Edelman PR

Nicholas Carr discusses a New York Times article on Heinz’s foray into user generated advertising. As it turns out, it hasn’t resulted in the creative they had hoped. What’s more, it’s costing them far more than it would to simply hire an ad agency to do the work for them. Quoting the article, Carr points out:

The company is holding a big YouTube contest to get people to create video advertisements for its ketchup. But the entries are almost universally crappy, the contest is generating ill-will among some in the target audience, and the company is actually spending more than it would have if it had just hired an ad agency to put together a campaign.

Turns out, that’s par for the course. The companies that have jumped onto the user-generated-ad bandwagon “have found that inviting consumers to create their advertising is often more stressful, costly and time-consuming than just rolling up their sleeves and doing the work themselves. Many entries are mediocre, if not downright bad, and sifting through them requires full-time attention. And even the most well-known brands often spend millions of dollars upfront to get the word out to consumers.

SiliconRepublic covers a speech given by Ciaran Lally, managing director of EBookers Ireland and UK. Lally points out that “Travellers in Europe who shop for flights or book online average about four leisure trips a year. Of the European leisure travellers online, 40pc are bookers - consumers who search and book their trip online – and 27pc are described as lookers - consumers who look at trips online but purchase offline. This indicates that the web is used both as a tool for searching and booking.”

The BBC reports on a survey recently published by retail analysts Verdict Research which shows that “online retailing in the UK has grown at its fastest rate since the dotcom bubble burst. The amount of money spent by consumers shopping online increased by 33.4% to £10.9bn last year. Verdict also sees online sales almost tripling over the next five years…By 2011, the typical spend of an online shopper will grow to £1,056 per year with the clothing and footwear, DIY and gardening, and food and grocery sectors achieving the fastest growth.“

Textually.org points out an article in the Guardian on why mobile content generates more revenue than on the Internet. The article explains “because most content on the web is free whereas mobile phones arrived with a payment system pre-installed for calls, followed by a premium service for texting. If the web had had its own payment system it would have taken a different course. Revenues from the web are about $25bn (£12.5bn) but the content on mobile networks is reckoned by Informa to be worth $31bn - and that is before music and mobile TV take off in a big way…Tomi Ahonen, a strategy consultant, points out that whereas porn and gambling drove revenues on the internet, five content groups are more successful than adult material on mobile phones: music, infotainment, images, videogames and web browsing.”

Nintendo are rolling out an interesting advertising campaign in the UK. Joystiq reports that they will be launching a series of “live, interactive adverts in a number of UK cinemas. Over the next two weekends, five pairs of actors will appear at nine cinemas across the UK. An advertisement will play on the screen as usual, with one of the actors planted in the audience as a teenage boy named Steve. The second actor, his mother Elsa, will enter the theater looking for her son. At that moment the on-screen ad will freeze and the house lights will come up. Elsa calls out for Steve and challenges him to a game of Wii Sports tennis in the theater, showing audience members how “exciting and easy” it is to play.“

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Niall Kitson has been made editor of PC Live.

In other news, the Irish Times are going to start producing a monthly business magazine.

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VentureBeat has a very interesting post about the rapid success of Funny or Die. A sketch by Will Ferrell (see below) has seen the new site’s success skyrocket. As Bernard Moon points out, this is due to the quality of the content and backs up his argument that it won’t be “the Long Tail that wins out in the video space, but big studio and middle market talent.”

Adam Maguire discusses the relaunch of the Irish Independent’s website. Looks great and it’s rumoured that they will also be offering blogs in the near future.

The Irish Times reports that the Broadcasting Commission of Ireland (BCI) has awarded the Midlands/North-East Regional license to iRadio North East & Midlands Limited for the provision of a new youth-based service for the midlands and north east of Ireland.

Textually.org picks up on an interesting observation that “84% of users expect a SMS response in five minutes.”

The shopping habits of the Irish consumer have changed drastically over the last twenty years. The last five years alone has seen our new levels of prosperity reach farcical levels as the children who grew up during the boom of the Celtic Tiger splash their cash. This has been highlighted by the changes made to the typical Irish shopping basket by the Central Statistics Office. As the National Consumer Agency point out it ‘reflects our changing spending habits in modern Ireland’:

Among the everyday items dropped or modified, girls’ trousers have replaced girls’ dresses, the sweeping brush usurps the sweeping brush handle, and tinned sweetcorn has given way to tinned tomatoes. Streaky rashers, shoe polish brushes and wallpaper borders are now off the list. But shellfish, fake tan and coffee makers have all been included for the first time. Technology has also had an impact on the index, with the addition to the basket of plasma screen TVs, home cinema systems, digital printing costs and MP3 players.

For those that are interested here are some stats and trends which reflect the changes in Irish society.

Holidays

The Central Statistics Office reported that Irish people spent nearly €1.5 billion on international trips in the last three months of 2006 - a figure 25 per cent higher than the amount spent during the same period the previous year. However to get a true picture of consumer spending you have to look back to the CSO’s previous figures on holidays abroad by Irish people which showed that we took 5.3 million trips between January and September last year, that’s a rise of almost 40% from 2003 when Irish people made 3.8 million for the same period.

