Today we released the newest Experian Marketing Services’ Consumer Expectation Index (CEI) analysis of the first half of 2012. As noted in the release, during the first six months of 2012 we reported that consumer optimism has reached an all-time high over the last four years, beating 2008 by 8 index points.

The CEI provides us with unprecedented insight into our economic outlook by who we are; men versus woman, age, household income and employment status, to name a few of the 60,000 variables that we have access to.

What’s most striking about today’s release is that optimism is up across the board among men and woman and all age groups; even the unemployed increased their economic outlook from an index of 87.6 to 88.0 from the first half of 2011 to the same period this year.

As we approach the holiday season, the latest CEI figures indicate a strong seasonal performance for retailers. The CEI figure for the week of Sept. 3, 2012, (the most recent single week for which data is available) was 7.4 points higher than it was at the same point last year and higher than it has been heading into the holiday season since 2008.

This holiday season also could be very good for brands and retailers with big-ticket items to sell

Further, key consumer groups are even more optimistic. On Sept. 3, the CEI of those adults who made an online purchase in the past year was 2 percent higher than the national average and 8.1 points higher than the CEI recorded for online shoppers at this time during 2011. This holiday season also could be very good for brands and retailers with big-ticket items to sell, since the CEI among adults planning to make a big-ticket purchase hit 117.9 the week of Sept. 3, 2012, compared with 103.5 the same week in 2011 and 100.5 in 2010. In fact, a CEI above 100 indicates that consumers are more confident than they were during the base line period, which was the first half of 2004, years before the recession began.

Perhaps it’s all the talk of the looming fiscal cliff that makes today’s release appear to be counter-intuitive. In fact searches for “fiscal cliff” increased over ten-fold comparing last week to the week ending November 3^rd.

However, if we look for what people were searching for using search term variations, the top searches were “what is the fiscal cliff” and “fiscal cliff definition,” showing that consumers are still learning what the fiscal cliff is and what it means for them.

As the population becomes more educated on the looming crisis, we’ll keep tabs on any resulting changes to consumer optimism, specifically which demographics are most concerned.

Learn more about the CEI here.

Seventy eight percent (78%) of last year’s tracked holiday campaigns had some form of offer or discount. Overall, campaigns with offers had witnessed a decline in opens and clicks but powered through with a 68% higher transaction rates and 60% increase in revenue per email over campaigns with no offer. When looking at the kinds of offers or discounts, we see the big winners were % off, $ off and multi-offers, while there were fewer free gifts and countdowns.

Since we can’t know for sure what the future holds, it is important to look at what happened last year to inform us directionally as to what we should expect for the upcoming holiday season. This data makes the case that you should definitely make an offer or present a discount within your email in order to increase transaction rates and revenue per email.

For more tips watch our holiday webcast featuring insight you can use right away and keep your eye on this blog.

Checking in on value qualifiers such as “discount,” “coupon” and “deal” we see that the number of search variations has remained constant during the same time period.

The king of value qualifiers, “cheap,” shows moderate increases during 2012, specifically during summer.  This is most likely due to the popularity of “cheap” functioning as a value term in online travel searches.

I decided to check in on the top ten search variations containing “cheap” over the last four weeks (ending 10/13/2012). In fact 50% of the terms are travel related.

The popularity of “cheap” as a value qualifier in travel might be explained by the commoditization of the industry. Loyalty programs excluded, do we really care which airline gets us from point A to point B?

What is surprising regarding our “cheap” searches is that we rarely see this qualifier applied to apparel. Do we really want cheap clothing? Yet appearing in the #9 position is one of the most important apparel searches – “wedding dresses.”

Top 10 searches containing “cheap”

1. Cheap Flights
2. Cheap Tickets
3. Cheap Halloween Costumes
4. Cheap Hotels
5. Cheap Car Rentals
6. Cheap Gas
7. Cheap Airfare
8. Cheap Cruises
9. Cheap Wedding Dresses
10. Cheap Car Insurance

Join us Thursday, October 25^th for our holiday digital marketer webinar where we will discuss search behaviors and other actionable insights for the upcoming holiday season.

