Top Local Markets
The rankings of the Top 10 local TV markets were unchanged, but in the Top 20, the Miami-Ft. Lauderdale area moved ahead of Denver. No new markets entered the top 100, however there were several changes within the ranks. Austin, TX had the largest spike within the top 100 ranks, moving from 48 to 44.

Other notable local market changes:
There were more changes in the rankings compared to last year, yet still not as many as previous years. It was a tie for the largest increase in TV households, with Odessa-Midland and Austin, both rising four spots. The decline in the overall number of rank changes the past few years reflects overall slower household growth in the U.S. and large declines in domestic migration, particularly to Sun Belt areas. Major metropolitan areas lost less population than usual partially attributable to Baby Boomers delaying retirement plans, individuals unable to sell their homes, and/or individuals unwilling to move away from job-heavy markets. However, the recent increase in rank changes for this year seems to imply some of these phenomena are relatively short term and/or heavily contingent upon economic conditions.

Similarly, while many Florida markets had dropped in rank in the latest estimate (Tampa, Miami, Ft. Myers, Tallahassee) partially as a result of the aforementioned phenomenon, there is evidence of some “bounce back” for markets such as Miami and Tallahassee. Further, previous “high growth” markets (e.g. Las Vegas, Florida markets) which showed diminished growth or even declines in the last two estimates seemed to “stabilize” (i.e. maintain rank) for the most recent estimate. For all these markets, the decreases and/or growths do not necessarily reflect a true decline in population or households. The estimates may also reflect an adjustment to align with the most recent information from the U.S. Census Bureau.

For the first time since the Hurricane Katrina recovery period, the New Orleans market rank has declined (from 51 to 52). Though population in the market has increased, recent trends in Persons Per Household (PPH) indicate that previous PPH assumptions were too conservative (i.e. assuming fewer people per household). To better reflect contemporary population dynamics in the area, the PPH ratio was increased for the recent estimate, based on recent U.S. Census Bureau data, resulting in a smaller than usual increase in the Total Household estimate for this year which allowed the Buffalo market to pass New Orleans.

Leaving New Orleans
According to the 2000 Census, New Orleans was the 35th largest market in the U.S. with 1.32MM persons. Just before and shortly after Katrina, the New Orleans area lost 595,205 persons—most migrating to nearby counties to the north or to Atlanta, Houston, and Dallas.

In 2005, New Orleans dropped to the 59th largest market with 793,970 persons but then quickly recovered to the 49th largest market in 2006 with 993,071 persons. As of 2010, it has moved-up a few positions to the 46th largest market with 1,194,196 persons and is expected to retain that ranking in 2015 with a projected population of 1,264,365. The net result as of 2010, is that the New Orleans market dropped 11 positions in terms of its size relative to other markets within the U.S. (which grew by 4.7%) and is expected to remain so in the mid-term future.

Demographic Shifts
As the number of residents receded then return, the underlying demographics of New Orleans saw significant shifts. Since the storm, the city has become older (the median age rose from 34.0 to 38.8), less diverse (the white non-Hispanic population increased from 25.8 percent to 30.9 percent) and a bit wealthier (median income rose from $31,369 to $39,530).

Across New Orleans, the storm decimated downscale, African-American-dominated sectors. The eastern part of the city in low-lying areas took the brunt of the flooding, and members of these segments were least able to return to New Orleans. In Orleans Parish, the percentage of African Americans initially dropped from 67 percent to 58 percent in 2007 before returning to 61 percent in 2010.

“If your house received 10 feet of water, it cost a lot to repair it and many insurance companies didn’t make settlements for almost a year,” said Allison Plyer of the Greater New Orleans Community Data Center. “People needed money in the bank to start rebuilding their homes, and the neighborhoods that came back the fastest were the affluent ones. Those in poverty tended to be renters, and there was little assistance for rebuilding rental properties.” Among the lifestyle segments that actually grew were younger, upper-middle income renters (up 31% in 2009 compared to 2005) due to an influx of relatively upscale, younger residents who rent.

While the challenges facing New Orleans may have been profound, they were by no means unique. From tornadoes and earthquakes to fires and chemical spills, natural and man-made calamities test a community’s ability to gather and disseminate accurate population information to help indicate current status, progress and prognosis. “Absent data, it’s hard to make a credible case that you’re back,” says Michael Hecht, President and CEO of GNO, Inc., the economic development alliance for the greater New Orleans area. “Data is critical to attracting businesses and selling the city to people who would locate here.”

Download a detailed regional and demographic breakdown of post-Katrina New Orleans.

