NOVEMBER 18, 2013

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Advertising
Opinion: Advertisers Over-Exploit Consumers' Time & Attention
In an opinion piece published in this quarter's Journal of Advertising Research, academics from Bentley and Simon Fraser University argue that advertisers have over-exploited consumers with countless unwanted interactions that have led the group they are trying to endear to turn away. The group writes that information technology has allowed for massive cost reductions that have enabled advertisers to serve an exponential number of interactions that are cheap for them and intrusive for consumers, such as pop-ups and junk e-mail. The word advertise comes from the Latin advertere "to turn toward," but the onslaught of messages are leading consumers to find ways to do just the opposite, such as skipping commercials and filtering unwanted messages into junk-mail boxes. The paper's authors feel solutions to this issue include systemic caps to advertising, government regulations as have been instituted in countries like Sweden, continued consumer pushback and re-evaluation by the advertisers themselves as to what constitutes an effective message.
So what? This paper eloquently describes a fundamental flaw in many forms of advertising -- ads can be very intrusive, so much so that ways have been developed for consumers to avert them. Conversely, print advertising has the benefit of being complementary to its media experience and opt-in by nature. Advertisers that do not want to further contribute to the growing glut of ineffectual interactions (that are often measured on their ability to gain exposure rather than engagement) might find more receptive audiences in print.
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Media
Television Program Ratings Positively Correlated With Cast Diversity
In a new report, researchers at UCLA explore the relationship between the success of television shows and the ethnic and gender diversity of the cast. The report, “The Hollywood Diversity Brief: Spotlight on Cable Television” found that programs that featured more racial diversity had more viewers than shows that were less diverse. Ratings for programs on cable were higher among shows that featured casts that were 31% to 40% minority, while ratings were lower when shows’ casts were comprised of 10% or fewer minority cast members or if more than half of the cast was minority group members. Ratings for broadcast TV were at their highest when minority casts members were 41% to 50% of the total cast.
So what? This report shows a correlation between diversity in a show's cast and its viewership. As the American population becomes increasingly multicultural, consumers are showing a preference to see environments that are reflective of their own heterogeneous lives. Content creators should keep this in mind and look to embrace a diversity of backgrounds and stories.
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Digital
Hotel Brands Show Digital Acumen
By next year, three out of five hotel bookings will be done through brands' sites, so it’s important that hotels have a strong digital presence. And according to L2's Digital IQ Index the industry has gotten better at providing consumers with good web destinations. In its most recent Digital IQ Index, L2 rated the majority of brands it analyzed with a "Gifted" rating or better. Best Western and Holiday Inn were given the best rating handed out as both were considered “Genius.” L2's ratings account for the site's effectiveness and ability to convey brand attributes (30%), effectiveness of digital marketing tools such as search (30%), compatibility with mobile (25%), and its social media presence (15%).
So what? The ability of hotels to build stronger web platforms is a bit of a double-edged sword. On one hand it shows a greater digital commitment, but on the other it brings some marketing elements that hotels use in-house. This will be an interesting trend to keep an eye on; it will require some creativity to ensure traditional branding and promotional channels remain a part of hotels' marketing plans going forward.
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Retail/Shopping/Commerce
The Web Will Influence 60% of U.S. Retail Sales by 2017
A new Forrester report forecasts that by 2017, 60% of all U.S. retail sales will be influenced by the web, either as a direct e-commerce transaction or as part of a shopper’s research on PCs and mobile devices. Forrester estimates that total retail sales in the U.S. will reach $3.6 trillion in 2017. Of those, 50% ($1.8 trillion) will be in web-influenced offline sales, up from 39% in 2012. Another 10% ($370 billion) will be in online sales, an increase from 8% in 2012. This growth is expected to affect every retail category, but four sectors are projected to drive the majority of cross-channel sales: grocery, apparel and accessories, home improvement, and consumer electronics. Dollars spent online tend to be strongest in categories where consumers don’t need to touch the product (e.g. software and music) or have it immediately (e.g. PCs). On the other hand, in categories like groceries and furniture, consumers tend to research online more frequently, but prefer to make the purchase in the store, where they can inspect the product and consult with sales associates.
