AUGUST 08, 2011

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Media
Study: Context Is Essential For Effective Advertising
A recent study by CBS Corporation and the Cambridge Group illustrates that marketers must go beyond demographics to effectively reach consumers who will be most receptive to their ads. The study took a 360-degree perspective of consumers, segmenting them not by demos, but by media consumption, attitudes, motivations, and behaviors. One of the key findings of the study was that marketing is most effective when the ads appear within (or alongside) content that matches a consumer’s interests, not necessarily when they are targeted to a specific demographic. For example, the study found that an advertiser who wants to reach high-spending mobile-phone users who have indicated that they are willing to change service providers is much better off placing their ads within sports, drama, and news content; two of which actually under-index for the target demo, adults 18-49. With such insight, the authors of the study hope to create a buying system for marketers that moves beyond demographic reach and into quality reach.
So what? Although this study emphasizes TV content, it proves something essential to Condé Nast’s key ad selling proposition across all platforms: context matters.
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Economy
Nielsen: More Consumers Worldwide Slip Back to Recessionary Mindset in Q2
According to Nielsen’s quarterly Global Online Consumer Confidence Survey, consumer confidence declined to its lowest level in six quarters to 89 as economic recovery hit a stumbling block and recessionary jitters again reverberated around the world. Confidence in the U.S. fell five index points to 78, two points lower than the 80 points recorded in the first half of 2009 at the height of the global recession. According to the study, 58% of global online consumers said they are still in a recession (the most in the past year), with 31% of U.S. consumers saying they have no spare cash for discretionary spending, along with 25% of Middle East/Africa consumers and 22% of Europeans. “Weak economic figures, slowing manufacturing performance and inflation in Asia, an intensifying debt crisis in Europe and continuing political instability in the Middle East combined with rising household expenses in the U.S. have taken their toll on consumers’ fragile confidence. Hopes for full global recovery in the next 12 months substantially weakened in Q2 as the majority of consumers around the world remained in a recessionary mindset,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of Nielsen. The study suggests that in order for the outlook to improve for the rest of the year, consumers globally will look to greater stability in food and energy prices, as has begun to occur recently, along with abatement of region-specific concerns.
So what? Marketers across all sectors must be alert to consumer mindset indicators such as this one if they are to create meaningful messages that resonate in today’s uncertain environment.
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Culture
The Myth Of A Unique Youth Culture
The Millennial generation (ages 16-32) is characterized by both its ethnic diversity and its openness to the influences of other cultures and ethnicities. Because of this, many marketers are under the impression that Millennials have developed a sort of hybrid culture that represents an amalgamation of ethnic influences. According to this point of view, Millennials can be marketed to as a cohort with relatively little attention needing to be paid to their individual ethnic heritages. A recent paper by The Futures Company/Yankelovich suggests that this strategy misses the mark. While Millennials are the most ethnically diverse generation in U.S. history, many of them also remain highly attached to their cultural heritage and traditions. According to the paper, Millennials, for the most part, have not formed their own unique culture that represents an amalgamation of multiple cultural influences. Rather, most Millennials are multicultural in the truest sense of the word, meaning that they have access to, and can exhibit, more than one distinct cultural sensibility. They maintain strong ties to their cultural heritage, while at the same time appreciating and valuing elements and influences from many different cultures.
So what? This paper suggests that Millennials will respond to global multi-cultural messaging.
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Retail/Shopping/Commerce
Social Commerce Will Change How We Shop
According to a recent paper by J. Walter Thompson, social media will have a significant impact on our shopping habits. Social networks are well-established, as is e-commerce, but it’s only now that we’re seeing the meshing of the two and a great deal of hype around the possibilities. “Social will have a transformational impact on shopping… The key is to begin to experiment,” said Christopher Payne, chief of eBay North America, at the Internet Retailer Conference in June. JWT maintains that just as retailers gravitate to densely populated, highly trafficked areas in the real world, they are now following that model in the virtual world. Rather than hoping for customers to come to them, they’re going to where millions of consumers are spending their time, sharing their opinions, recommendations, and (in some cases) purchases—Facebook. So far, 100-plus brands and retailers have experimented with selling directly on Facebook, and more are jumping in every day. Research firm IDC predicts that 10-15% of total consumer spending in developed markets may be funneled through sites such as Facebook in the next three to five years. The paper does highlight potential obstacles to social commerce, such as privacy concerns and limits on effectively mirroring the shopping experience. But by and large, JWT suggests that the benefits will outweigh the risks and social commerce will eventually be the norm.
So what? Influencing consumers' buying decisions through brand advertising will continue to be relevant regardless of whether people shop online, through social media, or in retail stores.
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Technology
McKinsey: The Digital Revolution Intensifies
New McKinsey research highlights a dramatic increase in the intensity with which people use digital devices and platforms. Nearly 50 percent of US online consumers are now advanced users of smartphones, social networks, and other emerging tools—up from 32 percent in 2008. McKinsey’s findings highlighted the growth of advanced multi-digital and rich-media segments: the people most likely to be early adopters of new technologies, often younger men; those spending more time on social networks, often women; and those more likely to consume internet-based video. Meanwhile, McKinsey has seen a decline in segments focused primarily on one kind of digital use (such as e-mail or gaming), as well as late adopters whose digital consumption is superficial. Behind these broad category shifts are meaningful changes in how consumers use core technologies.
So what? Digital sophistication is on the rise. Naive digital users are a vanishing species.
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Quick Takes
CHART OF THE WEEK: Apple Made Twice As Much Profit On Phones As Everybody Else COMBINED
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Hispanics Have Highest Tablet And E-reader Adoption
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Google+ Hits 25 Million Visitors
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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