Vintage Filings Business Blog

Have you taken advantage of the power of Twitter yet for your company? (Make sure to foll us on Twitter here: http://twitter.com/vfilings) It seems like everyone, especially in the media, is answering that question in 140 characters or less with a “tweet” and letting their “followers” know what they are up to each hour of the day. But is Twitter something that is in its infancy, something that is just a media darling or has it already experienced its fifteen minutes of fame?

Opinion of Twitter

Just under half of advertisers (45%) say that Twitter is something is in its infancy and its use will grow exponentially over the next few years, while one in five (21%) believe Twitter will not move into the mainstream and is something mostly young people and the media will use. Just under one in five advertisers (17%) believe Twitter is already over and it’s time to find the next best thing while 17% of advertisers say they don’t know enough about Twitter to have an opinion on it.

Among consumers it is a different story altogether, as over two-thirds (69%) say they do not know enough about Twitter to have an opinion about it. Just over one in ten say it is just at its infancy (12%), 12% also say it is just something that young people and the media will use and 8% of consumers say it is already over and it’s time to find the next best thing.

As might be expected, there is also an age divide on opinions of Twitter. Younger advertisers are more likely to have an opinion on Twitter than their older counterparts (only 11% of 18-39 year olds do not know enough about Twitter to have an opinion compared to 20% of advertisers 40-49 years old and 21% of advertisers 50 and older). Among consumers, the same applies and only half (55%) of adults, 18-34 years old say they don’t know enough to have an opinion, compared to 80% of those 55 and older.

Effectiveness of Twitter

Among those who have an opinion regarding Twitter, feelings about the effectiveness of it for promoting products and ideas are lukewarm among both consumers and advertisers. Among advertisers, just 8% say Twitter is very effective for promoting products and ideas while half (50%) say it is somewhat effective. One-third (34%) of advertisers say it is not that effective and 8% believe it is not at all effective for promoting products and ideas. Among consumers, 8% also say it is very effective for promoting ideas and products and 42% believe it is just somewhat effective. Three in ten (31%) consumers say Twitter is not that effective and 19% feel it is not at all effective for promoting products and ideas.

Although those of us who watch cable newscasts can’t help but notice their proclivity to invite us to follow the show or host on Twitter, it does not seem as though Twitter has made it mainstream yet, let alone to its edge. While advertisers and marketers expect Twitter to grow, its effectiveness as a marketing tool will most likely hinge on consumer education: consumers need to learn more about what it is, why they should pay attention to it, and why they should “tweet.” It is the advertisers and marketers who should play the lead role in promoting consumer education if they truly want to move Twitter beyond infancy and into its “tween years.”

So how is the business travel industry doing during the recession? The National Business Travel Association (NBTA) and Egencia today released a sample of findings from a study that quantifies global business travel spend and projects business travel growth through 2013. Evaluating 72 countries, the study shows that business travel growth patterns vary dramatically across the globe with North America advancing at an average rate of just over 2 percent per year for the last decade, Western Europe growing 4.6 percent annually and Asia Pacific advancing by 7.2 percent annually over the same period. Emerging Europe and the Middle East/Africa region advanced annually by 12.4 percent and 7.7 percent, respectively, from 1998 to 2008.

Kevin Maguire, CCTE, GLP, NBTA President & CEO, said, “This study is the most comprehensive look at the global business travel industry available today. Corporations can leverage this insight to guide their travel programs and preferred supplier market strategies across the globe for many years to come. We look forward to making the full report available in the coming weeks.”

The study predicts that growth of business travel in China and Japan will exceed U.S. growth over the next five years. In addition, developing nations, like India, Vietnam, Iran and Indonesia will experience significant compound annual growth rates over the same timeframe.

“Developing countries are proving to be fertile business-travel areas,” said Rob Greyber, president of Egencia. “Over the next five years, we’ll see countries like India and China grow at rates of 5.3 and 6.5 percent respectively, versus the U.S. projected growth rate of 0.3 percent.”

