Something has happened to the way potential customers and clients respond to marketing and advertising — and it’s happened so rapidly most people are still scratching their heads and wondering what to do about it. It’s occurring across the board throughout all industries. Consumer advertising, trade advertising, product announcements and application stories are all drawing fewer leads. What’s going on?

There are a lot of reasons, and I think we’re in kind of a perfect storm that’s been brewing for some time. The first step to getting a handle on the solution is to understand the three most important factors:

Factor #1: It’s the economy, stupid.

Everybody remembers James Carville’s quote about the last recession in 1992 and it really still holds true today. Especially when the National Bureau of Economic Research (NBER), made the announcement about the obvious this past Monday. We are in a recession. And that’s not a surprise to anyone. People are holding onto their wallets tighter and waiting. Even people who have job security and plenty of liquidity are waiting. We all seem to be waiting. Waiting to see how the economy pans out. Waiting for prices to drop on the items we need and want.

Factor #2: This doesn’t look like 2006 anymore, Toto.

I was culling through data yesterday when I found a survey on Consumer Spending Attitudes for the 2008 Holiday Season. These figures are released every year and they are very important to retailers and other advertisers who need to forecast earnings for the year-end. The research was done by The American Research Group (ARG), a very well-respected research firm that has been conducting surveys and gathering poling data for over 30 years. The ARG said that consumer spending on the Internet had dropped for the third straight year. 30% of the people surveyed said they planned to buy gifts online, down from 36% in 2007 and 44% in 2006. That’s insane. That figure can not be correct. Who is being surveyed? People who answer the phone. I’m not sure about you, but I don’t answer my home phone anymore. I don’t know anyone who does without checking caller ID. For that matter, I know plenty of people who don’t even have a land-line anymore. How can a company publish significant and accurate data based on information collected from people who still choose to answer their home phone? It can’t be done. They’re still collecting data like it’s 2006.

It’s not just survey firms who seem to be slow to change and operating like it’s still 2006. Most companies are still marketing in the same ways they always have been and being unsatisfied with the results. In their defense, the marketing landscape has changed so rapidly even the smartest people have some degree of whiplash.

Factor #3: People’s buying approaches have changed

Today’s buyers are anonymous, smarter and generally don’t want to talk to you. Technology and the Internet has affected the traditional pre-purchase information gathering process. The Internet has given more choices and control to the buyer. It allows people to search for products or services they need and get detailed information without leaving a trace behind. Buyers want to remain anonymous in the initial stages of the information gathering process. They want information now, not in weeks, days or even hours. They often know a lot about your company, your products and services and competitive options by the time they contact you. In other words, by the time today’s prospect contacts you he or she has done their homework. Buyers generally will have a good idea of what they need and have figured out what they are willing to pay. Potential customers used to complain, “why can’t I get someone on the phone.” Now they may complain, “I can’t believe I can’t find any information about this online.” That means companies need more than a website to help potential customers make up their minds. They need dozens of information access points: blogs, social media interaction and comments on articles, wikis and more.

Blaming the messengers. If you listen to the news today, it seems that not only do people not read newspapers, but they also don’t read books or magazines, look at billboards, watch TV, movies or even listen to the radio. All of the mediums that deliver messages are offering fewer sales leads. Even web ads are down. But let’s really think about this. Does everyone really no longer read magazines and newspapers? Does everyone really no longer have any interest in new products or services? If sales are down don’t necessarily blame the messengers. Maybe it is that people are responding in ways that confound the tracking process, just like the survey example you just read about above.

The amazing vanishing customer! Like I said before, research is a much more important part of the buying process than it used to be. Buyers may start at an ad, a direct mail piece, a web banner ad, e-blast, personal recommendation, posting on a web article, blog or even Twitter. Buyers now gather as much information as possible about a product or service — and then seem to vanish for a while. They may finally contact you later via a variety of ways — leaving you wondering where they first learned about your product. And even when you ask people how they learned about your product, they may not really remember. Of course special web addresses, links, cookies and tracking codes are all great ways to track lead but in some ways they act like Black Boxes in airplanes — only tracking the last few moments of the customer’s purchasing approach. It also skews the data to make it look like the Internet is the only medium worth dealing with.

Be there for your potential customers when they begin to research.