According to Nielsen, African-Americans use the most voice minutes – on average more than 1,300 a month. Hispanics are the next most talkative group, chatting an average of 826 minutes a month. Even Asians/Pacific Islanders, with 692 average monthly minutes, talk more than Whites, who use roughly 647 voice minutes a month.

African-Americans and Hispanics also text the most. Hispanics send and receive around 767 SMS messages a month while African-Americans send and receive around 780 – significantly more than Asians/Pacific Islanders (384 texts a month) and Whites (566 texts a month). The voice and text results are compiled from one year (April 2009-March 2010) of mobile usage data gathered by the The Nielsen Company, which analyzes the cellphone bills of more than 60,000 mobile subscribers each month in the United States.

Women Have Their Say
And if you think women in the U.S. talk more than men on their cellphones, Nielsen data confirms your suspicion. On average, women talk 22 % more than men (856.3 minutes a month compared to men’s 666.7). Turns out, American women are more communicative in general on mobile devices; they text more, too, sending or receiving an average of 601 SMS messages a month compared to the 447 monthly text messages sent or received by the average American male.

Teens Rule for Texting
Not surprisingly, teens text the most, sending or receiving an amazing 2,779 SMS messages a month. In the next two age brackets, text usage falls by more than half each time, with those aged 18-24 sending or receiving 1,299 messages and those aged 25-34 exchanging an average of 592 messages. While the text usage varies greatly between those 18-24 and those 25-34, their voice usage is quite close (981 voice minutes for 18-24 and 952 minutes a month for those 25-34 years old.)

The South Speaks Up
Location plays into usage patterns as well. Southerners are the most talkative, but while Florida ranks high in terms of monthly voice minutes used, it ranks very low for text messaging (the state has one of the highest median ages and older Americans text the least.) Mississippi, interestingly enough, ranks high for both talking and texting.

As financial institutions determine the impact on their bottom line,  consumers also have choices to make. But how aware are they of the implications of this new regulation, and how likely are they to take advantage if the service is offered? To better understand consumer interest, characteristics, preferences and the best way to reach them, The Nielsen Company conducted an online study of 2,013 panelists in the March 2010 Nielsen Financial Track, which looks at financial product usage, accounts, balances and asset allocation.

Of the consumers surveyed, 26%, would opt-in to an overdraft program, 22% would not and 39% were undecided. Consumers who stated they would opt-in were more likely to have an overdraft in the last year. Consumers who were undecided never heard of the regulation or didn’t know much about it.

Identifying Customers that Want an Overdraft Option
Nielsen did further analysis of the survey respondents mapped against Nielsen’s dozens of lifestyle segments, which group consumers by demographics, census data, lifestyles, shopping patterns, media preferences and more.

Customers who said they would want an overdraft option were more likely to be in a group known as “Upscale Earners.” This group is comprised of home-owning families who work at well-paying management or white collar jobs. Additionally, they are also receptive to a variety of insurance products.

The main reasons they stated for opting-in included:

• Would like to be covered in case of emergency situations or an unexpected expense
• They have multiple users on their card and don’t always know their balance
• They want to avoid embarrassment at check out

Helping the Undecided Decide
A closer look at two of the four lifestage segments that indexed higher as undecided were “Working-Class USA” and “Fiscal Fledglings.” Those in the “Working-Class USA” group are a mixed portrait of consumers who are racially and ethnically diverse and range from being employed in white collar jobs to service industry jobs. Nearly nine out of 10 people in this group earn under $30k a year and many own their own homes. The “Fiscal Fledglings” have the lowest levels of income and assets. They are the least likely to have auto, life or residential insurance. This group will need the most financial advice to determine their best option not just for overdraft but to provide consultation for their financial future.

Both groups cited these reasons for their indecision included:

• They don’t have enough information about the regulation
• They are still thinking about it
• They had no idea there was an opt-in/opt-out option

Fit the Message to the Audience
“Regardless of a bank’s strategic direction for meeting the requirements of Regulation E, a comprehensive communication plan and consumer strategy is necessary depending on consumer needs, media and channel preference,” said Deborah Sumner, Vice President, Financial Services Practice Lead, at The Nielsen Company. “Customers interested in opting-in are interested in the service just in case, therefore messages that focus on unexpected expenses are more likely to resonate with this group. Whereas the undecided customers are more likely in need of financial education and awareness messaging, to determine their best option not just for overdraft but to provide advice for their financial future.”

