At Apple’s unveiling of the iPhone 4S today at their headquarters in Cupertino, we were excited to see comScore’s data featured prominently for the second time in a major Apple presentation. Previously, as part of the Apple Worldwide Developer Conference (WWDC) keynote presentation in June, the same chart was used to illustrate the prominence of the Apple iOS in having the largest current mobile installed base of smartphones and connected devices.

Source: Apple, Inc.

This chart, which was derived from data in comScore’s syndicated MobiLens service, illustrates each platform’s share of the total universe of smartphones and connected devices in use (excluding feature phones and devices such as e-readers that are not running on an OS capable of running applications). The iOS share accounts for each iPhone, iPad, and iPod Touch in use. Similarly, the Android share accounts for phones and tablets running on the Android platform. In sum, this chart shows that out of the total universe of devices running on these mobile platforms, the Apple iOS currently has the largest share of the market at 43 percent.

Now that it has been confirmed that the iPhone 4S will be available on the Sprint network, how might Apple’s share of this pie change? Which market segments traditionally underserved by the platform are now within reach? Read our recent report on the impact of the next iPhone on the telecom industry at large.

With so much attention in the digital display landscape currently focused on ad exchanges and RTB, there has been a great deal of speculation about what the future of media planning will look like. If you’ve read the media stories and listened to the industry keynotes, it would appear that we are moving ever closer to a world in which all media data will be available in the cloud, fancy algorithms will dictate trading-desk decisions and real-time buying and optimization will be the norm. Many of us who were raised on traditional media planning have probably wondered at one time or another, “What, then, will happen to media planning, and the human side of the planning process, as we know it?”

Like many of you, I’ve heard the questions, I’ve engaged in the debates, and I’ve considered the implications. I now want to share with you my perspective on why I think the future of media planning will be an effective integration and interplay of people-oriented and data-driven media intelligence.

Assembling a media plan has always been a human endeavor; it is the place in the process where the brand’s communication strategy becomes manifest as a media strategy. Who should the media target be? What media should we buy? What vehicle types? When should the schedule run? (Too often, a precise vision of the brand’s target customer ends up morphed into “Women 25-49” when the time comes to develop a media strategy.)

When the book on media planning was written (and there is a book, and we used it in grad school; here is the latest edition) there were five media—TV, radio, newspapers, magazines, and billboards. And if you bought network TV, there were only 3 networks, and no cable. “Moms with kids” was a pretty sophisticated behavioral target. So, for a lot of brands, you put the money into TV, and if you wanted to get fancy maybe you allocated some to print, and then you punched out early and met Don Draper for cocktails.

Today though, the explosion in media platforms, vehicles and technology has rendered the media planning process far more complex, and as some would argue, too slow (and maybe too human) for today’s digital world. (We’ve all heard the horror stories about how 50 different Excel spread sheets are usually involved in the digital planning process and how surprisingly labor-intensive it remains to turn strategy into plan.)

Given all of this change engulfing the industry, we are left to wonder: Will the discipline of media planning as we know it fade into history in the wake of cloud computing and sophisticated real-time technology?

While some might argue that we’re already far down that path, I have a slightly different opinion. When I think about the ideal future state of digital (and cross-platform) media planning, I tend to think first about the fundamental discipline itself, and then I think about the tools. Oddly enough, in theory, I don’t think the ideal state of media planning has changed much since that book was first written.

Media planning, as a discipline, is still all about maximizing ROI in the service of communications goals. How do I get this creative messaging in front of the right consumers (reach) often enough (frequency) to accomplish my communications objectives? Given my target and my creative executions, what are the best media, and the best types of vehicles within those media, to deploy in meeting my objectives? What are the attributes of different media, how does my target experience these media, and what are my best choices to reach that target throughout the day, and throughout the purchase cycle?

We operate in a data-driven ecosystem, but I don’t think all that data should eliminate the need for strategic thinking; rather, it should fuel that thinking. Similarly, the toolkit should free up the media planner to bring all his or her creativity to bear in refining the plan. In an ideal media planning future, the media planner’s toolkit would accomplish the following:

• Remove all rote work from the process;
• Integrate all necessary data for the full spectrum of available buying entities (i.e., media vehicles as packaged, combined and sold);
• Allow for scenario planning, hypothesis testing, optimization, and plan modification on the fly;
• Let all of these functions take place in a single unified dashboard

As a digital media planner, you deserve nothing less.

comScore is committed to making this vision of the ideal digital media planning process a reality, and we’ve got several things going on that get us—and you—closer than ever before. The most exciting part of realizing this vision is the launch of Media Planner 2.0, the next generation of our industry-leading digital media planning platform. Our agency team, product engineers and beta clients are pretty excited about it, too.

