recession

Americans Are Rekindling Their Dangerous Love For Credit

Source: http://www.businessinsider.com/americans-are-rekindling-their-dangerous-love-for-credit-2013-9

credit card spendingFueled by a burgeoning economy, shoppers have slowly but surely rekindled their love affair with plastic. A new MasterCard analysis shows that in 2012, U.S. credit card volume grew by $172 billion year-over-year, an increase of 8.4%.

We’ve pretty much done a complete 180 since the onset of the recession. Back in 2008, Americans shifted more than $140 billion from credit to debt card spending.

You could say consumers are simply feeling more secure about their ability to handle credit card bills these days. But looking closer at the study, we found two dangerous signs that we could be getting in over our heads again.

More than half of credit users say they continuously carry a balance on their accounts and 54% of consumers say they use credit for rewards, up a full 9 points from 2008.

Credit lenders are incentivizing overspending and consumers are clearly taking the bait.

Already, we can see the effect rewards are having on credit use. The average credit card transaction is only $93, signaling that consumers are leaning on credit even for everyday purchases in order to get rewards.

Warning Signs

Credit perks are all well and good if you’re planning on paying your card down each month. But what’s the point in cashing in credit rewards if you’re dragging your credit score down and running the risk of paying late payment fees in the process?

There’s real danger in relying on credit cards just for a fe! w extra cashback points. First of all, carrying balance on your credit card is one of the easiest ways to lower your credit score. You’re basically telling lenders that you’re willing to rack up charges without having the means to pay them off in quick fashion.

“The amount of debt a consumer carries tends to be highly predictive of future credit performance because the amount a person owes has a direct impact on her or his ability to pay all their credit obligations on time each month,” says Barry Paperno, consumer operations manager for myFICO.com. “While having debt doesn’t automatically put someone in a high-risk category, as balances increase, the probability of having difficulty making payments on time each month increases.”

In an ideal world, everyone would pay down their credit card balance in full each month. Realistically speaking, most experts recommend keeping your total debt load at one-third of your available credit limit.

We’d recommend going even further. A recent FICO report found that people with the highest credit scores typically carried debt loads less than 7% of their total limits.

A good rule of thumb: If you’re about to use a credit card, just ask yourself if you’d be making that purchase if you were using cash instead. If the answer is no, chances are you’re better off keeping that card parked in your wallet.

 

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Monday, September 16th, 2013 news No Comments

New Intuit Data Confirms Americans’ Spending Up 9 Percent Since 2009

source: http://network.intuit.com/2013/05/08/consumer-spending-index/

The Intuit Consumer Spending Index is the latest index from Intuit Inc., which also produces the Intuit Small Business Employment and Revenue indexes. These indexes provide a unique view into the economy based on data from those among the 45 million customers Intuit serves through connected services like Mint.com and QuickBooks small business accounting software.

U.S. consumers are spending again! After the historic spending lows of the 2008 recession, consumers are now spending about nine percent more than they did just four years ago. Gasoline, gift and healthcare spending have grown significantly, and the biggest spenders are men.

Those are just a few of the findings of the new Intuit Consumer Spending Index, which are from the actual, nearly real-time data anonymized and aggregated from Mint.com, Intuit’s leading online and mobile personal finance software. Overlaid with demographic information including age, gender, income and location (provided by Mint.com users if they so choose), this is the first report to accurately reflect the average American household’s spending – across ages and income levels, in every state – in a way that tracks to the current population.

National view
The Intuit Consumer Spending Index tracks national spending averages from January 2009 to April 2013. The data shows that Americans are rebounding – with hou! sehold spending up to approximately $4,220 per month in 2013 from $3,870 in 2009 (comparing first quarter of each calendar year).

