JULY 11, 2011

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The Web Is Shrinking. Now What?
According to a recent article by AllThingsD.com (WSJ Digital Network), the meteoric growth of social media, mobile devices, and online video has resulted in the “rest of the web” shrinking. The article states that when you exclude just Facebook from the rest of the Web, consumption in terms of time spent shrank by nearly nine percent between March 2010 and March 2011, according to data from comScore. The article defines the “rest of the web” as that part of the internet that is document-based and navigated primarily via search. The author believes that this document-based, searchable web is losing relevance and being replaced by a new, social, and “fully connected” digital ecosystem. This connected, social web is alive, moving, proactive, and personal, while the document web is just an artifact — suited as a universal reference, but hardly a personal experience. This is a generational overhaul of the internet that has Facebook at its core, not Google (in its present state). Aside from far-reaching cultural ramifications, the implications for publishers are massive. Search Engine Optimization’s (SEO’s) strategic value, based on utility, will diminish and be replaced by social discovery efforts that are based on human connections, closer relationships, and stronger engagement; and, importantly for publishers, these efforts will be branded. The article predicts that as the “document” web of old shrinks, the new connected web will expand and deliver experiences that make our time online more effective, efficient, and enjoyable.
So what? If this article is right (and Mark Zuckerberg is counting on it), current emphasis on high reach and low CPM will likely weaken, and branding/engagement-based strategies will play increasingly dominant roles in the future social web.
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U.S. Online Ad Spending: The Floodgates Are Open
A new eMarketer report forecasts 20.2% growth in US online ad spending this year, and delves into the trends that will help digital advertising continue to grow steadily through 2015, when total online ad spending will approach $50 billion. The rise of mobile, the success of Facebook and the expansion of Google's offerings will all play a role. Although the report is very bullish, eMarketer also highlights several issues that could inhibit even greater online ad spending growth, including: more marketing in social media that won’t “count” as ad spending, a complex buying process for displays ads, and the proliferation of set-top TV ads stealing online’s thunder.
So what? With digital ad spending rising, it is important to grab our share.
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Studies: Digital Video Gaining A Bigger Piece Of Advertising Pie
Two recently released studies strongly suggest that more TV and display advertising dollars are shifting to online video. A recent IAB study found that 69% of marketers and 55% of agencies plan to increase their digital video advertising. The study predicts 22% growth in 2011, with online video accounting for 17% of total online display advertising budgets. Another recent study conducted by video ad network Brightroll found that media buyers and agency executives are mainly reallocating TV, search, social media and direct response budgets to online video. Despite its optimism, the Brightroll study does highlight some significant challenges ahead: clearer success metrics, proving ROI, and cost of online video.
So what? A bullish outlook for online video advertising is a positive signal for this emerging area at Condé Nast.
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What Does “Family” Mean To You? - Part 2
As noted in a Pew study cited in a previous CNtelligence article (see “What Does ‘Family’ Mean To You?,” 3/7/11), today’s American family looks very different than it did 25 years ago. In 2011, families include a growing number of unmarried couples living together, same-sex partnerships and marriages, interracial families, older parents and single-by-choice parents. The Futures Company/Yankelovich recently examined this phenomenon further and focused specifically on what it means to marketers. The paper states that despite radical changes in the demographic make-up of the all-American family, family in general has lost none of its prominence and importance in people’s lives; therefore, family remains as potent a basis for targeting and connecting with consumers as ever. The biggest adjustment that marketers will need to make in the face of changing family configurations is having to better understand and respond to the differing needs and buying patterns of non-traditional households. Families no longer have a predictable and uniform set of needs and wants, and marketers must adapt accordingly. The Futures Company suggests modeling various family structures against existing and future products in order to come up with the right marketing formula.
So what? Family structures will continue to evolve as more people accept non-traditional lifestyles. It is crucial for Condé Nast to be conscious of this shift and depict families appropriately in our magazines, apps, and websites.
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OPA Study Shows Tablets Popular For Reading Magazines
The Online Publishers Association just released the results of a study they commissioned to gain a fresh understanding of consumers' usage of tablets, content preferences and implications for advertising. According to the study, 12% of the U.S. population between ages 8-64 now own or use a tablet, and that number is projected to rise to 23% by early 2012, representing 54 million people. One of the more interesting findings of the study was that tablets are the preferred reading device over dedicated eReaders (Kindle, Nook, etc), printed newspapers and magazines, and computers for a variety of content; including weather, entertainment, news, sports and financial information. Other key findings include: • Tablets are preferred over PCs for many activities • Consumers want bundled content and payment options for paid content on their tablets, and they prefer a variety of retail channels to buy tablet apps • 89% of tablet users are satisfied or very satisfied with their tablet • 87% of tablet users are accessing content and information, the dominant activity for this device • 93% have ever downloaded apps; the average tablet user has downloaded 20 apps • 79% of app downloaders have paid for apps in the last 12 months; 26% of all apps downloaded are paid • 46% find tablet advertising within newspaper and magazine apps to be relevant, unique and interesting
So what? A fair question given the generality of studies like this. However, in a fast developing market, it is useful to have multiple benchmarks, of which this is one.
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Quick Takes
Best 10 Luxury Branded Mobile Apps Of Q2
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CHART OF THE WEEK: The Fall Of MySpace
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INFOGRAPHIC OF THE WEEK: How Much Data Will Humans Create & Store This Year?
If you’ve spent any amount time watching your Facebook or Twitter feed stream by, it should be obvious that the world is creating a lot of data. But because all that data is really just a collection of ones and zeros it can be hard to actually visualize how much is really there. One way to put it all into perspective is to hypothetically plug all that data into physical objects we all recognize. For example, the amount of data we are talking about (1.8 zettabytes) would require 57.5 billion 32 GB iPads to store. How much is that? About $34.4 trillion worth. That’s equivalent to the GDP of the United States, Japan, China, Germany, France, the United Kingdom and Italy combined. And that’s how much data we’ll create and store just this year.
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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

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