Global Business Travel Market & Outlook

The study finds that the North America, Western Europe and Asia Pacific regions each represent about 30 percent of the global business travel market (90 percent combined), estimated to total $929 billion in 2008. This figure includes both domestic and outbound international travel. The remaining 10 percent of global activity takes place in Latin America, Emerging Europe and the Middle East and Africa. The United States represents the largest piece of global business travel spend with $261 billion or 28 percent of the world total, followed by China at 10 percent and Japan at 8 percent.

“This study shows that business travel spend has increased by more than 35 percent since 1998, making it an impactful industry in the global economy,” said Kenneth McGill, NBTA Research Consultant and lead analyst on the IHS Global Insight report. “Most of this growth has been due to an expanding global economy and the rising dispersion of business travel activity around the world.”

Despite the United States’ position as the global leader in business travel spend, Asia Pacific is poised for substantial growth over the next five years, while U.S. growth is expected to stagnate. China’s spend, at $93.8 billion in 2008, has tripled over the past 10 years and is expected to lead market growth between 2008 and 2013, followed by Japan and South Korea. Measured in terms of the dollar increase in business travel spending, the United States is expected to be fourth in terms of growth, just behind India.

Business Travel by Industry Sector

The study examines the highest growth industries for business travel globally, of which the top five include utilities, food processing and services, real estate, social and personal services, and professional and business services. Over the next five years, sectors that directly benefit from both infrastructure development (utilities, government and communications) and economic stimulus packages (education, construction and real estate) will experience the most significant growth in business travel spend.

The research shows that, globally, businesses spend an average of about 1.1 cents of every sales dollar on business travel, though it varies widely by industry. In the equipment and leasing sector, for example, the measure of travel intensity is more than three times higher at 3.7 cents per dollar, while in the mining sector, business travel measures only fractions of a cent per dollar of revenue.

Reflecting the global recession, nearly every industry foresees a decline in business travel outlays in 2009 from 2008 levels, led by steep drops in the transportation services, paper and paper products, construction, chemicals, communication equipment, and rubber and plastic manufacturing sectors. The only anticipated uptick in spending is expected in education with a 2.2 percent projected rise. However, there has been a downward trend in the amount of travel spending businesses require to support their sale and operational activities, which is a clear indication of the rising productivity of business travel.

“The increase in productivity highlights several major shifts within our industry,” said Greyber. “Stronger travel management and greater efficiency when traveling have both contributed to this change, essentially driving down business travel spend per revenue dollar. This development should be a key consideration in program planning, in addition to overall macroeconomic changes and sector trends.”

By Ben Blascoe

Sixteen months after Microsoft’s first attempt to buy Yahoo failed miserably, the two technological giants finally worked out a 10-year deal that if applied correctly could put search and advertising leader Google.com in the ‘hot seat’.

Microsoft has generated a lot of e-buzz over the last couple months concerning the launch of its new search engine Bing.com, that the Washington-based company claims is just as “good, if not better than Google’s search engine.” The hatched deal between Microsoft and Yahoo is centered around Microsoft taking over the search responsibilities of Yahoo (via Bing) and hopefully creating enough worthy traffic to convert Googlers into users of Microsoft’s new platform.

Basically, the deal is as follows:

• Microsoft acquired a 10-year license to Yahoo’s search technologies to integrate with Microsoft’s Bing.
• While Yahoo will still be very much active in the process, all Yahoo sites will now be run through Bing.com
• Microsoft will pay Yahoo through shared Revenue based on traffic through their specified network.
• Yahoo’s operating income will be boosted by roughly $500m

According to ComputerWeekly.com who followed a press conference with Microsoft CEO Steve Ballmer and Yahoo CEO Carol Bartz, this 10-year merge will be a “game-changer”.  Both parties are very excited and agree that it will enable Microsoft to innovate in search while providing web-users with better options, transparency and choice.

But will this deal actually be able to undercut Google?

Taken from Reuters.com, Google spokesman Adam Kovakovich says “There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users.” Google Inc later stated that it is very “interested” in the 10-year deal – not surprising considering that Yahoo is Google’s largest competitor.

As with any new innovation in technology, the bar will be raised and will prove to be an interesting couple of months as users watch the ‘merge’ take flight right before their eyes. We are sure to see the next level of search application and judging by the illustrious history of Google it should be quite a footrace.

