Brandthony

Get ready to see a lot more “fun young professionals” stock photography like this in the next decade or two because there’s some very interesting news coming out of Nielsen today describing the consumer of the future. According to the research by Doug Anderson, SVP of Research & Development at The Nielsen Company, growth in business in the next 20 years is unlikely to be coming from households with children.

Here are some quick highlights (or lowlights, depending on which business you’re in) from the Nielsen data.

“Marketers in the developed world will be locked into share wars while those able to compete in the less-developed world could see substantial growth.

• Worldwide there is still substantial, though slowing, population growth. By 2030, world population will have grown by around 20%. Only 3.2% of this growth will come from the more developed world. The less-developed regions will grow 31 times faster than the more developed ones. Some of the older countries in Europe as well as Japan will lose population.”

“By the middle 2020s, the share of U.S. households with children under 18 will fall below 30%. ”

“Multi-cultural marketing will be essential when selling to families with children.

• The majority of population growth in the U.S. will come from new immigrants and the children they have in this country. Since most immigrants are young, families with children will become more ethnic, more quickly, than the total population. By 2025, the majority of families with children in the U.S. will be multi-cultural (Hispanic, Black, Asian, etc.). Less than half of families with children will be native born non-Hispanic White.“

“Nielsen projections show per household spending on packaged goods will begin to fall after 2020, while the current recession is already impacting spending in the short-term.”

This seems to be following a trend as noted in a report last year by The Census Bureau, which announced that the share of households with children under 18 reached its lowest point in half a century at 46%, a full 16 points below the 30% range predicted in the Nielsen report.

So what does this mean? If you’re a brand in the CPG category, especially with products aimed at mothers, it is time to do some heavy research into that whole “building relationships through social media” hullabaloo that web-oriented marketers such as myself have been talking about endlessly over the past few years.

And if you’re an entrepreneur? Then it’s time to start building products and services aimed toward the professional 20- to 30-somethings with all of that extra income from not having many, if any, children. And don’t forget those older Gen Xers who’s kids have already left the nest. That’s right, it’s time to embrace the DINKS! (Dual Income No Kids)

I have a feeling that a lot of these consumer electronics are going to do really well in the next twenty years, what with no kids in the house breaking those expensive HDTV’s and Blu-Ray players (or, for me, the Boxee Box).

[NOTE: This post was originally written for the official blog of Conversation, the digital marketing agency for which I am employed.]

It’s about time there has been good news from the Commerce Department, with all the 9.8% unemployment data meaning less consumer buying power in the country and slight depression here in the Conversation offices.

Gross domestic product expanded at an annual rate of 3.5 percent in the three months ending in September, a significant spike from a relatively shrunken base. The economy had contracted at annual rates of 0.7 percent and 6.4 percent in the second and first quarters of this year, respectively.

Even Cash For Clunkers now has some data to provide support for its campaign, with consumer durable goods up 22.3% compared to -23.3% last quarter.

So in an attempt to skip past some other data because your time is precious and ours is limited – what with all of our client work to finish and all – what does this all mean for marketers? It means the American consumer is making a comeback and just in time for the all-important holiday season. So if you planned to slum it through the holidays, pick up the phone and call Conversation now for some timely holiday campaign work.

While this holiday season won’t be like the prosperous ones of 2006 and 2007, it is apparent that holiday 2009 could at least beat out 2008, if only narrowly. With the economy in a slight upturn, there is no better time to jump into the digital marketing arena, because when 80% of consumers are making purchases online and 80% of their time is spent on social networks, isn’t it about time your brand started reaching those consumers where they are?

After all, close to 70% of them are skipping your TV commercials and 20% of Twitter “tweets” mention your brand name.

The one thing I’ve noticed in my short time working at Conversation, a fairly new social media agency, is that clients still have a hard time understanding the marketing value of social media initiatives. They fully understand the math: hundreds of millions of people are on social networks like Facebook more than any other Web site, but they still do not understand how to utilize the networks to communicate marketing messages. Sadly, attempting to communicate the network effect such an initiative can have seems so foreign from anything they’ve ever studied and experienced that explaining it sometimes raises even more empty, puzzled looks.