Offline media isn’t going to go away. It will change dramatically over the next several years but it’s not going away. People will still listen to the radio, read books and pay attention to billboards and well designed direct mail and web ads. Businesses will still need to tell people about their products. The best thing you can do for your company is provide as many resources for your potential customers for when they start researching. After all, they are going to research and if they can’t find you they will find your competitor.

I’ve recently had numerous discussions with marketers about the role of their company’s website in the marketing mix. Many marketers think that websites are all they need online, and that the future of advertising is in finding ways to get people to the site — usually with SEO or banner ads. In fact, these people are looking for ways to make it less expensive to update and manage their sites so they can free more money to attract viewers.

Our experience is that this view is sooooo 2008. That’s because unless you’re an online retailer, your website is viewed by consumers as a biased reference tool.

Home builders have on their websites an “about us” page, floorplans, area maps, virtual tours, and even customer testimonials — all valuable information for someone who is interested in the homes. But what about those who might be interested, but haven’t yet decided to visit your sales center? Your website will NOT convince them to come in any more than a brochure that includes the same information. And that’s because a builder’s website is seen simply as information.

Hospitals have the same problem. Their websites are mostly used by consumers to find a doctor, locate a facility, check hours, learn about services, etc. But the site doesn’t persuade anybody that you’re better or worth the viewers’ time. It simply informs.

While this type of reference information is important to have online, you should not think that it is a marketing tool any more than a corporate brochure is a marketing tool. It’s a reference tool.

So what’s the 2009 approach? We are reworking our sites to be the best reference tools possible, and then we drive traffic (and sales) to it via blogs, eblasts, Twitter feeds, etc. that act as sales tools.

We use blogs for builders to talk about customer satisfaction, construction techniques, design tips, technology updates and special offers on spec homes.

For hospitals, we use blogs to promote events in the area, classes, new physicians and their qualifications, job offerings, new technology, and even CON petitions and updates.

All of our blogs are trying to do the same thing — start a relationship with the viewer by getting them to sign up for our eblast updates.

While the blogs and eblasts can link to information within the main site, we often link them to other blogs that we manage for the client and to appointment schedulers or online class enrollment forms.

One advantage of blogs over main websites is that the constant flow of new information makes these blogs desirable to search engines. Combine this “freshness” with some techy tagging and bookmarketing, and you have a search engine’s dream site.

So as you think about your website in 2009, please don’t put too much pressure on it. Viewers know it’s biased (have you seen any website with testimonials that were bad?), but they also know that all they are looking for on it is basic information. For online sales power, try blogs and eblasts that link to microsites that can do more selling because they are not part of your main site.

Our results in 2008 have been spectacular for those clients who have allowed us to make these changes. In fact, we can easily compare the results we generated for these clients with those clients who have not allowed us to take this approach and all we can say is “trust us in 2009″.

According to new research from Enid Burns at The ClickZ Network, blogs can have more impact on purchase decisions than social networks. Blogs create a conversation and trusted resource that influences purchase decision.

The study, “Harnessing the Power of Blogs,” sponsored research by BuzzLogic and conducted by JupiterResearch, a Forrester Research company, looks at the evolving influence from the reader’s perspective. “What we wanted to do was look at the reader’s side of the coin, look at reader patterns and how people are reading blogs…and drill down into the content impacting other media platforms,” said Valerie Combs, VP of corporate communications at BuzzLogic.

Readership of blogs is on the rise. JupiterResearch noted a 300 percent growth in monthly blog readership in the past four years. Readers look to links and multiple blog sources to extend the conversation: 49 percent of blog readers, defined as someone who reads at least one blog a month, and 71 percent of frequent readers all read more than one blog per session. Multiple blog sources offer more opportunities for consumers to see blog ads. A quarter of readers say they trust ads on a blog, compared to 19 percent who trust ads on social networking sites.

Advertisements on blogs are an opportunity for marketers to reach consumers. The findings said 40 percent of people reading blogs have taken action as a result of viewing an ad on a blog; and 50 percent of frequent blog readers say they have taken action. Of those actions: 17 percent have read product reviews online; 16 percent have sought out more information on a product or service; and 16 percent have visited a manufacturer or retailer Web site.

“More and more publishers are become extremely savvy understanding the game and becoming better at monetizing, which is great for the advertiser as well,” said Combs.

The survey also finds consumers are influenced by blogs at the moment of purchase decision. The channel plays a greater role than social networks, likely because bloggers establish themselves as an authority on a topic, particularly in niche areas, and create a relationship with the consumer.

