customer groups according to the value they bring to the business, and assign them to customer engagement channels with the appropriate cost-structure?
- Put yourself in the driver's seat. Unless you are genuinely looking for advisory services around topics such as in the second point above, you probably just need a standard market research company. Brief them well, and don't let them stray into the strategy side of things too much.
- If you are doing segmentation work, whether you need external help or not you will need some good brain-power applied to it. Make sure the right people are on the project, and that you draw on the people inside your organisation who have good market knowledge. Analytical minds combined with lateral thinking and common sense will be key.
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2006 Marketing Minds
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