The interesting thing about these stats is that the majority of these trips are increasingly being made by people aged between 60 and 69, which reflects the importance of this age group due to the end of the cocooning trend. To highlight a paragraph of Pamela N. Danziger’s book ‘Let Them Eat Cake‘ which is quite relevant in this instance:

One of the most significant changes on the horizon for luxury goods marketers, especially those that sell home goods, is the end of the cocooning trend that has dominated our consumer culture over the past 20 years. The cocooning, or nesting, trend (as it is variously called) was identified in the mid 1980s by trend tracker Faith Popcorn to describe how people how people were turning their focus inward to hearth and home. The trend was largely driven by demographics, because during that period the baby boomers were in the cocooning phase of life, the period when they were raising young children, and practical necessity kept them grounded at home.

Car purchases

2006 was a landmark year for the Irish car industry. Not because it was a bumper sales year. Instead more supercars (Porsches, Ferraris, Aston Martins, etc) were sold in the first three months of the year than in all of 2005. In the past eighteen months you don’t have to drive around Dublin for long to pass a Bentley, and since the reopening of the Shelbourne Hotel an exotic vehicle in some shape or form seems to be permanently parked outside.

The worrying thing about the buoyancy of the car industry isn’t the level of sales of supercars, but as any BMW dealer will tell you that people are coming into dealerships asking how much it will cost them per week. When you go to a repossessed car auction it isn’t luxury brands you see up for sale, but cars like Peugeot 207s or Golf GTis.

Eating habits

A Food Futures study (pdf) carried out by Amarach Research for Campbell Catering in 2005 is quite insightful despite being two years old at this stage. The report points out:

As Ireland has become more affluent, our eating habits have changed to reflect cultural influences arising from increased travel abroad, changing work patterns and increased discretionary spend. For the first time in our history, we spend more on food to eat outside the home than in the home, which illustrates the transformation that has happened in Ireland in the past decade. If eating out was once the preserve of the ‘well to do’ in Ireland, it is certainly no longer the case.

Forget flash cars and more holidays abroad, if there’s anything that shows how spending habits have changed it’s our eating habits. The potatoe which was once the core of our diets, is now second place to pasta and rice. This reflects one of the four emotional drivers set out in Michael J. Silverstein’s ‘Treasure Hunt - Inside The Mind Of The New Consumer‘:

Questing is about buying goods and experiences that enable people to challenge themselves and try new things. Examples include a car, travel, exotic foods, exercise equipment, entertainment, and collectibles. As the world has opened and Americans are better educated and more widely traveled, they are eager to push their limits and constantly move from one thing to the next.

Levels of Debt and the Housing Boom

Ireland has one of the highest levels of consumer debt in Europe. On top of that the majority of consumers are unaware of the interest rates they are being charged on the amount of money that they owe. Due to a few hiccups in the economy there is a voice that is beginning to grow louder and is raising concerns about debt levels - mortgages in particular. Sunday Business Post journalist, Richard Curran, has a programme on RTE at the moment that is getting a lot of talk at the moment. Futureshock aims to examine whether Ireland’s property bubble is about to burst. In the programme Richard Curran assesses the chances of a significant readjustment to Irish property prices, and asks who will feel the most pain if the market does crash?

A couple of very interesting statistics we came across recently though is that 62% of housing in the country currently has no mortgage associated with it. Furthermore 25% of houses purchased since 1996 have no mortgage associated with them. Brings new meaning to the popular Irish phrase, ‘Do you take cash?’ Hopefully these figures may allay some concerns about the property market.

*Thanks to Davy Stockbrokers, SIMI, National Consumer Agency, and the CSO for the information. If anyone has any other interesting stats please point us in the right direction in the comments section.

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This week’s links are posted a day later than usual this week as yesterday was a bank holiday in Ireland. Here’s a synopsis of the stories which caught our attention last week:

SiliconRepublic reports on IBM’s ThinkPlace initiative which “s like a 24×7 internal chat room where IBM hosts a global idea marketplace. Executives post challenges to request solutions and validation. Any IBM employee can volunteer to work on any idea and if the idea gets picked up they receive an award.” Customer and staff led innovation is getting a lot of attention at the moment. It’s interesting to read about how multinationals like IBM encourage it within the workplace, but time will tell whether it leads to the same innovation in companies like Google where GMail was the brainchild of one of its employees.

Damien Mulley has posted some great advice from a variety of Irish journalists about the best ways of contacting them to pitch your product or company.

Ged Carroll has a fantastic insight on the strength of brands. Using the example of Porsche, he recounts a conversation where the word Porsche was used instead of car when discussing whether a set of golf clubs would fit in the back. It highlights how some brands take on a life of their own and underlines the personal relationship that consumers can have with their possessions.

Stephen Davies picks up on recent research which shows that Technorati is tracking over 70 million blogs, but that only 15.5 million have been updated in the last 90 days. It underlines that fact that blogs are not going to replace mainstream media, and are in fact another strand of the increasingly fragmented sources of information we get news and analysis from everyday.

Textually.org has a startling post about an foreseen consequence about the popularity of mobiles in Japan, “the problem is that as the youth become more adept with mobile technology, their ability to use PCs and real keyboards has regressed to the point where it matches their parents’. Many of the 4 million young, part-time workers cannot afford PCs, and are being permanently locked out of white-collar work because of their ineptitude with computers.”

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