National Average Monthly Spend _Intuit Consumer Spending Index

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Thursday, July 18th, 2013 news No Comments

All Oil Spikes Have One Thing In Common

Source: http://www.businessinsider.com/socgen-all-oil-spikes-have-one-thing-in-common-2012-3


From SocGen, a visual case that oil spikes always equal recessions.

chart

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Monday, March 19th, 2012 news No Comments

This Retailer Is Doing So Well It’s Opening Hundreds Of New Stores For The Third Straight Year

Source: http://www.businessinsider.com/dollar-general-retail-expansion-2012-1


dollar general

Dollar stores are booming in a struggling economy, and one of the big boys of the industry is doing so well it’s planning another period of explosive growth, reports Gail Hoffer and Drug Store News.

It will open 625 stores and hire around 6,000 employees over the course of 2012. The discount chain already has about 9,800 stores spread across 38 states, and some of the new stores will be in previously unoccupied states California and Massachusetts.

Dollar General has adopted an aggressive growth strategy since the start of the recession. This marks the third straight year it has opened hundreds of new locations, and the chain has created more than 21,000 jobs since 2009.

It’s not all about the economy though. Dollar General had to be smart in its expansion strategy too — after all, Walmart is its biggest competitor, and the world’s largest retailer has had similar success recently.

It thrives on hitting markets that Walmart hasn’t taken over, such as small towns that can’t support one of Walmart’s massive big box stores. It also competes with the other big dollar store chains, like Family Dollar. The hybrid concept — somewhere between a giant discounter and a small dollar store — has worked admirably.

Plus, while dollar store marketing plays a significant role in getting people through its doors, Dollar General is actually also a clear leader in price over both Walmart and its dollar store compatriots.

NOW SEE: The 20 Brands With The Most Loyal Customers >

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Wednesday, January 4th, 2012 news No Comments

Here’s Why The New York Times Wants To Sell Off Its Regional Papers [CHARTS]

Source: http://www.businessinsider.com/chart-heres-why-the-new-york-times-wants-to-sell-off-their-local-paper-division-2011-12


Yesterday, the news leaked that the New York Times Company was looking to sell off its regional media group to Halifax Media Holdings.

Now we know why.

A look at the Times’ SEC filings shows that the regional media group has tanked in the past half decade, and that it was particularly devastated by the economic recession. Amid dwindling revenue across the Times’ three news segments, the Regional Media Group — which includes 16 papers from California to Florida with a combined circulation of about 433,000 — has performed the worst in recent years.

At the end of last year, revenue for the Regional Media Group had fallen to 65% of what it was in 2001, and that’s without adjusting for inflation. Further, revenue has been cut almost in half from the highs of 2006.

chart, revenue by news segment indexed to 2001

 

Though revenue began to decline starting in 2006, it took a more precipitous plunge once the recession hit. In the second quarter of 2009, revenue for the Regional Media Group was down over 25% from where it was in the same quarter the previous year.

 

chart, revenue by news segment year over year change

 

Those extreme plunges led the New York Times Company, in their most recent annual statement, to note that they could take action if the Regional Media Group did not turn around this year. “We believe that if the Regional Media Group’s projected cash flows are not met during 2011, a goodwill impairment charge is possible in 2011,” the company wrote.

In the first three quarters of 2011, the regional group still hadn’t turned things around. While the decline in revenue for the New York Times Media Group and the New England Media Group began to slow down, the regional group’s problems kept going.

 

chart, revenue by news segment change indexed to 2008 levels

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Tuesday, December 20th, 2011 news No Comments

Meanwhile…. The Economy Is Still Coming Unglued In Europe

Source: http://www.businessinsider.com/eurozone-pmis-2011-12


Sovereign debt and banking issues aside, the economy of Europe still looks like it must be in recession.

Every country has reported a sub-50 PMI today.

This map from Markit is fantastic.

chart

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Thursday, December 1st, 2011 news No Comments

Consumers Won’t Settle For Cheap, Discounted Products

Source: http://www.businessinsider.com/consumers-are-not-willing-to-settle-with-discounted-cheap-products-2011-10


sam's club shopping

No matter how thin your wallet is, you’re probably not willing to sacrifice beauty to save. 