The first 111 search terms in the Lifestyle – Politics category focus on Republican candidates’ names, their wives’ names and navigational searches on political blogs. One of the most striking observations we’ve made about this year’s primary as well as previous primaries, is that searches revolving around political issues don’t show up on the list until the 112^th search term.

We decided to take a closer look at just those terms that relate to political issues. The interesting observation is that while most of the primary debates have featured the economy as a main issue, there are no economic issue terms in the top ten issues searched. So what political issues are people are searching on? Here is the list of the top ten political issues searched for the last four weeks.

Political Search Terms: Top Issues Searched

(4 weeks ending 2/11/2012)

1. Israel and Iran
2. healthcare
3. abortion
4. gun control
5. global warming
6. European crisis
7. human rights
8. taxes
9. death penalty
10. Iran nuclear

Be sure to pre-order the 2012 Digital Marketer report here to receive your copy as soon as it is released.

Given our environment of hyper-innovation, it’s hard not to become myopic focusing on what’s next and how to plan for it. In writing this year’s Digital Marketer (pre-order here) we’ve come to a realization. In our world of fast-paced change, some of the biggest gains can be had by understanding constants versus variables, and the most important constant is the customer.

In the upcoming 2012 Digital Marketer report, as in previous reports, we’ll supply you with a plethora of data around email marketing, social media, mobile and direct marketing. This year, unlike previous years we’re going to focus on understanding the people who buy your products and services. Through tools like our New Mosaic segmentation, data from Techlightenment, Hitwise, Cheetahmail and others we’re going to fuel our new focus – customer obsession.

We will be releasing this year’s Digital Marketer in March, before it’s release we’ve been posting some of our findings and insights here, so stay tuned for more. If you missed our earlier posts, read them here:

Three steps to maintaining a clean email database

Three ways to optimize email for mobile consumers

Source: Experian Hitwise

As a result, two retailing trends have developed post-recession that define the landscape—retailers extending key purchasing opportunities and savvy consumers searching for deals or discounts. The latter behavior is evidenced by searches around Black Friday deals beginning to ramp up as early as mid-October and measurable searches on the term are starting to appear as early as mid-late September. These searches have started earlier and earlier for the last three years.

As marketers, understanding this new American consumer behavior is important. We recently launched new Mosaic segments  to help target audiences more effectively by going beyond traditional demographics.  Our latest segmentation includes one named “Boomers and Boomerangs,” consisting of Boomers who share a household with their adult children. This segment represents one of the most active deal-seekers.  Being able to employ this type of data will help marketers in understanding a customer’s triggers.

One way marketers have responded to this new consumer behavior is evidenced by deeper discount offers being made within email campaigns throughout the holiday season. In email offers, 30% off is the new 20% off.  As illustrated in the chart below, in 2009, 20% off was the most prolific of the percent discounts during the holidays. In 2010, we saw 30% take the place of the 20% off discount. Deeper discounts – of 50% or higher – also increased last year. This trend of higher offers should continue this season and start even sooner.  Email marketers relied on heavy end-of-season discounts in 2010.

Source: Experian CheetahMail

The takeaway is that consumers have become more confident in their ability to find deals over the years. Marketers have countered by starting the holiday promotion cycle sooner and extending further into January.  These trends will continue so timing and targeting are again critical to achieving better results. Experian Marketing Services will be posting trends and tips throughout the 2011 holiday season on our blog so make sure to visit our site to find new ways to reach your audience and better understand consumer behavior.

If you missed our recent webinar further detailing the above trends, you can watch it here.

First, to be clear, the above chart measures web-based traffic to both domains and does not include mobile or app specific traffic.

Regardless of these exclusions, the drop-off in Groupon traffic this summer has been significant nearly 50% since its peak in the second week of June 2011 compared to last week. During the same time, Living Social has achieved 27% growth in visits to its site. Overall visits to a custom category of Daily Deal & Aggregator sites were down 25% for the same time.