Media Planner 2.0 is a fully integrated, end-to-end workflow system that allows you to:

• Perform all of your planning work on the cloud
• Send RFPs, merge proposals and analyze packages seamlessly, while eliminating the need for 50+ spreadsheets
• Build consideration sets based on demographic, lifestyle or behavioral targets so you can reduce ad-hoc trial and error
• Perform optimizations to obtain the final media plan based on campaign parameters, such as budget or desired exposure
• Eliminate unnecessary and inefficient communications and increase speed to market

Also, in the future we’ll be including audience data that leverages cookie-based targeting segments. So, if for example you’re building a media plan for an automotive brand, you can look at websites, ad network packages, and auto intender segments, and combine them into a single media plan with pre-buy reach and frequency—all in one place.

I posed the question above: will the cloud disintermediate media planning? I think the answer is a resounding “no.” As we’ll show with Media Planner 2.0, the systems will take advantage of the cloud to help you put multiple useful data sources to work for enhanced campaign optimization. If there is anything that’s getting disintermediated, it’s the need for 50 different Excel spreadsheets

In our view, media planning—and the media planner—is more important than ever before. A data-rich ecosystem doesn’t negate the need for sound design and implementation of media strategy—on the contrary, it elevates the importance of that strategy. We’re working to put 21st century planning tools into your hands, so that you can continue to drive the success of your clients’ brands.

comScore is excited to announce the introduction of Ad Metrix Social, a significant new product enhancement that provides unique detail and insight into the social side of display advertising. The availability of this new social measurement module helps advertisers and agencies understand the importance of display ads appearing on social networking sites and socially-enabled display ads appearing across the web.

Why is understanding the social side of display advertising so important? Consider the following statistics on the U.S. social networking market:

• 1 out of every 6 minutes spent online is spent on a social networking site
• 1 out of every 3 display ads appears on a social networking site
• ½ of the total U.S. Internet audience visits a social networking site in a given day
• The average Internet user views more than 2,000 display ads on social networking sites each month

Socially-Published Display Ads
Right now, you may be asking “What are socially-published and socially-enabled display ads?” Socially-published display ads are ad units appearing on social networking sites, such as Facebook and Linkedin. While comScore Ad Metrix has always reported on the volume of display ads on these sites, the addition of enhanced reporting detail and functionality provides advertisers and agencies with a more comprehensive understanding of these advertisements. In the case of Facebook, which accounts for the preponderance of display ads in the category, most of its ad units are non-standard display ads based on an image and surrounding text, such as the examples below:

In addition, comScore’s Unified Digital Measurement (UDM) methodology provides Ad Metrix with a distinct advantage over competing services when it comes to accounting for socially-published display ads. Competing services, many of which rely on spiders to crawl the web for display ad collection, are unable to access all the content on sites like Facebook that require the user to log-in. Because Ad Metrix measures activity within the comScore panel with explicit permission from the panelists, it has visibility into ad exposures occurring within Facebook and other log-in sites.

Socially-Enabled Display Ads
Socially-enabled ads are a somewhat more recent development on the display ad landscape. These ads typically include an emblem or specific messaging directing the audience to engage with their brand on a social network (usually either Facebook or Twitter). Below are a few examples of display ads classified as socially-enabled ads.

Socially-enabled ads help increase the number of brand fans, which in turn increases the ability of brand marketers to directly reach their fans with relevant messages. But that’s not the only benefit, because comScore research through our Social Essentials service has shown that a brand’s communication to fans is amplified through the “friends of fans”, with this amplification occurring both in terms of additional reach and persuasion.

The Intersection of Social + Display = the Future of Digital Ad Campaigns
We are still in the very early phases of the integration of social media and display advertising. Historically, these marketing tactics have been relegated to their own silos, but savvy marketers are beginning to understand the synergy between the two. Social has evolved into an essential component of the modern marketing mix, and one of the most vital aspects of developing these relationships with consumers is by turning them into brand fans and followers. Socially-published and socially-enabled display ads are helping to forge this critical link.

