APRIL 07, 2014

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Game Makers Exchange Rewards for Ad Exposure

A freemium game is defined as a video game where access is provided free of charge while more advanced features such as levels or virtual items must be purchased. These types of games dominate the app marketplace as they represented nine of the 10 most downloaded games worldwide last year. But game makers are rethinking what constitutes "paying" for those next levels or virtual items. Can engaging with an ad serve as a form of payment? According to research presented at last month's Advertising Research Foundation conference from game makers EA and WildTangent, the answer to that question is: yes, ad engagement can be a useful form of payment for all parties involved.

Gamers overwhelmingly prefer free games with ads to paid games without ads (86% to 14%) and they also like using ads to earn rewards within games (66%). And for marketers, the format offers good advertising metrics. According to the results of this study, in-game video ads that created a value exchange (ad engagement for game rewards) were 22% more noticeable than live TV ads and 75% more noticeable than ads in streaming video. Finally, exchanging ad engagement for rewards does not seem to cannibalize real purchases in game -- 94% more gamers spent money in-games after seeing the value exchange ads.


So what?

While Condé Nast might not have a direct stake in the games business, our business model is not far different than the one examined here. This study suggests that when we have gated digital content, visitors might be willing to "pay" for their access by engaging with an ad.

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Over a Third of US Consumers Now Own a Trio of Laptop, Smartphone, and Tablet

In 2013, 81% of US consumers owned a laptop, 65% owned a smartphone, and 48% owned a tablet, according to the annual Deloitte Digital Democracy survey. Digital omnivores – consumers who own all three devices – now account for 37% of US consumers, up from 26% in 2012 and only 10% in 2011. Along with the constant growth in the adoption of digital devices comes a change in content consumption. One in three consumers now watch digital video via a subscription streaming service, up from 17% just a year before.  Television continues to struggle to maintain consumers' undivided attention -- only 14% report watching television without any distraction (such as surfing the web, reading a book or talking on the phone).   And when multitasking, less than a quarter of multitasking activities are directly related to the programs they are watching.

So what?

As cross-device consumption and multitasking become increasingly prevalent, especially among younger generations, brands and advertisers need to rethink their strategies for reaching customers. The focus often needs to shift from the screen that provides the greatest reach to the screen that commands the most attention from users.

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Harris: Men More Likely than Women to Buy Big Ticket Items in the Coming Months

Harris Interactive recently updated their quarterly report on Americans' economic outlook and spending expectations for the coming months. Compared to the December results, consumers’ overall conservative stance about their finances remains stable. However, there are some gender differences in purchase intentions in the next six months. Men are more likely to plan to purchase big ticket items in the near future, such as a new computer (27% men vs. 20% women), a new automobile (18% men vs. 13% women), and a vacation away from home (42% men vs. 36% women). Perhaps reflective of their higher overall optimism, men are also more interested in investing than women. When the data are sliced by age, Millennials are more optimistic than their older counterparts, as 41% agree that in the next six months, they will have more money to spend the way they want, compared to 36% of Gen Xers and 28% of Boomers.

So what?

Reflective of the slow growth throughout this recovery, Americans remain cautiously optimistic. However, men are a bit more bullish than females when it comes to their own spending and financial plans. We have seen much written about the rise of the male shopper in recent years, and perhaps this bullishness will lend momentum to that trend.

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When Addressing Multicultural Audiences, Marketers Need to Know Whether they Are Targeting First or Second Generation Consumers

Many marketers have participated in efforts to attract multicultural audiences, such as Hispanics, over the past decade. According to research published in the International Journal of Research in Marketing, messages to multicultural audiences must be nuanced to resonate among their intended audience. The researchers assessed two strategies -- saliently identifying with the targeted group in the message or using a spokesperson or model as the same heritage of the intended audience. They found that for first-generation multicultural consumers, advertising with a spokesperson of the same background resonated well, but had a negative effect among second-generation consumers. Those second-generation consumers responded better to messages in which the ethnic identity was salient.

So what?

Marketers can get themselves into trouble when they target multicultural audiences too broadly. Just as any other group, multicultural groups are made up of unique segments. When structuring a marketing plan to attract multicultural consumers, advertisers should ask themselves a set of questions about the specific segments within the multicultural group they hope to attract.

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Quick Takes
After a Flat 2013, European Ad Spend Expected to Grow 3% in 2014

Source: Warc
Less Than Three in Five Households Own a Landline; Cell Phone Only Homes Continue to Gain Penetration

Source: CDC, Statista
Despite A Host of Digital Resources, Consumers Still Turn to Traditional Radio to Discover Music

Source: Edison Research and Triton Digital
Amazon's New Television Set-Top Box (Fire TV) Enters A Market Dominated by Apple and Roku

Source: Hillside Partners, Bll Estimates, Business Insider
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