James Russo, Nielsen
1
Title of Presentation

KEYS
TO
GROWTH
1. REACH: An increasingly economically divided consumer
2. CONNECT: With consumer need states
3. LEVERAGE: The redefinition of value
4. TARGET: Economically powerful consumer segments
5. UNDERSTAND: New viewing habits

INCREASINGLY ECONOMICALLY DIVIDED
CONSUMERS
1 in 2 Americans own stock, mutual fund, 401K or IRA
1 in 7 Americans rely on food stamps
87% of Americans earning over $75,000 own stocks
Source: msnbc.com; CNN Money
*Supplemental Nutrition Assistance Program (SNAP)
20% of Americans earn less than $20,000 a year

RETAIL SPENDING DRIVEN BY AFFLUENT
HOUSEHOLDS
4%
Retail Spending: 2 year trend
-1% -1%
-1%
-3%
-9%
-8%
Approximately
20% of HHs earn over $100k
< $20K $20K - $29K $30K - $39K $40K - $49K $50K - $69K $70K - $99K $100K +
Household Income
Source: Nielsen Homescan, 52 w/e 10/1/2011 versus 10/3/2009 excludes gas-only or Rx-only trips

US MEDIAN HOUSEHOLD INCOME ON
DOWNSLIDE
Source: U.S. Census Bureau;
The New York Times & USA TODAY/Sentier Research
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What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

YOU CAN NO LONGER AFFORD TO BE
“MIDDLE OF THE ROAD”
Conventional Retailers can no longer be …conventional
They need to differentiate themselves more than ever – to get beyond price
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What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

KEYS
TO
GROWTH
1. REACH: An increasingly economically divided consumer
2. CONNECT: With consumer need states
3. LEVERAGE: The redefinition of value
4. TARGET: Economically powerful consumer segments
5. UNDERSTAND: New viewing habits

WHAT WE DID
• Selected a list of major CPG & Retail advertiser brands to include in the analysis
• Categorized ads (4000+) by creative approach: humor, narrative, sentimental, product, promotional & value
• Evaluated the “effectiveness” of each creative approach throughout the recession (from 2006 through 2011) among Adults 18+
8
What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

WHEN DESIGING ADS, THE SMART MONEY IS
ON: HUMOR, NARRATIVE, SENTIMENTALITY
2006 - 2007 2008 - 2009 2010 - 2011

FOCUS ON THE CONNECTION
• Marketers focused on product features and promotion/price do not resonate with viewers . . . even during tough economic times
• Consumers respond to marketing that makes a connection . Focus on creating messages that engage audiences with humor , sentimental/family themes, and relatable/engaging storylines over those that tout price/promotion/product features

KEYS
TO
GROWTH
1. REACH: An increasingly economically divided consumer
2. CONNECT: With consumer need states
3. LEVERAGE: The redefinition of value
4. TARGET: Economically powerful consumer segments
5. UNDERSTAND: New viewing habits

VALUE IS NOT JUST ABOUT PRICE, IT’S ABOUT
THE BALANCE OF PRICE AND BENEFITS
Value Consumer = Price Value Consumer = Benefits/Price
All other Yogurt
Unit Sales -8%
Mainstream Coffee
Unit Sales -4%
Mainstream Chocolate
Unit Sales 6%
Pasta Excluding Health
Pound Sales 1%
Greek Yogurt
Avg Price +107% higher
Unit Sales 134%
Premium Coffee
Avg Price 18% higher
Unit Sales 5%
Premium Chocolate
Avg Price 83% higher
Unit Sales 10%
Healthy Pasta
Avg Price 57% higher
Pound Sales 5%

NEARLY HALF OF CONSUMERS HAVE
SHOPPED AT ALTERNATIVE VALUE FORMATS
Plan to shop in the next
12 months
75%
72%
66%
Shopped
In the past 3 months
56%
56%
Shop
52%
46%
<= $49K $50K to $99K $100K+
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Defined as: Thrift, 2 nd hand/used goods, consignment, & pawn stores; Craigslist website; check cashing establishment – February 2012
What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

KEYS
TO
GROWTH
1. REACH: An increasingly economically divided consumer
2. CONNECT: With consumer need states
3. LEVERAGE: The redefinition of value
4. TARGET: Economically powerful consumer segments
5. UNDERSTAND: New viewing habits

KEY TRENDS THAT WILL IMPACT BEHAVIOR
Increasingly Multicultural Older but Wiser Stagnant Population
Increasingly Urban Declining Families Smaller Households

ETHNIC HOUSEHOLDS WILL BE THE MAJORITY
BY 2050
54%
35%
Source: US Census

BUT THE OPPORTUNITY IS TODAY
HISPANIC
AMERICANS
12
LARGEST
ECONOMY
AFRICAN-
AMERICAN
17
LARGEST
ECONOMY 27 th
LARGEST
ECONOMY

CONNECTED BUT CONNECTED = ENGAGED
HISPANICS text
AFRICAN AMERICAN talk
ASIAN AMERICAN view

THE GAP
New Product Ad Spending
Hispanic African American

HOW WE GET THERE
REACH RESONATE
20
What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

• A successful ad is a successful ad
• Everybody responds to humorous storylines
• Prioritize universal drivers over cultural nuances
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What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