Now is the time for brands to get serious about their social strategies or risk falling behind their competitors. Staying ahead of the curve requires the right competitive intelligence to understand the social side of display advertising, and Ad Metrix Social provides the actionable insights to do just that.

North American audiences interested in learning more about Ad Metrix Social can join comScore for a webinar on October 20th at 2PM ET. Please register by visiting: https://www1.gotomeeting.com/register/338258400.

Following years of speculation and anticipation, European social music application Spotify recently touched ground here in the U.S. to a great deal of fanfare. Despite some difficulty in tangling with the record labels on royalties and fees, Spotify was finally able to come to terms and launch in the U.S. In its first three months since entering the market, Spotify has already amassed more than 2.4 million monthly U.S. visitors – a very strong start for a service that was initially invitation-only. While such exclusivity may have curbed some early adoption, it can also potentially drive benefits in terms of long-term engagement as consumers must put forth a concerted effort to be included in the network.

Following its first couple of months of live service in the U.S., I thought it would be worth understanding a bit more about Spotify’s early user base and what its entry into the market could mean for similar or competing music services. From a demographic standpoint, Spotify is currently drawing an audience that resembles the traditional early adopter. Nearly 3 in 5 visitors are male, 50% are between the ages of 18-34, and 24% are from households making at least $100,000 annually. Each of these demographic segments index significantly higher than average. That Spotify is attracting early adopters could be significant in the long run, as these opinion-leaders have a way of influencing the behaviors of those around them.

*Composition Index = % of Spotify visitors / % of U.S. Internet users x 100. Index of 100 indicates average representation.

Despite Spotify’s rapid emergence, it still trails the computer-based (i.e. excluding mobile) online audiences of other music services like iTunes and Pandora by a sizeable margin. If it is to catch up with these other services, it will likely be due in large part to the company’s social strategy, which leverages Facebook for social music sharing. Spotify was prominently featured during Facebook’s f8 developer’s conference to highlight its social utility, which may have raised its profile and helped to introduce the brand to a broader base of U.S. consumers.

One point of contention with regards to Spotify’s Facebook integration strategy is the new requirement for newly registered users to log-in via their Facebook account. comScore data suggest, however, that this requirement does not appear likely to shut out many potential users. In fact, 96% of all Spotify visitors in September also visited Facebook, significantly higher than the 75% of the total U.S. internet population that visited Facebook.

While it is still very early in the life of Spotify here in the U.S., the service seems to be off to a fairly auspicious start. Its social strategy will be an important determinant of adoption and it will be interesting to see how quickly it manages to grab hold in a competitive marketplace.

One of the best things social media has done for marketing is to give it some creative energy again. Not since the 1999 Internet heyday have we seen brands innovate so many unique ways to generate audience “buzz” among a group of people they’re trying to reach. Craftsman, Sears’ powerful tool and equipment brand, has discovered one particularly creative way by using a retail showroom in downtown Chicago as the linchpin for an integrated social strategy that reaches millions each month. And now thanks to comScore Social Essentials, a new product designed to measure the reach and impact of social media brand exposure on Facebook, brands like Craftsman can finally understand who’s really getting the message.

Known as the Craftsman Experience, the showroom serves as everything from production hub, to research facility, to tourist attraction for the Do-It-Yourselfer and self-professed Garage Geek. Craftsman Products are available to touch, feel, and even test on an unsuspecting nail. It houses the world’s first DIY radio station that pumps out How-To wisdom over the airwaves from America’s DIY designer Frank Fontana, along with a complete television production studio.

I’m not a DIY’er and don’t visit Chicago frequently, so I have to get personal for a moment to explain how I first came upon the Craftsman Experience. When your two life’s passions are as divergent as advanced data analytics and Landspeed Motorcycle Racing, you are not often afforded the opportunity to bring the two together in a meaningful way. So when a client asked me if I would participate in Craftsman’s three-part made-for-viral miniseries about motorcycle racing, I jumped at the chance.

