According to the Nielsen Global Consumer Confidence Index, it seems that the world is finally recovering from the “Great Recession”. To Neilsen:

“Globally, the index reached 92 in the first quarter – just two points shy of the high score posted in the third quarter of 2007 before the recession swept across the world. Confidence hit an all-time low of 77 index points in early 2009.”

While consumer confidence seems to be up across the board, it has not risen evenly. The regions that lead the increase in confidence appear to be Asian and Latin America, while the North American and European economies seem slower to recover.

According to Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of The Nielsen Company.

“For the first time in two years, Nielsen’s global consumer data provides evidence that economic prospects are improving—a sign manufacturers and retailers have been eagerly waiting for that consumer spending intentions are turning into actual spending reality.”

Other findings from the Study include:

• Asia Pacific posted the highest increase in confidence of the regions – up 8 points
• Chinese confidence levels are back up to its all-time high of 108 in Q1 2005
• Latin America jumped 5 points, with Brazil leading the region
• Europe posted a two point increase, but Germany and Italy declined 3 points

via Neilsen

The New York Times posted an article on Sunday, by Teddy Wayne, revealing that for the first time ever advertisers spent more on Internet marketing in 2009 than on magazine marketing. This news came through a report from ZenithOptimedia, which purported that Internet ad spending is on pace to eclipse that of newspaper in the near future. Although 2009 saw a record 4th quarter, overall online advertising revenues for the year dropped 3.4 percent from 2008, the first time since 2002 there was an annual loss. Internet revenues were the least hit, however, as ad spending across all media sloped 12.3 percent for the whole year.

According to the Interactive Advertising Bureau and PricewaterhouseCoopers, search advertising posted gains from 2008 and made up 47 percent of all Internet ad spend. Similarly, display ad spending increased with digital ads rocketing up 38 percent. However, total revenues for e-mail advertising and online classifieds slumped.

While 2009 decreased minimally from 2008, industry totals reached $22.6 billion. However, in the magazine sector, ad sales fell to $19.5 billion, as noted in data given by the Publishers Information Bureau. This shift further emphasizes the continued migration into the Internet as a platform for marketing.

via New York Times

The Guardian posted an article this week on the newest Bellwether report, which is indicating signs of recovery in the advertising industry. The UK advertising industry, which has seen companies slashing their budgets during the last two and a half years now, is starting to pick back up with more companies growing their ad budgets than those which are not.

According to the survey, 21% of companies in the UK reported an increase in their advertising budgets in the first quarter of 2010, while 16% of companies suffered cutbacks. The last time that a higher percentage of companies reported an increase in their budgets was back in the third quarter of 2007. The growth is welcomed by many, such as Rory Sutherland, president of Practitioners in Advertising, the publisher of the Bellwether report, who says “it is good to see that businesses are now increasing their investment in marketing as a route to growth, a welcome change in sentiment compared to this time last year.”

The good news, however, was not universal. The types of marketing that were previously down and recently have gotten a boost include TV, press and radio. Internet marketing has been up for three quarters and continues to grow, but sales promotion and direct marketing were unchanged, while PR and events continued their downward trend. Although there are reasons to be pleased, “this should not be seen as a return to the good old days,” remarked Andy Viner, head of media for BDO LLP, he continues,  “spend on the marketing mix is changing.”

The growth in ad spend is probably a result of the renewed confidence in the economic stability of UK businesses. 42% of UK marketing executives said they had more optimism in the first quarter of 2010 than the last quarter of 2009. “The last three quarters saw an increase in optimism without an increase in spending,” continued Viner. “These results are a clear sign that renewed business confidence is translating into real budget increases and tangible economic recovery.”

via The Guardian

Coupons may have once been on the brink of extinction, but after a three year downward trend in redemption, 2009 finally witnessed some changes. As an article on Nielsen.com summarizes, coupons work – not just for the consumer – but the retailer and manufacturer as well.

Previously, coupon redemption peaked in 1999 reaching 4.6 billion, a figure which has since declined significantly. This figure was only 2.6 billion in 2008. But due to the economic recession and the recent proliferation of online coupons, the redemptions have sky-rocketed while the frustrating scissors and paper clippings have gone by the wayside. In fact the 27% year-over-year growth in 2009 was the second highest ever recorded.

