Marketers that spend heavily on research and development (R&D) to bring new products ranging from computer software to pharmaceuticals have been hurt as much as other companies during the recession.  Yet the majority of large public firms with track records of research and development activity continued to invest in innovation.  According to a new report by Booz & Company, these companies, on average, added 5.7% to their R&D budgets despite extreme profit pressure. This type of forward thinking prompted  Barry Jaruzelski, Partner at Booz & Company, to remark, “[n]ow is an opportune time to build advantage over competitors, especially weaker ones that may have to skimp on R&D for financial reasons.”

In 2008, significant R&D spending occurred in the following industries:

• Computing and electronics (28%)
• Health (23%)
• Automotive (16 %)

The study focused on industry leaders such as Toyota, Nokia, Roche Holding and Microsoft.  Results also indicated that R&D spending continued in the face of profitability problems. Here are the percentages of firms that increased R&D spending when viewed through the lens of income and profitability:

• Companies with net income: 52% (increase in R&D spending)
• Companies with net loss: 16.5%
• Net income increased: 26.7%
• Net income decreased: 42.7%

Senior managers also indicated that in addition to funding more R&D, they are quickly shutting down  “bad projects” and paying close attention to customer requirements. The results of this study also suggest that as companies refine the new products they have developed, they will also be launching new marketing campaigns to support sales.

[Source: Company release, Booz & Co. 10.27.09]

Thirty eight percent of U.S. auto buyers are willing to drive more than an hour for their best deal, highlighting the importance of aggressive advertising by dealers.  The Fall 2009 Ad-ology Media Influence on Consumer Choice survey also found online media is now more influential than social or traditional media on auto purchasing/leasing decisions.

Manufacturer Web sites influenced nearly half of recent purchasers.  Search results and online video were also influential, and nearly twice as many males as females reported influence from online video.  Traditional media is still influential for automotive sales.  Newspaper was the most influential traditional media overall, particularly so for older demographics, Asians, and African Americans.

Social media had the most effect on buyers under the age of 54, females, and higher-income consumers.  Auto purchasers who use Twitter say social networks influenced their purchase more than users of other social networks.

“The growing influence of online media has created the opportunity for price-sensitive consumers to shop beyond their own backyard,” said C. Lee Smith, president and CEO of Ad-ology Research. “Dealerships must promote themselves consistently because they have more competition than might be readily apparent,” Smith said.

Other key findings from the survey:

• 63% of consumers contacted more than one dealer during the decision-making process.
• Nearly 16% of U.S. consumers intend to purchase a new or used vehicle within the next year.
• After the vehicles themselves, the topics most researched online by auto purchasers were:  Trade-in values, auto insurance, and gas mileage.
• Television was the most influential traditional media for 25-to-34-year old auto buyers.
• Blackberry and iPhone users were more than twice as likely than other mobile phone users to have their auto purchase influenced by support of a cause or charity.

“Fall 2009 Ad-ology Media Influence on Consumer Choice,” survey conducted by Ad-ology Research, October 23, 2009.  Website: www.ad-ology.com.

Automaker Web sites most influential on buyers;
newspaper, TV still effective

Thirty eight percent of U.S. auto buyers are willing to drive more than an hour for their best deal, highlighting the importance of aggressive advertising by dealers.  The Fall 2009 Ad-ology Media Influence on Consumer Choice survey also found online media is now more influential than social or traditional media on auto purchasing/leasing decisions.

Manufacturer Web sites influenced nearly half of recent purchasers.  Search results and online video were also influential, and nearly twice as many males as females reported influence from online video.  Traditional media is still influential for automotive sales.  Newspaper was the most influential traditional media overall, particularly so for older demographics, Asians, and African Americans.

Social media had the most effect on buyers under the age of 54, females, and higher-income consumers.  Auto purchasers who use Twitter say social networks influenced their purchase more than users of other social networks.