With comScore Social Essentials, we were able to truly understand how these efforts reach beyond the Fan into their Friends and extend the reach of these creative efforts. In fact, Social Essentials shows that both Craftsman and Kenmore (who has a similar “Experience” retail hub on the same Chicago city block) are able to double the reach of their messages through Friend of Fan exposure – showing a strong amplification effect from Fans to their Friends (reaching between 1/3rd and 1/2 of Fans and subsequently doubling that effect through Friends of Fans monthly.)

Social Essentials also shows that the overlap among Craftsman, Kenmore and Sears Facebook Fans is less than 10%, suggesting Sears’ strategy of developing brand-specific Facebook environments is paying off in the sense that they are reaching a significant number of unique individuals with each brand presence.

In terms of reaching a relevant and interested audience, Fans of the three Sears brands are more than twice as likely to visit a Sears online property than the average Internet user. This may not be surprising given their self-selected affinity towards the Sears brands, but it is interesting to see that Friends of Fans are more than 60 percent more likely to visit a Sears online property (13.0% vs. 7.9%). This data point likely in part reflects the fact that “birds of a feather flock together,” but it may also reflect the effect of trusted persuasion of Fans on their Friends.

Clearly these social efforts are reaching a great audience and finding ways to creatively communicate with their brand audiences – arguably audiences we might not traditionally associate with edgy new media approaches. And I enjoyed being able to play a part.

This post was originally published at SearchEngineWatch on 10/17/2011.

It’s October, which means that football season is in full effect! Suffice to say I was eagerly anticipating a resolution to the NFL lockout to ensure there would actually be a season.

I can’t even begin to wonder what I would do on Fall Sundays and what I would talk about all week without the NFL. How would I spend my Monday mornings if not obsessing over my fantasy football team’s performance, wondering whether I would be able to pull out the win with Monday Night Football? Thankfully, the players and owners found room to agree and I was able to avoid being forced to start following regular season hockey.

Fantasy football has, in many ways, become its own favorite pastime. If your favorite NFL team is having a down year at least you can root for the guys on your fantasy team each week.

Fantasy football first emerged in the 1980s, allowing millions of armchair quarterbacks to more deeply immerse themselves in what has become an enormous time and money pit. Prior to the advent of the Internet, managing a fantasy football league was a cumbersome activity to say the least, requiring participants to peruse newspaper box scores and manually tabulate each team’s score.

The Internet created an ideal environment for the growth and adoption of fantasy football as the powerhouse of engagement that it is today. This engagement has translated into what is now a multi-billion dollar industry, making it a highly competitive market for digital marketers.

While NFL football appears tightly linked with fantasy football, the reality is that these are two different consumer markets requiring very different digital marketing strategies. Marketers who understand these differences will be much better positioned to optimize spend and attract more than their fair share of these lucrative markets.

NFL-Related Searching

Search activity for the NFL and individual teams begins to spike every year in July with the start of training camp and grows over the next few months.

More than 28 million people conducted 105 million searches containing either “NFL” or team name searches in September 2011 (e.g. Bears, Giants, Raiders). These searches tend to peak each year in October, and we anticipate a similar peak this month when every fan still believes their team has a chance (well, except for maybe the Dolphins). Searches decline in November as many teams fall out of the playoff race, but then December sees a pickup in activity as the final playoffs races are decided.

Overall, however, this sort of general NFL-related search activity remains active throughout the season and presents ample opportunity to market to NFL fans with at least 40 million related searches each month. This is especially important for any NFL league sponsors, heavy NFL advertisers like beer and auto companies, and NFL apparel retailers, from both a direct response and branding perspective.

(As an interesting sidebar, the Dallas Cowboys tend to be the most searched for team every season, although something as trivial as winning the Super Bowl and the Cowboys missing the playoffs at least allowed the Green Bay Packers a brief moment in the sun back in January and February. The Cowboys have once again assumed the mantle of “most searched team.”)

Fantasy football searching exhibits some different patterns from the more general NFL-related search, and relevant marketers should take note. Every year the fantasy football providers compete mightily to win your business. Whether they want you to renew your league, expand your subscriptions, or to try out their service as a first time subscriber, they all know that search plays a critical role in your NFL and fantasy football navigation.

The main difference between fantasy football searchers and regular NFL searchers is the peak of activity. NFL searchers open the search season in July and more or less continue it until the season ends in February. Search activity on fantasy football, however, is heavily concentrated in August and September, with a peak in September.

