MAY 09, 2011

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Announcement
***NEW SOCIAL CAPABILITIES ON CNTELLIGENCE***
We have worked with Condé Nast Studio to build a couple of exciting new interactive features on CNtelligence: 1) A “Comment Box” where users can publish comments regarding each article live directly on the newsletter (with the option of anonymity if desired). 2) The ability to provide direct feedback to the Editor (Michael Gratz) via the newsletter, without the need to send a separate email. Great thanks go out to Anthony Landa, Meghna Mathur, Kesal Patel, and Alex Melman at Condé Nast Studio for their ingenuity and creativity in helping to create these exciting capabilities. We are looking forward to your comments and feedback!
> Announcement
Media
Brand Equity Under Assault
Price promotion, short term marketing strategies, and now hyper-active social media usage have all led to measurable declines in consumers’ trust of brands. Young & Rubicam’s BrandAsset Valuator indicates that the percentage of brands that consumers deem trustworthy fell from more than 50% to 20% between 1997 and 2008. This is sobering news for CMOs as they figure out how to regain their brand’s reputation in an era where their products, services, and company are subject to public scrutiny. According to a recent report by Forrester, in the digital age, a brand’s health is more vulnerable as consumer opinion travels further and faster, spreading like a communicable disease. The report boldly states that CMOs who remain detached from the everyday pulse of consumer sentiment are putting their brands at great risk. Today, brand health is under attack in four ways, through: 1) greater volume of data sources; 2) faster velocity of consumer data; 3) broader visibility of consumer sentiment; and 4) greater volatility of consumer behavior. To manage these four V’s of digital brand influence, CMOs and marketing leaders must prescribe a new approach of empowered brand health by building their: 1) brand responsiveness to act quickly to rapidly changing market conditions, and 2) brand resilience to counteract unforeseen crises and threats.
So what? This report highlights specific tools and methods for monitoring brand health in this era of increasing consumer empowerment.
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Report: India On The Verge Of A Digital Media Explosion
According to a recent report by British ad agency BBH, India’s digital media usage (online, mobile, and social) is skyrocketing. But the most intriguing implication of the report is that India may just be at the beginning of its digital revolution. The statistics are astounding: • Only 8% of Indians have access to the Internet; with a population of over 1.2 billion, that still represents 100 million people • 31% of Indians living in rural areas don’t even know the Internet exists (more people than the population of Brazil) • 50% of Indians are ages 25 or below • The number of Internet users in India grew by 25% in the past 12 months alone • The value of Indian ecommerce grew by 60% in 2010 • The number of mobile subscribers in India is growing by 20 million every month • There are more Indian Facebook users than the entire population of Australia, yet they represent only 2% of India’s population.
So what? As is true for China, India represents an enormous growth market for global media companies like Condé Nast.
> Read more
Culture
FOMO (Fear Of Missing Out) - A Social Epidemic Or A Golden Opportunity For Brands?
J. Walter Thompson has recently written a paper that examines a cultural phenomenon that is impacting both consumers and marketers alike: FOMO (Fear Of Missing Out). JWT defines FOMO as the uneasy and sometimes all-consuming feeling that you are missing out—that your peers are doing, in possession of, or “in the know” about more or something better than you. FOMO may be a social angst that’s always existed, but it’s going into overdrive thanks to real-time digital updates and to our constant companion, the smartphone. With 600 million-plus active users on Facebook, not to mention Twitter and other social platforms, today’s unprecedented awareness of how others are living their lives will only heighten, ultimately leaving people predisposed to FOMO. This phenomenon has negative implications sociologically, as FOMO can be quite paralyzing—people can become caught up in their fears, unable to decide just what they should be doing at any given moment. But FOMO also has great positive potential for brands: it heightens participation on social media platforms, motivates consumers to do more, and can drive increased spending.
So what? Smart brands can leverage FOMO to their advantage by easing it, escalating it, making light of it, or even turning it into a positive.
> Read more
Technology
eMarketer: How The iPad Is Transforming Retail
As noted throughout past CNtelligence issues, technology is changing the way we shop. Other studies cited in previous CNtelligence articles have already established the increasing role smartphones are playing in the shopping process. In a recent report, eMarketer speculates on how iPads may alter shopping behavior as well. A recent survey found that 41% of consumers who planned or were considering buying an iPad cited shopping as a primary reason for their interest. The iPad’s vivid imagery, tactile screen, and portability foster a casual and exploratory shopping experience that leads to product discovery, impulse buying and shared purchasing. The report outlines several strategies retailers are implementing to leverage iPad apps.
