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Frugality Is the New Black

Parents and families are shifting to a new value system where keeping up with the Joneses is out and teaching the kids about responsible spending is in. Also in, according to a recent report from Starcom and Nickelodeon: putting brands' feet to the fire and demanding they prove their worth to consumers who increasingly buy generic products in a hunt for deals.

Those are some of the key findings in a joint research effort that explored how the recession has affected family dynamics, relationships to brands and spending patterns.

The research—which is being shared with clients but not released widely—was conducted over fourth-quarter 2008 and first-quarter 2009, and included nationally representative online surveys of 1,000 parents with kids aged 2 to 17 and 700 children aged 8 to 17. Qualitative parental responses were culled from blogs.

"Frugality is cool, or the new black if you will," said Ron Geraci, svp, research at Viacom-owned Nickelodeon. Parents, he said, indicated that they had become "stressed out" by the pressure of having to keep up with "neighbors and friends in the acquisition of cars, trips and homes." The recession, he added, has provided relief from that burden.

According to the survey, 72 percent of those polled said they agreed with the statement, "It's no longer important to keep up with the Joneses," while 48 percent said that as a result of cutbacks in the family budget "we have redefined what's truly meaningful in our lives."

Over 60 percent of those polled said they were buying more store brands than previously, while 73 percent said they had started using coupons more. Almost half (46 percent) said they would take a "staycation" and spend time at home as opposed to traveling.

According to Geraci, the survey indicates that for premium brands "long-standing relationships with consumers are now being questioned. Brands have to prove themselves all over again, passing a test that goes through the filter of this new consumer mind-set."

Kathy Kline, svp, director of consumer context planning at Publicis Groupe's Starcom, added that "brands have to understand that things have changed. They need to earn their place at the table by understanding their targets, providing value and demonstrating the fundamental benefits they offer to consumers."

Kline said the behavioral shifts happened quickly—in the span of just six months—and are likely to be long lasting. "What we're seeing is a pretty dramatic shift in how people are thinking about money and finances and needs versus wants," she said.

While brands are still important, Kline said, blind loyalty to premium products is out, particularly if a competitor appears to offer more.

"Parents are asking different questions about value and when it's appropriate to pay a premium for a brand," she said.

Traditionally, Geraci noted, parents tended to shelter their children from financial realities and avoided the topic. But the worst recession in several generations has apparently changed that, with almost three-quarters of both parents and kids surveyed indicating that they have engaged in discussions about how to save money.

"Remember where we're coming from as a nation," said Geraci. "The credit-funded spending and disregard for finances is what got us into the mess. Now those conversations that should have been happening are happening."

Kline added that it often takes a major event, like a recession, "to shake people up and remind them about what's really important."

The recession also appears to be changing media-usage patterns with significantly more home entertainment occurring over the last six months. More than three-quarters of respondents said they were watching more movies and TV shows at home.

"More co-viewing is occurring" between parents and kids, said Geraci. (In June, according to Nielsen, ABC's Wipeout and Fox's So You Think You Can Dance were two of the top network shows viewed by kids 2 to 11 watching with adults 18 to 49. On the cable side, Nick's SpongeBob SquarePants and Disney's Mickey Mouse Club were two of the top co-viewed shows in June.)

Forty-three percent of those surveyed said they were watching more Netflix or Blockbuster movies at home. The same percentage also reported an increase in co-viewing via "family movie night," while 38 percent reported playing more video games together.

And the research showed that non-media family activities are also on the rise compared to six months ago. For example, 74 percent said their families spend more time cooking together, while 57 percent reported an increase in playing outside together.

Jim Perry, Nick's evp, 360 Brand Sales, said the network would present the research to clients in the coming weeks to show them how the consumer outlook has changed and to help them fine-tune ad messages to consumers.

"Consumers are looking to spend less and get more, and now is the time when you need your brand to resonate more than ever," Perry said.

Chris Boothe, Starcom's president of activation, said that with clients such as Kellogg's on its roster, the research "is a logical extension to our approach to the market."

--Adweek