Advertisers continue to rely on a mix of media types, although print is clearly suffering, partly at the expense of Internet and digital advertising.

The Media Mix

There is a divide in what types of advertising are being used in media campaigns. On one hand, more than nine in ten advertisers (92%) are typically incorporating Internet advertising into their media campaigns while 88% say they are incorporating print advertising. At the same time, less than half say they typically incorporate radio advertising (46%), television advertising (46%) and digital advertising, such as through cell phones (39%). There is a regional difference here as advertisers in the South are more likely to use radio advertising (57%) and television advertising (56%) while those in the West are least likely to use both (39% each).

Among those advertisers who are using each of these types of media, there is a difference in the level of their usage since last year. Three-quarters of those who use Internet advertising (74%) say they are incorporating it more often while 69% of those who use digital advertising are incorporating that more often when compared to a year ago. Just under half (48%) of those who use television advertising are using it the same amount as last year, but 38% are using television less. Those who use radio advertising are split, 46% are using it the same amount while 43% are using it less often. The largest drop is with print advertising as half (49%) of those who use it are using it less often relative to a year ago while 41% are using it the same amount.

Internet Advertising

Among those who use Internet advertising, just 14% say they only use it as a standalone digital campaign, while over half (54%) say they use it in an integrated campaign with other media and 33% use Internet advertising in both types of campaign equally.

More specifically, Internet advertising is used in a broad number of ways. Four in five advertisers who use Internet advertising use it as a branding device (79%) and two-thirds use it to drive information gathering for an offline transaction (65%). Slightly less than three in five advertisers (58%) use Internet advertising to drive online transactions while 57% say they use it to promote community around their brand, through such things as message boards, memberships and fan clubs.

Consumers, however, find many characteristics of Internet advertising very frustrating. Four in five consumers (80%) say they find ads that expand on the page and cover the content very frustrating while 79% say ads where they can’t find the close or skip button are very frustrating. Three-quarters of consumers (76%) find Internet ads that automatically pop up very frustrating while two-thirds (66%) say ads that open if they are “moused over” are very frustrating. Three in five consumers find both animated ads that automatically start playing and ads that play music and/or have loud soundtracks to be very frustrating (60% for both).

So What?

Given that half of all advertisers are using print media less as compared to a year ago, it is not surprising that so many magazines and newspapers are folding. Nor is it surprising that some of the survivors are publishing less frequently or instituting employee furloughs.

Although the trend among advertisers is clearly towards the Internet, advertisers have to walk a fine line. At least three in five consumers are very frustrated with six of the main Internet advertising characteristics, and there is the potential to see a backlash forming. To be successful, those that advertise on the Internet will need to come up with more engaging ways to connect with consumers.

These are some of the results of a new LinkedIn Research Network/Harris Poll of 1,015 advertisers from agencies or corporations who are involved in the advertising decision making process surveyed online between June 22 and 30, 2009 and 2,025 U.S. adults surveyed online between June 24 and 26, 2009.

Consumers continue to buy technology products to improve their lives, although the consumer electronics (CE) industry will see overall shipment revenues decline in 2009, according to new data released today by the Consumer Electronics Association (CEA). The semi-annual U.S. Consumer Electronics Sales and Forecast shows that industry revenues will contract to $165 billion in 2009 but grow slightly in 2010.

The consumer electronics industry will see shipment revenues fall 7.7 percent, to $165 billion this year, the first decline since 2001. While consumer demand for CE products remains high, several market forces are contributing to lower revenues, including lower consumer spending, price declines and compositional shifts in key product categories. As consumer confidence rebuilds, industry revenues will grow, albeit at a pace of less than one percent in 2010. CEA’s forecast projects industry revenues will bottom out by the second half of 2009, although many risk factors remain causing industry growth to remain muted.

The CE industry continues to hold up favorably compared with other industries. Most recessions are marked by steep declines in durable goods purchases as individuals defer discretionary purchases that can be pushed into the future. Despite the worst recession since the Great Depression, CE spending as a percentage of all durable goods is as high as it has been in 50 years. Vehicle sales are down 40 percent since the recession began in the fourth quarter of 2007, according to Autodata Corporation, and existing home sales are down 34 percent from their peak in August 2005, according to the National Association of Realtors.

