MARCH 28, 2011

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Technology
The Web Vs Apps: The Battle Continues
One common theme throughout CNtelligence has been the changing landscape of how we consume digital media: via the web (open browsers), or via apps (closed, packaged platforms). The latter has been getting most attention as of late and is a bet by many to be the dominant form of digital consumption in the future. However, as comScore’s report suggested in last week’s newsletter (see “comScore: Maybe The Web Isn’t Dead Afterall”, 3/21), browser use is not necessarily on the decline, indicating that the future may not be an “either/or” scenario but more of a world where the web and apps live in harmony (or competition). A recent article in the New York Times suggests that the growth of HTML5 could further strengthen the web’s status in this rivalry. Engineers say the technology will make it possible to write apps, accessed with a browser, that are as visually rich and lively as closed, packaged apps. Potentially, HTML5 could be the main technology used for all mobile programs, with some tweaking of applications on each device; thereby reducing publishers’ dependence on purveyors of closed networks (like Apple).
So what? “‘If HTML5 lives up to its promise, that would make my life easier,’ says Joe Simon, chief technology officer at Condé Nast”- NY Times, 3/26/11
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Media Content Drives Tablet Purchase Intent
According to a recent study by the Boston Consulting Group (BCG), tablet and e-reader purchase intentions are high, especially among those who are already familiar with the devices. Half of Internet users in the US who knew about tablets and e-readers planned to buy one in the next year, and 70% were considering a purchase in the next three years. BCG’s research suggests that multipurpose tablets are in greater demand than single-purpose e-readers, as respondents indicated a desire to consume a variety of digital content on their devices. Most respondents in the US and abroad agreed that enhanced web access and the ability to purchase and play back a variety of entertaining content, including music, video and games, would be key to driving usage of tablets and e-readers. The study also found that consumers are willing to pay for such content; a good sign for publishers and other content owners that view tablets as an opportunity to create digital revenue streams.
So what? “The challenge—and opportunity—is to produce immersive, interactive content that engages consumers and provides a real revenue stream for publishers.” - John Rose, senior partner and global leader of media at BCG
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Media
eMarketer On Twitter: Don't Believe The Hype
A recent eMarketer report states that although Twitter users are a sizable and growing bunch, their numbers are considerably smaller than those reported by many media outlets and even Twitter itself. For example, Twitter’s online fact sheet says the company had 175 million registered users as of September 14, 2010. However, this number refers to total accounts signed up to date and includes accounts that may be inactive or shut down completely, as well as automated feeds and people (or companies) with multiple accounts. eMarketer claims that based on more credible survey data, there will be just over 20 million US Twitter users by the end of 2011, and that base will increase to 27.7 million by 2013. eMarketer also sheds light on some usage stats: most users never tweet at all- fewer than 25% generate 90% of tweets on a worldwide basis.
So what? Twitter can be an effective marketing vehicle, but in order to use it to its potential, we must start with a realistic measure of its size and usage patterns.
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Deloitte: As Digital Media Explodes, Traditional Media Remains Strong
According to Deloitte’s State of the Media Democracy survey released last month, watching TV and reading print magazines are still at the top of our lists when it comes to consuming media. The survey indicates that digital media (Internet, mobile and social media channels) tend to enhance, rather than detract from watching TV or reading magazines. 71 percent of Americans still rate watching TV on any device among their favorite media activities, and since 2007 a consistent 70 percent of Americans state that they enjoy reading printed magazines even though they know that they could find most of the same information online; and 55 percent have continued to subscribe to printed magazines.
So what? “Enthusiasm for printed magazines is consistent across all age groups, a unique result in consumer attitudes across all the media categories, we surveyed,’’ said James McDonnell, principal, Deloitte Consulting LLP. “Publishers have the opportunity to develop smart strategies to ensure that they maintain their print readership while simultaneously advancing a digital strategy that enhances the user experience.”
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Lifestyle/Luxury
Do Celebrity Endorsers Pay Off For Luxury Brands?
According to the Luxury Institute, it depends upon the objective. If you want to drive sales- NO, if you want to drive awareness- SOMETIMES. According to a previous LI study based on 1,000 Americans with a household income of $250,000 or more and a median net worth of at least $1.5 million, only 1% of wealthy consumers say that a celebrity endorsement will spur them to purchase a luxury product or service and a mere 5% say that endorsements will increase their consideration of such purchases. In contrast, 13% of wealthy consumers said that they would definitely not consider a celebrity-endorsed luxury product or service. However, 18% of the wealthy say that celebrity endorsements help them become aware of luxury offerings. A recent Luxury Daily article suggests that celebrities resonate significantly more with aspiring affluents/luxury consumers than they do with existing ones. “I feel celebrity endorsements, and particularly having their own branded product as Elizabeth Taylor did with her perfume, are more influential with teenage girls and the aspirational affluent,” says Ron Kurtz, principal of American Affluence Research Center.
So what? Studies like these should make it clear that Condé Nast needs to be strategic in how we use celebrities in association with our brands.
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7 Trends That All Luxury Brands Should Follow in 2011, And Beyond
The luxury industry saw tepid growth in 2010; considering the state of the global economy, things could have been a lot worse. According to the Luxury Institute, top-tier luxury brands surged in China, while holding their own in the US, Japan, and Europe. Leading public companies have done much better than privately-owned brands by using their heritage, innovation, and resources to gain market share. Many family-owned European brands, rich with history but lacking innovation, have suffered and are desperately looking for capital. Regardless of recent performance, luxury companies must fight hard to maintain its relevancy. The Luxury Institute has identified 7 trends that, if followed, will allow luxury brands to prosper during these tumultuous times and beyond.
So what? As the premier media company for advertising luxury products, Condé Nast needs to understand the challenges our clients face.
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Culture
Why Do Some Brands “Feel” Better Than Others?
According to a recent study conducted by Metrixlab and branding firm BR-ND, it is emotion, not rational thought, that drives our decisions about which brands to buy and use. According to the study, human emotional drives are the foundation on which thought processes, decisions and actions are based. Although we think that decision-making about brands depends strongly on functional benefits, it all comes down to one question: how will this make me feel? It is not just about what the brand represents (eg sexiness), but about what is internalized as a desired feeling linked to the brand (feeling sexy when using it).
So what? These studies help support Condé Nast’s claim that brand passions matter.
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Quick Takes
2010 Ad Pages: Total Magazines Down By 0.1%; Condé Nast Up by 7%
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Hot List Of The Week: The World’s Top 10 Busiest Airports
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Top Online Video Properties, February 2011
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Top U.S. Flat-Panel TV Brands (Q4 2010)
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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