Tuesday, February 26, 2013 | Edited by Daniel Moores
||New Report Says Radio Turning Corner in Digital Sales, Growing Share
Radio gained digital share in 2012, and it looks like many stations are building on that momentum in 2013, according to a report issued by Borrell Associates on behalf of the Radio Advertising Bureau.
Moreover, there appears to be significant profit in local digital sales operations, the report states.
The report, Benchmarking: Local Radio Stations' Online Revenues, says that radio grew its online ad revenues 22 percent last year, outpacing the 20 percent overall increase in local online ad expenditures. That was enough to achieve a share increase of two-tenths of a point, to 2.0 percent.
The report is based on Borrell's annual industry-wide survey of more than 6,200 local online operations, including more than 2,000 radio stations in 527 clusters. This report analyzes data derived from three principal sources: media ad revenue, local business ad spending, and a special radio manager survey asking questions about digital revenue resources, sales methods, expenses and other digital operations.
The growth signaled a boost for the radio industry, which had lost digital advertising market share for three years against aggressive sales from newspaper, TV, Yellow Pages and Internet pure-play competitors. The results offer strong evidence that radio is turning the corner in digital sales, according to the report.
"In terms of digital advertising, radio has been in a come-from-behind position for years," said Gordon Borrell, CEO of Borrell Associates. "But it looks like quite a few groups are breaking out and even challenging their newspaper and TV competitors for a slice of that very large digital pie. I hope the data in this report will show radio general managers and general sales managers that it is entirely possible to generate millions in digital sales, and that there's a high likelihood that these sales hold significant profit margins."
Overall, radio sellers closed $370.7 million in local online advertising last year. Borrell expects the number to pass $420 million this year as many radio groups double down on digital sales efforts.
Much of that growth will be fueled by stations budgeting for unusually high growth. In a survey of 1,075 radio stations administered in January as part of the report, 17 percent said they expect growth of 30 percent or more this year.
There's more good news for radio: Stations are diverting their focus from banner advertising and branching out to sell other, more popular formats like email advertising, paid search and even video ads. While banner ads were the largest single source of revenue for 32 percent of the stations who participated in the survey, the number dropped to 22 percent for 2013.
"Digital strategy among radio stations and groups is varied," remarked Erica Farber, president and CEO of the Radio Advertising Bureau. "Revenue opportunities continue to grow for those who are pushing the digital limits with online and mobile initiatives. As radio further defines and focuses on monetizing their digital platforms and applications, we will continue to see growth for radio in revenue and market share."
The full study is available to RAB members on RAB.com, by clicking here. A free webinar featuring the study results will also be presented by the RAB and Gordon Borrell, on Thursday, March 7, at 10AM CST. To register for the webinar, follow this link.
||Seven in 10 Americans Adjusting Spending Plans to Cope with Recent Payroll Tax Changes
NRF Survey Also Looks at Current Tax-Filing Trends
A change in federal tax law that decreased the take-home pay of many working Americans is impacting household budgets. According to the National Retail Federation's 2013 Tax Returns Survey conducted by BIGinsight, nearly three-quarters (73.3%) of those polled say their spending plans are taking a hit.
"We cannot grow the nation's economy until consumers consume. A smaller paycheck due to the fiscal cliff deal early last month, higher gas prices, low consumer confidence and ongoing uncertainty about our nation's fiscal health is negatively impacting consumers and businesses across the country," said NRF President and CEO Matthew Shay. "Every day we hear about building the middle class. We can only do that if we tear down barriers that prevent consumers from investing their hard-earned money back into our nation's economy. It's really that simple."
When asked how the new federal tax laws have affected spending, saving or budgeting of their households, nearly six in 10 (58.2%) of those polled say their plans have been either somewhat or greatly impacted. Specifically, nearly half (45.7%) say they will spend less overall, and 35.6 percent will watch for sales more often.
Additionally, one-third (33.5%) will reduce how much they dine out and 24.5 percent will spend less on "little luxuries," such as trips to coffee shops, manicures and high-end cosmetic items.
Of those greatly impacted, nearly half (49.2%) will delay major purchases, such as a car, TV or furniture, and 58.2 percent will reduce the amount they dine away from home; another 43.4 percent say they will contribute less to savings, 46.4 percent will comparison shop more often, and 54.4 percent will spend less on clothing.