“The CE industry is not impervious to the economic downturn but remains resilient compared to other industries,” said CEA President and CEO Gary Shapiro. “Through innovation and global access to consumers and open markets, technology companies will restore economic growth and prosperity. American consumers continue to purchase CE products despite cutting back in many areas, showing that consumer electronics are vital to everyday life in this country.”

Digital displays continue to be the primary revenue driver for the industry, comprising 15 percent of overall industry sales. Unit shipments of displays remain robust, projected to be up eight percent in 2009. LCDs remain the display of choice for consumers with unit volumes jumping 24 percent. Lower price points and an increase in consumer demand for mid-size displays are reducing revenue. TV display shipment revenues are expected to drop six percent this year to $24 billion.

One year after emerging as the next-generation DVD format of choice, Blu-ray players are poised for growth in 2009. Unit shipments of Blu-ray players will jump 112 percent this year, reaching nearly six million. Even as prices drop, revenues are expected to top one billion dollars, an increase of 48 percent over 2008.

Continued innovation in the smartphone category is leading to high consumer demand and increased shipment revenues. Smartphone shipment revenues will increase almost three percent in 2009, to nearly $14 billion, despite declines in average unit prices. Smartphones will account for one in four total handset sales this year as consumers continue to seek devices capable of Internet access, navigation and media playback while on the go.

CEA’s updated sales and forecast also shows netbook momentum is building within the PC category. Unit shipments are forecasted to nearly double in 2009, rising 85 percent, to eight and a half million units. Even as more consumers opt for lower-priced netbooks, the category will reach $3.4 billion in revenue in 2009.

“Consumers continue to buy CE products at high rates, showing that CE is a must-have even during the darkest of economic times,” said Steve Koenig, CEA director of industry analysis. “Notably, consumers are buying CE products that fit today’s budget, like mid-sized displays, netbooks and private label products. Some categories, such as digital cameras, Mp3 players and video game consoles, have reached maturation as most American homes now include such devices.”

Increased globalization brings increased travel and along with it the need to obtain work visas and residence permits. Not having the correct information or missing documents can mean weeks of delay when one is turned back at the border. In some cases, it can even cause significant penalties.

Vyoma Nair, co-founder of Nair & Co., a leading global integrated solutions provider helping companies expand internationally, summarizes immigrations requirements, in some key countries, for short-term business travel (e.g. travel to attend meetings, travel for fact finding, travel for transacting business or buying or selling goods).

Brazil

Brazil issues VITEM II visas, which allow a maximum stay of 90 days per visit, maximum 180 days in a year. These visas are valid for five years. There are no exemptions for U.S. citizens. Executives should keep a checklist for a completed visa application form explaining purpose of trip, valid passport, recent passport photo, Green Card (if applicable), letter from employer or sponsoring company on letterhead stating nature of business to be conducted by the applicant in Brazil, possibly yellow fever vaccination certificate, and visa fee.

China

China issues F visas, which allow a stay of up to 30 days per visit and can have validity up to one year. There are no exemptions for U.S. citizens. Executives should keep a checklist for a completed visa application form, valid passport, passport photo, Green Card (if applicable), invitation letter from host company or introductory letter from U.S. company, and visa fee.

India

India issues a business visa for short-term business travel allowing multiple entry for up to 10 years for U.S. citizens. Executives should keep a checklist for a completed visa application form, valid passport, two passport photographs, Green Card (if applicable), copy of U.S. driver’s license or other state-issued identification card, flight itinerary clearly showing date of departure from India, invitation from Indian company in India, letter from a U.S. company indicating purpose of travel, and visa fee.

Netherlands

U.S. citizens do not require a visa for business travel if their stay does not exceed 90 days in the year. If the stay exceeds 90 days then a Machtiging tot Voorlopig Verblijf (MVV) or temporary residence permit is required to enter Netherlands for a Green Card holder but not for a U.S. citizen.