Asian Americans like product features
46% 85%
OF TOP ADS OF BOTTOM ADS
DON'T DISCUSS DISCUSS
FEATURES PRODUCT
FEATURES
* Likability Index versus average Asian Ad likability
22
What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

African-Americans respond to humor
42% 96%
OF TOP ADS ARE OF BOTTOM
HUMOROUS AND ADS ARE NOT
RELATABLE HUMOROUS OR
RELATABLE
23
What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

Hispanics prefer family references
41% 95%
OF TOP ADS OF BOTTOM
FOCUS ON
THE FAMILY
ADS DON'T
FOCUS ON
THE FAMILY
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What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

TOP PERFORMING
GENERAL AD
RESULTING IN
41%
INCREASE IN HISPANIC
MARKET SALES
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What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

KEY TRENDS THAT WILL IMPACT BEHAVIOR
Increasingly Multicultural Older but Wiser Stagnant Population
Increasingly Urban Declining Families Smaller Households
26
What’s In Store: 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.

You need to adjust to accommodate different shopping and product preferences
It’s an age AND it’s an attitude
This Not this

Know the difference between age groups and generations
Seniors Today Seniors Tomorrow
• More traditional
• Less technological savvy
• Conservative values
• Conservative tastes
Different
People
• Less traditional
• More technological savvy
• Less conservative values
• Willing to experiment
Patient
• Requirements, conditions
& ailments related to age
Same needs
• Requirements, conditions
& ailments related to age
Consumer

KEYS
TO
GROWTH
1. REACH: An increasingly economically divided consumer
2. CONNECT: With consumer need states
3. LEVERAGE: The redefinition of value
4. TARGET: Economically powerful consumer segments
5. UNDERSTAND: New viewing habits

HOW WE CONNECT WITH
CONSUMERS IS EVOLVING

USING NEW AND TRADITIONAL WAYS
DEVELOPED
3.5
Hours
DEVELOPED
74%
Internet penetration
+
21
% of
North
Americans have TV’s with internet connection
Source: Nielsen Global Survey Q3 2011

CROSS PLATFORM VIEWING GAINING
•
Average TV viewer is watching 6 fewer minutes per day of traditional television
•
Viewing is shifting to other devices, including to tablets. (Current penetration is 15% of
US homes)
• Nearly 36 million mobile phone owners in the
U.S. watch video on their phones.

LEVERAGE SIMULTANEOUS USAGE
86% tablet owners and 84 % of smartphone owners use their device while watching
TV
44% of simultaneous tablet+TV viewers visited a social networking site during the program
Source: Nielsen Q2 2012 Connected Devices report

BREAKING THROUGH THE SOCIAL MEDIA
AUDIENCE

SOCIAL ADS GENERATE A 55% GREATER LIFT IN
RECALL
Consumers will provide their personal information for:
52% Opportunity to save
37% Free service or app.
36% Exclusive information
33% News of interest
26% Charitable purpose

FOR OUR INDUSTRY…WHAT ARE CONSUMERS
WILLING TO DO ON SOCIAL MEDIA?
New Product Input
Product Reviews
Join Manufacturer Group
Receive/Share Recipes
Join Retailer Group
Receive Coupons
Join Loyalty group
59%
56%
52%
49%
49%
48%
46%
Consumers are willing to get more involved
Source: 2011 Nielsen PanelViews Media Survey - Individual responses - Canada

TRUST IN A SOCIAL MEDIA WORLD
Friends
&
Family
Completely
Recommendations from people you know 28%
Consumer Opinions posted online
Editorial Content (Newspapers)
9%
7%
Completely/somewhat
91%
70%
59%
Traditional
Media
New
Media
Brand Sponsorships
TV Ads
Radio Ads
Newspaper Ads
Magazine Ads
Ads before movies
TV product placements
Outdoor billboards
Completely
7%
6%
5%
6%
6%
4%
5%
4%
Completely/somewhat
47%
48%
43%
46%
47%
41%
41%
46%
Branded websites
Emails I signed up for
Ads in search engine results
Online video ads
Online banner ads
Ads on social networks
Txt ads on mobile phones
Display Ads on mobile devices
Completely
9%
6%
5%
4%
4%
4%
3%
4%
Source: Nielsen Global Online Consumer Confidence Survey 3Q2011
Completely/somewhat
57%
50%
40%
36%
33%
36%
29%
33%

Economic Outlook

U.S CONSUMER IS CAUTIOUSLY OPTIMISTIC
ABOUT THE FUTURE
DO YOU THINK YOUR COUNTRY WILL BE
OUT OF A RECESSION IN THE NEXT 12 MONTHS?
% SAYING YES
50%
40%
30%
Most
Optimistic
24%
22%
20%
10%
0%
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12

LOOKING FORWARD, COPING
MECHANISMS REMAIN CONSISTENT
WHEN ECONOMIC CONDITIONS DO IMPROVE, WHAT DO
YOU EXPECT YOU WILL CONTINUE TO DO……
Save on gas 51%
Reduce take-out 35%
Less on apparel 31%
OOH Entertainment 29%
Save on groceries 28%
Source: Nielsen Global Omnibus Consumer Confidence Survey 2Q2012

THE CONSUMER IS IN CONTROL
Brands Retailers Consumer

SUCCESS RELIES ON EVEN GREATER
COLLARBORATION
Collaboration
Trust

James Russo, Nielsen
43
Title of Presentation