As illustrated below, “fantasy football” search volume peaked in September 2011 with 3.4 million searchers and nearly 11 million searches. But there is a precipitous decline as soon as the season starts in September, as many fantasy footballers have already conducted the majority of their research and preparation in advance of the season. Once fans have their fantasy leagues set, they are less likely to search for information and insight and instead rely on bookmarks and direct URL navigation for ongoing team management.

Reviewing the search click-throughs on fantasy football terms, 14.4 million out of the 15.2 million total search click-throughs In September (95 percent) were organic. Therefore, “evergreen” SEO content around fantasy football should be an incredibly important part of any fantasy football marketer’s customer acquisition strategy. Although the window for conversion is very short, the need to work on your SEO rankings year round is essential for those wanting to capitalize on the high-demand part of the season.

A simple analysis of the search data clearly demonstrates important insights for how to best maximize your digital marketing investment. This sort of analysis can be applied to any overlapping markets to reveal actionable insights that will drive success.

Recently-released 2010 U.S. Census data reveals that more than half of the U.S. population growth between 2000 and 2010 was driven by Hispanics. During this time, the U.S. Hispanic population increased by more than 15 million people, now making them the largest minority group in the country at just over 16 percent of the population.

While the sharp rise in the U.S. Hispanic population makes it an important target for marketers, it may be difficult to reach this segment via traditional means. Approximately 23 percent of U.S. Hispanics speak Spanish exclusively at home, while 77 percent speak at least some Spanish at home and only 53 percent claim to speak English “very well.” Therefore, Spanish-language ads are likely necessary to effectively market to U.S. Hispanics. Fortunately, with ratings for Spanish-language television channels such as Univision often outpacing major broadcast networks, powerful channels do exist to reach this attractive market segment.

comScore recently conducted an analysis to identify drivers of effective TV advertising for U.S. Hispanics. The data set consisted of 38 ads representing 20 product categories that were tested among unacculturated Hispanics that speak primarily Spanish at home and at work and consume Spanish-language media.

While the Hispanic ads tested were on par with an average U.S. ad in terms of behavioral measures such as sales effectiveness and memorability, consumer feedback on attitudinal metrics indicated that there were positive and negative aspects to the ads. On the negative side, Hispanics found the ads to be less believable, difficult to relate to and understand, and more irritating than a typical U.S. ad. This suggests a need for advertising targeted toward Hispanics to be more credible. The attributes on which Hispanic ads outperformed the average U.S. ad include loyalty (the only brand for me), brand uniqueness, purchase intent, and a sense that they shared a lot in common with other product users.

comScore measures the actual persuasion of an ad through a metric we call Share of Choice™, which reflects actual consumer preference for a brand among a competitive set. Thousands of comScore studies have shown that lifts in Share of Choice correlate highly with actual in-market sales lifts for the advertised brand. In our data set for this study, approximately two-thirds of the ads were created specifically for the Hispanic market, while the other third were either adaptations of general U.S. market advertising or dubbed in Spanish. It was found that ads created specifically for the Hispanic market were 40 percent more persuasive than those simply adapted for this market and 3 times as effective as ads dubbed into Spanish.

Hispanic ads that effectively break through the clutter and engage consumers in a way that leaves a lasting impression linked to the brand generate higher lifts in Share of Choice for the advertised brand. The table below shows how ads with above average lifts in Share of Choice were more likely to obtain higher related recall and linkage to the advertised brand.

Interestingly, the ads that generated above average lifts in Share of Choice for the advertised brand were more likely to contain a relevant setting and link the messaging and drama to the brand. Above average ads also provided visual and verbal justification for purchasing the advertised brand.

While nearly all ads identified the brand in the first half of the commercial, those that did not performed well below average, suggesting caution when using long blind lead-ins.

Finally, among the themes present in the stronger advertising, those that resonated among Hispanic women centered on quality time with family, making intelligent product choices, and aspirations to look young and attractive. Hispanic men tended to respond more to themes centered on portrayals of them as the “hero” and “avoiding embarrassment.”

