Will Someone Please Pass Me the Crystal Ball? Marketing Predictions of the Coming Year

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In 2007, retailers began to face the tough decisions about their media mix in an environment where consumers were using technology and legislation to skip the holiday commercials. Without doubt, the retailers that fell behind in this trend would have suffered poor sales performance in 2007, and will continue to do so in 2008."

SmartReply

In 2007, retailers began to face the tough decisions about their media mix in an environment where consumers were using technology and legislation to skip the holiday commercials. Without doubt, the retailers that fell behind in this trend would have suffered poor sales performance in 2007, and will continue to do so in 2008.

With all the mixed analysis of the holiday's trading figures - up and down like a yo-yo - the nation's retailers could have been forgiven for prematurely resigning themselves to a miserable outcome. With so many variables beyond their control, like the obscene price of fuel, or the millions of shoppers carrying out super-last-minute or online purchases, some retailers felt they had little choice but to carve up the discounts and incentives to lure customers well into the New Year. Did they?

Eric Holmen, President of mobile and voice marketing firm SmartReply, thinks otherwise.

His company provides mobile, voice and loyalty campaigns for some of the country's leading retailers and has the following insight for the industry;

"In 2007, retailers began to face the tough decisions about their media mix in an environment where consumers were using technology and legislation to skip the holiday commercials. Without doubt, the retailers that fell behind in this trend would have suffered poor sales performance in 2007, and will continue to do so in 2008."

Welcome to the real world, Consumers are demanding

Consumers are demanding, through their technology purchases and their legislative representatives, that the control of marketing is passed from the brand over to themselves. It was only a matter of time. What SmartReply calls "Customer Managed Communications," this movement requires an opt-in capture (read: permission) for every marketing communication, as well as preference management tools the consumer can access and control.

Macro-themes in 2008

Holmen sees the marketing world in 2008 broadly governed by a couple of macro-themes: the impending American economic slowdown and the continued rise of interactivity, personalization and mobility of marketing efforts, fuelled by the evolution of digital technology. The New Year will also, if prior years are any indicator, witness small but significant leaps of innovation and several perception-changing strategies and tactics.

1. The American Economy
At the end of 2007, many economists had already indicated that the US economy was headed for a slowdown, if not a full recession. The Livingston Survey, a semi-annual sounding of several respected economists undertaken by the Federal Reserve Bank of Philadelphia, predicted in December substantially lower growth for the first half of 2008 than they had originally estimated (1.9% growth, revised from 2.9%). In such a situation, marketing dollars are usually the first thing to go. But as marketing and advertising budgets get leaner, the focus on connecting with customers in the most effective possible way becomes absolutely paramount. Not just for retailers, but for every business. So, with a sluggish economy looming, we can expect new initiatives designed to maximize adoption/response rates and readily demonstrate positive ROI in the short term. Many of the campaigns that relied on mobile technology or that were based in web 2.0 fit this bill, and will enjoy continued usage and growth in 2008.

2. The Decline of Traditional Media Streams
It seems this particular topic gets more and more coverage each year- and will continue to, at least until the internet is reclassified as traditional media. According to Forrester's study of consumer media consumption trends released September 2007, 26% of households are using DVRs, like TiVo, to skip television advertising, up from just 19% only a year ago. At the same time, 35% of households actively use MP3 players - like the iPod - avoiding radio advertising, and 52% of households are using broadband internet at home during typical television viewing hours.

We are in an age where consumers have unprecedented control over what sort of media they are exposed to, and, by extension, how much and what kind of advertising reaches them. Coupled with the well-publicized decline of newspaper circulation and advertising revenue, and the trinity of traditional mass media that was the basis of every marketing 101 textbook printed before 1996, "traditional media" is slowly tipping over into obsolescence.

3. Green Marketing
The practices of assessing environmental impact and promoting sustainability have transitioned from being exercises of goodwill to economic necessities. Many large multinational corporations are pouring significant resources (read: millions, or billions) into developing sustainability plans and practices, the marketing effect of which is readily translatable to brand image and overall reputation. Wells Fargo, according to data published by the Riskmetrics group, instituted a 10-point climate change action plan and dedicated $1 billion to sustainability initiatives in 2006. Indices like the Ceres, Inc. report on corporate governance and climate change rank companies based on environmental criteria- and with GE, DuPont and Cinergy leading their respective industries on the list. Poor performers are cast in a decidedly unfavorable light. Data sets like these are widely disseminated and available for public consumption, making them extremely significant from a marketing perspective.