So what? As consumers become more accustomed to shopping online, they’re increasingly likely to use the web to support all of their purchases, particularly as a research tool. Condé Nast gives brands the opportunity to reach these consumers as they are researching, through both content and advertising.
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Reader Response
READER RESPONSE: Consumers Use Their Smartphone on Path to Purchase, but More Likely to Complete the Journey on a Tablet or PC
Ned Newhouse serves as CN’s Director of Mobile, on the job for the last 2.5 years. He offers his take here on the November 4 CNtelligence item that covered a Yahoo! Study on how users are using smartphones on the path to purchase. "Absolutely. This point is supported by a number of studies. Smartphones are the consumer’s, handy, go-to, 16-in-1 device. Average US Smartphone ownership is 60%, and for CN it’s even better at 80%. Logical thinking puts most use “on-the-go” however, it’s to the contrary. A September 2013 AOL user study found that 60% of non-voice US of mobile is inside the home versus 40% outside. I’ve been in the NY media space for the last 25 years and I’m bullish. Mobile ads and content more highly resonate better than any other medium yet. We’re so leaned in, focusing (especially on a phone screen) on our own personal device. It is why I believe smartphones will earn faith as the “one to buy” advertising vehicle, because the data all support substantial same user driving PC and Tablet E(M)commerce. The AOL Study also concluded that people with multiple devices (PC, Tablet, Phone) investigate on one device, but 70% buy using another. However, smartphone and tablets need a new model versus just picking up the desktop cookie for tracking and identification. You cannot track cross device use. Also because mobile devices don’t use cookies, they don’t track the same. For example, “did they return to the site subsequently and buy” cannot be tracked, and retargeting is out too. Getting $1M Mobile ad campaigns remain a client side sale. Good creative is a must. The engagement ad options to tie-in the phone’s social, camera, video and other applications make “respond-ability” easy and trackable. The key is creative that motivates people to respond. Well thought out interactive seeking, rich media creative will drive substantial, measureable response, direct from an ad. We’ve seen five times higher the response rates over desktop with more effective ads that cost as little as $1-$5K that are internally developed. I anticipate that MobileWeb will amount to 50% of our digital traffic by December of 2014. Our brands today already reach an even more filtered affluent buying and influencer audience. Mobile has gotten to a place IF the execution is exciting to consumers, a salesperson’s faith is justified to sell $1M+ programs. If your client can provide some creative and direct collaboration time together, even on the phone - please call on me to help create PR worthy, KPI beating mobile creative advertising programs. Absolutely." NedN 4TS x5142 ORIGINAL ITEM on SMARTPHONE PATH TO PURCHASE A new report by Yahoo! outlines how users of smartphones, tablets, and personal computers are using their devices throughout the path to purchase. Smartphone users are actually slightly more likely to use their device to visit reviews sites and communicate with others about a product than tablet and PC users. However, when the time comes to make a purchase, consumers are significantly more likely to complete it on a tablet or PC. A handful of categories, including entertainment, travel, and dining, buck the trend and over-index on smartphone purchasing.
So what? While this analysis only covers self-reported behavior, it is interesting nonetheless that consumers feel they are consulting their smartphones just as much as their PCs on the path to purchase. Since shoppers are still somewhat hesitant to complete purchases on smartphones, this might mean the mobile ad community will have to resign itself to a place earlier in the purchase funnel for a little while longer.
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Quick Takes
New York Times Reports Its Making More Money Since Introducing Paywall: Company Has Shown Year-Over-Year Revenue Growth in Eight of the Last 10 Quarters
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Less Than One in 10 Americans Get News from Twitter
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Netflix & YouTube Account for Half of All Video Streaming
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Congress's Approval Rating Hits New Low
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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