NOVEMBER 14, 2011

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Retail/Shopping/Commerce
Internet Flash Sales Face a Number of Challenges
Despite a number of recent positive stories about the proliferation of flash sales (such as Gilt Groupe or Rue La La), Forrester Research’s forecasts for these sites are not as positive. While Forrester reports that flash sales help customers discover brands, products, and services, they are less effective in translating to sales. 47% of subscribers did not make a purchase in the past year. Furthermore, flash sales seem to be causing subscribers to spend less at traditional retailers. 61% of Gilt Groupe subscribers and 53% of Rue La La subscribers report they spent less at traditional retailers since they started buying from flash sale retailers.
So what? Many of Condé Nast’s advertisers are already partnering with flash sale retailers or prospecting a partnership. This report should give those advertisers some pause as it indicates that flash sales may damage profitability. Sales on flash sites may actually be cannibalizing sales that could have been made at retail price. A more traditional marketing spend on the pages of Condé Nast’s magazines may be more advantageous for retailers.
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Innovation
Digital Disruption: Moving At the Speed Of Thought
Disruptive thoughts and technologies have been the driving force behind much of history. According to a new white paper by Forrester, digital disruption has the power to change more things at greater speeds than humans have ever seen. Between global connectivity and new levels of computing power, there are now ten times more innovators doing work at one tenth of the cost. The paper outline some key strategies to help businesses navigate the next decade. These include: Listening to consumer thoughts and actions, failing (with innovations) quickly and often and delivering total product experiences beyond traditional boundaries.
So what? Condé Nast is certainly ahead of the curve with our digital editions and apps. We’ve responded quickly to the changes in consumer habits by creating new experience that publishing companies haven’t attempted before. However, the high rate of change will continue so CN must continue to listen, innovate and create.
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Media
Social Media Buzz Correlates with Higher TV Ratings
An analysis from NM Incite and Nielsen studied the correlation between online buzz and television ratings, and found a significant relationship between the two. The correlation was strongest among people 12-17 and 18-34; among 18-34 year olds a nine percent increase in buzz volume in anticipation of a season premiere correlated to a one percent increase in television ratings.
So what? What is true for television is likely true for magazines. Condé Nast’s social media strategy should build consumer demand for our brand in print and online. Social media will continue to be an important part of the discovery process for new and repeat consumers.
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Business
Mobile Ad Spending Hits $1.2 Billion in 2011
eMarketer reports mobile ad spending will hit $1.226 billion in 2011, a +65% gain over 2010. eMarketer projects continued growth and a total mobile ad spend of $4.396 billion in 2015. The largest segments of mobile advertising in 2011 are messaging (36.1%), banners and rich media (30.7%), and search (28.5%). However, eMarketer projects that search and banners/rich media will own a bigger piece of the mobile advertising pie in the coming years.
So what? Mobile advertising has entrenched itself in marketing plans, and will continue to grow. Condé Nast should be on the cutting edge of developing mobile resources for advertisers, with increased focus on search and banners/rich media.
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Culture
Millenials: The Key to Success in Politics
The characteristics of the Millenial generation are unique in American history. They are the largest generation in our history, the most ethnically diverse and are the most socially liberal. Consequently, they are the strongest supporters of the Democratic Party. A new study by the Pew Research Center outlines the sharp differences in attitudes around politics between the Millenials, Gen Xers, Boomers and Silents (WW2 generation). They also buck the trends on some traditional democratic principles around Social Security and Medicare. One unexpected finding shows that while 50% of millenials ‘approve’ of Obama, their overall support for him (over the last 2 years) has dropped the most out of any generation.
So what? Understanding the Millenial’s habits and opinions is important to Condé Nast’s success. While this is already an important segment for Condé Nast, the Millenial's influence in politics and commerce will continue to rise in the coming years.
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Quick Takes
E-Commerce in 3Q 2011 Grows +13% Over Last Year
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Fewer Consumers Concerned with Credit Card Safety when Buying Online
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comScore's Top 25 Sites in September
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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