However, a residence permit, Verblijfsvergunning, is required to live in Netherlands and, for non-EU citizens, a work permit may also be required. The residence permit is generally issued for a maximum of one year at a time for a total maximum period of five years. The residence permit is obtained by submitting a completed residence permit application form with passport and application fee to the Aliens Police. It is also necessary to register at the City Hall.

United Kingdom

U.S. citizens do not require a visa for business travel as long as their stay does not exceed six months in a year. The U.K. government is currently considering reducing this period to three months.

16% of high-impact, high-tech firms have at least one immigrant founder, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration. Although these firms are concentrated in states with large immigrant populations, in most other respects they resemble high-impact, high-tech firms founded by native-born entrepreneurs.

Moreover, these immigrant entrepreneurs are highly educated and appear to be strongly rooted in the United States. Roughly 55 percent of the foreign-born founders hold a masters degree or a doctorate. In addition, they are more than twice as likely as native-born founders to hold a doctorate. Furthermore, 77 percent of the foreign-born high-tech entrepreneurs are American citizens and, on average, they have lived over 25 years in the United States. Two-thirds of them received their college degrees here, as well.

“Immigrant entrepreneurs clearly contribute a significant amount to our country’s cutting edge high-tech firms,” said Shawne McGibbon, acting Chief Counsel for Advocacy. “This report outlines these contributions and delivers important new data about immigrant entrepreneurs.”

High-tech Immigrant Entrepreneurship in the United States, written by David Hart, Zoltan Acs, and Spencer Tracy, Jr. with funding from Advocacy, defines high-impact firms as those with sales that have at least doubled over the 2002-2006 period and which have significant employment growth during that time. The authors defined high-tech industries using research and development employment as a share of total employment as the key criterion.

For a complete copy of the report, visit www.sba.gov/advo. The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.

While the current economic recession has forced companies to re-evaluate their business models and overall document spend, it also has started to cause companies to shift their investments toward outsourcing and partnering to better control document costs, according to a survey of key business decision-makers by InfoTrends, prepared for Pitney Bowes.

Three times as many survey respondents indicated that they would increase their outsourcing investment rather than decrease it. In addition, the survey revealed that organizations are looking more closely than ever at potential partnerships in order to expand their market reach.

“While managing cost and risk remain top-of-mind for all organizations, especially in light of the current recessionary environment, businesses are beginning to realize now more than ever, the cost and efficiency benefits of managed or outsourced services that can be realized by partnering with the right outsourcing partner,” said Vincent De Palma, executive vice president and president, PBMS. “Outsourcing enables companies to focus on their core competencies and increase efficiency without making additional investments in people and technology. This helps companies become more profitable, and the use of experts in a particular area can lead to better service levels than internal departments can provide.”

Omri Duek, consultant, InfoTrends Professional & Managed Print Consulting Services, noted that “companies in all industries should consider their core competencies, especially in these tough economic times, and how managed or outsourced services can help support their non-core operations.” He explained the reasons organizations can benefit from managed services include: reducing up-front capital costs and/or operating costs, improving focus on their core business, increasing their agility (such as effectively scaling operations), adapting to a smaller workforce, looking to access best practices and technologies, wanting to improve consistency or service levels, and trying to meet environmental goals or compliance requirements.

Misconceptions About Managed Services

Despite their numerous benefits, misconceptions about managed services continue to exist. According to the survey, several myths still exist. For example:

Myth: Managed services aren’t secure

The reality is managed services are often more secure than self-managed processes. Managed Service Providers (MSPs) recognize the need for comprehensive security measures and guarantees. In fact, MSPs with expertise in highly-regulated industries such as financial services, manufacturing and healthcare are often certified and regularly audited by independent, industry-specific third parties.

Myth: Managed services aren’t cost-effective

Controlling capital costs (60 percent) and reducing operating costs (53 percent) were cited as the top two reasons companies today are outsourcing, according to the survey. Previous InfoTrends studies have verified that managed print services for example, can save organizations 20 to 25 percent of their document output costs, on average.

