E-commerce. Up? Down? All Around?
Welcome to this Friday’s version of surveys, research and statistics to ponder. Of course, how and what you ponder always has more to do with the source of the statistics and your mood which makes the numbers kinda funky but ‘Hey!’, if we didn’t have stats what would we do with our days?
This latest statistical ‘he said / she said’ consists of different numbers regarding the state of e-commerce. Today’s particpants are, “In the red corner”, comScore. They are in the red corner because they are reporting that e-commerce is slipping for the first time in the history of the world (you get it right?). “In the blue corner” is Forrester who tells everyone to not get our knickers in a twist because even in the cruddy economy e-commerce is the light on the hill or a veritable economic ‘beacon o’ hope’. Today’s match is brought to you by the Wall Street Journal.
On Thursday, comScore reported that U.S. online spending in the third quarter slipped 2% to $29.6 billion versus last year. That represents the first time since comScore began tracking the figures that online spending has shrunk for two quarters in a row. (Online shopping was flat in the first quarter, and slipped 1% in the second quarter.) ComScore was slightly more upbeat about the potential of growth in the fourth quarter, if only because we’ll be comparing it to last year’s dismal fourth quarter.
But on Monday, Forrester Research put out a report that reached a different conclusion: online sales in November and December are likely to grow 8% compared to last year. Moreover, a survey Forrester conducted with the National Retail Foundation found that online retailers reported sales in the third quarter grew 16%.
Geesh, can’t we all just get along? Let’s just say this. The rest of the article is the two researchers pointing fingers at each other saying that how they collect data is better than the other guy and having a researchers equivalent of a “my dad can beat up your dad” argument.
How about we do this? How about we look at what has happened and then work toward getting better. Then we assess if we did or did not get better after we actually DID SOMETHING! What a concept.
Aren’t rosy predictions and unfettered prognostications how we got into this mess in the first place? Isn’t predicting the future that never was a mistake? If the Internet truly is a better way to do things then why can’t we find a better way to assess things rather than act like we have some magic 8-ball or crystal ball that tells the future as well. We don’t.
My prediction? People will go out and do their very best to make something happen in Q4 regardless of these predictions and then they will live in the world of reality of whether things are good or bad, not in the fantasy land of what they may or may not be in the future. This research is for the big boys and not the rest of the world and even then it’s dicey at best. One man’s opinion. Have a fun Friday!
Introducing lGoogle (The L is for Lobbyist)
We have talked on several occasions here at Marketing Pilgrim about Google’s Washington, DC connections. Some wonder if there is too much Google in the capitol while others just think it’s the normal course of big business. Either way you look at it there is no denying that Google is as much a part of the Beltway Bunch as Democrats and Republicans.
According to the Wall Street Journal Google spent $950,000 in the second quarter on lobbying efforts
The sum tops the $880,000 it spent in the first quarter and represents a 30% increase from the second quarter of 2008, when it spent $730,000.
While Google continues to raise its presence in Washington the money that they spend is still less than Microsoft ($1.9 million in Q2) and AT&T ($3.1 million in Q2).
The range of causes that Google is involved in ‘influencing’ include potential regulation related to online advertising, expanding Internet access and increasing the adoption of cloud-computing technologies. Also in the line of sight of Big G are green initiatives like renewable energy policies and firming up the electrical grid. Of course, the whole electrical grid thing is focused on the environment and not ensuring that Google and its users stay ‘energized’ to continue to make money for the search giant.
In the recent past, Google has placed so many Googlers in Washington, DC that one wonders if paying lobbyists to be there is overkill. I suppose you can never have enough feet on the street when it comes to influencing public policy to the benefit of Google all.
Google Increases Lobbying Spend
According to the Wall Street Journal, Google is boosting spending on lobbying in Congress:
Google spent $950,000 lobbying lawmakers, regulators and the White House on issues ranging from cloud computing to copyright in the second quarter, according to public lobbying disclosures.
The sum tops the $880,000 it spent in the first quarter and represents a 30% [...]
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Google Has “Stabilized,” Reports $5.5 Billion In Q2 Revenues
Google just reported second quarter earnings of $5.52 billion, representing “an increase of 3% compared to the second quarter of 2008.” The first quarter of 2009 was $5.51 billion, by comparison. So growth was flat quarter over quarter. According to Google CEO Eric Schmidt, Google’s business has “stabilized” and has seen growth in certain areas in [...]
