JUNE 25, 2012

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Digital Marketing: The Conversation Continues
Advertising Age published a comprehensive update on the state of digital marketing, and spoke to a number of key stakeholders in the advertising community. The three largest US advertisers -- Procter & Gamble, Unilever and L'Oreal -- each spend about 10% of their advertising budgets on digital, which puts the medium behind television and magazines. And, while digital has maintained a hold within that ad mix for a number of companies, questions still surround its effectiveness. Because of that, marketers are paying closer attention to measuring ROI and some of the early results are encouraging. P&G's Global Brand Building Officer, Marc Pritchard, said "the ROI work that we've done so far has demonstrated that digital is better than TV" and digital has "a smaller range of reach, but it's more targeted, and that's what gives it a higher ROI."
So what? This is an important capture of the current sentiment around digital advertising. Marketers will continue to shift dollars to digital, and ask for further measure of the impact of their investments.
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International Growth to Come from the Middle
While effects of the US recession have shrunk this country's middle class, a new paper from the Boston Consulting Group outlines future growth within the middle class of the global population. The BCG reports that the middle class will make up 30% of the global population by 2020. The growth will come from emerging markets, such as Brazil, India, China, Mexico and Russia. These countries and other emerging markets will comprise 45% of global GDP by 2020, compared to 31% today. While the middle class made up just over one-quarter of households in China and India in 2010, those households are forecast to nearly double and represent almost half of all households in each country by 2020. The growth will be made by upwardly mobile lower income households, and advancement in less developed cities and areas.
So what? The BRIC countries (Brazil, Russia, India and China) receive exhaustive coverage for the growth opportunity within them, but what is often left out are details about where the growth will come from. The growth of the middle class will be an important factor to consider for multinational companies setting strategy. Condé Nast might look for opportunities to further create marketing programs centered around the emerging middle class in some of these international markets.
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The 2012 Tablet User Profile
What age group showed the greatest percentage growth in tablet ownership in 2012? 55-64 year olds! The OPA released a new study last week that profiles tablet owners and users. The study outlines key trends in demographics, device preference, usage habits, spending patterns and more. Some of the more interesting findings include: While men were the early adopters, women are buying the majority of tablets currently. The average user spends nearly 14 hours per week on his or her tablet. Watching Video is the number one activity. 31% of tablet owners read magazines on the tablet. 33% of tablet owners believe advertising on tablets is ‘eye-catching.’ Tablet owners will spend nearly $2.6 billion on tablet content in 2012.
So what? The OPA study provides a lot of useful data for pitching the value of the tablet audience and advertising in tablet executions. It’s a must read for everyone involved in selling the digital editions or display ads on the sites as rendered through a tablet.
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People That Use QR Codes are More Likely to Talk About Products
About 9% of US smartphone owners have used QR codes, according to GfK MRI. While the penetration may seem small, a new report from the research firm indicates the technology's impact can be measured beyond that metric. GfK MRI found that QR code users are more socially influential among their peers than those who do not use QR codes. They are nearly three times more likely than the average adult to influence others in the new technology, consumer electronic, mobile phone, and alcohol categories. They are also twice as likely to be influential in the fashion & clothing category.
So what? The use of QR codes has become a major part of print creative for a number of brands. These data suggest that advertisers that are successful at getting people to snap their QR codes will receive a dividend beyond the scan.
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Quick Takes
Growth of Time Spent on Social Networks Significantly Outpacing Growth of E-Mail
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Asian Immigration to the US Now Higher than Hispanic Immigration
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US Consumers Most Likely to Trade Up in Category for Mobile Phone, Electronics; Most Likely to Trade Down/Out for Vacations, Services & Restaurants
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GDP Rate in China Declines Slightly in 2012
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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