Less than one-fifth of 25,000 respondents from 51 countries say they’d buy cheaper health and beauty products for the price, according to a survey by Nielsen, a global information company

Meanwhile, 61% chose “good value” over “low price” for any retail products their families may need, meaning a generic brand of bread may get passed over for a loaf of tastier (and possibly healthier) Pepperidge Farm bread.

“Value is not about price alone,” James Russo, vice president of Nielsen’s Global Consumer Insights, said in a statement. “Retailers and manufacturers who offer good values tailored around benefits of the product beyond price will resonate with consumers who continue to look for ways to stretch their money in a tough economy.”

The study found product preference also depends on where the respondents live, with those in Asia Pacific, Europe, Latin America, and North America preferring good value over lower prices, and those living in Africa and the Middle East choosing price over value.

But just because North Americans prefer value over lower prices doesn’t mean that they’re willing to pay full price. In fact, Americans are among the world’s leading coupon-users, followed closely by China and Hong Kong.

We also buy in bulk more than anyone else in the world. According to Nielsen’s chart below, the main reason Americans visit the grocery store is to stock up, whereas a quick trip to replenish products is more popular in other parts of the world.

consumers Nielsen

Learn why consumer brand loyalty may never recover from the recession>

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Monday, October 17th, 2011 news No Comments

This is what happens when 99% of the inefficiencies are cut out of a system (advertising industry)

Update: Including Q3 09 numbers

Source: http://adage.com/agencynews/article?article_id=140125

While no holding company’s results are pretty these days, Interpublic Group of Cos. last week posted particularly poor numbers, swinging to a net loss of over $35 million for the first nine months of 2009 from almost $60 million in profit during the same period in 2008. IPG’s third-quarter revenue fell 18% compared to declines of 14.4% at rival Omnicom Group, 8.7% at WPP (factoring out the effect of acquisitions and currency shifts) and 5.3% at Publicis Groupe. WPP’s reported revenue, including revenue from its big Taylor Nelson Sofres acquisition, rose 16.7%. In the same quarter, net income attributable to IPG tumbled 47.3%, more than double the drop of Omnicom (down 22.5%).

wasted-ad-dollars

Google changed the game by changing the business model from paying for impressions to paying only when the advertiser gets the click.  This helped to cut out the 99% of waste and inefficiency which existed in the industry.


WPP Profit Dropped 47% in Second Quarter More Than Half of Company’s Revenue Came From Nontraditional Advertising

NEW YORK (AdAge.com) — Using words such as “severe” and “surprise” to describe the recession’s impact on its business, WPP, the world’s largest advertising conglomerate, today said its profit was down 47% for the second quarter. And WPP Chief Executive Martin Sorrell said it will be a while before marketing executives begin to spend and take chances the way they did just a few years back.

FULL ARTICLE – Source: http://adage.com/article?article_id=138673

______________________________________________________________________

In a first half earnings statement released this morning, WPP Group announced that digital and direct marketing-related services now comprise 25% of its body.

WPP Group owns labels like 24/7 Real Media, Mediaedge:cia, MediaCom, Mindshare, GroupM and Outrider.

Digital and direct garnered $1.7 billion in revenues in the first half of ‘09, with a projected annual run rate of nearly $3.5 billion total. But it is digital media and advertising that appear to be dominating the segment.

Overall, first half revenues fell 2.9% to $6.4 billion in the first half on a reported basis, MediaPost reports. Like-for-like, however, total revenues slid 8.3% against the first half of 2008.

According to WPP, traditional advertising and “media investment management” have been the hardest-hit amidst the economic downturn.

“On a constant currency basis, advertising and media investment management revenues fell by 7.5%, with like-for-like revenues down 7.8%,” it stated.

Branding and identity, healthcare and specialist communications — which includes direct, internet and interactive — were least affected.

The media conglomerate committed to prioritizing the growth of digital communications, customer insights and strong geographic markets.

Related topics: Online Advertisers, Data Updates,

Sourcehttp://www.marketingcharts.com/updates/digitaldirect-marketing-now-25-of-wpp-group-10211/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink

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Thursday, August 27th, 2009 digital 1 Comment

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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