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Areas of Ad Spend Drop 14% in First Quarter
As we rapidly approach the end of the second quarter of 2009 there is still news trickling in from what happened in Q1. As suspected, that news is not good. A study by TNS Media Intelligence was reported in today’s WSJ and ad spend for media including TV, print and online display ads fell 14% year to year to $30.8 billion. It is important to note that this number does NOT include online search ads or in store ads.
Based on that what are these numbers telling us? First, they are from the equivalent of a century ago but they are simply validation that things have been bad and all of the complaining may have some merit. In fact, to hear TNS’s senior vice president of research, Jon Swallen, put it “We are now in the record books with the worst quarter in a decade.”
So are we looking at a turnaround anytime soon? Swallen continues
A recovery in the media business may take time. “So far it looks like second-quarter spending is starting pretty much the same way the first quarter ended. There are hopeful signs of general economic indicators bottoming out, but the advertising sector still appears to be lagging behind”.
Had enough doom and gloom for the day. Take heart Internet marketers. TNS , unlike other reports, is saying that online display advertising, which includes banners, was actually UP 8.2%. You can rub your eyes and scream “Typo!” if you want but please don’t shoot the messenger in the comment section. PricewaterhouseCoopers just reported last week a 5.5% drop in online display advertising. So who’s right? Are either right? Shall we just meet close to the middle and call it a draw for online display ads as compared to Q1 for 2008?
As for Q2? Most are saying that it looks like it could be just as bad, if not worse, but there may be sentiment shifting toward some recovery in the second half of the year.
Before we all bemoan the state of the advertising world across the board it is important to take in one last piece of data
TNS said the ad market was hampered by double-digit pullbacks in spending by big industries like autos and financial services.
Ad spending in the automotive category slid 28%, with local car-dealer ad spending taking the biggest hit, falling almost 50%. Spending by financial services companies fell 18%.
Now one wonders what actually happened in other sectors that weren’t in the news for receiving bundles of bailout cash and a lot of negative publicity for their relative incompetence. As with all studies and data it is interesting to track an overall trend but if there is no attention given to the details about specific industries that affect your line of business directly you could be missing the point or, even worse, some opportunity.
Marketing Pilgrim readers work in all areas of business. What are you seeing in your industry? Are you in the doldrums like the auto and finance industries or are you seeing a light at the end of this tunnel (and you are reasonably sure it’s not a train)? Maybe a street level sampling can add something to the big picture. At least you may find out you’re not alone.
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Newspaper Ad Revenue Drops a Shocking $2.6B in Q1
Yup, that’s a B as in billion. Just when you think the newspaper industry can’t take another hit it gets hit with a haymaker. According to TechCrunch, the Newspaper Association of America reported a 28.28% year over year in Q1. That number’s monetary equivalent is $2.6B and that’s a stunning number even to an already beleaguered industry.
TechCrunch says
The sharp decline is caused by the lousy state of both digital and dead tree ad sales: the stats posted on the Newspaper Association of America website show that print sales fell by 29.7% in the first three months of this year (to $5.9 billion), while online sales dropped a record 13.4% (to $696.3 million).
Now it almost feels like dog piling on newspapers. With papers closing and the threats of closings being thrown around the kind of graph you see below almost seems unfair. It’s almost like you want the industry to cry “Uncle!” and just throw in the towel.
While most would say that newspapers aren’t going to vanish those same folks would say that the newspaper’s reach and influence will be determined by how well they move their offerings online and if they can get subscribers to pay for their content. The theory is that you pay for paper delivery then you should pay for online. Makes sense but most end users don’t see it that way at all unless there is a specific niche that will support the information that makes their jobs easier with most being related to business.
So is this the bottom yet for the industry? Not likely.
Annual ad sales for American newspapers came in at a grand total of nearly $49.5 billion in 2005 and dropped to about $37.8 billion in 2008. If the decline rate keeps accelerating the way these first quarter results suggest, we could be looking at somewhere in between $26 billion and $30 billion in total ad sales revenue for this year.
The momentum that the deconstruction of the newspaper industry has gained makes it unlikely that newspapers will ever see their heyday numbers again. The new era of ‘newspapers’ is going to need to get underway now if there is to be any papers of note in the future.
So let’s fast forward 10 years from now. It’s 2019. What does the newspaper industry look like. Is it relegated to museum displays or is there still a remnant remaining. Is it possible to see a bounce back by the industry? If so what could that look like? Feel free to jump in the time machine and take a look. Tell everyone what you see – if anything.
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