People Don’t Have A Lot To Spend, But They Do Have $0.99

John Gerzema, Chief Insights Officer for Young & Rubicam, shares some thoughts about the re-emergence of frugal consumers and how micropayments appeal to this growing market segment.

Certainly folks are saving more, deleveraging by increasing their savings relative to their spending, but they are also finding new ways to spend. Specifically, a rise in micropayments as: main revenue drivers, models for restructuring traditional ad delivery and essential components to emerging social platforms like the Apple App Store and Facebook.
Underneath this strategy and market velocity is the deleveraged consumer who comfortably parts with $0.99. The luxury of micropayment pricing is that a consumer can instantly make a low risk value judgment. Limiting risk allows for product experimentation leading to little failure’s or successes and the consequent expansion of brand loyalty.

In other words, if you have a product or service that lots of people will pay a little for, you’re good to go.



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.