Of individuals that say the paycheck decreases will have little to no impact, many will still alter their spending habits. According to the survey, of this group, 22.4 percent say they will spend less overall, and 15.8 percent will use coupons more often. An additional 11.1 percent will reduce their entertainment plans, 11.6 percent will cut back on vacation and travel plans, and 17.9 percent will watch for sales more often.
The survey found that half (50.0%) of those who make less than $50,000 a year say they will spend less overall. Additionally, 23.2 percent will spend less on groceries, compared to 16.7 percent of consumers who make more than $50,000 a year, and 27.6 percent will shop at discount stores more often, compared to 19.7 percent of adults making more than $50K.
Many Americans have already filed their taxes
According to the survey, tax season is in full swing; three in 10 Americans (29.2%) say they have already filed their returns as of February 13 and another 29.2 percent will have filed by the end of the month. More than one-quarter (27.4%) will file in March and 14.2 percent will wait until the deadline and file in April.
Unsurprisingly, of those who say the payroll tax changes have had a great impact on their spending and budget plans, three in 10 (31.1%) have already filed.
The survey found nearly two-thirds (65.8%) of consumers are expecting a refund from Uncle Sam this year, and when asked how they plan to spend their refund, 37.2% say they will use the money to pay down debt, 44.0 percent will put it into savings and 29.7 percent will use it for everyday expenses.
Looking at the group whose spending plans have been greatly impacted by payroll tax changes -- a hefty 48.1 percent of those expecting a refund say they will pay down debt, and 40.2 will put their refund towards savings.
"Americans are extremely mindful of how they spend their hard-earned money these days, and that includes any refund they may get back from their taxes," said BIGinsight Consumer Insights Director Pam Goodfellow. "Thanks to years of practice stemming from high gas and food prices, and an uncertain economy, families will adjust to the changes in their take-home pay by purchasing generic brands, searching for coupons, downgrading on services like cable and Internet and re-evaluating their overall spending habits."
Online tax preparation grows
When it comes to how Americans will file their taxes, the number of people who file their taxes online continues to increase. This year, 62.5 percent of U.S. taxpayers will file their taxes online, up from 60.7 percent last year and the most in the survey's history. Additionally, 37.3 percent will prepare their taxes using computer software, 20.2 percent will use an accountant, 18.8 percent will use a tax preparation service, and 14.0 percent will prepare them by hand.
(Source: National Retail Federation, 02/21/13)
To download the complete results of the NRF's 2013 Tax Returns Survey, click here.
||Cocooning: It’s Back and Thanks to Tech, It’s Bigger
Cocooning is undergoing a metamorphosis: Call it super-cocooning.
Thanks to always-on wireless Internet connectivity and bigger, better TVs that reproduce pixel-perfect high-definition video, cocooning is entering a new evolutionary stage. Consumers are staying home more, watching movies delivered via cable, satellite, Internet or disc, eating in and transforming their apartments and houses into a shelter from the daily social storm.
This new level of super-cocooning is affecting Hollywood, professional sports and restaurants across the U.S. "Everybody is nervous, really nervous," says trend forecaster Faith Popcorn, who coined the term "cocooning" in 1981. "I think we are looking for protection. Almost like the Jetsons, we want to walk around in a little bubble. We are moving toward that."
Cocooning is not a new behavior. Born out of a mix of fear and fun, it became a trend identified with Cold War unease that led to stay-at-home entertainment such as the first home video game systems, rec rooms and the adoption of home swimming pools and trampolines.
After the 9/11 terrorist attacks, a refocus on cocooning occurred. Homeowners lined their nests with media rooms and remodeled kitchens meant for entertaining. And in the last 12 months, with the July 20 movie theater shooting in Aurora, Colo., and the Dec. 14 school shootings in Newtown, Conn., many have a heightened sense of unease. "We don't feel too safe, and people are getting more and more nervous about being vulnerable," Popcorn says. "Cocooning is going strong in 2013."
