JANUARY 21, 2014

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Digital
Can Online Publishers Optimize Revenues by Charging for Content?
The Marketing Science Institute published a study by researchers from London Business School and the University of Michigan, in which they examine whether and how publishers should charge for access to online content. As the researchers point out, there is a tradeoff between advertising and subscription revenues – when erecting a paywall, publishers often take a hit to their overall consumption levels, leading to reduced earnings from advertising. By analyzing viewership to free and paid articles on ESPN.com, they found that on average, increasing the number of paid articles would reduce ESPN’s total revenues. However, on closer inspection it became apparent that there are two very different groups of customers. During the regular season, there is an influx of low-value customers who are not willing to pay for the content and respond negatively to paid articles. Customers visiting during the off-season, on the other hand, have a relatively high valuation of sports news and are more likely to pay for it. As a result, when a particular sport is off-season, revenues increase when more articles are put behind the paywall. The researchers suggest that publishers can maximize revenues by flexibly adjusting the amount of paid content they offer based on seasonality and dynamic consumer demand, rather than always offering the same amount of content against a fee.
So what? Many online content providers are experimenting with paywalls, trying to emulate the reliable dual-revenue model of magazines, whose revenues are derived from both advertising and subscriptions. The findings of these studies suggest that when evaluating whether to charge for content, publishers should account for heterogeneity in their audience base and seasonality in demand, and use those insights to design a flexible pay model.
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Fashion/Beauty
Beauty Buzz on Social Media: Consumers Talk Quality and Price
When talking about their beauty products and routines on social media, consumers mainly discuss the quality and price of products they use or are interested in purchasing, according to a study by Mintel. Other top topics relating to beauty products that consumers discuss are: reviews, product availability, and online shopping. When thinking about price and quality together, many consumers are willing to pay more for higher-quality beauty brands, reasoning that the quality is worth the extra cost. The majority of online beauty chatter occurs on blogs as 51% of beauty conversations take place on these sites. Facebook and Twitter are other top venues on which consumers talk about beauty. Reviews on retailer sites are also important social conversations. Over one in ten (13%) adults visited retailer sites to look up beauty product reviews. Sephora is the category leader with one in five (19%) beauty consumers having visited the site to read consumer beauty reviews.
So what? Consumers are discussing and looking for information about quality, price, and reviews of beauty products online and through social media. With rich print and digital media assets, a number Condé Nast brands are in a position to host, contribute to, and spark consumers’ conversations about trying and buying beauty products. As quality is the top most talked about attribute for beauty products on social media, content that showcases the value and quality of products should be part of the discussion.
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Media
Car Buyers are Heavily Influenced by Media
Young, digitally savvy and higher earners, prospective car buyers rely heavily on media in their purchase journey. A new study from the IAB found that while word-of-mouth is still the most significant source of information for their purchase decision, those intending to buy a car are also influenced by a variety of media, including broadcast TV (31% of auto intenders), newspapers (24%), magazines (21%), digital ads (21%) and email advertising (15%). Those media then trigger auto intenders to search online, with 86% searching for cars regularly or occasionally. Auto intenders are also twice as likely as the average internet user to be influenced by sponsored search ads. Searching using a computer is most popular, but smartphones are also used by a sizable share of auto intenders. In general, auto intenders are more likely to enjoy a wide range of online activities, such as video streaming, social networking and online shopping.
So what? Since all forms of media influence the automotive path to purchase, automotive brands should target prospective car buys across a multitude of channels. By advertising on Condé Nast properties, they are able to reach customers when they are in an aspirational mindset, both offline and online.
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Affluents
Affluent Americans Closed Out 2013 Feeling Good
The Ipsos MediaCT's Affluent Barometer (a regular online survey of U.S. adults 18+ with a household income of $100K+) found that affluent Americans thought 2013 was a better year for them, their families and the country than 2012 or 2011. Among affluents, 31% said the U.S. economy was good in 2013 -- that's nearly double the number of those who said the same in 2012 (16%) and nearly quadruple the number in 2011 (8%). And for the ninth straight month, affluents optimistic about the economy outnumbered those pessimistic about it. Economic optimism currently skews higher among men (46% versus 37% for women).
So what? While economic barometers delivered monthly often offer conflicting takeaways based on current events, this more macro measure from Ipsos provides insight that optimism is progressing among affluent Americans. The data illustrate that affluents are in a better state of mind than they have been in the previous couple of years and that positive outlook might lead to increased spending in 2014.
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Quick Takes
The Average American Attended Five Movies Last Year; Men & Millennials More Likely to Visit Theaters
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Open Rates for Retail & Daily Deals/E-Coupons E-Mails on Gmail Have Dropped by More than 1.5% Since the Introduction of Tabs
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eMarketer Estimates Advertisers to Spend An Average of $33 Per Capita on North American Social Media Users in 2014
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Americans Less Accepting of Extramarital Affairs than Australians, Chinese and Europeans
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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