In this occasional column, learn the latest news from around the blogosphere. Learn about hiring plans for the direct marketing industry, the effectiveness of cause-related ads, one foundation’s use of virtual worlds to foster community service, and predictions for 2008 holiday sales.
●Direct Marketing Hiring Plans Take a Dive
The slumping economy has forced marketers to take a close look at their hiring plans. Look for hiring freezes and employee layoffs to take hold in the remainder of 2008 for the direct marketing industry, according to the latest employment survey from executive search firm Bernhart Associates.
Only 31% of companies responding say they plan to add to headcount during Q4 2008, down sharply from 47% last quarter. Hiring freezes jumped to 34%, compared with 20% over the summer. The percentage of companies planning layoffs rose 12% from last quarter - to 17%, a new high for the survey.
Some job categories, such as sales and sales analytics, are holding up much better than others in terms of positions employers plan to fill during the fourth quarter of the year. While the credit crisis likely contributed to the survey results, direct marketing employment has been in a downtrend all year, according to Jerry Bernhart, owner of Bernhart Associates.
“Every one of our major employment indicators showed significant declines compared with summer and now stand at their lowest levels since the survey began eight years ago,” Bernhart said. “We always ask companies that have a hiring freeze when they plan to lift it, but very few were able to give us a definite time frame. In addition, most of the new hiring will be replacements rather than new additions.”
●Attention-Getting Cause-Related Ads Can Increase Sales
Cause-related marketing can increase sales as much as 74% in certain consumer-goods categories and consumers spend twice as long looking at cause-related ads than generic corporate ones, according to a study by Cone and Duke University’s Fuqua School of Business. The 2008 Cone/Duke University Behavioral Cause Study finds a strong link between cause-related marketing and consumer choice.
After participants were exposed to either a cause-related or a generic corporate ad for one of four focus brands in the toothpaste, shampoo, chips and light-bulb categories, they entered a mock convenience store with nearly 150 SKUs and were given real money to purchase a product of each type.
Results of the study included:
· A 74% increase in sales of a shampoo brand after it had been associated with a cause. Nearly half (47%) who viewed the cause-related message chose the brand, while 27% of those who saw the corporate ad chose the brand.
· A 28% increase in actual purchases for a toothpaste brand that was associated with a cause. More than two-thirds (64%) who saw the cause message chose the target brand versus 50% who viewed the corporate ad.
Cone and Duke replicated the study online among a sample of more than 1,000 adults in order to validate the sales increases for shampoo and toothpaste. The results included:
· Participants spent nearly twice as long reviewing cause-related ads vs. general corporate ads.
· This resulted in a sales increase (19%) similar to the lab study for the target toothpaste brand.
· Though the shampoo brand increased only by a modest 5%, sales among its target audience of women increased by nearly 14%.
Related, qualitative consumer responses showed that the issue, the nonprofit organization involved with the brand, and the inherent nature of products were key factors in cause-related purchasing decisions.
“One thing we know for sure - consumers are paying more attention to cause messages, and as a result are more likely to purchase,” said Gavan Fitzsimons, Duke marketing professor and lead researcher on the study. “This is clearly great news for brand managers, as every percentage increase can translate to millions of dollars in revenue.”
A new Carter Academic Service Entrepreneur (CASE) grant program offered through the Jimmy and Rosalynn Carter Partnership Foundation will provide University of Texas students the opportunity to use virtual worlds to serve real-world communities. The Second Life-focused CASE grant offers $1,000 to support the project and a $500 scholarship at its completion. The competition will work in concert with a UT-Austin course on “Working in a Virtual World.” "Our CASE grant model has proven extremely successful offline, this project will be a demonstration that community service can be a new horizon for online virtual worlds," said Foundation President Sue Sehgal.
●Fewer Gift Cards Expected in 2008 Holiday Stockings
Holiday stockings will likely be a little lighter this year. That old holiday gift staple-the gift card-will be left off of some consumers’ shopping list this season. According to Archstone Consulting’s 2008 Holiday Gift Card Survey, U.S. gift card sales are expected to drop 5% this holiday. Consumers will also shift their gift card spending towards household necessities such as groceries and gas, or small indulgences such as dining at restaurants.
Some key survey findings include:
- Pre-paid bank cards (Visa, American Express, Master Card, etc.) will continue to be the most desired by gift recipients this year – as they were in 2007.
- The restaurant/fast food category will sell more cards than any other category this holiday season.
- Teenage and post-college consumers will represent the bulk of the increase in gift card purchases.
- Sales of gift cards through outside locations, such as grocery, drug stores, banks and kiosks are expected to grow significantly, by 30 percent versus 2007.
●Americans Expect Companies to Have Social Media Presence
Increasingly, consumers are welcoming social media marketing into their lives. Rather than perceiving it as an intrusion, an overwhelming majority of Americans expect companies to have a presence in social media.
According to the “2008 Cone Business in Social Media Study”:
• 93% of Americans believe a company should have a presence in social media
• 85% believe a company should not only be present, but also interact with consumers via social media
• 60% interact with companies on social media websites
• 56% feel both a stronger connection with and better served by companies when they can interact with them in a social media environment
• 25% interact with companies more than once a week