MAY 19, 2014

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Television is Still King for Advertisers, But Should It Be?

Nielsen has released its latest State of the Media report and despite increased competition for ad dollars and time spent, television is still king.  In 2013, the total television ad spend increased by 3% over the previous year to $78 billion.  That ad spend is supported by Americans spending time with television far more than any other media -- they watch more than 155 hours of traditional television each month.  However, that also means that viewers are being bombarded with commercials -- while watching 5 hours a day of television, they are being exposed to 15 minutes of commercials per hour.  In other words, 1 hour and 15 minutes of each person's day is watching commercials. But are they truly watching the commercials?  Maybe not.  Two of three tablet users and half of smartphone users report also using their device to surf the web while watching television.

Below are the percentage of device owners that engage in each behavior while watching television.


So what?

Television gets the lion's share of media time, so it gets the lion's share of ad dollars.  But with the consistently growing penetration of smaller screens and ways to engage on them, the question must be asked if that trend for television will (and should) continue to be the case.  Consumers are exposed to nearly nine hours of television commercials each week.  As they more often turn to their smaller screens during breaks in the action, will commercials continue to be an effective way for brands to advertise?

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Humor Can Backfire for Brands

Many brands create the majority of their advertisements around humor.  This is a somewhat risky practice according to research published by the Marketing Science Institute.  In a series of experiments, respondents were asked to rate their emotional responses and brand perceptions of ads created by other participants within the study.  The analysis found that ads with a humorous tone were perceived as more amusing, but were less likely to lead to positive feelings or persuasion.  The authors argue that attempts at humor can lead to negative feelings despite amusement and that those negative feelings can outweigh the good.  The researchers found three types of humor ads to be most dangerous:

  1. Any severe violation of accepted standards.
  2. Motivation of avoidance.
  3. Threatening of specific groups.
So what?

The scope of this study is somewhat narrow, but its results still hold credibility.  Advertisers often default to humor as a way to warm consumers to their brand or encourage sharing.  However, humorous ads come with the inherent risk that their negatives might outweigh their positives among the audience.

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Digital Influences One-Third of In-Store Retail Sales

A recent study from Deloitte set out to explore the influence of digital on the retail shopping journey.  The consultancy found that digital (across all platforms -- desktop and laptop computers, tablets, and smartphones) influences 36% of the dollars being spent on in-store retail sales and has a profound impact on various measures of success in retail. From a traffic perspective, 84% of visitors report using a digital platform for shopping-related activities before or during their most recent trip to a store. When it comes to converting their shopping experience into a sale, conversions increase 40% when customers use digital platforms before and during shopping in-store. The study also found a correlation between loyalty and digital behavior – across categories, customers who visit the store more frequently are also more likely to have used a digital platform prior to or during their in-store shopping experience. One of the reasons that customers use digital in-store is that they prefer to go to their own device rather than to a sales associate when they need assistance.

So what?

Despite the wide-ranging influence of digital platforms on the shopping journey, many retailers still measure the success of their digital efforts by focusing narrowly on online conversions. A more holistic approach is in order, and retailers should evaluate the success of investments like online advertising also through the lens of their impact on brick-and-mortar sales.

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Millennials Consume Entertainment on Their Own Terms

According to a new study from Verizon Digital Services, millennials are unique entertainment consumers. They spend nearly three times more of their TV-watching time online than those 35+.  They are also much more likely to marathon-view TV shows and tend to be using other devices while the TV is on. Millennials are loyal to brands like Amazon, YouTube, Facebook and Netflix, which match the way they consume entertainment and communicate the importance they place on form and function. But, while all four broadcast networks rank in the top 10 brands for non-millennials, none appear on the same list for millennials.   When it comes to social networks, millennials use Facebook to manage large numbers of friends, and turn to other platforms (like Instagram) for self-expression. They are also relatively strong users of community-based sharing sites like Reddit, Imgur, 4chan and 9gag.


So what?

Millennials' entertainment consumption trends are changing the paradigms of the past, and content providers need to change accordingly. When targeting millennials, content needs to be available at all times and on all platforms, and monetization strategies should focus on things that are valuable to this age group, such as instant, comprehensive access and cutting-edge technology.

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Quick Takes
While iPad Growth Has Slowed, Android Tablets Gain Penetration

Source: Strategy Analytics, Wall Street Journal, Statista
Older Millennial (25-32) College Grads Are Making More Money than Previous Generations

However, those without a bachelor's degree are making less.


Source: Pew Research Center
The Majority of Digital Publishers' Site Visitors Are New Visitors, However Higher Traffic Sites Have Higher Composition of Return Visitors

Noah & Sophia Were Most Popular Baby Names of 2013

Source: Social Security Administration
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 |

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