While incorporating these learnings into your advertising won’t assure instant success, it can increase the likelihood that you will be creating advertising that effectively speaks to, and motivates, U.S. Hispanic audiences. At the end of the day, one of the best ways to maximize the impact of your campaigns is by evaluating the strength of your creative prior to its airing or publication and optimizing your ad quality early on. comScore Creative Messaging and Optimization helps in this regard by using proven methods to predict the impression your creative will have. In targeting a rapidly growing segment such as U.S. Hispanics, this could spell the difference between advertising success and failure.

This post was co-authored with Alan Vaughn.

As sociable beings in an interconnected world, our social networks have intuitive importance in our everyday lives. These networks influence the movies we watch, the music we buy, the parties we attend, and the friends we keep. Our associations – both on the web and in the real world – define us.

Facebook was the first widely successful means to document these associations. It distilled nebulous social relationships into structured data. Now, Facebook documents nearly every preference imaginable, from favorite brands to places to cooking and even workout routines. Although it began as a communication tool reserved for our closest friends, Facebook is no longer just a social network. Some, including Facebook itself, now call the network a “social graph”.

Mindful of Facebook’s growing scope, we wanted to understand how Facebook’s fan pages relate to one another, which we did by applying network theory to comScore’s Social Essentials data. We thought this would be useful to brand managers who face a daunting task in trying to understand a brand’s social media presence. By understanding how fan pages relate to one another on the web – the world’s most consumer-friendly communications medium – advertisers can better understand how audiences view themselves and their brands¹.

Our analysis defines fan pages as the individual nodes in the network, and mutual fans as the relationship that links two distinct fan pages. This setup is a unique variation on prior analyses, which focused on relationships between people and not fan pages. For example, imagine that Jon Smith was a fan of Red Bull and MTV. In our analysis, those brands would be linked because Jon served as a common fan between them. For simplicity, we included all fan pages covered in comScore’s Social Essentials product that met a minimum sample size threshold. This broad definition of a “brand” included entertainers like Lady Gaga and online games like Zynga Poker, which are brands in their own right.

Our brand-centric perspective gives brand managers a clear picture of how fans relate to them and other brands – including the competition. Our analysis revealed three key findings:

1. It’s a small world

We sampled the most highly connected pages, representing some 350 individual brands, to understand how many degrees of separation exist between them. By calculating closeness, a measure that indicates the extent to which a node can reach other nodes, we found that the average brand was just 1.8 degrees removed from all other brands, and that the greatest distance between any two brands was three degrees.

In a world where offline social networks are dense – Harvard psychologist Stanley Milgram’s famous “small world” experiments showed that people are just six degrees removed from one another – it’s no surprise that the online fan pages that summarize our social lives are even denser.

2. Size doesn’t matter

We analyzed the degree centrality of our network to find that the largest brand pages by fan count were not always the most highly connected. In fact, the brand most connected to other fan pages ranked just 9th by fan base overall.

A page’s degree is simply the number of other brands with which a brand has a direct connection. While the average fan page in our sample was connected to 50 other fan pages through common fans, Family Guy was connected to nearly 300 other fan pages. Facebook followed second, despite having about 16 million more fans than Family Guy. This data shows that brand popularity can take many meanings: a brand can either be popular among a large number of people, or it can be popular among a wide array of people. Which one matters more, though, depends on the marketer. Since degree reflects the number of relationships and not the strengths of those relationships, a high degree might suggest that a brand has mass appeal while a lower degree might indicate focused appeal.

Generally, the smallest fan pages by fan base also happened to be the least well connected. Yet, after controlling for fan base, we still found meaningful relationships between brands. We saw strong relationships between brand extensions: Jon Stewart’s Daily Show was closely tied to The Colbert Report, for instance. But we also found measurably strong relationships between smaller brands. Taco Bell, for instance, shared many fans with Dr. Pepper:

In a communication medium where brand managers have the least control over the message— think social vs. television—understanding precisely how consumers view a brand’s identity is invaluable for branding and tactical purposes. comScore’s Social Essentials data yields this insight by identifying the other brands that jostle for space inside a consumer’s mind. It also provides actionable takeaways about audience targeting – for instance, consider revaluating a brand’s television ad buy if its ads are airing on a TV show that has weak audience overlap in the digital realm. According to Social Essentials, it could be an inefficient purchase.