4. Mobile Marketing
By combining demographic and media consumption data, SmartReply is forecasting that by 2012, 90% of the most active retail consumers will be unreachable by advertising via radio, television, and newsprint. Only five years ago, these were the main staples of the media mix for every major retail company. With consumers now demanding more control of the marketing messages they receive, and how companies communicate with them via individual accesses and controls, what better platform for reaching them than the ubiquitous mobile phone?

As phones have evolved rapidly into multimedia devices (think iPhone, the BlackBerry nation), their capabilities have opened unlooked-for advertising channels. Emarketer, a market research and trend analysis firm specializing in Internet and e-commerce, predicts that advertising on mobile phones and through web video viewable on mobile devices will triple in the next 3 years. The efficacy of webpage ads is consistent whether viewed on a PC or on a smartphone. SMS-based text advertisements and marketing campaigns are increasing in frequency and adoption. The new year will also see a social-network approach to mobile marketing, incorporating group texts and friend-circle communication, hosted by savvy retailers looking to connect with their customers in real time. Drew Neisser, CEO of Renegade.com, sums the mobile marketing revolution up nicely: "[it's] the missing link in personalized communications."

5. Social Networking
"The continued growth of social networking seems assured," says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report, Social Network Marketing: Ad Spending and Usage, "unless teens stop social networking as they become adults." Indeed, eMarketer predicts that almost 10 million more Americans will use a social network in the next year (up to 56.9 million), a 5% increase of online users over 2007. Consequently, advertising spending on social networks will also increase, though perhaps not at the exponential rate witnessed in 2006: spending is projected to increase 75% to $1.225 billion in 2008 (compared with a 155% increase between 2006 and 2007). With the scope of the audience and the scale of the advertising dollars, the social network angle is still very much in play.

6. The Rebirth of Second Life and Game Marketing
"Don't ignore Second Life," says Eric Krangel, Reuters Second Life reporter. "Don't write it off. [This] is a tremendous untapped market that can be reached with savvy marketing." Second Life, once though of as the new horizon of online marketing, has fallen on disfavor in the latter part of 2007. But while some of the data associated with the virtual world is indeed pessimistic (9 of 10 accounts are inactive, according to whatsnextblog.com) the sheer number of subscribers warrants marketers' attention. The "metaverse" has approximately 1.2 million active members- who log in at least once a month- which represents significant buying power, both within the virtual realm and in the real world. As the online population tires of traditional social networking sites like Facebook and MySpace, Second Life, with its unique avatar-based interaction model, might just be poised for a renaissance.

Likewise, the increasingly interactive and realistic world of online gaming is becoming more attractive to marketers and advertisers. As World of Warcraft and the like are drawing thousands of play hours, the opportunity to reach the gaming demographic through integrated in-game advertisement grows commensurately. Offline, the unprecedented popularity and physical interactivity of the Nintendo Wii makes the new system an exciting tool for marketers.

7. Widgets, Other Service Marketing and More
Visit http://www.smartreply.com/press_release/?pg=news&arc=mb_08_08_1
8. Do It Yourself
Visit http://www.smartreply.com/press_release/?pg=news&arc=mb_08_08_1

About SmartReply
SmartReply's voice and mobile messaging solutions have created breakthrough-marketing results for over 80 leading retailers throughout the United States and Canada. As the only voice and mobile messaging company dedicated to meeting the unique marketing challenges and objectives of retail executives, SmartReply's clients now have the proven ability to increase store traffic, lower marketing cost and strengthen brand affinity. Because of this, SmartReply is the provider of choice for more than 80 major regional and national retailers. Headquartered in Irvine, California, more information for partners and clients can be found at http://www.SmartReply.com or by calling (800) 785-6769.

Press Contact
Vanessa Horwell,
Strategic Vantage for SmartReply
(786) 206.7883
vanessahorwell(at)StrategicVantage.com

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Eric Holmen
SmartReply
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