AUGUST 27, 2012

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comScore: US Online Retail Update
comScore recently updated its clients on the state of US online retail. Using survey and behavioral data, comScore makes several interesting points [among others in the presentation attached]: - E-commerce in the second quarter of 2012 grew by 15% over the same quarter last year; overall retail grew by only 4% during the same time. - E-commerce now represents approximately 8-9% of all consumer spending (ranges slightly by quarter - peaks in colder months). - E-commerce continues to grow across all income segments, with the sharpest increases among the lower and middle income groups. - Groupon continues to be the most visited coupon site. The majority of Groupon's traffic comes from mobile. - Approximately 9% of e-commerce dollars are brought in through purchases made on mobile or tablet devices.
So what? Condé Nast's sites hold a unique place in path to purchase for many of our visitors. In a traditional sense they can serve as an additional resource for consumers to help guide choices, but can also shorten the path to purchase. A program like 'GQ Selects with Nordstrom' features editorial recommendations and an interface that allows for a swift checkout. Partnerships like that and others will gain continued attention as e-commerce continues to outpace traditional retail sales.
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Industry Viewpoints
Boomers Maintain Spending Power
While no longer the largest generation in our history, there are 80 million Baby Boomers (born 1946-1964) in the US. According to a new Nielsen report, they are still hefty consumers and control 70% of the nation’s disposable income. They are also adopting new technologies (smartphones and tablets) and spending similar amounts of time on these devices as younger generations. Historically, marketers have placed less value on the 50+ consumer groups. Nielsen argues that the Boomer generation should be treated differently from previous generations because their wealth makes them ‘too valuable to ignore.’
So what? Condé Nast magazines and websites reach approximately 17 million Boomers. As this group is still quite valuable for advertisers, CN should continue to reinforce both our reach and engagement with this group.
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Social Contagion Explored
Social contagion is the idea that certain social events and conditions can create ‘crowd behavior.’ This idea is of great interest to marketers as they seek to influence consumers to adopt new products and behaviors on a mass scale. A new report from the Marketing Science Institute examines the effects of social contagion in the medical field. The authors found that a physician’s adoption of a new prescription drug is based on the knowledge and adoption of the same drug by the physician’s professional network. The study examines how social contagion impacts those closest to us and those who are in our extended social network: When a physician adopts a new behavior (prescribing new drug), it is highly influential on close colleagues' decisions (social-normative influence). When a physician promotes a positive experience with the drug, it is highly influential to their network (risk reduction).
So what? As the publishing industry is trying to drive adoption of magazine reading on tablets, this research is timely. Condé Nast might create avenues for greater social promotion of positive customer experiences with the digital editions. As user satisfaction is quite high, users should be given more opportunities to share their experience and content across their social network. This will help reduce the perceived risk of buying a digital magazine amongst non-users.
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A Portrait of the Smartphone User
The Online Publishers Association recently released an updated snapshot of the 107 million US smartphone users. In a study of over 2,500 people between the ages of 8-64, the researchers found users to be increasingly reliant on their smartphones. Content is king: smartphone users favor content (especially weather, video and news) over any other activity. Smartphone users are also growing more comfortable with making purchases on their device -- 24% have made a purchase through an app or on mobile web. These purchasers are far more receptive to ads than non-purchasers. Purchasers were 70% more likely than non-purchasers to feel that smartphone ads are eye-catching. Finally, apps continue to be a major part of the smartphone experience. Nearly all smartphone users downloaded an app last year and they have an average of 36 apps on their phone. Paid apps are still working to gain traction as just 14% of apps downloaded by those in the study were reported to be paid.
So what? Smartphones have given content publishers another opportunity to expand their reach and engagement. That broader reach presents an opportunity to sell display ads and drive purchases on device. While the mobile ad market lacks the maturity of other established ad marketplaces, users' increased acceptance of ads and desire to make purchases will make mobile an important revenue source in years to come.
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Quick Takes
More than One out of Three Books Still Sold in Brick-and-Mortar Retail Stores
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Apple's Profit Margin Dwarfs Samsung's
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Three out of Five Smartphone Owners Have Used Device to Find a Better Price While in a Store
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VEVO & Machinima Are The Most Popular Partner Channels on YouTube
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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 |

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