For a country of more than 300 million persons spread out over 3.6 million square miles, counting the entire populace is an immense logistical feat. To accomplish it, the Census Bureau mails approximately 134 million questionnaires that were to be completed by April 1. That would cost nearly $60 million in postage alone if the Census Bureau did not get free postage from the United States Postal Service (USPS). The collective weight of all 360 million printed questionnaires (from all three mailings) is nearly 12 million pounds, and if stacked on top of one another, would be nearly 29 miles high.

Who uses it and why?
Put simply, the census is used for three primary reasons:

1. To alter the state-by-state appointment of seats in the House of Representatives.
2. To determine how much money the states receive back from the federal government.
3. To provide demographic data used by marketers today.

While congressional representation and distribution of federal funds is vitally important, the third reason represents big business. The U.S. census drives business intelligence in America today and if you have ever examined demographics about consumers, you are likely an indirect user of census data.

From modeling and segmentation strategies to sampling plans and projection results, from site evaluations to trade area definitions, it may hardly seem possible that a once-per-decade survey is a catalyst for the efficiency and competitiveness of the American marketplace.

How is census data used?
Most modern corporations have six key disciplines related to marketing and they all use some element of census data:

1. Strategic Planning & Market Research
2. National Media Strategy
3. Local Market Promotion
4. Product Distribution
5. Channel Management
6. Customer Relationship Management

Learn how each of these integrated functions rely on data intelligence that focuses on the core component of any successful marketing plan—the consumer. You may not recognize the role the Census Bureau plays in carving up the country into statistically reliable and stable units of geography that provide much the foundation for modern Geographic Information Systems and their application.

• Download Nielsen’s white paper report on Business Uses of Census Data.

Based on local TV ratings data, the home markets surrounding each of the Final Four schools clearly have a passion for college hoops. But Indianapolis stands above the others when looking at Nielsen survey data. According to Nielsen’s Claritas PRIZM profiles, 41% of Indianapolis residents consider themselves fans of college basketball. That beats out  Lansing, MI (39%), Durham-Chapel Hill, NC (37%) and Morgantown, WV (36%).

More In Common Than Basketball
Through a close look at various socio-economic data, such as income, age, race, occupation, education and household composition, Nielsen can identify 66 pre-defined life style groups, or “segments,” in any given geographical area.  A demographic analysis of the  hometowns represented by West Virginia, Duke, Michigan St. and Butler, revealed that the Final Four markets share similar population characteristics.  Interestingly, Morgantown, WV, Raleigh, NC, Lansing, MI, and Indianapolis, IN share high scores for a handful of segments including one near the top for owning hunting rifles and pickup trucks. Residents living in those  areas tend to be young, working-class couples with large families (more than half have two or more kids) living in small homes and manufactured housing. Additionally these Final Four regions also reflect the shared influence of college town life. With 10 times as many college students as the national average.

“Nielsen’s online data shows that about half of the U.S. population visited a social networking website in the last year and that number grows every quarter,” said Wils Corrigan, AVP, Research & Development, Nielsen Claritas. “The rising popularity of these sites and the deep engagement consumers have with them has advertisers and marketers asking for more and more detail as to which lifestyles should be targeted for their online advertising and promotions.”

Facebook vs Myspace

Through Claritas, Nielsen defines U.S. households in terms of 66 demographically and behaviorally distinct segments like “Young Digerati” or “Beltway Boomers.” When those segments are overlaid with the activity of Nielsen’s online panel of more than 200K, we see a marked difference in the demographic makeup of the two largest social networks, Facebook and MySpace.

• Facebook users have a largely upscale profile. The top third of lifestyle segments relative to affluence were 25% more likely to use Facebook than those in the lower third.
• The bottom third segments related to affluence are 37% more likely to use MySpace than those in the top third.
• Users of Facebook were also much more likely to use LinkedIn, a network geared towards business and professional networking, than those who use MySpace.

Bloggers more urban as well

According to Nielsen Claritas, the blogging and tweeting community at large isn’t necessarily more affluent, but bloggers and tweeters do live in more urban areas such as New York, Los Angeles, San Francisco, and Chicago. The penetration rates of the top two most visited blogging platforms (Blogger, Wordpress) and the most popular micro-blogging platform (Twitter) show that Nielsen’s 12 Urban lifestyle segments are more likely to blog and tweet than Nielsen’s 22 Town & Rural segments.

Not surprisingly those lifestyle segments most likely to blog and tweet also tend to use Facebook and LinkedIn more often than those segments that typically don’t blog or tweet. Case in point, the Urban lifestyle segments for Blogger are 18% more likely to be Facebook users and 140% more likely to be LinkedIn users than the below average segments.