I believe, among other reasons, there are two main problems brands have with social media strategy. There are certainly others, but I want to keep this fairly brief especially since I have work to get to.

1. How does “communicating” in a “two-way conversation” with customers translate to sales and how do I measure that ROI?
2. I recently found data that suggests 55% of Twitter accounts are inactive. Not only do I not understand this platform, but it seems as though I won’t be speaking with any real prospects.

Let’s address each one at a time.

1. Communicating in a two-way conversation with customers is fundamentally not a “direct response” initiative, so why are we expected to measure its effectiveness by those metrics? Communicating on social media platforms is branding with the opportunity for sales, not sales with the opportunity of branding. I would argue that conversations can result in brand loyalty and sales, while marketers could argue that conversations could result in just conversations without sales.

Multi-million dollar TV ad campaigns with the intention of branding that could result in a lift in sales gets green-lighted without much of a problem. Whatever happened to the 80/20 principle, where 80 percent of business comes from 20 percent of your customers? What better way is there to constantly communicate in a friendly, helpful way with that 20 percent than through social media. I’ve said it before and I’ll say it again:

Imagine the power your brand can have with the streamlined manufacturing and distribution power of the current corporate marketplace along with the loyalty and customer satisfaction engendered by Mom-and-Pop shops.

2. Now, some may argue that I should discuss Facebook here, but I’ll take on the challenge of explaining Twitter in a mere two paragraphs. First, the basics: Twitter is a platform where a person can “tweet” about anything they find interesting, whether it be “Am I stupid or is quisitive really NOT a word?” or “Wow, check out this cool video: www.video.com.” All of these tweets are archived and searchable, and if another person finds value in what another person is tweeting they can “follow” them and subscribe to their updates so they can keep track of what’s interesting to that other person, who’s often a complete stranger unlike the connections on Facebook.

Now, for the problem of activity. Sure, there are a lot of dead accounts on Twitter and I believe that will always be the case. But check out this information from yesterday’s USA Today by Nicholas Christakis, a physician and Harvard University sociologist who is co-author of a new book, Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives.

Much of the work by Christakis and Fowler is based on research using the Framingham Heart Study, a key group of 5,124 adults within a larger network of 12,067 people in Framingham, Mass. Each had an average of 10.4 ties to others — totaling 53,228 ties.

Now, assuming that most adults have 10 solid offline connections, let’s assume only one of those 10 is on Twitter (10 percent isn’t a bad estimate). Now, let’s assume the average Twitter user has 49 followers. Now let’s also assume the average Facebook user has 120 friends.

Now for the following example, when I say “reach X% of connections,” I mean the connection has actually read and taken note of the message. If you reach only that one person out of that offline group of 10 with a valuable enough message, and they in turn repeat your message on Twitter and Facebook and it reaches 10 percent of their connections (169 total), then your message has now reached 17 other people.

Now let’s say 20 percent of those people (3 people) distribute the message to their network of a combined 507 connections and again reach a conservative 10 percent of their connections, now the message has reached a total of 67 other people. And so on and so forth.

And we haven’t even taken into account how online messages don’t live in a bubble online, and can be spread offline by people who were reached online. In other words, a valuable promotion can spread by word of mouth easier than ever before, and messages live on all media online and offline.

There are still many areas we haven’t touched on, including the fact that you can see what people are saying about your brand in real-time, and have the opportunity to not make the mistakes of, say, Kryptonite bike locks.

That’s the (truncated) true value of social media for marketers.

Another interesting read: ‘Flocking’ behavior lands on social networking sites (USA Today)

Considering my motto is “Blogging A Branded World,” it seems only fitting that I blog about this disturbing image from Stephen Von Worley of Weather Sealed. It’s a heat map (click for full size) of the United States visualized by the distances of nearest Mickey D’s.

Some people may be blown away while others may find the sparse Western area surprising. Having lived in Colorado, it isn’t. Per capita, McDonalds is just as abundant out West as out East, but people are spread out more in the West. When I lived in Pueblo, CO, two hours south of Denver, there was a lot of open space between cities. The closest city north was Colorado Springs (2,000 feet higher in elevation than the much ballyhooed Mile High City), and it took a drive of 35 to 40 minutes through a vast wasteland to get there. Plus, don’t get me started on the emptiest state I’ve come across: Kansas.

