OCTOBER 07, 2013

If you prefer to read this in a browser, please click here.
Video
Pay TV Continues to Dominate the Video Subscription Market
In a recent study of video content consumption among 21-49 year old consumers, PwC found that cable and satellite subscriptions still dominate the market, but additional subscription services such as Netflix are added to complement the traditional services. Non-traditional video services are appreciated for the convenience of watching a variety of content whenever and wherever, as well as the power of their recommendation engines (which many view as more credible than recommendations from friends and family). Consumers are generally willing to watch ads in lieu of subscription fees, especially if they can select advertising categories that are related to their individual interests. However, this willingness greatly diminishes as screens get smaller and more mobile – consumers are much more open to ad-attached packages for TVs and PCs than for tablets and cell phones. Consumers explain that when they are viewing content on their mobile devices, they often have a short amount of time for viewing and they don’t want to interrupt it with ads. They are also concerned about using up their bandwidth and battery.
So what? The dynamics of the TV market serve as an interesting case study for the subscription-driven magazine industry. Consumers are increasingly augmenting their traditional content sources with digital ones, and the way to their heart is through personalized and customized content discovery tools. Subscription models may be especially important for mobile content, as consumers are less receptive to advertising on mobile devices.
> Read more and comment
Fashion/Beauty
L2: Personal Care Brands Struggling with Digital
A recent audit of 75 personal care brands by L2 found that beauty brands have a lot of work left to do on their online and mobile platforms to match the digital presence of other categories. According to L2's research, more than two of three personal care sites had not updated their homepages in more than a month and one-third suffered from broken links. Three in ten brands had not purchased branded search terms, despite search's importance in product discovery. Mobile was also a weak spot for many personal care brands: while one-third of searches for personal care and beauty brands occur on a mobile device, less than half of personal care brands have a mobile optimized site. The overall lack of digital strength may be one significant reason why beauty and personal care brands are failing to take advantage of e-commerce opportunities. On average, only 4% of beauty and personal care sales occur through e-commerce. The average is bolstered by skincare (12%) and fragrance (6%), but depressed by oral care, hair care, deodorants, tissues, and sanitary protections, which all have less than 2% of sales occur online.
So what? Considering that many personal care brands have less than ideal digital presences, there is an opportunity for Condé Nast brands to take a leadership role in the space. From a consumer perspective, weak sites elsewhere may be an opportunity for CN to build audience among those seeking quality beauty information. From an advertiser perspective, CN might find opportunities to further partner with beauty clients to help them create better and more engaging digital offerings.
> Read more and comment
Mobile/Tablets
In-App Mobile Ads Need to be Targeted, Immersive and Non-Disruptive
With mobile app downloads and usage on the rise, marketers are increasingly able to reach large and diverse audiences through mobile in-app advertising. Forrester found that 40% of US smartphone owners recall seeing ads in mobile apps, but many find in-app ads interruptive and irrelevant. Despite this negative attitude, more than half of those users have taken an action, such as researched or purchased, after seeing an ad. On the advertiser side, in-app ads face many hurdles. The market for in-app ads is still in development, and there are no clear standards for ad buying and for creative execution. Additionally, there is difficulty tracking and measuring the performance and effectiveness of these ads. To take advantage of the in-app advertising opportunity, Forrester recommends utilizing unique targeting capabilities that apps offer to reach the right audience at the right time. The campaign should be immersive and designed for the best user experience, incentivizing users to interact rather than interrupting them. The content itself should offer value to the user and focus on utility, since customers are in a utilitarian mindset when using their mobile devices.
So what? Not all digital advertising was created equal. Marketers must realize that mobile in-app ads are fundamentally different than mobile web display advertising, and even more so than desktop web advertising. To make sure that their in-app ads have the right impact on consumers, marketers need to develop new formats and experiences that are aligned with the unique nature of apps.
> Read more and comment
International
Millennials in the BRIC Countries: Stressed, but Optimistic
There are over 800 million millennials (18-35 year olds) in the BRIC countries of Brazil, Russia, India and China. And like their home nations in totality, they represent a group whose business many brands would like to attract. According to a new report from J. Walter Thompson, millennials in these countries come from very diverse backgrounds, yet share many of the same feelings about their place in the world -- 70% feel their generation has been dealt an unfair blow because of economic uncertainty globally. Despite that challenge, BRIC millennials remain optimistic and entrepreneurial -- 83% feel their finances will improve in the next six months and 71% said if they had trouble getting a job they would start their own business. And while many feelings are consistent across regions, the demographic profiles of these millennials look very different in some areas. For instance, 87% of millennials in India are college graduates while only one in four Brazilians have received their college diploma; 56% of Russian and 65% of Chinese millennials have graduated college. While they may have less access to education, Brazilian millennials acknowledge its importance as 82% say it is a good investment -- a higher percentage than any of the other BRIC countries. Brazilians are also the least likely to be married -- about one-third of them are married compared to about half the millennial population in the other BRIC countries.
So what? It seems like every advertiser is building a millennial component into their campaigns. With that, the importance of reaching and understanding millennials in the United States has never been greater. But, far less is known about the group globally. This report provides some insight on the group in the emerging markets. In a lot of ways BRIC millennials' guarded optimism is not very different than the outlook of many American millennials.
> Read more and comment
Quick Takes
Tablets Still Primarily Used as An Entertainment Device
> Read more and comment
Teens Nearly as Likely to Purchase Physical Products on Smartphones as they are Digital Products
> Read more and comment
Hispanics Who Prefer the Term 'Hispanic' Outnumber Those Who Prefer 'Latino' By Two-to-One, But Most Say It Does Not Matter Either Way
> Read more and comment
56% of Americans Look Themselves Up on the Internet
> Read more and comment
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