So why is there a narrowing of the gap between the two market leaders in group coupons? Perhaps it is simply a case of increased number of competitors and deal fatigue among consumers or simply not enough of the right deals. PriceGrabber® released results from its Local Deals Survey in June, stating that 44% of respondents said they use or search daily deal Websites. However, 52% expressed feeling overwhelmed by the number of bargain-boasting emails they receive on a daily basis.

While consumer fatigue may be one factor another key consideration for these sites is to focus on the attracting new and preferred audience segments via the inbox. Currently the audience segments for both Groupon and Living Social are very similar so it will be interesting to see how both sites and category perform heading into the holiday season.

At the beginning of 2011, the economic outlook was very positive among consumers. However, rising gas prices and conflicting economic news have led to extreme fluctuations in consumers’ economic outlook. While economic expectation settles back to the steady state of the low 90s that we observed in 2010, consumers’ overall view of the economy has returned to one of cautious optimism.

Consumers’ overall view of the economy has returned to one of cautious optimism.

Online buyers continue positive edge

With the exception of September 2008 through June 2009, the CEI has shown that digital consumers have a more positive outlook on the economy than the U.S. population as a whole. One of the challenges of using Internet traffic data as a sole barometer of consumer economic sentiment is that in good times online retail traffic increases as consumers increase spending. In tougher times, however, online retail traffic also increases, as consumers leverage the Internet as a cost-savings tool.

One of the great features of the CEI is that we are able to combine data from other Experian Marketing Services assets. As such, data from Experian Hitwise showing visits to the top 500 retail sites with consumer expectation data reveals that, as of May 2011, moderate increases in both traffic and consumer economic outlook reinforce our viewpoint that after a period of strong positive outlook in Q1 2011, we’ve returned to the state of cautious optimism.

The Experian Consumer Expectation Index will be released monthly with additional insights in-between monthly updates.

I wrote that line here as an opening to our series of posts highlighting findings from the Experian Marketing Services’ 2011 Digital Marketer Report.

That question for marketers is more pertinent today than ever as we’ve had to adjust in recent years to a new environment of constant change and hyper-innovation. This has arrived in many different facets, from a dizzying array of new online offerings, to external influences, such as the economic uncertainty over the last several years that has altered buyer and marketer behavior.

The only way to answer that question is to focus on a better understanding of our customer. As such, we are proud to launch the Experian Consumer Expectation Index (CEI) to better understand consumer behavior. The CEI trends consumer behavior based upon their economic outlook through more than 60,000 consumer data elements including users of more than 8,000 consumer brands and products and 600 psychographics, lifestyles, attitudes and opinions.

This unprecedented depth of consumer behavior data allows us to provide more finite insights to share with marketers. Along with the monthly updates we will be posting additional findings in-between the regular updates to the blog.

Please tell us what you are curious to know about consumers.

I’m in the midst of preparing a presentation about how the Internet space has changed over the last five to six years. To be as realistic as possible, rather than just roll back some of our data to 2005-2006, I opened my presentation archive and read through some of my decks from that timeframe.

A PowerPoint file from the summer of 2005 focused on online video. There appeared to be a gaping hole in my survey of the online video landscape – no mention of YouTube (of course it hadn’t launched yet).  That’s when it hit me – I remembered how confident that I was in my prediction that Google Video would continue to own the Hitwise Entertainment-Multimedia category.

Another chart in the same presentation showed how MySpace was the 800 lb. social marketing gorilla, more than six times the size of nearest competitor Facebook, of course we all now how that story played out.

So today, when asked if Facebook will continue to dominate social networking, or if Groupon is worth $6 billion dollars, I’m not as quick to answer. The more you study observed Internet behavior, the more you realize how quickly things can shuffle.

So what’s a digital marketer to do in an environment of constant change? The answer is to arm yourself with as much data as possible. This year’s Digital Marketer report would be a great start.

Want to learn more about other purchase decision influencers? Click here to request a copy of Experian Marketing Services highly-anticipated 2011 Digital Marketer Report, launching in late March. The report features an editorial by Bill Tancer as well as unreleased data spanning email, social, mobile, search and more.