¹ Jennifer Escalas & James Bettman. You Are What You Eat: The Influence of Reference Groups on Consumers’ Connections to Brands. Available at: http://faculty.fuqua.duke.edu/~jrb12/bio/Jim/53.pdf

The following blog post formed the basis for an article that was published in Ad Age on October 31, 2011.

It’s no secret that the global recession has devastated many industries. And while some have recovered, consumers continue to feel the pain in a variety of ways, leading them to fundamentally alter their brand buying behavior.

The unemployment rate remains stubbornly high at levels above 9%, with no evidence that it will decline any time soon. That translates into 14 million Americans without a job. Another 7% of consumers are under-employed, meaning that they can’t find full time jobs, while a further 1% have simply decided to stop looking for a job. The negative impact on consumers’ spending power has been brutal. A recent report from Sentier Research shows that average U.S. household income has fallen by 10% from December 2007 through June 2011. Even for households headed by a full-time worker, median income has fallen by more than 5%.

At comScore, we’ve been able to quantify the impact that this loss of spending power has had on brand choice. To do that we have been tracking consumers’ response to the question: “Do you buy the brand you want most?” We began the study in 2008, just before the recession hit home and we’ve updated it in each year since then. We examined brands in the health & beauty aids, over-the-counter (OTC) medicines, food, household products and housewares categories. The results aren’t pretty. In 2008, about 54% of consumers said they bought the brand they wanted most. By 2010, this had dropped to 45% and fell further to 43% this year. Declines were observed in every category, with the overall decline being most severe in the OTC medicines category where preferences fell by 17 points and least in the household category, but with a 6 point decline nonetheless.

So, if consumers aren’t buying the brand they want most, what are they buying? It turns out that consumers are often switching brands when another “peer” brand is on sale, with 38% in 2011 saying they did this compared to 33% in 2008. But, they also more frequently turn to buying a cheaper product -- generally Private Label -- to save money. About 19% of consumers switched to Private Label in 2011, up from 14% in 2008.

Marketers are reacting in a variety of ways to this new economic reality. Some are introducing lower priced brands. P&G, for example, recently announced a bargain price Gain dish soap in an effort to retain those consumers whose incomes have dropped, causing them to fall from the middle-America demographic segment to the lower income sector.

Yet another result of the new economy is a shift by manufacturers to introduce smaller product sizes. But, this can also cause consumers to shift brands. When comScore asked those consumers who had noticed a downsizing in the brand they usually bought if it caused them to switch to another brand, 14% said it usually did with another 54% saying it occasionally did. That means about two thirds of a brand’s franchise is at risk with this downsizing strategy. That said, when asked which cost-controlling action they would prefer to see, 62% more consumers preferred to see smaller sizes over a price increase. So, brand marketers would appear to be backed into a “damned if you do, damned if you don’t” corner when pursuing either a price increase or downsizing strategy today.

One bright spot for marketers is the growing realization that digital advertising can be an extremely effective way to drive top-line growth but at a lower cost. In fact, the IAB reports that online advertising grew by a staggering 23% during the first half of this year, well ahead of the 3% growth reported for all measured media. Both search (+31%) and display-related (+27%) advertising registered impressive gains. Research we’ve conducted at comScore has shown that digital is beginning to be used by consumer packaged goods (CPG) marketers as a substitute for print to communicate price and promotion messages. At the same time, evidence is accumulating that digital is also a powerful branding technique on a par with other more traditional media. Information Resources has reported an average 8% lift in brand retail sales over the course of a year as a result of TV advertising. This matches the sales lift comScore has observed from digital advertising over the course of a three month period. The faster sales lift from digital traces to a greater use of price and promotion messaging when compared to TV but also because digital’s superior targeting ability allows more ad impressions to be delivered against a target audience in a given period of time.

Looking to the future, it’s evident that the economy will continue to be a challenge for brand marketers for some time because, unlike previous recessions, the economic situation isn’t likely to improve quickly. The Department of Labor reported that the number of long-term unemployed people – those without a job for 27 weeks or more -- actually increased to 6.2 million in September from 6.0 million in August. It’s clear that we have entered a “new normal” for brand marketers that features, for the foreseeable future at least, cash strapped consumers. While this suggests we’ll continue to see strength in digital ad spending, it’s also apparent that for brand marketers the future is going to be a bumpy ride.