By the numbers
An indication of super-cocooning comes from a recent JPMorgan Chase analysis of credit card spending. Consumers with Chase Freedom credit cards spent significantly more (65%) on electronics such as TVs and tablets during the last three months of 2012 than during the same period the year before, the firm found.
Overall, consumers spent 2% more during the fourth quarter of 2012 than a year before, but spent less on hotels (-21%), car rentals (-26%), restaurants (-16%) and tolls (-8%). "It does appear that consumers are staying closer to home," says Phil Christian, general manager for Chase Freedom.
That trend is buttressed by the slowed growth in travel and tourism spending, from about 5% growth in the first three months of 2012 to 2.2% and 0.6% in the second and third quarters, reported by the Bureau of Economic Analysis in December.
On the plus side, movie theaters set a box office record of $10.8 billion in 2012. but overall attendance remained flat, according to Nielsen.
That's in part because Hollywood is increasingly catering to consumers by getting films from theaters into homes more quickly via on-demand or pay-TV services. Among those who stay close to home, a subset of about 7% of U.S. homes with Internet access are inhabited by "heavy home entertainment cocooners," says consulting and research firm Frank N. Magid Associates. They spend nearly $300 each month on pay TV, Internet service, video games, on-demand video, music, books, newspapers and magazines, says Magid.
These heavy cocooners are an affluent, racially diverse group: More than one-third (35%) make $75,000 or more annually. Whites make up 57%, Hispanics 22%, blacks 14% and Asians 7%, according to Magid. The firm conducted the nationally representative survey of 2,540 digital consumers in March 2012.
Even a large portion of digital consumers in the $35,000-$50,000 annual-income bracket identified themselves as heavy cocooners.
"The emerging cocoon of home entertainment is being led by a new, technologically sophisticated and more culturally diverse American consumer," says Andrew Hare, senior analyst for Magid.
The cost of cocooning
While pay-TV bills have risen about 6% annually, The NPD Group says, more homes are opting for higher-cost packages. About 23% of homes pay more than $100 monthly for cable-delivered pay TV, up from 19% in 2008, Magid found. Homes paying more than $100 for satellite pay-TV service rose to 14% from 10%.
But in other ways, the price of becoming a super-cocooner is falling. As the average price for an HDTV has plummeted, now about 88% of homes have one, according to the Consumer Electronics Association. And bigger TVs, those larger than 55 inches, cost on average $1,400, about 10% less than a year ago, The NPD Group says.
Consumers bought slightly more TVs last year than in 2011, with many upgrading to bigger displays, says NPD analyst Ben Arnold. "The move toward big screen is part of that (cocooning) story. You've got tons of content options. You've got TVs that connect directly to the Internet, so you don't even have to get a DVD; you can call up Netflix or Amazon video services directly on your TV."
There's more HD content available, too, he says. "There are a lot of reasons to stay home and either watch movies or sports on TV. Picture quality has become better and better. Actually being able to see the event or see the game, one might argue that it's a better experience than in person."
Among recent TV buyers is Kornel Lelea of Hawthorne, Calif., who bought a new 70-inch Sharp HDTV before his annual Super Bowl party. Three other screens also had the game on, but the new set was the star attraction. "The technology is so much better. It has 3-D capability, the color saturation," he says. "It is just beautiful."
The 46-year-old L.A. housing inspector watches a lot of sports, movies, as well as the Discovery Channel. "With the (new) 70-inch now, it's better than a movie theater," he says.
And it's safer, even for a guy who's 6 foot, 2 inches. "I'm a big Dodgers fan, but the last time I was at a game someone was actually trying to get stupid with me," he says. "I'm a fan, but I'm not going to lose my career or my life over a game, either, you know."
Recent assaults at sports events have caught the attention of the public and fueled cocooning. A post-game stabbing occurred at the NFC Championship game in Atlanta last month. And in 2011, national attention was turned on Los Angeles after a San Francisco Giants fan was beaten at Dodger Stadium. The National Football League in 2008 enacted a Fan Code of Conduct; last season it toughened the rule by requiring fans kicked out of a stadium to take an online behavior-management course before returning.
While convenience, cost and quality of home theater were the biggest factors cited for staying at home, security was a concern for several others who responded to USA TODAY about the subject on Twitter and Facebook. "Why leave the comfort of my lazy boy (sic) when I can see/watch a HD football game?" wrote Nathan Tameling.
