DECEMBER 01, 2014

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Media
Bain: In Order to Succeed, Media Companies Must Invest In Native Digital Formats and Rethink Monetization

Bain & Company surveyed 7,000 consumers in the United States, Europe and the BRICS countries (Brazil, Russia, India, China and South Africa) about their media habits. Based on the study's findings, Bain provides three recommendations for media companies to grow:

  1. Invest in native digital formats. In developed countries, 43% of 15-25 year olds prefer a native digital format (such as YouTube) to watch video as opposed to traditional television (38%). The remaining 18% prefer digitized formats like Netflix. These younger consumers are relying on their social networks to choose video, music and books. Bain suggests that media companies take advantage of the growth in these formats and gather more data to inform better content planning.
  2. Rethink monetization. Many media companies have long been identified by their ability to drive revenue through subscriptions OR advertisements; fewer have been known to do both well. Bain suggests that media organizations will need a more nuanced approach in the future. Media companies should strive for greater equilibrium between consumer-pay models and advertising. Companies should also follow the likes of Facebook and LinkedIn, both of which have effectively leveraged large consumer data sets.
  3. Finally, Bain encourages media companies to improve their relationships with communications networks. As the quality of content (and the data load) becomes higher and parallels an increased demand on a network's bandwidth, both stakeholders will need to work together to ensure the consumer experience does not suffer.
So what?

While Bain's findings might not be considered earth-shattering, the suggestions do validate many of the strategic endeavors Condé Nast has pursued. As digital natives force publishers to rethink everything they knew about media consumption and monetization, media companies must be nimble to offer new products and pricing structures that respond to changing demands.

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Retail/Shopping/Commerce
Holiday Shopping Spend Will be Down in 2014, but the Number of People Celebrating Will Increase

This holiday season, shoppers will continue to spend cautiously, but online’s share of total spending will grow. According to PwC’s 2014 Holiday Outlook, the average household spend in 2014 will be $684, down from $735 a year before. Prices, deals and convenience considerations will be at the core of customers’ spending decisions. Online shopping is a great match for people seeking convenience and value, and digital will therefore account for close to half of holiday spending. 50% of spending will happen between the end of Thanksgiving weekend and Christmas, with another 21% spent on Black Friday and 21% spent prior to Thanksgiving. Post-season deal seeking will account for the remaining 8%. The top categories shoppers will spend on are clothing (61%) and gift cards (58%), followed by toys (39%), electronics (36%) and media and entertainment (31%). As shoppers are looking for other holiday experiences beyond gift giving, holiday gatherings grow in importance. Thanksgiving dinner is the most popular of these events, and 76% of Americans planned some sort of Thanksgiving celebration in 2014, up from 68% in 2013. The number of people planning to celebrate Christmas and Hanukah is also on the rise, but the number of out-of-home formal parties will drop as Americans return to entertaining at home. Spontaneous gatherings are also expected to increase, especially among millennials.

So what?

As Americans prepare for the holiday season, many will find themselves turning to content created by Condé Nast brands – from gift guides and product reviews, to recipes and party planning ideas. Understanding the shifts in behavior can help us craft content that address the new needs of consumers.

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Social Media
Global Survey: Tumblr, Pinterest and Instagram Grow in Popularity

In a recent study, GlobalWebIndex surveyed 40,000 global internet users aged 16-64 across 32 markets about their social media habits. Not surprisingly, Facebook still reigns supreme as four in five respondents reported having an account. However, Facebook faces some challenges among younger audiences. Half of teens surveyed said they were bored of Facebook and 54% said they're just not as interested in using it as they used to be. Conversely, Tumblr and Instagram boast the youngest audiences of the social sites measured. 38% of Tumblr's and 37% of Instagram's global audiences are 16-24; just 25% of Facebook's global audience is 16-24. Overall Tumblr (+120%), Pinterest (+111%) and Instagram (+64%) exhibited the most growth in reported usage when compared to data collected in GlobalWebIndex's survey in the first quarter of 2014.

So what?

Social media has permeated daily life around the globe, and each platform has slightly different audiences. Many of the "up-and-coming" social networks that have already been identified domestically are now going through their growth spurts abroad. 

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Quick Takes
Condé Nast Digital Reached More Affluent Millennials than Any Other Lifestyle Site in October

Affluent Millennials defined as aged 18-34 with a household income of $100K+.

Comscore_affluent_millennials_october_2014

Source: comScore
MediaRadar Reports That More Brands Advertised in Magazines in 2014 Versus 2013
14-10-min-ad-category-chart

Source: MediaRadar
Craft Beers Outsold Budweiser for the First Time Last Year
Budwesiser_versus_craft

Source: Beer Marketer's Insights, The Wall Street Journal
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