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MARKETING FORECAST FOR 2007

Prepared by Robert Dunhill, President

The following is my business forecast for 2007. I hope it will assist you in formulating your marketing plans for the year.

ID THEFT

In 2006, identity theft victims lost almost 50 billion dollars.  That's the bad news.  The good news is that the loss represents a decline of 11 1/2% because of increased vigilance of business and consumers.  Average theft was $5700.  Medium theft totaled $750.

Identity Theft   of stolen medical information can cost victims far more dollars than a credit card theft which can be negotiated between the victim and the bank.  Doctors and hospitals that provide the care are left without recourse.  Patients and the medical industry will strive for better privacy procedures in 2007.

Hospitals   are a popular ID THEFT TARGET.  Stolen medical data from computer companies that maintain hospital patient information is worth its weight in gold.  Names of cancer patients are invaluable to unscrupulous scammers who bill phony medical charges which are easily hid in many legitimate costs.  Patients should put a fraud watch on their credit records.  However, patients will not be alerted to fake medical charges.  Patients need to check their medical files.  Last year a laptop was stolen from the Veterans Administration that contained personal data on 29 million veterans.  The largest medical theft occurred in 2005 when the names of 365,600 patents were stolen from the Oregon Providence Health System.  So beware and be prepared.

Data Privacy Legislation   is reappearing in the U. S. House.  It was ignored in 2004 and 2005.  Recent bills contain 31 pages of software industry regulations in an attempt to define what activities are allowed and disallowed. 

It’s not necessary to list your CELL PHONE NUMBERS on the FTC Do Not Call Registry.  The DNC file has reached almost 140 million.  Problem is when a family moves and changes their telephone, the new resident may receive the DNC listed number and will have difficulty having the restriction removed.

ECONOMY

Consumer Confidence   is increasing.  Reports show a 2 1/2 year high as regards interest rate stability, gasoline prices and economic and investment opportunities.  If you are among the recently fired employees of Kodak or Gateway, etc., you may not agree.

The U. S.  economy surged along at a 3.5% rate.  Consumer's confidence and improved housing plus higher wages were reportedly adjusted for inflation during Q4 of '06.

The Conference Board   suggests that consumer confidence may diminish in 2007 because of wage growth and job opportunities.  They report that consumers will continue to be responsible behind the growth.

Small Businesses   remain optimistic in 2007.  Even in light of mixed economic news, 55% of small business owners expect to hire one or more new workers.  They point to sales growth using ecommerce to supplement sales.

A Troubled Economy   in 2007 could lead to much slower growth.  Some economists have even suggested a possible recession.  They point to less than robust business activity ... no guarantees of steady interest rates ... war jitters with Iran and continued disappointment with the Iraq war.  Add this to the possibility of higher gas prices, a stagnation of wages and a minimum or negative increase in jobs.

DIRECT MARKETING ASSOCIATION 

The DMA   is soliciting presentations for its 2007 DM Days Conference in New York City, June 19-21 at the Jacob T. Javits Center.  The emphasis this year is on targeting and integrated marketing.  Marketing grows from a diversified range of industries and job functions will deliver effective messages through multi channel means.

Self-regulation  regarding ethic guidelines is another DMA initiative.  Members are being asked to aggressively protect their customer's information ... such as notification in case of security breaches ... date retention and destruction practices, etc.

The FTC   will report on its workshops about negative option marketing.  The DMA participated in these workshops that brought together consumer representatives and industry leaders to discuss the good and the bad elements of such offers.  We'll learn how to make effective disclosures when these offers are made online.

The DMA  is calling attention to resources that are available to help consumers prevent identity theft, recognize fraudulent solicitations and protect themselves in a rapidly changing marketplace.  DMA members are encouraged to draw upon this information and educate and inform their customers.

INTERNET

High Speed Connections   to the internet increased by 26% in the first half of '06.  For the 12 months ending in '06, high speed lines increased 52% and are forecasted to continue double digit levels in 2007.

Online Spending  will grow significantly in 2007.  The budgets for print and broadcast spending will shrink in 2007.  Surveys show that an increase of 18% this year and search engine advertising will increase by 39%.

Consumers Are Web Savvy  to advertising and not as easily up-sold or cross-sold as in previous years.  Expect a more knowledgeable consumer in the future.  They'll ask questions and demand answers in 2007.

Over 70% of Advertisers Surveyed   will spend more dollars on email acquisition campaigns in 2007.  Of the marketers polled, they ranked email optimization techniques, subject line testing and triggered messaging as important considerations.

SHOPPING

Shopping Browsers.   It's reported that "shopping browsers" spend 15% more than destination shoppers.  The Council of Shopping Centers says, "topless" malls satisfy the busy shoppers who want to run in and out because all stores can be entered from the parking lot.

The BBB  is warning consumers to beware of advance fee loan scams.  Victims lose hundreds of dollars in fees demanded by the scammers.

Mobile Marketing is growing   significantly with the planned efforts of advertisers to attract an older market.  Cell phone ad campaigns heretofore targeted tech-savvy young consumers.  Expect growth in the 30 to 50 age group.  However, cell phone advertising has been held back by concerns about alienating consumers  Seventy five percent of consumers are turned off by cell phone ads.

Gift Card Growth   Gift card growth rose 34% from 2005 to 2006.  This phenomenal rate will continue during 2007 and will change the way retailers do business.  Now they are restocking their shelves with new merchandise and selling early.  January used to be a dull month for retailers.  Not any more.  It's the latest retail marketing device.  Remember, gift card sales rose only 7% from 2004 to 2005 and only 0.5% the year before.

The Hispanic Market  is huge and growing.  Note some facts.  Hispanics, in ten years, will account for 1/3 of all new home purchases.  The DMA says that credit card mailings to Hispanics increased 57% during the past ten years.  And in the next 3 to 5 years, the Hispanic population will grow by 67 million.  The non-Hispanic population will decline within the same period.

OUTSOURCING

Brazil  is becoming a big-time outsourcing headquarters.  Maybe it's because of the time zones and a culture closer to the U.S. than Beijing.  An extensive outsourcing by corporate America could make Brazil a successful outsourcing market.  Brazil learned from India. Although not as cheap at India, wages are still much lower than the U.S.  Revenues are at the $45 billion mark and surging 20% per year.  Brazil’s market includes all of the Western Hemisphere nations plus part of the European continent.

MARKETING

Email Personalization  has not reached its potential but is growing quickly and 2007 will show significant use of personalization that’s well beyond the recipients name and address.  It will include demographic and psychographic data that will be included in email databases.

The challenge to using more personalization is lack of time and resources.  Lack of relevant data is another roadblock according to report by Responsys.

Voice Messaging  regulations will affect marketers in 2007.  Federal legislation will control the marketer's message ... in terms of the telemarketer's restrictions to cold calling, how it's offered, identification of the sender, dialing machine limitations, etc.

Email  Worlddata, Boca Raton, Florida, reports a drop in email prices for both Business-to-Business (B2B) and Business-to-Consumer(B2C) lists. Since more and more files are becoming available and the increase in spam, the list owners are adjusting their rates downward. Worlddata says that the B2C rates fell 7% and the B2B rates are down 4%. But the B2B prices are still higher than any other category at $273 per thousand records. Contributor lists are the least costly at $82 per thousand.

In 2007, we forecast an increase in the use of email lists. If the cost of lists keep dropping and the transmission costs stay the same the total email savings will allow marketers to cherry pick the best selections and focus on the most productive files that yield the highest return on investment.

If you want to receive more information about any of these forecasts, please contact valerie@dunhills.com.