Wednesday, July 24, 2013 | Edited by Daniel Moores
||Local Ad Shops Dine Out as State Health Exchanges Start to Advertise
As Target Date Nears Under Affordable Care Act, States from New York to California Ramp Up Education Campaigns to Explain Costs, Eligibility to Consumers
Ads for Colorado's health-care exchange pose a simple question: Who's the winner when health-insurance companies compete? The answer, of course, is the consumer. But another winner here is Pilgrim, the Denver-based ad shop behind the campaign.
Pilgrim is one of several agencies across the country that have won multimillion-dollar state contracts to market health-care exchanges that open Oct. 1 as part of the Affordable Care Act. And that marketing is proving crucial to educating consumers, who are mystified as various states take divergent approaches.
Some have been slow to mobilize; others are openly hostile to exchanges. Meanwhile, as parts of the ACA have been rolled back or delayed, confusion is the order of the day.
"People believed they would wake up one morning and everybody would have health insurance," said Todd Spencer, president-CEO of Doe Anderson, the Louisville agency running Kentucky's campaign. "The amount of confusion was just so enormous."
Like many agencies across the country, Doe Anderson is now carrying out the educational phase of its state's campaign.
Doe Anderson won the $11.3 million contract through a vigorous RFP process, a route many states took to find their agencies. This includes Washington state, whose $9.37 million contract went to GMMB, a D.C.-based agency with an office in Seattle; and Illinois, which awarded its $35 million contract to Fleishman-Hillard, which has an office in Chicago.
Some states skipped the RFP process. In New York, the Department of Health awarded DDB its health-care-exchange contract without a review.
California selected multiple global agencies to market its Cover California exchange: Weber Shandwick is developing the campaign, and Ogilvy Public Relations is assisting with media relations and community outreach. It also partnered with the California Endowment, a private health foundation that expects to spend $25 million through 2015 on integrated marketing. Its TV ads are made in-house and target Latinos, the largest demographic of uninsured residents in the state.
The objective of these campaigns is to explain coverage options, when residents can participate in exchanges, who is eligible and how much they cost.
Health-care providers and insurers are also stepping into the fray, hoping to lure consumers to their brands.
Wellmark BlueCross BlueShield, which does business in Iowa and South Dakota, teamed with Minneapolis-based agency Campbell Mithun to position it as a category leader with integrity. Its messaging has changed significantly since the ACA was signed into law to focus more on consumers and their education, said Mike Gerrish, VP-corporate and marketing communications at Wellmark.
Blue Cross and Blue Shield of Illinois launched its own unbranded campaign, "Be Covered Illinois," three months before Illinois even awarded the state's contract to Fleishman-Hillard.
"Key to the success of the health-care exchanges is education and understanding and awareness, so we get people to participate in it," said Mike Deering, director of media and PR for the insurer.
Campaigns -- whether they be from exchanges or private companies looking to distinquish themselves on service -- are targeting demographics least likely to be insured. These include ethnic minorities and the superhero-esque group dubbed "the invincibles" -- Millennials who've never bought insurance or don't think they need it. Young, healthy people also tend to be the most profitable customers for health-insurance companies.
In most states, the campaigns involve TV, radio, print, digital and out-of-home. Some insurers are running campaigns with information presented in easily digestible chunks: "What are the three things you need to know about the Affordable Care Act?" offers Wellmark BlueCross and BlueShield on its new health-care website.
For agencies with the home-state advantage, advertising lends itself to local predilections. North, the Portland agency running Oregon's $9.9 million campaign, has advertising on coffee-cup sleeves. Doe Anderson will market Kentucky's exchange through college-sports marketing and sponsorship.
With Oct. 1 mere months away, nonprofits have also stepped in to educate residents in some states. Enroll America is a nationwide nonpartisan group that kicked off a tour in June in 18 states, including Florida, Texas and Michigan, to teach people how to shop for insurance.
(Source: Advertising Age, 07/23/13)
||U.S. Auto Sales Predicted to Increase 16% in July
U.S. new-vehicle sales are projected to rise 16 percent this month as the industry gains strength entering the second half of the year, according to a forecast released on Friday by LMC Automotive.
LMC estimated that the seasonally adjusted annualized selling rate for July would reach 15.9 million, nearly matching June's rate of 15.98 million, which was the highest in five-and-a-half years. The SAAR for July 2012 was 14.1 million.
