The facts, the stats, and the true in-the-trenches business experiences from 2009 now tell us a lot about what to expect for 2010. Below is a quick review of some of the key things online marketers should look for in the coming year.
A Slow Recovery
There will be continued slow recovery in US consumer spending, especially for large purchases due to a lack of discretionary cash (not income, per se), increased savings rates and a general adjustment to this new “now”. 2008 changed buying behavior to a “no”-first shopping mindset and 2009 cemented a value-only, thrifty approach. 2010 won’t change this. Unemployment, under-employment and slow-growth for the private sector are the engines that are choking back substantive improvements in consumer confidence. While there are certain job sectors re-igniting hiring, most industries will only begin to replace the attrition they forced during the lean 2008 and 2009.
Pent-Up Demand from the Jet-Set
For the super-wealthy demographic, expect that luxury items will be back in vogue as pent-up demand for jewelry, cars, homes, boats, fashion, at today’s reduced costs, increases. Unfortunately, this is unlikely to offset the dramatic fall-off seen from the much larger affluent group that accounted for much of the demand growth during the run-up to the recession.
Personal Fulfillment for the Rest of Us
The definition of discretionary has changed relative to consumer purchases and buying behavior. Where, pre-recession, this meant items people didn’t need but wanted, the recession and its epic duration have people focused on their hobbies and passions to relieve stress and to add back pleasure in their lives. No longer considered discretionary, these hobbies and their related items and services have become part of the indispensable. I anticipate revenues from home improvement, home-based interests like gardening and exercise, and passion hobbies like crafts, music, fishing, etc. stay in vogue and continue to capture wallet share.
Just the Basics for the Apparel Market
Recovery in this sector will likely take all of 2010, and I remain suspect of any predictions that buyers will return to their pre-recession buying behaviors. I believe we’ll see minimal increased spending except for wardrobe maintenance and accessories. In other words, “yes” to blouses, shirts, jackets, slacks and low-cost accessories, but “no” to high-end designer fashion unless it also has a high perceived value. That said, this recession has instigated new opportunities for designers…Jimmy Choo and its line of clothes for H&M, Norma Kamali and her Walmart business are fascinating experiments. I do think it’s going to be an exciting time for the fashion industry but certainly not in terms of their business economics.
The Mature Market Will Keep Booming
I expect the mature market — including insurance, financial services, healthcare products and domestic travel — to see revenue growth throughout the year. The aging baby boomer continues to age and there are ongoing decisions this audience will need to make that younger generations can save for another day.
Paid Content Will Test Its Limits
2010 will be the year of publishers testing paid content business models. Led by Murdoch and others, lean advertising has forced publishers to develop new revenue streams without significant cash outlays. Existing readers and registered users are going to have their interests tested. Where the line between paid and free exists, and whether the fundamental shift in technology and the internet’s jarring redirect of consumer’s reading behavior has made getting paid moot, will be tested.
Newspapers Will Leverage Strong Regional Brands and Databases
The national and large regional newspaper businesses are rallying together to create their own ad networks and will test bypassing Google and other low-cpm advertising outlets to create higher value advertising relationships that result in higher ad rates. The only way to deliver this and meet the expectation will be to offer refined demographic targeting of their databases. For their ad clients and agency media buyers to embrace this, advertising performance is all that matters.
Social Media Will Grow Up
2010, and especially Holiday, will be the year that social media loses its innocent charm and crosses over into the demand requirements of traditional ROI-based search, display and email campaigns. Social media is not a campaign, and that’s the biggest threat to its purity and ability to drive high-quality traffic for retailers. Particularly for brands with significant recognition, fans are growing at the rate organic search traffic was growing back in 2005. We expect this level of growth to continue through 2010 especially if brands do not compromise the relationships they’ve built with over-zealous marketing, but that’s unlikely as companies are spending real money on people and talent. As marketers, we know audience measurement and impact need to be brought into the calculation but figuring out just how to measure it and what we want to measure will require a different set of analytics since there’s a bit of a land grab happening for which department owns it.