Paper vs Digital Study

from Mediapost this week:

Print Pervasive and Persuasive, But Digital Overtaking

According to new research from Nielsen, reported by Todd Hale, SVP Consumer & Shopper Insights, 60% of shoppers from the survey say they look at printed paper material either mailed to the home or in newspapers at least once per week. With 82% of Americans online, 93% owning mobile phones and 155 million using Facebook, access to digital technologies is pervasive, yet retailers still spend an estimated 60-70% of their marketing budget on printed ad circulars.

The only electronic tactic that matches printed paper's weekly reach is email. But while far fewer people are looking at sales and product information from digital methods like social media sites, store sites using a tablet PC, or from smart or mobile phones, the weekly usage conversion rates are strong.

Weekly Usage of Retail Advertising Material
Sales Product Information	Weekly Usage
Materials mailed to home	67%
Emails from retailers	67
Newspaper	69
Social Media	45
Smart or mobile phone	39
Printed material in store	38
Store site on computer	37
Store site using PC	35
In store kiosk	24
In store TV	21
Source: Nielsen, July 2011

When shoppers are asked what they want for the future, demand goes up for high tech information sources. While nearly 90% of consumers still want print, more than 70% want email and traditional websites and about one-third are interested in social and smartphone applications. These numbers are even higher among younger generations of shoppers who say they still want paper, but they are more accepting of all information sources.

Future Desires For Information Sources
Source	% of Respondents
Paper
Direct mail	87%
Newspaper	86
In store	86
Digital
Store website using computer	75%
Emails from retailers	72
Store website using tablet	59
In store kiosk	43
TV in store	42
Social media site	37
Smart or mobile phone	31
Source: Nielsen, July 2011

The research showed that while printed material gets shoppers in the store, digital tactics reinforce and reward loyal shoppers. Printed campaigns help shoppers find deals about their favorite products and locate widespread sales and high-tech touch points such as tablets, social sites and in-store kiosks are used to more so for research purposes.

Printed circular response promotion lifts are less effective than five years ago, delivering about a 20% return on investment in 2010, compared to a 28% boost in 2005. The report suggests that an improved mixture of items with an overall higher lift profile and/or timing improvements can counterbalance smaller average lifts.

Printed Circular Ad Principles

Do

Advertise for broad appeal

Deep discounts, but not excessive

Compare lift by category

Price multiples

Manage national brand ad composition

Don't

Worry about page count

Advertise multiple competing items

Use price multiples on new items

Deal low penetrtion

Source: Nielsen, July 2011

In study after study, Nielsen finds that the online circular is the most widely used part of a grocery/drug retailer's web site, but the lift gained is a bit less than the lift seen for the site overall. The research also shows that:

• Online display ads drive offline sales
• ROI is generally higher than traditional media
• Every online campaign does not work
• Success is driven by new shoppers, not greater spending among existing shoppers
• The best responding offline segments are not always the most responsive to online ads

For many brick and mortar retailers, figuring out how to effectively draw people to online offerings and then determining what contribution online efforts are having to offline sales is a challenge. Few of these retailers get more than 20% of store shoppers to visit their site, despite the fact that the majority of shoppers spend 25+ hours per week online.

The presentation concludes with these recommendations:

• Put a process in place for both print and media campaigns that tracks ongoing optimization. A department-by-department win/loss weekly scorecard that includes display compliance should be deployed to get below the surface of the ad.
• An understanding of past shopping behavior makes a big difference in the ROI of online campaigns on driving offline sales. Customer-based reach tactics can be effective, but requires a level of analysis beyond what is known about existing brick and mortar segments. Creative messaging with price and promotion on specific items is particularly effective.
• Digital is necessary to bring about the type of consumer relevancy that future shoppers will expect. It will evolve along with development on the web and in social media, and will be driven to a large degree by younger and more diverse population segments.

For additional information from Nielsen, please visit here.

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