The following table breaks down how much the redemption of each form of coupon grew in 2009:

You would think that a majority of the coupon redemptions would come from low income households, but that does not appear to be the case. 38% of “super heavy” users and 41% of those labeled “enthusiasts” are from households earning $70,000 or more annually. Finally, those households making $100,000 or more were the real drivers of overall coupon growth in 2009. The graph below charts this out.

Further research shows that three-fourths of coupon users are white. In fact, the heaviest coupon users tend to live in affluent neighborhoods, while non-users likely reside in rural areas or low-income metropolitan regions. Better-educated people also tend to read the newspaper more which is still a popular way to deliver coupons. With a few adjustments and more sophisticated targeting tactics, retailers and manufactures can reach a market that remains largely untapped.

The question still remains: with the economy seeing improvement, will we see consumers continue to use coupons? Nielsen’s experts suggest that “…as long as Americans feel unsure about their personal finances or confident about their jobs, they are going to continue to look at ways to save and get the most for their money.” They also believe that as retailers and manufacturers continue to develop new ways to distribute coupons, the redemption growth will continue to increase for at least the next few years.

Via Nielsen

“Social Networking” and “Social Media” are terms often bandied about without a real understanding of any differentiation between the two. Patrick Keane, author of a recent article posted on Advertising Age, helps distinguish between the terms and how companies can best utilize these online tools.

The social nature of the Internet has gone through some considerable changes since its inception. In the early days, a majority of the social activity took place in a small number of venues, such as AOL, Prodigy, CompuServe, etc. But as the web has grown exponentially, the diversity of online social venues has become virtually endless, making it a wonderfully dynamic place for companies to advertise.

Keane says that companies must be aware of the engaging and one-on-one nature of the ‘Social Networks’. They are platforms for everyone to be involved with the content by creating it, viewing it, and interacting with content other users have created. But this often poses a marketing conundrum for large brands that are unable to establish one on one connections with the millions of users utilizing the networks. Unfortunately, the companies using social networks are often spammers.

Similarly, ‘Social Media’ is a platform for various voices, including companies. But, unlike old media, content is created and promoted by anyone, breaking down the barriers of “professionalism” while promoting the polyphony of dynamic voices. Keane believes that the principal challenge and strength of utilizing social media tools is the ability to create an authentic voice. He cites CNN as a prime example of a brand whose comprehensive approach to social media, which includes the release of breaking news on twitter and posting stories from a multitude of reporters, has won them millions of followers.

Another valuable aspect of social media is the ability to “crowd source” content. When millions of people are interacting with and creating content on a site, the value of that content goes up due to the inherent human voice. The audience that was previously reached through buying ads can all of a sudden be reached for free through this type of media.

Keane posit that companies should have social media/networking entities internally to facilitate these engagements. But, needless to say, relying solely on social media or social networking for the branding of a company is a lost cause. But when you combine those platforms with traditional media, the scope of the company’s reach is dramatically increased, and the authentic voice of the company can be heard and understood.

Via advertising age

According to three recent studies, produced by Forrester, Mastercard and MyBuys, online retail experienced considerable growth in the first quarter of 2010. The Forrester report, as described by Shop.org’s Fiona Swerdlow, shows a Q1 year over year growth of 12.3%. Over half of the retailers that participated in the study reported year over year increases of 10% or more. And the good news was widespread, with the majority of large, mid-size and smaller retailers all reporting growth for the quarter.

According to Mastercard’s study, the results of which were posted on internetretailer.com, the sector showed even stronger growth in Q1. The report says that e-commerce advanced 18.4% over the previous period of last year, making it the eighth consecutive month of double-digit growth. That’s faster than brick-and-mortar stores are growing. Interestingly, big-ticket items are making a strong comeback, an indicator of further stabilization in consumer spending patterns.

The third study is an ongoing index that seeks to measure the health of the online retail sector by aggregating figures in total sales, non-promoted sales, discounted sales performance, depth of discounts and average order value. In March the results showed a positive 6% growth . This is down from the 14% increase in February, but the overall index is up 3% during Q1. This indicates a steady and persistent growth in the online sector.