“One of the things that’s so great about them is the personal, specific information,” said Combs. “Thorough, useful, honest creation, create a level of trust with the reader.”

We at Demi & Cooper just love blogs for our clients (heck, you’re reading our own blog now!). In healthcare, websites simply cannot be written for discussion purposes — they are reference tools designed to get the viewer the information he or she seeks quickly and easily, such as where are you located, how do I find a doctor, what services do you offer, etc. In homebuilding, websites show what the builder offers, where it’s at, and what it cost, plus a whole bunch of other biased info.

But blogs can go deeper into each subject, explaining medical procedures (even using video), new facilities and procedures, etc. in health care. In home building, testimonials go in blogs, as do local events, new hires, new techniques in building, etc.

But the most valuable thing you can do with a blog is tag it (digg, delicious, etc.) and link it so that the topic of the blog will come up in searches. We even Twitter our clients’ blogs and feed it to Facebook, getting the social community behind our work.

So just blog it. It won’t hurt and the results will be very impressive.

We all know the market for new homes is bad. Okay, horrible is a better word. According to Hanley Wood Market Intelligence, new home sales in the Chicago market continue a sustained downward trend. In August 2008, builders netted only 424 sales in new for-sale subdivisions of ten units or more, down 79% from the 1,975 net sales recorded a year earlier. Although absorption rates have fallen greatly, base prices of units sold remain little changed from a year ago. Average prices have fluctuated in recent months due primarily to shift in sales mix product such as the sale of high end units in and around the Chicago Loop. Future job losses in Chicago will hamper the demand for new construction in the near term.

What to feel even worse? Check out this chart:

Inventory (homes built by not sold) is also at an all-time high, meaning fewer new communities will be introduced in the near future as the market attempts to absorb what is already out there.

So what’s a marketer to do?

First, don’t panic — at least not in front of sales people. I sit on a Board with new home salespeople and I can tell you from firsthand knowledge that the doom and gloom attitude of many of them is not helping anything. In fact, those builders who have the most upbeat salespeople also have the highest sales. The key to keeping sales people up is to bring them leads. Sales people need to be busy. They need to know their time isn’t being wasted. They need to know that their jobs are secure — otherwise they’ll spend time looking for another job instead of selling your homes.

Second, advertise, and then advertise some more. No, I’m not saying you have to spend a fortune just because it helps my company. Rather, you must remember that advertising is an investment and not an expense. As such, advertising must get back for you more than it cost.

To accomplish this, go where the buyers are — online. Research today shows that over 85% of new home shoppers use the web. It makes sense. With a click or two, potential buyers can be at your site and then at your door. But to reach them, you must make your online efforts work cost-effectively. That means “pay per click” advertising where you only pay when someone clicks on your message, versus “impressions” where you pay based on getting your message in front of 100,000 to 1,000,000 eyes.

Then, when someone clicks on your ad, where do you send them? If you just send them to your site, then your online ad isn’t working together with your website. Your ad should have some type of offer or solution to the viewers’ problems that, when clicked on, leads the viewers to a page that further explains your offer and even encourages them to make an online appointment or sign up for more information.

If you just send people to your site, they’ll have to click around to find what you promised in your ad — and that could lead people to just leave, meaning you paid to get someone to your site and then lost them at your site.

Here’s an example of an appointment scheduler we created that has worked out very nicely.

ParkPlaceHomesChicago.com

To see this live, visit www.parkplacehomeschicago.com

If you look at the market reports each week, you’ll notice that the big sellers are also the big advertisers. Those who aren’t promoting themselves continue to slide in sales, and will likely have a tough time in 2009 trying to get some momentum going.

Remember, advertising is an investment. You shouldn’t fear it. Rather, you should embrace it and make it work for you.

I recently included the information below in a speech about Social Media Marketing for ISHMPR (Illinois Society of Healthcare Marketing and Public Relations), and it led to some surprised looks and a very nice discussion. So I’ll summarize here for your review.

According to the findings of the 2008 Cone Business in Social Media Study, almost 60% of Americans interact with companies on a social media Web site, and one in four interact more than once per week. The survey finds that 93% of Americans believe a company should have a presence in social media, while 85% believe a company should not only be present, but should also interact with its consumers via social media. 56% of American consumers feel both a stronger connection with, and better served by, companies when they can interact with them in a social media environment.