Said Dave Majewski of Columbus, Ohio, "It's cheaper and more comfortable and safer."
That is a growing consumer sentiment, says Tom Campbell of retailer Video & Audio Center in Los Angeles. He was surprised at the rate at which consumers began snapping up new $17,000, 84-inch Ultra HD televisions after LG Electronics began shipping them in late October.
"We called some of them back to ask, 'Why did you buy it?' We found out that with the ever-increasing violence at sports events people are becoming concerned about their safety," said Campbell, who called several dozen customers. The three-store chain has sold more than 100 Ultra HD displays.
Other retailers also report an uptick in sales of larger-screen TVs, he says: "It's beyond the cocooning we saw in the Jimmy Carter years."
Sales of Sony's first Ultra HD 4K TV, a $25,000 84-inch model that it began shipping in early December, have been "exceeding expectations," says Sony Electronics Vice President Brian Siegel. "Over the last few years, consumers have been spending more time at home, and their expectations are increasing" for TV quality, he says.
Not so super socially
Super-cocooning is making us less social, says analyst Michael Greeson of The Diffusion Group, a media research group.
Technology makes it possible for us to avoid leaving our homes -- whether seeing a movie or getting food delivered -- and, he says, it can lessen our connections with others.
"With all the information and entertainment at arm's reach at home, why get out and meet up with a friend when you can chat on Facebook? Why go shopping for a book at Barnes & Noble when you can search through a virtually unlimited bookstore like Amazon and never leave your couch?"
Trend analyst Popcorn doesn't see an end in sight for super-cocooning.
If anything, we will line our cocoons with more technology like the IllumiRoom that Microsoft showed off at the Consumer Electronics Show last month. Using a Kinect camera controller and projector, the IllumiRoom turns your entire room into a 3-D movie or game environment.
"You can see the evolution," she says. "But it all comes out of the same thing: We're people getting more and more nervous about being vulnerable."
(Source: USA Today, 02/19/13)
Daily Sales Tip: Don't Talk Yourself Out of a Sale
Knowledge should be one of the most powerful tools in our toolbox. Knowing how to use specialized industry vocabularies should also be one of our basic and power tools.
In reality, for many of us, knowledge and specialized lingo are powerful -- in costing us business.
Naturally, a great many new salespeople are tempted to try to impress prospects and clients by demonstrating their product knowledge and slinging their newly learned industry vocabulary around. They tend to oversell, answer questions no prospect has ever had, dazzle with words the prospect and client may not be familiar with.
They talk about the fine points of their product or service; discuss how their service or product will impact ROI; how their product or service creates a new paradigm to address the prospect's issues or needs; and the list goes on.
Some say that if you want credibility with your prospects and clients you have to speak their language. I don't have a problem with that in the least -- if you're actually speaking your prospect's language. But how many prospects actually talk about creating a new paradigm to address an issue or problem? There's certainly something to be said about just talking to the prospect in plain English.
And very often new sellers butcher their newly acquired vocabulary and confound and frustrate their prospects with their enthusiastic demonstration of their knowledge of the minutiae of their product or service. Many lose more sales than they capture because of their lack of discipline and their need to impress.
Unfortunately I've noticed over the past several years that this desire to impress isn't confined to new sellers. I consistently run across experienced sellers who should know better that are making the same rookie mistakes. The only real difference between these experienced sellers and new salespeople is experienced sellers tend to have a better grasp of the industry lingo.
In the current tough selling environment even experienced sellers are falling into the trap of trying to oversell and to impress with their knowledge and "deep" understanding of the prospect's issues. We tend to pull out all the stops and often end up losing our discipline and the prospect's attention. We try to force the sale.
Rather than creating new clients, we end up alienating them.
Whether you're a relatively new seller bursting with enthusiasm and wanting to impress your prospects or an experienced seller feeling the pressure to produce, you need to step back and relax. Giving in to the pressure to oversell and force the sale is self-defeating. Address your prospect's needs and leave the unnecessary demonstration of knowledge and the impressive vocabulary at the office.
Source: Sales consultant/speaker Paul McCord