The forecasting firm also increased its full-year forecast for light-vehicle sales by 200,000 units, to 15.6 million.
"The overall trend in vehicle demand has outshined economic growth, and looking forward, the improving economic fundamentals should hold demand at the current level, if not accelerate it over the next several months," Jeff Schuster, senior vice president of forecasting at LMC, said in a statement. "With a strong tailwind, it is not unreasonable to think about a 16 million-unit level of demand in 2013."
A 16 percent gain from July 2012 would represent the industry's largest year-over-year gain since last August, when sales rose 20 percent.
LMC, which develops its forecast with registration data from J.D. Power and Associates, said stronger-than-expected retail demand compelled it to raise its full-year outlook. It now projects retail sales for 2013 to total 12.8 million units, up from its earlier estimate of 12.6 million.
LMC's forecasts, which are based on J.D. Power and Associates transaction data for the first half of the month, have underestimated the industry's performance in most months this year.
Automakers are scheduled to report July sales results on Aug. 1.
Most analysts expect U.S. light-vehicle volume to reach 15.3 million to 15.6 million for the year, compared with 14.49 million in 2012.
The J.D. Power data show that increased leasing and availability of long-term loans are helping to drive sales higher. Loans with terms of at least six years accounted for 30 percent of new-vehicle retail transactions in the first half of the year, up from 29 percent in the same period of 2012, and leasing represented 24 percent of first-half sales, up from 21 percent a year earlier.
"Elevated new-vehicle transaction prices are being enabled by the availability of longer-term loans, affordable leases and strong used-vehicle values, compounded by the availability of low interest rates," said John Humphrey, senior vice president of the global automotive practice at J.D. Power.
J.D. Power said light-vehicle production in North America rose 4 percent in the first half of the year from the same period of 2012. That includes gains of 15 percent for Hyundai Motor Co. and 14 percent for Ford Motor Co., while General Motors production fell 4 percent.
It said automakers had a 61-day supply of vehicles in early July, up from 57 days a month earlier.
(Source: Automotive News, 07/19/13)
||Improving Economy Bodes Well for Consumer Electronics Industry
Like other industries, consumer electronics in 2013 is slogging through an "uneven" economy, with drags on it such as the effects of the Q2 sequester and a slow unemployment decline.
But there are marketplace positives, too: "measured improvements" like easing of consumer credit, rising home prices, and pent-up demand for products that consumers are satisfying by increasing their purchases, as the broader economy improves.
However, technology is having to compete harder than ever for consumer dollars against the appeal of durable goods like cars and appliances.
As a percentage of durable goods purchases, tech has been on a slight down trend since it peaked at 17.6 percent in 2010; in 2012, it was 16.5 percent and year to date is currently trending at 16.1 percent, said Shawn DuBravac, Consumer Electronics Association chief economist and senior director of research, during the recent CEA Research Summit.
He said tablets and smartphones continue to be the tech category drivers of 2013; without them in the CE mix, revenue growth projections, up 2.7 percent when the stats were last revised in January, would have declined 3.5 percent over 2012.
Smartphone revenues are growing at a 20 percent pace this year over 2012, and tablets, at a 45 percent pace. Tablets are owned by 40 percent of all U.S. households, and 30 percent who don't own them intend to buy them in the next 24 months, meaning that there is still a large addressable market for them.
Flat-panel TVs, while overshadowed in the spotlight by tablets and smartphones, are seeing "good growth," said DuBravac. Up just .6 percent in unit sales in 2012, they are up 12 percent year to date from January through March 2013, with revenues for that period up 10 percent for the same stretch.
"It's a large-screen market," DuBravac said. In 2011, just 11 percent of TVs sold were 50 inches or larger, but that is expected to leap to 34 percent by 2016 -- and the shift to larger screens is occurring more rapidly than anticipated, fueled by both very low prices and replacement buys happening as the first waves of HD flat panels sold in the middle of the last decade reach maturity.
Internet-connected TVs are also gaining some traction among buyers, with 36 percent of all sets sold this year expected to carry "smart" capabilities.
Sales expectations for Ultra HD/4K (UHD) sets are a modest 23,000 units for 2013, but could reach 1.4 million in 2016, accounting for five percent of overall unit volume then, DuBravac said. OLED TV unit sales might track slightly below UHD in 2013 at 20,000, and next year, UHD unit volume could be 212,000, versus 190,000 for OLED.