“The growing influence of online media has created the opportunity for price-sensitive consumers to shop beyond their own backyard,” said C. Lee Smith, president and CEO of Ad-ology Research. “Dealerships must promote themselves consistently because they have more competition than might be readily apparent,” Smith said.

Other key findings from the survey:

• 63% of consumers contacted more than one dealer during the decision-making process.
• Nearly 16% of U.S. consumers intend to purchase a new or used vehicle within the next year.
• After the vehicles themselves, the topics most researched online by auto purchasers were:  Trade-in values, auto insurance, and gas mileage.
• Television was the most influential traditional media for 25-to-34-year old auto buyers.
• Blackberry and iPhone users were more than twice as likely than other mobile phone users to have their auto purchase influenced by support of a cause or charity.

The Media Influence on Consumer Choice survey is conducted throughout the year by Ad-ology Research to study on- and off-line media influence on buying decisions.

In addition to the media influence data, the Media Influence on Consumer Choice: Automotive report includes breakdowns by social network and smart phone usage as well as future purchase intentions.  The report is available for purchase through the Research Store at Ad-ology.com and includes 50 data charts and marketing insights.  An additional report, Media Influence on Consumer Choice: Auto Care is also available.

About Ad-ology Research

Ad-ology Research analyzes key marketing and advertising trends in over 400 industries and what motivates end-customers. The company’s research is used by over 2,000 advertising agencies, media properties and product marketing departments across the United States. Ad-ology Research is a division of Sales Development Services (SDS), Inc. – a Westerville, Ohio firm founded in 1989.

Methodology

Ad-ology Research surveyed an online consumer panel of 1,159 adults in a manner that is 98% representative of the adult population of the United States from September 11-14, 2009. The margin of error for this survey is +/- 2.88 percentage points.

Editor’s Note: The Ad-ology trade name should be hyphenated in all printed references.

PRESS CONTACT:
Michelle O’Brien
(614) 794-0500 ext. 100
pressrelations@ad-ology.net

According to the latest Kelley Blue Book www.kbb.com Market Intelligence Study, since the end of the CARS 2009 program (commonly referred to as ‘Cash for Clunkers’), in-market car shoppers have indicated they are once again delaying the purchase of a new vehicle. However, the price consumers are considering paying for a new car has significantly increased in the month since the CARS 2009 program ended.

In September 2009, 50% of in-market car shoppers said they are delaying the purchase of a new vehicle, up nine points from 41% in July 2009 (prior to the start of the CARS program). In addition, consumers indicate that in the past month they are less likely to be persuaded to change their purchase timeframe due to the availability of incentives, rebates and special financing offers. In September 2009, 63% say the availability of incentives has not affected their timing plans at all, up 10 points from consumers who said the same in August 2009.

However, in the past month alone, the average amount of money shoppers say they are willing to pay for their next new car has increased $1,671. In September 2009, shoppers said they would be willing to spend an average of $27,271 on their next new car, up from August 2009 when they said they would spend an average of $25,600.

“With the ongoing economic recession and the Cash for Clunkers stimulus program over, the latest Kelley Blue Book Market Intelligence data shows that availability of incentives and rebates is no longer enough to persuade car shoppers to deviate from their intended purchase timeframe,” said James Bell, executive market analyst for Kelley Blue Book’s kbb.com. “Although shoppers say they are delaying their purchase timeframe, at least when they do hit the dealerships they’ll be willing to stretch their wallets a bit further and spend more, resulting in a higher dealer and manufacturer profits.”

Additionally, a current hot-button issue in many states is whether to issue (or re-issue) carpool-lane stickers to hybrid vehicles. A May 2009 quick-poll on kbb.com asked consumers how likely they would be to buy a hybrid if carpool-lane stickers were available for those vehicles, and a majority (55%) of car shoppers said they would be more likely to consider buying a hybrid if they could get a carpool-lane sticker.

“Kelley Blue Book Market Intelligence Study,” conducted by Kelley Blue Book, October 7, 2009.  Website: www.kbb.com.