Myth: Managed services limit organizational control

For most organizations, managed services can actually provide greater control over business operations in the form of Key Performance Indicator (KPI) dashboards, greater cost visibility, and contracted Service Level Agreements. Also, managers can establish a single, contractually obligated contact to mitigate performance issues in a timely manner, and managed services enables organizations to quickly scale processes up and down. This agility was critical for business leaders in the study, with 87 percent of respondents indicating that this priority had increased in the past 12 months.

If you have a company in the retail industry, it is vital to understand the importance of consumer experience.  Over 50% of all shoppers have experienced truly great “WOW” shopping experiences, according to “Discovering WOW – A Study of Great Retail Shopping Experiences in North America,” a new study examining the loyalty dynamics of outstandingly positive shopping interactions. But the study – released today by the Jay H. Baker Retail Initiative at the Wharton School, the Verde Group and the Retail Council of Canada – establishes that not all great experiences deliver impact for retailers in terms of shopper loyalty and intent to return. In fact, of the 26 “great shopping experiences” assessed in the study, fewer than half measurably improved loyalty.

The study found that great shopping happens frequently:

• A majority of customers (52%) have enjoyed a “WOW” shopping experience
• 35% of all shoppers encountering great shopping within the past 6 months.

Notably, great shopping occurs when a number of things go well for the shopper: on average over 10 distinct elements are required to create a single great shopping experience for a customer.

But not all of these “great shopping” elements drive loyalty. The study determined that there are five categories of great shopping experiences:

• Engagement – being polite, genuinely caring and interested in helping, acknowledging and listening
• Executional Excellence – patiently explaining and advising, checking stock, helping find products, having product knowledge, providing unexpected product quality
• Brand Experience – exciting store design/atmosphere, consistently great product quality, making customers feel they’re special and that they always get a deal
• Expediting – being sensitive to customers’ time and long check-out lines, being proactive in helping speed up the process
• Problem Recovery – helping resolve and compensate for problems, upgrading quality and ensuring complete satisfaction

The presence of “great” clearly makes a difference: customers who have enjoyed a “WOW” experience are over 75% more loyal to a given store than customers who have not enjoyed “WOW” shopping. However, only “Brand Experience” and “Engagement” elements measurably build shopper loyalty. Ultimately, “Brand Experience” is the most critical quality, nearly 40% more important than the next closest factor.

“The good news for retailers is that consistent “greatness” is possible, and can have a significant impact on the loyalty bottom line,” said Paula Courtney, President of the Verde Group. “Our research shows that retailers are excelling at delivering on “Engagement” elements. Their biggest challenge is that they deliver significantly fewer “Brand Experience” elements than elements from the other four categories.”

“The research makes clear that “WOW” shopping is a complicated phenomenon,” said Stephen J. Hoch, director of the Baker Retail Initiative at Wharton. “Retailers that want to deliver great shopping experiences that build loyalty must understand their customers deeply. But the payoff of that understanding can be very large.”

A new report from Diamond Management & Technology Consultants confirms that businesses are failing to take full advantage of online assets and that organizational investment rarely matches online’s economic potential. The report, “The New Online: Modernise or Fall Behind,” describes how companies can achieve step-change business improvement by enabling significant cost reductions, distinctive propositions, and upgraded customer experiences. It also identifies barriers to optimal decision making and outlines recommendations as to how these might be overcome.

Reflecting on the current situation, Diamond observes that online investments are often disproportionately geared towards cosmetic Web site upgrades. “Look and feel” changes are not sufficient to capture the new opportunities. Deeper and more sophisticated operational and technology capabilities must be developed. Diamond’s experience in advising blue chip companies confirms that the required online transformation is achievable and can drive material business benefits.

The report’s conclusion is that online is more than another channel. Rather, it is central to the business—a company’s central nervous system—and should be treated as such. Amongst the opportunities available to innovative companies are the ability to transform the user experience, for example through rich, personalised and humanised interactions, and the ability to reach and truly engage a broad and dispersed target community.

Taking a cross-industry approach, the report demonstrates how:

• A financial institution has used an online community to achieve a 40 percent increase in new account openings;
• An online retailer saw sales increase by 38 percent from real-time targeted marketing; and
• An insurance company realised significant efficiencies from rolling out Web capabilities to its intermediary agents, including a reduction in customer information upload time from 30 minutes to 30 seconds.