GIMME Shelter

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Sept. 11 may have sent us into our cocoons for a feeling of security, but it's cold hard cash that's feeding our fervor to keep them spruced up.

A perfect storm of influences have converged to stimulate interest in shelter-related topics, and the print and TV media, as well as the advertisers that rely on them, are riding the wave. Fueling this are such economic factors as the availability of low-interest loans to fund home improvements. It also helps that as other investments have stumbled, housing prices have soared.

In a survey that Lightspeed Research conducted for this Special Report, only 29% of the respondents said that creating a secure environment at home in response to increasing terrorism was a very important factor in their decision to spend on home-related purchases.

However, 63% of the survey's respondents, homeowners aged 18 and older, cited the increasing value of their homes, especially compared with any other investments, as a reason to make such purchases.

"After the bubble burst in '99, a lot of people lost interest in risking their capital in the market and realized their safest investment seemed to be their real estate. That certainly has not changed," says Bob Vila, who for 25 years has entranced TV viewers with his home renovations on "This Old House" and "Bob Vila's Home Again."

The greater influence of home-as-investment vs. home-as-safe-haven seems especially remarkable given another survey WPP Group's Lightspeed conducted for Advertising Age around the time of the one-year anniversary of the 9/11 terrorist attacks. Signaling how much the attacks continued to weigh on Americans' outlook, 51% of respondents to that survey said they didn't think marketers should run any ads on Sept. 11, 2002.

But Steven Marks, national account director at Lightspeed, notes an enduring core of concern for security at home 21/2 years after the terrorist attacks on the U.S. "The shock wears off over time," Mr. Marks says, "but the fact that a third are concerned is something you wouldn't have found before 9/11."

He also points out that respondents from the Northeast, where the 9/11 attacks occurred, showed the highest concern for creating a secure environment at home-36%, vs. 33% in the South, 28% in the Midwest, and 22% in the West.

cocooning strong

Even if some security-related concerns are lessening, the desire to stay in, and enjoy the safety and comfort of the cocoon, remains strong. A total of 54% of Lightspeed respondents said they were more inclined than a year ago to spend more time at home, and only 9% said they were less inclined.

Mr. Vila says he was aware of the cocooning and do-it-yourself trends in the early to mid-1990s, before the 2001 terrorist assault. "I always thought of it in terms of economic reality," he says. "When you have downturns in the market, you have people who are less able to afford a movie and less able to afford a contractor to come in and do a paint job for them. And I think that's kind of something that has stuck, and needless to say things have gotten worse ... you've got people who cannot afford to have others do home improvement projects for them and can't necessarily afford to go on a trip or go to the movies even, so they're doing more cocooning."

The balky economy hasn't dampened Americans' desire for "more" when it comes to shelter. The good news for marketers is that if homeowners get their wish, they'll need more products to fill their ever-increasing living space.

The average new single-family home has grown by more than 800 square feet since 1970, according to U.S. Census Bureau data cited by the National Association of Home Builders. More precisely:

* Average home size was 2,320 square feet in 2003, up from 1,500 in 1970.

* Of new homes completed in 2003, 41% were 1,600-2,399 square feet, vs. 26% in 1971; 19% of '03's new homes were 3,000 square feet or more, vs. 7% in 1986.

* Of new `03 homes, 52% had two or more stories, vs. 17% in 1971.

* Among new `03 homes, 56% had 21/2 or more bathrooms, vs. 15% in 1971; 22% of 2003 homes had three or more bathrooms, vs. 12% in 1987.

* In 2003, 59% of new homes had one or more fireplaces, up from 36% in 1971.

Americans aren't ready to abandon their dreams of home ownership. Of 1,001 people surveyed earlier this year by Ipsos-Insight, 12% said they plan to buy a home in 2004. Among those who intend to buy, 43% plan to buy a newly built home. Marketers of remodeling products should note that the other 57% of that group plans to purchase an existing home.

Of the current homeowners surveyed by Lightspeed, 33% had undertaken a remodeling or renovation project within the last year. And 41% said they were more inclined to spend on home remodeling projects than a year ago, while 28% said they were less inclined.

Despite the millions of dollars poured into shelter-themed advertising, word-of-mouth has more power to motivate people to spend on home improvements, according to the Lightspeed research. Slightly more than half cited advice from friends or neighbors as very important, while nearly one-quarter cited ads for such products and services.

The power of word-of-mouth raises the inevitable ROI question about conventional advertising.

"From an advertising perspective, maybe [shelter-related marketers should get more involved] with local community efforts and understand what's happening at the grassroots," says Mr. Marks. "But that's very tough to do."

The reach of word-of-mouth in the Internet age may provide a new opportunity for marketers, Mr. Marks says. "Word-of-mouth" is no longer confined to asking your neighbor about how her remodeling project went. It extends to online communities where thousands of people can recommend products.

"The advent of the Internet and instantaneous information is leading to electronic word-of-mouth," Mr. Marks says, and new potential for advertisers to reach shelter-conscious consumers.

entry homes

Ipsos-Insight says 48% of those planning to buy this year don't currently own a home. Younger, first-time homeowners are key to fueling the continued prosperity of the entire shelter industry.

Some trend watchers have speculated that the shelter-mania is a distinctly baby-boomer phenomenon and will fade along with the boomers. Others disagree.

"I think [the shelter theme] has staying power," says Tim Spengler, exec VP-director of national broadcast at Interpublic Group of Cos.' Initiative Media, New York. "I'm not going to say the [shelter-themed TV] program trend, which is hot right now [has staying power]. And trends definitely come in and out, so I don't know if a `Trading Spaces' in five years will be that hot of a show, but the focus on the home feels like a longer-term trend."

appreciation high

Mr. Vila, whose passion is renovation of old housing, adds: "We baby boomers have probably made kind of a real impact on the generation that's coming up, which is after all the generation of our children, in terms of our approach to housing, and the importance of maintaining housing and of preserving good housing. ... This newer generation very much appreciates the house that may have been built by their parents or their grandparents, and appreciates keeping it polished up and keeping it in good repair."

The Lightspeed survey affirms the interest of young people in home improvement-for example, among 18-to-24-year-old homeowners, 46% had taken on remodeling project within the last year, vs. 28% of 45-to-54-year-olds.

While the economy is improving, and interest rates will inevitably rise, the focus on the home won't change, says David Karp, senior VP-general manager at Discovery Home Channel, which as of March 29 was the new moniker of cable's Discovery Home & Leisure.

"The lifestyle category taps into what's important in people's lives," Mr. Karp says. "For most people, the center of their world is what happens in their home."

contributing: daisy whitney

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