So what? Since so many Condé Nast properties spotlight products that people buy at retail, we have an opportunity through our digital apps to play a greater role in the new consumer shopping experience.
> Read more
Study: Privacy, Security Now a Major Concern For Mobile Users
Privacy, security and the possibility of being tracked across the web by advertisers are all big issues for users of the desktop Internet. And now, as we have seen with Apple’s recent iPhone privacy scandal, with mobile phones more sophisticated than ever, the same issues are causing concern for mobile users who carry around a wealth of personal data all the time. According to a recent study conducted by Harris Interactive and online privacy service provider TRUSTe, the top concerns among US smartphone owners are privacy, followed by security. Smartphone owners are wary of sharing information via apps, and many do their best to protect themselves with strong passwords and by reading privacy policies. But just 36% of respondents said they felt in control of their personal information when they used their mobile devices.
So what? It would be wise for Condé Nast to include privacy and security assurances to our customers as we delve deeper into the mobile space.
> Read more
Condé Nast Exclusive
MRI: Condé Nast Readers Are “Super Influentials”
It has been a widely held notion since Malcom Gladwell wrote “The Tipping Point” that “influentials” (the 10% of the population that influences the decisions of the other 90%) are the most valuable target for marketers to reach. MRI has since established a target on their national syndicated study that competitively measures this valued group among media companies. MRI defines these “Category Influentials” as “the leading disseminators of information in the consumer and public opinion marketplace, the one in ten people who tell the other nine how to vote, where to eat, and where to buy.” MRI has gone on to identify an even more elite segment of influentials called “Super Influentials”, who are more frequent recommenders across social networks, more highly trusted, and more deeply familiar with the category. Dan Jennings, Senior Research and Insights Manager, found that Condé Nast Indexes #1 or #2 for “Super Influentials” in 44 of the 67 categories measured by MRI.
So what? These findings provide solid quantitative evidence that Condé Nast delivers the most sought after audience among all major media/publishing houses in the industry today.
> Read more
Economy
Consumer Reports Index Is Positive For First Time
The Consumer Reports Index (CRI), created in 2008, measures consumer sentiment in the U.S. and is based on a number of factors, including: financial pressures, general stress, employment outlook and buying behavior. For the first time since its inception, this Index moved into positive territory in March 2011. Driving the positive turn in consumer sentiment was a significant downturn in financial stress, according to CRI analysts. While major purchases (like cars and homes) were stable or down in March, the employment index was up and the personal financial outlook was much improved.
So what? There are many mixed messages about recovery in the first quarter of 2011, but signs generally point in the direction of slow but steady improvement for many consumers.
> Read more
Lifestyle/Luxury
Luxury Brands Can Use Twitter To Drive Sales
According to a recent Luxury Daily article, many luxury brands are beginning to use Twitter as an effective means to boost their bottom lines at both retail and online locations. Brands, retailers and hotels such as Bloomingdale’s, Stella McCartney, Bluefly, Bergdorf Goodman and Four Seasons are successfully using short and direct tweets to inform customers of special deals, in-store events, and online exclusives that are translating into increased sales. The article suggests that Twitter appeals to affluent consumers because the messages can be highly personal, especially if a customer is directly messaged, re-tweeted or mentioned by the brand; resulting in increased loyalty across all mediums.
So what? Although we have previously called into question Twitter’s actual reach and identity as a social network on CNtelligence, Twitter should not be overlooked as a highly targeted, effective marketing vehicle that can especially resonate with affluent consumers.
> Read more
Quick Takes
Nielsen: Tablets Beginning To Cannibalize Other Connected Devices
Last year when we reported on early findings regarding iPad usage, tablets were used mostly as a companion to other devices. There was little evidence that suggested people were replacing or using their PCs or other connected devices any less at the time. According to this recent Nielsen report, times are changing.
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Study: Prices Ending In “9” Influence Luxury Buyers, Too
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CHART OF THE WEEK: Android's App Store Will Be The Same Size As Apple's This July
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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