McDonalds is the lifeblood and DNA of America, while, at the same time, a remnant of an era from which we’re now transitioning. That’s not to say McDonald’s isn’t as prosperous and ever-present today as it was 10 years ago, but that I do subscribe to the idea of The Long Tail, which asserts the position that we’re fragmenting into specific interests and creating smaller niche markets that, when combined, equal the former dominance of the mainstream. McDonalds is a relic which reminds us that in some industries, however, that movement hasn’t taken place.

So now that I’m on the job market, I’ve noticed one constant during my job search. Whether or not the job posting explicitly asks for someone to fill the position or not (and there are a lot of Social Media postings out there), a question about social media pops up in just about every job interview I’ve been on. Hell, there are even doctors out there looking for social media wizards.

In these interviews I’m generally asked how I would use social media to improve the company. The other day, after being asked for the third straight interview, I responded with with this.

“I could name a whole bunch of fads, but it would be difficult for me to tell you offhand what exactly would work well for you. What’s most important is that whatever I would develop for you would have to do one of two things: Create a valuable dialogue between this company and your consumer or make it easier for that consumer to share interesting information about your company to others that’s of value to their lives. If you don’t accomplish that, then you might as well not do it because you won’t be successful.”

That may seem like common sense, but I’ll be damned if I don’t see the rule broken all over the place. Right now there’s an unhealthy love affair with social media that’d been ginned up due to articles in BusinessWeek and the like about how social media will turn your also-ran into the lead dog in whatever field you’re in.

That’s horse sh*t.

Anybody peddling that propaganda your way is no better than late night infomercials for products like the Internet Treasure Chest that’ll make you hundreds of thousands of dollars in as little as 10 minutes/day. Hell, just double-check that job posting I mentioned earlier. They want a social media person to work magic in only 10 hours a week.

Bottom line is that the fundamentals of advertising that held true at the advent of the craft still hold true in social media: benefits, not features, sell. Right now everyone is obsessed with the features, these platforms that provide easy ways to reach hundreds and thousands of people. All the while, they’re missing the benefits. The benefit to the consumer is the value you add to their lives through social media. If you’re not delivering on the benefits, then you better start re-evaluating your strategy.

People seem to forget that Twitter, for example, is opt-in by nature. Just as quickly as you can gain 100 followers, you can lose 70 the following day if you’re peddling garbage. But unlike e-mail, where unsubscribe links are small and often hidden as legally as possible, the unfollow button is prominently displayed under your name on Twitter.

I’ll leave you with a final thought from Maria Veloso’s excellent Web Copy That Sells (which is indeed very good, even though the cover looks like that of a terrible text book) and it comes from Author Sidney J. Harris.

“The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things. Information is giving out; communication is getting through.”

So stop contributing information. Noise is cluttering the web faster than carbon is clogging up the atmosphere. Make your mark, or miss the party.

My cousin (and roommate) cracks on Twitter every a single day, especially since it’s shown up on every single TV show out right now. He hates Twitter, and here’s why. Do you think you can change his mind?

#5 “I don’t care what other people are doing when it’s stupid like, ‘I just ate a cracker, and it was good.’ Unless you’re tweeting, ‘I just lost my virginity,’ then maybe I might be interested because that’s just funny. I feel like if I don’t care what you’re doing, you don’t care what I’m doing, so why bother?”

#4 “I don’t like the terms ‘tweet’ and ‘follower.’ I’m not a follower, I’m a leader. And ‘tweet’ kinda sounds stupid. I can’t imagine going up to my friends and sayin, ‘Yo, I’m gonna tweet you later.”

#3 “It seems like it’s for kids. If you’re over 21, you shouldn’t be tweeting! Go do something adults do, like ACTUALLY talk to people.”

#2 “On Facebook, I can comment on what my friends write and other people can see it. It just makes more sense then replying and retweeting and all that complicated shit.”

#1 “It’s just not gonna last, it’s something that 10 years from now we’re gonna be like, ‘Yo, remember Twitter? Why don’t you ‘tweet’ me anymore?”

BONUS INSULT: “What are guys and girls gonna do now in social situations? They can’t get Twitter names anymore, how kids ever gonna date?”