About the methodology

Nielsen examined the seven most-visited social networking websites and platforms: Facebook, MySpace, Blogger, Twitter, WordPress, ClassmatesOnline, and LinkedIn. Website penetration by segment was calculated by dividing the number of unique visitors to the website per segment by the total number of households in each segment.

Mike Mancini, Vice President of Data Product Management, Nielsen Claritas

SUMMARY: In a down economy, price sensitivity can trump loyalty. Without loyal customers, however, businesses can lose a substantial revenue stream, higher profit margins and enthusiastic referrals. Innovative companies are staying ahead of the trend by deploying strategies built on consumer segmentation to strengthen the bonds with these high-profit potential customers. These strategies go beyond the classic marketing applications of segmentation to drive customer-facing aspects of a business.

For most businesses, loyal customers are the ultimate quest: consumers who wouldn’t think of buying a car from another dealer, shoppers who are on a first-name basis with a boutique store clerk, coffee shop regulars who don’t even need to place an order to get their half-caf, no-whip soy latte. Loyal customers provide businesses with a steady revenue stream, higher profit margins and confirmed evangelists who virtually—and sometimes virally—do much of their marketing for them.

Twenty-five years after Neiman Marcus introduced the first customer loyalty program, nationwide surveys have reported a decline in corporate allegiance as consumers shift their concerns from patronage to price. To strengthen the bonds with their best customers and retain wallet share, a number of innovative companies are taking a second look at a classic marketing tool—consumer segmentation—and applying its concepts in new and innovative ways.

Customer-centricity as a growth strategy
Electronics giant Best Buy launched a customer-centric program based on segmentation that now is at the heart of its company-wide growth strategy. According to published reports, Best Buy, which has more than 1,000 stores nationwide, classified its best customers into five consumer segments, with names like Buzz (the young tech enthusiast), Jill (the suburban soccer mom) and Barry (the wealthy professional guy).

Using a variety of demographic, lifestyle and marketplace data to flesh out these portraits, Best Buy re-aligned its stores according to the segments. Store clerks received training on how to serve the Barrys or Buzzes in their trade areas, and stores were remodeled to reflect the dominant target groups. As a result of this program, the company invested more than $50 million to renovate 110 stores.

In the year after the makeover, the Best Buy stores that had been converted to the customer-centric model reported same-store sales growth in excess of 9%—more than double that of outlets that had not been overhauled using the segmentation model.

The human connection
Typically, segmentation initiatives like the one used by Best Buy augment a company’s transactional data with syndicated survey research to create detailed profiles of the best customers. Segmentation systems—such as Nielsen’s PRIZM, which was introduced in 1976—enhance customer data by linking consumers to a variety of third-party databases that can reliably predict their lifestyles and media preferences through their demographics.

PRIZM® draws on U.S. Census data and market research conducted by companies like Simmons and Mediamark Research & Intelligence and currently classifies all 114 million U.S. households into one of 66 consumer types putting a human face on every segment’s likes and dislikes.

By appending a segmentation system such as PRIZM to an address file, any company can begin building stronger relationships with customers through tailored contacts that go beyond mass mailing a discount coupon or buying a 30-second spot on the evening news. Stores in different cities—or even different neighborhoods in the same city—can feature product mixes geared specifically to the lifestyles and preferences of the segments in that area. Once a company finds a specific segment with a high-profit potential, the segmentation system can identify areas where more of those kinds of consumers are likely to live and provide insights on what messages will appeal to them.

Loyalty has its privileges
At the Arizona Republic, a Gannett newspaper with the largest circulation in Arizona—486,686 Sunday subscribers—consumer segmentation drives its interdisciplinary approach to maintaining customer loyalty. Reporters attend seminars about the most common PRIZM segments among their readers to better craft their stories with their audience in mind. Circulation managers differentiate customer service policies based on whether a subscriber is a long-time reader or a new customer. And marketers target subscription drives to prospects who, according to segmentation data, are most likely to become loyal readers.

The Arizona Republic classifies loyal readers by PRIZM segments based on their addresses. The resulting list of dominant segments is then sorted into five target groups with nicknames like Gold (older, affluent readers from PRIZM segments like Upper Crust and Blue Blood Estates) and Silver (younger, upscale residents of segments such as Young Influentials and The Cosmopolitans). Analysts then identify Arizona neighborhoods with high concentrations of the target groups and the retail areas they are likely to frequent. Knowing where to find people who share the same demographics and lifestyles as its most loyal readers allows the Arizona Republic to target its introductory direct-mail subscription offers and differentiate its pitch based on the prospects’ specific interests.

