With the country in the grips of a recession, however, consumers are focusing on price more than where they purchase goods.  Recent surveys have reported a decline in corporate allegiance.  But all is not lost for companies who are willing to take a hard look at classic marketing tool – consumer segmentation – and applying its concepts in new and innovative ways. 

Best Buy, for example, launched a customer-centric program based on segmentation that now is at the heart of its corporate growth strategy.  By classifying its best customers into five consumer segments, targeting them with marketing and changing the way stores look and training associates in new ways, the company has posted same-store sales growth in excess of 9 percent – more than double that of outlets that haven’t converted to the model and no small feat given the current economic challenges.

Nielsen has been at the forefront of consumer segmentation since the 1970s; its PRIZM system draws on a range of U.S. Census data and market research to classify all 114 million U.S. households into one of 66 consumer types.  Systems like PRIZM can help companies build stronger relationships with customers through tailored marketing and help them retain consumer loyalty, even when conditions are less than ideal.

Read more about how consumer segmentation works and can help innovative companies develop a competitive edge in the new edition of Consumer Insight.

But according to an analysis of the most effective holiday retail TV ads, released Tuesday by Nielsen IAG, retailers did not appear to increase the proportion of promotional ads in the mix this year. 

About half of all TV ads so far this holiday season (Nov. 17 – Dec. 14) have been brand-focused, while the other half have been devoted to sales/price-focused messages — as was the case during the 2007 holiday season.

What’s Hot
Instead of promoting sales events and low prices, the most effective TV ads from retailers this holiday season used strong narratives, nostalgia, and family-focused storylines to communicate a brand’s benefits to viewers. 

“Practical” messages for shoppers were also a successful theme.  Take this year’s most liked holiday retail ad — a Wal-Mart spot that shows lights atop all of the cash register lanes flashing on and off, in sync with a well-known holiday song.  The key message is clear: more open register lanes at Wal-Mart make shopping there more convenient.

What’s Not 
What didn’t work this year?  According to Nielsen, seven of the 10 least liked holiday TV ads were 15-seconds spots — an indication that shorter-length ads garnered less appeal, in this case. 

What’s more, the elements that helped enhance appeal levels in the best-liked ads were largely lacking in the less popular spots.  According to Nielsen, among the commercials at the bottom of the pack, promotional messaging generally accounted for a greater share of the creative, leaving proportionally less room for “entertainment value.”

10 Most-Liked Holiday Retail Ads (Nov. 17 – Dec. 14, 2008)

Likeability refers to the percentage of television viewers who report liking an ad “a lot” after viewing it, among those who are able to recall an ad’s brand.

An ad’s “likeability score” is the percentage of television viewers who report liking an ad “a lot” (among those who can recall an ad’s brand) after being exposed to it during the normal course of viewing primetime TV on the broadcast networks.

Likeability scores are indexed against the mean score for all ads during the time period to calculate a “likeability index.”  A likeability index of 100 indicates average recall. A likeability index of 171, for example, means that an ad was 71% better liked than the average new ad during the four-week time period.

Read the full report.

Visitors to Apple’s site logged the longest average stay-times.

According to Nielsen Online, 78% of adult online consumers in the U.S. made a purchase via the Web within the previous six months.

Travel-related transactions were most common, with 38% of adult online consumers making at least one travel purchase on the Web in the previous six months.

Large percentages of online consumers also went online to manage their credit card accounts (36%) and conduct personal banking transactions (35%).

Nielsen’s findings are based on data from @Plan, a quarterly survey of approximately 36,000 U.S. Internet users age 18 and older.

In October, eBay and Amazon were the top two online retailers, drawing 49.2 million and 48.3 million unique visitors, respectively.  Wal-Mart, Target, and Netflix rounded out the top five.

“The challenge for retailers is no longer how to lure shoppers online, but how to differentiate their brand among all others,” Nachi Lolla, research director, commerce, Nielsen Online, noted.  “Heading into this competitive holiday shopping season, selection, price, and customer service are the key areas in which retailers can shine.”

View the full press release.

Read coverage of Nielsen’s findings on Digital Media Wire and in Brandweek and BizReport.com.