JULY 15, 2013

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Industry Viewpoints
More People Are Paying For Digital News
The University of Oxford’s Reuters Institute recently released its comprehensive annual Digital News Report, analyzing the digital transformation of the news industry. One of the report’s interesting findings is that the willingness to pay for news content is on the rise as more paywalls are erected and more news apps are being offered in the marketplace. The highest rates of users paying for digital news are observed in countries where the legacy of free news is less pronounced, such as Brazil (24%) and Italy (21%). In the US, 12% of users paid for digital news in 2012, up from 9% the year before. Unsurprisingly, News Lovers – those who access news several times a day and define themselves as extremely interested in the news – are twice as likely to pay as other consumers of news. Two demographic groups were more likely to pay for digital news in all nine countries participating in the study: younger users (25-34 year olds) and high-income households. In the US, device ownership also played an important role in the willingness to pay. After controlling for the level of interest in news and for demographic characteristics such as age, gender and income, the Reuters Institute found that mobile devices – and Apple devices in particular – are significantly encouraging payment for news. iPad users are 147% more likely to pay for news and iPhone users are 77% more likely to pay.
So what? The study’s findings reflect an important change in consumers’ attitude towards digital news. After years of getting most of their news for free, consumers are starting to accept the concept that quality news needs to be paid for. This is an exciting monetization opportunity for companies like Condé Nast, because consumers are more likely to pay for strong brands that produce high-quality, native digital content.
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OPA: Nearly Three of Four Member Sites Now Running Native Ads
The Online Publishers Association, a group that Condé Nast belongs to along with a host of other major media companies such as CBS, ESPN, and the New York Times, recently published the findings of a study of its member organizations' experiences with and opinions toward native advertising. Among the 29 organizations that participated in the quantitative portion of study, 73% are currently offering native advertising and another 17% are considering instituting native advertising by the end of the year. Readers, thus far have exhibited an acceptance of native ads -- 71% of the publishers that have native ads said they have not received any complaints from consumers and readers, while 29% said they have received a few complaints. And while native advertising's definition is still up for debate, the two most popular descriptions of it from members of the OPA are: - "Integration into the design of the publisher's site and lives in the same domain." - "Content either provided by, produced in conjunction with or created on behalf of our advertisers that runs within the editorial stream."
So what? Native advertising is one the industry's most discussed topics right now. While it remains to be seen how the ad type will rank among others in effectiveness, it is clear that the majority of online publishers recognize the need to make it part of their offering.
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Local Food Movement Gaining Speed
Interest in local food consumption is spreading and becoming the next frontier in the grocery industry, says a study by A.T. Kearney. According to the study, shoppers across all segments are willing to pay more for local food. However, single urban households show the most willingess to spend more as 95% agreed with the sentiment. Other groups that overindexed in a willingness to pay more to have food closer to the source were young couples with kids (78%) and affluent families (71%). Nearly three out of four polled were willing to spend at least 5% more on food that was local. When purchasing local food, consumers were most trusting of farmer's markets to deliver quality products, followed by natural food markets and locally owned supermarkets.
So what? The local food movement represents a change in consumer attitudes and might force a pivot point for many in that industry. While its good news for those in the locally-sourced food business, big box retailers, national supermarkets, and national food brands will have to work harder to maintain their trustworthiness (and market share) among consumers.
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Business Travel Industry Continues Growth
Mintel forecasts that total US spending on domestic business travel will increase 21% over the next five years, reaching $158 billion by 2017. In line with the domestic spend; Mintel projects US spending on international business travel to grow by 17% during that period to $146.5 billion. The rising cost of travel is contributing to increases; from 2012-2013, airfare prices increased by 4.6% and the per diem costs of hotel accommodations increased by 6.6%. The rising costs of travel have impacted the way business travelers approach their plans -- business travelers were more likely to have taken a business day trip (38%) than an overnight trip (29%).
So what? Despite cutbacks in many organizations, business travel is still booming and a necessary part of the job for many. Companies that heavily rely on business travelers to drive revenue, such as airlines and hotel groups, can find an engaged audience of business travelers across many of Condé Nast's brands and platforms.
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Quick Takes
Walmart Drives Most in US Retail Sales
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Jeep is Perceived as America's Most Patriotic Brand
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AT&T & Verizon Spent the Most Ad Dollars in 2012
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There Are Now 2.7 Million Single Fathers in the US
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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

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