Mike Hollywood, director of new media for Cone, observes that “… social media… it isn’t an intrusion into their lives, but rather a welcome channel for discussion.”

When Americans were asked about specific types of interactions:

43% say that companies should use social networks to solve their problems
41% want companies to solicit feedback on their products and services
37% feel that companies should develop new ways for consumers to interact with their brand
33% of men and 17% of women interact frequently (one or more times per week) with companies via social media

“The ease and efficiency of online conversation is likely a draw for men who historically do not seek out the same level of interaction with companies as women,” says Hollywood.

33% of younger, hard-to-reach consumers (ages 18-34), believe companies should actively market to them via social networks, and the same is true of the wealthiest households (household income of $75,000+). Two-thirds of the wealthiest households and the largest households (3 or more members) feel stronger connections to brands they interact with online.

And eMarketer reports that Generation Y (those born after 1979) online buyers are more immersed in online and mobile activities than any other generation, according to 2008 research from shopping comparison site PriceGrabber. Some 85% of Gen Y respondents said they participated in social networking, and 57% reported involvement with blogs.

Data from an August 2008 survey of Web merchants, sponsored by Internet Retailer, found that, of the 39.3% of retail respondents that use social networks, 32% have a page on Facebook, 27% on MySpace and 26% on YouTube.

Social Networking Sites on Which US Online Retailers Currently Maintain a Page

Site % of Respondents

Facebook 32%
MySpace 27
YouTube 26
Flickr 5
Other 10

Source: Internet Retailer, September 2008

Hollywood concludes that “All of this is great news for marketers… men and younger consumers are traditionally the most challenging to reach… (and) they are saying… market to us and interact with us online… “

I came across this website that basically groups all the main search categories together and then lists those websites that are helpful search engines within those categories. It’s fun to look at and easy to use. You might even find a favorite here.

Visit This Site

Here’s some research I’ve uncovered related to newspapers and their websites. What’s important to note is that your results from newspaper advertising (which are likely down) does not necessarily mean that newspapers are worthless. Rather, it’s possible that although people are seeing your ads, they do not perceive the need to act now. Here’s the data:

According to the 2008 Readership Institute, Northwestern University tracking study of newspaper and online readership in 100 U.S communities, reported by Mary Nesbitt, Readership Behavior Scores (calculated on a 1-7 scale) among the general adult population have averaged 3.4 over the last six years, with variations likely due, in whole or part, to seasonal variations. With non-readers out of the mix, readers of the local daily newspaper registered a 4.7 score this year, a level that has actually risen slowly since the first measurement in 2002.

Some of the key findings of the study are reported by the writer as follows:

• Readership among 18-24-year-olds in the general population continues to slowly decline; but the habit is fairly stable for 45-plus
• People who read newspapers say they spend, on average, 27 minutes with them on weekdays, and 57 minutes on Sundays. The first figure has stayed stable, but the latter figure has been slowly dropping since 2002
• Readers continue to engage with the newspaper, on average, more than five days a week
• On average they complete 60 percent of the paper on weekdays and 62 percent on Sundays, also stable habits says the write

The penetration of newspaper Web sites is still quite low in most communities, though it should be noted that only the main sites were measured, not related sites whose ownership consumers might not recognize.

62 percent of respondents said they had never visited the local newspaper’s Website, and only 14 percent said they had visited between the last seven to 30 days, numbers that have improved only a little over the last five years. The Site Usage Measurement (SUM) score for the general population is only 1.26 on a 1-7 scale. When non-users are removed from the sample, Web site users score 2.54.

Readers are more engaged with print than with the Web site, according to the report, with ratings for four experiences that are significantly higher for the newspaper than for the site:

• “gives me something to talk about”
• “looks out for my interests”
• “ad usefulness”
• “touches and inspires me”

The trends are clear, concludes the writer, that low-reading groups continue to take their low-reading habits with them as they age. The very youngest adults have media and news habits very different from their parents. For the first time in six years RBS scores are dropping among people who also look at the newspaper’s Website.

So what does it mean to advertisers? Well, don’t count out print paper for reach. I believe that today’s tough market conditions has led to less direct results from advertising, rather than the commonly held belief today that print newspapers’ days are over. What needs to be revised is our expectations that print newspapers will deliver immediate results. Give it time, but of course, be sensitive to the overall budget.