Steve Koenig, CEA director of industry analysis, delved more deeply in a separate presentation during the Research Summit into the state of the TV industry, saying that TV has been redefined by a "second-screen dynamic" -- that is, the market presence of the tablet. "There is more content on more screens, and multitasking on multiple screens," he said, pointing out that two-thirds of consumers use a companion screen when while watching TV.
For traditionally defined TVs, Koenig observed that keeping unit sales elevated over the past three or four years has been achieved with "a cost to keep these boxes moving" -- namely, lower revenues. Peak revenues for flat panels came in 2008, when U.S. shipments reached $26 billion, and even though consumers are buying ever-larger screen sizes year after year, revenue has dipped to below $20 billion, where it is expected to hover through 2016, even with the market deployment of UHD and OLED sets.
LCD TVs are continuing in their dominant position, accounting for nine of 10 displays shipped, while plasma panels are in retraction mode; Koenig said OLED could gain a foothold in the middle of this decade, depending on supply-side manufacturing efficiency advances. OLED "could be more of a 2015 story," he said, also noting that with just three major manufacturers remaining as players in the consumer plasma TV business, "I don't see a lot of legs left in this market."
Ultra HD, which garnered the most attention at January's CES conference, is destined to be a "second half 2013 story" in the marketplace. But he added that "it will be some years before we see meaningful volume...UHD holds promise, but that promise is somewhat distant at the moment."
On the subject of 3D, Koenig observed sales "have been somewhat one-dimensional," with the pace of 2013 3D unit shipment increases for January through March (just one percent) far off from the 2013 unit shipment forecasts offered at the beginning of the year for 3D-outfitted TVs (28 percent).
What has kept overall TV sales momentum up, he averred, has been lower prices, and not necessarily features like connectivity and 3D. He said it would likely be improvements in searchability within connected TVs, and not the addition of "me too" apps, that would be a powerful purchase stimulus for future sales.
Overall, Koenig noted that TVs have become "cheaper, bigger, and provide more real estate for less money. How long can this trend continue. Is it a race to zero?"
DuBravac, in his presentation segment, also provided a brief overview of the Blu-ray category -- another addressable market opportunity, as one in three households currently own a player and 18 percent who don't say they will buy one within two years.
He reported that home audio revenue has been another bright spot thus far in 2013, up about 4.8 percent, and U.S. soundbar revenue is up an estimated 60 percent year to date.
Another area CEA is tracking is "wearables," including smartwatches and health-related wearables such as pedometers and blood pressure monitors. While many factors could affect the growth of the smartwatch category, the group is tracking pedometers as the most popular health wearable, with 31 percent of adults polled saying they owned one, and many using them and other health wearables in conjunction with fitness apps for personal health data tracking purposes, said DuBravac.
(Source: Dealerscope, 06/25/13)
Daily Sales Tip: People Love a Good Story
Over the years as a speaker, manager and facilitator, I have observed the greatest retention of my message was from stories that I told.
The impact went beyond facts and theories. Stories engage the audience, were conversational, and tapped into the emotions and senses. Often I would encounter people years later and they would playback a story I had shared with them, and more importantly, voice the point of the story and how it helped them overcome barriers or create solutions to problems.
How to use stories to educate and explain:
Listen. Learn to listen to your audience for clues as to what would resonate with them and what is important in their world. Be prepared to tell a variety of stories from your arsenal.
Use personal experience as a basis for your story. The greatest way to build trust and relationships is to be vulnerable. The story can demonstrate how you had to overcome an obstacle or barrier, reveal up-close and personal experiences that your audience can relate to, and encourage them to remember we are all human.
Be genuine. Share real-life stories that can demonstrate how you can learn from your mistakes (usually the best lessons are from our mistakes), and demonstrate effective techniques on how to overcome barriers.
Engage your audience. Stories capture the imagination by allowing people to paint their own pictures and images of what you are sharing. Have a beginning, a middle, and end with a clear take-away. Like a good joke, it is all in the delivery of the story and your conviction.
Be conversational. The delivery should be natural in a conversational tone. You are letting your audience behind the scenes with this revealing story about people and events. It can be fun, serious, sad, dramatic -- all the range of human emotions. People love a good story.
Source: Sales coach Paul Anovick