While each set of figures varies slightly among the studies, all signs point to positive growth, indicating  that the consumer is waking up from hibernation and is ready to spend.

via Shop.org and Internetretailer.com and Internetretailer.com

The Interactive Advertising Bureau (IAB), along with PricewaterhouseCoopers LLP, just released their annual Internet Advertising Revenue Report for 2009. The report shows Internet ad revenues for the whole year were $22.7 billion, down by 2.4%. But it also revealed a strong Q4, which earned 2.6% more than the same quarter in 2008, and signaled a 14% increase over the previous quarter. Although the entire year was down, the strong Q4 is an indicator of the imminent recovery in the online advertising industry.

Other notable highlights from the report include:

• Of the various types of interactive advertising, search continues to represent the largest percentage, amounting to nearly $10.7 billion, or 47% of the total for 2009, slightly up from 2008.
• Display advertising, including display ads, rich media, digital video and sponsorship, totaled almost $8 billion in 2009, an increase of 4% from 2008.
• Digital video, a form of display advertising, saw robust growth in 2009, increasing almost 39% over 2008.
• If nothing else, these latest figures represent a massive shift from traditional to digital media. According to industry data from PwC between 2005 and 2009, the Internet’s share of combined ad revenue grew from 8% to 17%.

“The latest IAB Internet Advertising Revenue Report makes clear that digital media are now a core component of successful advertising and marketing campaigns,” said Randall Rothenberg, President and CEO of the IAB.

The following highlights 2008 and 2009 revenue figures for online advertising:

($ in millions)

The results of this report are considered to be the most accurate measurement of interactive advertising revenues because the data is retrieved directly from information supplied by companies who sell advertising on the Internet. To view a copy of the whole report visit: http://www.iab.net/AdRevenueReport

Via IAB.net

WSJ recently released an article that features the details of the current attempted crackdown on taxpayers who fail to pay sales tax on goods purchased outside of their home state. The crackdown, however, is really more like a “track-down” of the goods that people have purchased out of state. On the 2009 tax forms, 24 states included lines that requested payment for these goods. This includes goods purchased from online retailers.

States have been attempting to tax interstate commerce using various methods, but with little success. Surprisingly, the lost tax revenue is probably due to a decision made by the Supreme Court in 1992, which says that taxpayers are responsible for tracking what they owe. As one can imagine, most people don’t. In the previous year, only 20 States included the line on their tax forms. This year D.C. Kansas, Nebraska and West Virginia included the line for the first time. Some states even include a warning against leaving the line blank and some provide a suggested amount to contribute based upon income.

Many states, however, are lobbying for a new bill to be passed, which will make the line pointless. The bill in focus is the Streamlined Sales Tax Bill. Essentially, this bill would force states to come up with their own rules, without having to alter rates, and then collect taxes on all outbound sales which are then paid to the inbound state. The bill, which was at the top of the docket before the health bill required so much attention, has been approved by 23 states but is still missing some of the largest revenue-generating states, including California and New York.

Currently, most online retailers track data so that customers can retrieve it for their purposes (should they need it later), but some, such Amazon, charge tax to customers in depending on their purchase location. Ebay, because they are an auction site, leave the sales tax collection up to the vendors. While it seems like a lot of these impending rules and regulations contain unknown implications,  the gears for taxable online retail seem to be in motion.

via Laura Saunders @  Wall Street Journal

Forbes posted an article this week about Yahoo!’s decision to pursue more local advertising. With advertisers spending more than $120 billion annually on local advertising, it’s safe to say that Yahoo! wants a piece of the pie.

The Sunnyvale, CA-based company aims to target companies that advertise in local newspapers, and on radio stations and web sites. Some companies on their radar include: Burger King, Dunkin’ Donuts, Home Depot, Pizza Hut, and State Farm Insurance, to name a few. The new emphasis on local advertising takes a nod from Google’s strategy to extend beyond its search business foundation.

According to Yahoo!, local clients will become increasingly important to the company’s regional advertising campaign. “We’re laser focused on this segment of the market,” posits Lem Lloyd, Yahoo!’s vice president of channel sales for North America. To Lloyd, many of these marketers – with their billions to spend – provide a virtually untapped market for web-based advertising services. Because, when it comes to local advertising, only 1% or 2% is spent online.

Via Laurie Burkitt @ Forbes