Usachov V.A. , Filipenko D.E. Donetsk National University of economics and trade named after Mikhailo Tugan-Baranovsky Marketing in the USA It is time to disclose a terrible secret. Business in the USA does not start from company registration. Instead, business in the USA starts from marketing. If you haven’t made a prior market research with the view to demand for your goods or service, your business will run blind. The US market is the largest in the world, but the competition is respective. If you are ignorant of either the price levels, or target group segments, or competitors’ advertisement media – the start of your business in the USA will be sorrowful. Many businessmen of both Russia and Ukraine do not simply know that a website – is the basic advertisement instrument in the USA. No website – no company. It is in Russia that goods and service are inquired on the Internet by less than 10%. In the USA – it is around 80%, as 92% of American families possess at least one computer. Those, who did not realize that in time, are already working in a different business. American companies not developing their websites fall out of business within a year.Even in restaurant business in US big cities, if it is not possible to book a favorite table in a restaurant online, that restaurant is not considered as decent…Now, about the goods.Tastes of Ukrainian and American public are drastically different. Heaven and earth – is a very mild metaphor…There are many businessmen who have scored serious success in Ukraine and are trying to duplicate their success in American market. That is laudable, but the problem is how they are doing it.For example, the myth that if you sell clothes in the USA, it is best to start with Versace! We assure, that Versace in the USA is absolutely unpopular among the Americans (not Ukrainians!) and, to a great extend, a simple unknown brand has a reverse effect – say, guys, you don’t understand anything at all, what are you talking about. Result? Within a year less than 15% of the consignment procured was sold (and including all the sells-out!). The standard recipe of “Ukrainian” business in the USA. Purchase everything bright, glittering, taking breath away and the most important is – the most expensive!Gentlemen, it will not work. And it has never worked. The problem is in the difference of psychologies. In Ukraine, a businessman having earned money, immediately buys a house as big as possible, a car, as cool as possible, and meets several lovers, as very soon either he’ll be jailed, or everything will be just taken away and that is why he has to live that short moment as brightly as possible and as “glamorously” as possible! To have something to remember (if there is someone to). There is no fear in the USA that everything will be taken away from you tomorrow. But there is a firm conviction in the USA that if you have some money today, it is better to put it off for tomorrow or invest into a cause, but not to try to squander it away as quickly as possible. That is why “Ukrainian” glamour projects have exclusively limited success only among “understanding” Ukrainians circles. Really, what type of decent “Ukrainian” business can be done in a country where even billionaires drive THEMSELVES, fill fuel and even wash their absolutely non-billionaires’ cars and can even drop to McDonald’s to have a quick snack. And that is done by people, owing their own business-empires and flying in their own planes!You will laugh, but in the USA (as well as in Europe in fact) work is honored and money’s counted. If you wish, you can write-off that fact to Protestants’ ethics. By our observations, main millions in the USA aren’t earned by those who sell Rolls-Royces, but by those who produce and sell small screws and gaskets for taps, or something else very small and imperceptible, but sell all that in millions and continuously. Namely this type of business will be the most successful in the USA. By the way, similar proportions start appearing in Ukraine. Those who specialize in small but successful business can actually earn more the luxury stores with super-expensive goods.Perfect option is when business self-creates a market for itself. At the same time you don’t have to be a Bill Gates at all. We know a story of one small company which started producing (or reselling) excellent professional dish-washing machines for restaurants. But for majority of restaurants they turned out to be expensive (it is rather difficult to enter an established market). And the restaurants which could afford them already had their own machines. Then the company president made a brave marketing move. He started giving his machines free to new restaurants along with obligatory signing of a long-term contract for their weekly servicing. Now the company is prospering and earning millions as thousands of restaurants pay monthly for washing agents and servicing. Market research – is a rather catch-all term. But anyway it is better to spend some money in advance than to waste very big money on dead-born business. Nowdays,marketing in the USA based on the Interactive Advertising Bureau/PricewaterhouseCoopers data for the first two quarters of 2012, and because the digital ad spending market is approaching maturity faster than expected, eMarketer has lowered the projected rate of increase for US digital ad spending slightly from its earlier forecast of 17.7% in 2012. However, eMarketer’s outlook remains optimistic—despite slower percentage gains, big dollar growth will continue.Combined, Google, Yahoo !, Microsoft , Facebook and AOL will take in $23.9 billion in ad revenues, representing nearly two-thirds of total digital ad spending this year.At $15.41 billion, Google’s ad revenue alone will account for 41.3% of total digital ad revenues in 2012. Google will see slightly slower growth than eMarketer estimated earlier this year, as the company’s ad revenues for the first two quarters of 2012 were a bit lower than expected. Despite this factor, Google’s growth will reach 20% in 2012 and remain in the double digits through 2016. As eMarketer reported, by 2014, marketers will spend more than $20 billion on Google advertising, while digital ad revenue at Yahoo !, Microsoft and Facebook will each total just over $3 billion.Search continues to be the leading digital ad spending format.Display ad spending, which includes banner ads, video, rich media and sponsorships, will rise from 40.2% of total digital ad spending in 2012 to 45.6% of the total in 2016. Search’s share of total digital ad spending will decrease from 47.1% in 2012 to 44.2% in 2016. Combined, spending on paid search and display advertising will account for more than 87% of all US digital ad spending this year.
This year, display ad spending growth will outpace that of paid search ad spending, driven by digital video advertising and sponsorships. At a 46.5% growth rate, digital video ad spending will continue to post the strongest gains—though it is starting from a much smaller base. Online and mobile video viewing are becoming increasingly popular. According to eMarketer forecasts, more than half of the US population will view video content through desktop or mobile devices in 2012.
eMarketer bases its estimates for US digital advertising spending advertising spending and market share on an analysis of reported revenues from company releases; estimates from other research firms on advertising revenues, pricing, impressions and other factors; usage trends at major ad publishers; eMarketer interviews with executives at ad agencies, brands, online ad publishers and other industry leaders; and figures from the IAB/PwC, its benchmark source for overall digital advertising revenues, for which the last full year measured is 2011.
These figures represent net US ad revenues after traffic acquisition costs to partner sites and publishers have been factored out, and include advertising that appears on desktop and laptop computers as well as mobile phones and tablets. "Ad spending growth sputtered during the second quarter and was unable to sustain its early year momentum," said Jon Swallen, Chief Research Officer at Kantar Media North America. "The advertising market is mirroring the tepid, slow growth performance of the general economy. Third quarter results will get a short-term boost from the Summer Olympics and political advertising but sustained long-term improvement will probably be linked to the health of consumer spending on the goods and services that marketers provide." Television continued to lead the ad market in the second quarter of 2012, with overall growth of 4.4 percent. Cable TV expenditures rose 4.2 percent and growth was driven by sports programming and networks with larger audience ratings. Network TV spending was down 0.4 percent and comparisons were hurt by a timing shift that moved ad money for NCAA Final Four games out of April and into the prior quarter. Spot TV expenditures increased 4.6 percent, lifted by a first wave of political money that began pouring into a handful of swing states crucial to the Presidential race.