This approach to finding “look-alike” customers who matched the characteristics of its most loyal segments yields measurable results. For example, after the paper segmented and targeted subscriber look-alikes, the drop-out rate fell to just 14%—a 39% improvement. Just as important, by targeting only selected households, the newspaper was able to cut printing and postage costs, reducing its acquisition cost per subscriber by 23% and decreasing the number of direct mail pieces sent by 40%.

Developing a competitive edge
Segmentation can also help companies keep existing customers from defecting to competitors. When First Tennessee, a Memphis-based regional bank with about 200 branches, decided to place a greater strategic emphasis on becoming customer centric, it employed an innovative approach to address the lifecycle needs of top prospects. The bank drew on both its customer records and data from Nielsen P$YCLE—a segmentation system that classifies households into 58 types based on demographics and financial behavior. Focusing on a customer’s investable assets and lifestage, First Tennessee identified segments of affluent and mass affluent customers, and divided them further into younger professionals, near retirees and retirees, for a total of six target groups.

After developing lifestyle portraits of the target group members, First Tennessee identified key marketing themes based on the intersection of customer needs and the bank’s competitive advantages. With a multi-channel advertising campaign built around the tagline “Powering Your Dreams,” the bank tailored individual marketing messages to resonate with its top target groups. “We want our bank to resonate with the lifestyle and financial needs of our target audience,” says Dan Marks, Chief Marketing Officer at First Tennessee.

Adopting such strategies across multiple departments has allowed First Tennessee to incorporate consumer segmentation into their overall business plan. For example, to increase customer awareness, First Tennessee deployed an advertising strategy linked to the media patterns of targeted P$YCLE® segments. While the bank used to run TV commercials on network news and sports programs, P$YCLE showed that its targeted customers actually preferred cable channels like CNBC, the Weather Channel and the Food Network. The bank’s media buy changed accordingly, and the number of new deposit accounts and loan applications rose in response. “We’re still surprised by the Food Network,” Marks chuckles. “But it’s worked very well.”

Principles for creating loyal customers
Despite these success stories, applying consumer segmentation across an enterprise is not always an easy sell. Some sales managers resist focusing on the most valuable customers over the long-term, preferring to acquire as many customers in as short a time as possible—especially if their compensation is structured to reward that objective. Others may consider customer loyalty a qualitative attribute that is less important than such quantitative metrics as product sales. For those companies ready to undertake an enterprise-wide segmentation initiative to increase customer loyalty, there are a handful of guiding principles that are important to achieving success:

• Identify key customer segments
• Create target groups of similar segments
• Prospect for look-alikes in target markets and your own customer database
• Deliver differentiated messages and experiences
• Implement the approach throughout the departments within your organization
• Measure the effectiveness and adjust your strategy

Using consumer segmentation to build customer loyalty can help companies prosper even in a difficult economy. By shifting resources away from mass-marketing channels to a focused campaign that puts their best customers front and center, businesses can improve sales and decrease costs, while building a loyal clientele that allows them to weather this challenging market.

To learn more, download the full report, Using Segmentation to Strengthen Customer Loyalty.

With roughly one-third of the total U.S. population and at least three-quarters of the country’s land area, rural America is a diverse and important marketplace for marketers of consumer products, Doug Anderson, EVP, Research & Development, Nielsen, argues in the January issue of Nielsen’s “Consumer Insight” online newsletter.

Marketers intent on reaching rural Americans should pay attention to marked differences in media usage and consumer preferences that distinguish rural and metro America, Anderson advises.

“As rural America continues to transform and diversify, makers and sellers of consumer products need to adapt their strategies in concordance,” Anderson writes.  “Ethnic diversity, together with ongoing economic instability and technology-driven developments, will continue.  Understanding how these changes impact rural life allows marketers to stay ahead of the curve.”

Read the full article.

View the latest issue of “Consumer Insight.”

But despite the evident buying power of boomers, many advertisers — intent of wooing loyal lifetime customers — continue to focus their advertising on younger consumers.

Writing in the January issue of Nielsen’s “Consumer Insight” online newsletter, Howard Shimmel, Senior Vice President, Consumer Insights, Nielsen, and Jess D. Aguirre, Jr., Senior Vice President, Research, Hallmark Channel, urge advertisers to rethink that media strategy.

“Advertisers who fail to recognize the economic value of Boomers, and continue to allocate media dollars to younger audiences, will fail to deliver Boomers and capitalize on their spending power today,” Shimmel and Aguirre argue.
     
Read the full article.

View the latest issue of “Consumer Insight.”