AUGUST 19, 2013

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U.S. Retail Sales in July Up Nearly $22 Billion Over July of Last Year
The U.S. Department of Commerce estimated total retail and food services sales to be $424.5 billion in July. That was an increase of $21.8 billion over last July (+5.4%) and the second straight month of year-to-year growth of over $20 billion. Although growth has been observed in nearly all measured categories, car sales has shown the most improvement. The motor vehicle and parts business brought in $80.8 billion in sales in July, up 12% over last year. Clothing and accessories (+4%), food and beverage (+3%), health and personal care (+1%), and department /warehouse stores (+1%) all displayed more modest growth.
So what? Many consider car sales an important economic indicator as they represent such a significant portion of consumer spending (nearly 20% of retail sales in July). If the automotive category is in fact indicative of the economy as a whole, it seems to be headed in the right direction. Revenue in the category and new car sales are both significantly up versus last year and growth is being led by the American carmakers. Chrysler, Ford and GM have combined to sell 10% more cars than last year. Now might be the time for many businesses, especially automotive companies, to be a bit more bullish.
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Social Media
Luxury Retailers Overcome Social Media Saturation to Spark Fan Engagement
New research shows that brands' presence on Facebook is reaching a saturation point that has changed the effectiveness of many social network advertising strategies. Expion, a social software company, analyzed the top 50 retail brands’ activity on Facebook over the past few years and found that fan engagement and volume decreased in the first half of 2013, despite the increased frequency of the brands publishing posts. Prior to 2013, frequency of posts positively correlated with fan actions and growth in audience size: the more active the brand on Facebook, the more consumers engaged with and talked about the brand. This year, engagement is obtained more effectively through focusing on quality over quantity. Tiffany & Co. drove the highest engagement among the brands ranked, despite posting an average of just once per day. Tiffany's posts are often high-quality, aspirational, and image-driven and lead to a higher quantity of fan actions per post than other brands. Conversely, Walmart uses a quantity-focused approach that has the brand usually posting about six times per day, but their posts have generated less engagement than Tiffany and Victoria's Secret, which also employs a quality over quantity approach.
So what? To combat consumers’ social network fatigue, brands should focus on delivering dynamic, high-quality, image-heavy content rather than copious amounts of content. Brands that focus on publishing a smaller number of highly interesting or creative posts might find that to be a more effective strategy than simply posting a lot. High quality posts are able to more easily rise above the increasingly saturated Facebook feed.
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What Makes an Online Video Ad Successful
Yahoo! recently conducted research identifying creative tactics that make online video ads successful. The study scored pre-roll and rich media video ads based on three metrics: breakthrough (the ability of a consumer to identify a de-branded version of the ad), brand linkage (the ability of a consumer to correctly identify which brand the ad was for), and persuasion (a consumer's expressed purchase intent). The analysis revealed several best practices that could impact breakthrough and brand linkage: * Introducing the brand early (within the first 3 seconds) increased brand linkage by 10%. * When the brand name was mentioned in the audio, there was a 13% lift in breakthrough and a 16% lift in brand linkage. * Using a problem-solution storyline led to a 21% increase in breakthrough for rich media video. * Interactive rich media videos had 17% higher breakthrough than ads with no interactivity. The research also advises against tactics that had a negative effect on the tested metrics. Purchase intent decreased when the ad included more than one call-to-action, and brand linkage decreased when the brand logo or product image were too big. Surprisingly, the length of the video ad was not found to have a significant impact on any of the metrics.
So what? As video ads’ popularity among advertisers and the corresponding spend continues to grow, those ads are becoming increasingly prevalent on Condé Nast’s digital properties. By understanding what makes a good video ad, we can provide guidance to our advertisers and ensure that their campaigns reach their full potential and engage our audiences.
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Forrester: TV Ad Market Faces A Host of Challenges
A paper from Forrester Research explores the challenges that television faces as it tries to maintain its top spot in an ever-growing complex advertising market. While television's breadth and storytelling ability are hard to match, digital's lower cost and more sophisticated targeting capabilities makes digital more appealing for many advertisers. Forrester also points to television viewers gaining more control on how they would like to watch. For example, ABC's Modern Family averaged a very respectable 7.3 rating among viewers 18-49 this past season. However, one-third of that audience did not watch the program on the day it aired. Instead, they took advantage of their DVRs during the following week to watch it on their own schedule and with the ability to skip commercials. Forrester also points to the growth of online video and its ad market (especially among younger consumers), device and audience fragmentation, and measurement challenges as reasons why the television business will need to work harder to keep advertisers' dollars.
So what? While print is often the brunt of any criticism about "old" media, questions are now more often being raised about television. And many would argue that it's about time more attention is given to one of television advertising's inherent challenges. The TV ad experience is opt-out for many. With greater control, consumers have shown they are less willing to put up with TV ads when they have the choice. Conversely, the print ad experience will always be opt-in. When a magazine reader engages with an ad they are choosing that experience.
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Quick Takes
Nearly Half of All Magazine Apps Offer Subscriptions at Multiple Price Points
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One in Five Americans Eat Fast Food Several Times a Week, But Are Eating it Less than the Past
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Blue is the Most Popular Color in Logo Designs for Top Brands
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Nearly 77 Million Students Get Ready to Go Back to School
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Condé Nast
Feedback, questions, ideas for future issues? Please contact:

Phil Paparella
Condé Nast Research & Insights | Associate Director
1166 6th Avenue, 14th fl. | NY, NY 10036 | office 212.790.6044 |

Tamar Rimmon | Senior Manager, Digital Analytics
Robyn Hightower | Manager, Research & Insights