APRIL 08, 2013

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Advertising
How Much is a Magazine Judged by the Ads it Contains?
A number of studies have found that ads within media actually complement the experience for consumers, but few have set to find out how those ads impact perception of the media vehicle itself. A new study out of the Stockholm School of Economics studied how the advertisements in a magazine affect attitudes toward that magazine. The researchers used a copy of InStyle to conduct their test. They kept all of the editorial constant within the magazine and placed respondents into one of four exposure groups. A) InStyle with all advertisements replaced by advertisements for high-end products. B) InStyle with all advertisements replaced by advertisements for low-end products. C) InStyle with no advertisements (just editorial). D) InStyle in its original form with real advertisements. Group A (the group exposed to InStyle with its original advertisements replaced by those for high-end products) was more likely than every other group to call InStyle exclusive, elegant and high quality. This group was also most likely to call the magazine useful and say they would be interested in purchasing it. Finally, respondents in Group A said they would be willing to pay $1.50 more for the magazine than those exposed to the real InStyle (Group D), and were willing to pay more than double the price those who had been exposed to the copy with low-end ads would be willing to pay (Group B).
So what? This study provides statistical support to an anecdote that many at Condé Nast already knew -- the ads in it can have both a positive and negative impact on a consumer's perception of a magazine. It benefits publishers and advertisers alike to have a magazine filled with high-end and well-crafted advertising.
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Technology
Devouring Digital Devices: One in Four Americans Own a Smartphone, Tablet and Laptop
Digital device ownership exploded in 2012, with 26% of the U.S. now owning a laptop, smartphone, and tablet. This group of digital omnivores (owners of laptops, smartphones, and tablets) grew by 160% between 2011 and 2012. Consumers are continuing to add mobile devices to their media arsenal and these devices are gaining value over more traditional media platforms, such as TVs and gaming consoles. Among Millennials, smartphones and tablets are the most valued devices, followed by laptop and desktop computers. Boomers most value their desktop computers, followed by their laptops, smartphones and flat panel TVs. Along with valuing digital devices, Millennials also value renting digital media over owning media. Millennials reported that in the last year, nearly 60% of all media purchases were digital downloads or streaming services, compared to 50% that were digital purchases for Boomers.
So what? Along with the increased value younger and older consumers place on their Internet-enabled devices, they are also shifting their media consumption from analog media purchases to favor digital media purchases and subscriptions. These cultural shifts will affect the way Condé Nast promotes its content. Because of their penchant for all things digital, Millennials have shown a willingness to lease content rather than buy; and one could assume that this trend will be even more widespread among the digital natives -- Generation D -- that follow them.
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Mobile Search Triggers Quick Follow-up Actions
Many associate mobile searches with being on-the-go, but a new study from Google and Nielsen finds that more than two out of three mobile searches occur at home, when most users are likely to have a PC available to them. Only 17% of mobile searches occur on-the-go, 8% at work, and 2% at a store. Mobile search is driven by speed and convenience, and tends to trigger additional action – from continued research (36% of searches) and information sharing (18%) to visiting a store (17%) and making a purchase (17%). Nearly half of all mobile searches are conducted to support decision-making, and they lead to quick results – 63% of mobile search-triggered actions are taken within one hour of the initial search. The study also found that two out of three participants noticed mobile ads during their search, and were significantly more likely to recall them if they saw them while they were in a store.
So what? Mobile searches drive increasingly growing volumes of traffic to Condé Nast sites. Mobile searchers’ tendency to take action and convert presents a valuable opportunity to provide them with content that will support their decision making process and serve them with the right ads at the right time.
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Retail/Shopping/Commerce
China’s Online Retail Industry is Booming
The rapid growth of electronic retailing in China is far outpacing the rest of the world, says a new report from the McKinsey Global Institute. China’s e-tailing industry has grown at a compound annual rate of 120% since 2003, and produced more than $19B in sales in 2012. This growth is shaped by the country’s unique context – while the spending power of China’s new consuming class is continually increasing, the brick-and-mortar retail industry remains underdeveloped in many areas. E-tailing is fulfilling this unmet consumer demand, with 90% of sales happening in marketplaces (much like eBay). E-tailing is not just a replacement for offline purchases, but in fact seems to power overall consumption, adding 2% of incremental value in 2011 according to estimates. The three largest online retail segments in China are apparel (35% of online consumption), recreation and education (20%) and household products (15%).
So what? Condé Nast has a strong presence in China, where it publishes Vogue, GQ, Self, Condé Nast Traveler and Architectural Digest. As marketers around the world try to take advantage of the growing demand for online retail, Condé Nast is positioned to help them reach the consumers with the right messages.
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Quick Takes
In-App Purchases Through Free Apps Account for 71% of iPhone App Revenue
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90% of Twitter's 2012 Ad Revenue Came from U.S.
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IDC Forecasts Global Smartphone Shipments to Surpass 1 Billion in 2014
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12 of the Country's 20 Largest Newspapers Now Have Paywalls
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Condé Nast
Feedback, questions, ideas for future issues? Please contact:

Phil Paparella
Condé Nast Research & Insights | Associate Director
1166 6th Avenue, 14th fl. | NY, NY 10036 | office 212.790.6044 | philip_paparella@condenast.com

Contributors:
Tamar Rimmon | Senior Manager, Digital Analytics
Robyn Hightower | Manager, Research & Insights