SEPTEMBER 11, 2012

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The Middle Class' Lost Decade
Much of the rhetoric around the presidential campaigns is focused on which candidate can best serve the needs of America's middle class. That conversation is an important one because during the past decade the middle class has become smaller, seen its wealth dissipate and lost some of its confidence according to a new report from the Pew Research Center. In an analysis of Census and survey data, Pew found that the middle-tier median household income for Americans dropped to $69,487 in 2010, down from $72,956 in 2001. During that same time, middle class families' net worth dropped by an average of nearly $60,000 ($152,950 in 2001 versus $93,150 in 2010). Just 43% of middle class adults expect their children's standard of living to be better than theirs; 51% felt that way in 2008.
So what? The past decade has shaken the middle class. The financial effects of recession have now impacted their overall outlook. It will be important to track how this group's desires evolve, including what engages them editorially. Will their current standing lead to greater aspiration or a repudiation of status symbols?
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Online Advertising: Time For A Model Change
One of the distinctive characteristics of display advertising has been the imbalance between supply and demand. There are millions of websites with hundreds of thousands of ad opportunities (from display to overlays to pop-ups and more), creating a seemingly endless supply of inventory. Since ad dollars have failed to keep pace with the ever-growing supply, digital advertising has suffered. CPMs and revenue have remained low, while the excess of ads have often created a poor user experience and mediocre advertising performance. Currently, advertisers pay when ads are served. comScore’s new white paper argues that advertisers should only pay when ads are seen. The authors believe this is the best direction for the industry as it will help create scarcity in the marketplace, improve user experiences and ad performance while helping publishers, advertisers and users at the same time.
So what? Condé Nast has given vocal support to comScore’s arguments outlined in this white paper. If the industry moves to a viewable impression standard, CN is likely to gain. This standard may help show the value of premium content adjacencies that are more visible than what many sites offer. The new standard may also depress the value of the CPM inventory that is bought and sold on the ad exchanges.
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Forrester: Segmenting Online Shoppers
As noted in the last issue of CNtelligence, US consumers are growing more reliant on e-commerce. According to comScore, online retail sales in the second quarter were up 15% over last year. A new report issued by Forrester looks more closely at the overall online shopping experience and how online shoppers vary. According to Forrester, online adults fall into one of three groups: - Super Buyers -- This group is significantly more likely than others to shop online. Not surprisingly, they are tech savvy -- 60% own a smartphone, 33% own a tablet and 30% own an Internet-connected television. They are very comfortable using online and mobile shopping channels, but are more likely to use brick-and-mortar stores for impulse purchases. They represent 17% of the online adult population. - Connected Traditionalists -- This group has the highest income of the segments and is just as likely to own smartphones and tablets as the Super Buyers. However, they have more traditional shopping preferences, choosing to shop in store or using a computer rather than new devices. They represent 25% of the online adult population. - Traditionalists -- By far the largest segment of online adults -- 59%. Most of their shopping is offline, but half say they are likely to make an online purchase in the next 3-6 months. The group has comparatively low adoption rates for new technology -- less than one quarter own a smartphone and less than one-in-10 own a tablet. Forrester believes that many in this group will become Connected Traditionalists in the coming years.
So what? Online retail is being driven by a small but fervent group of people. These consumers have a higher income, are young and tech savvy. In a lot of ways they look like the readers and visitors of Condé Nast magazines and sites.
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Luxury Marketers Look to Social, Mobile, Video
Luxury Marketers have lagged in investing in digital advertising compared to other categories. However, a new report by Digiday & Martini Media reveals that luxury brands plan to significantly increase investments in digital advertising (specifically in video, mobile and social). This planned growth is driven by the perception that digital media are more effective than offline media at driving several key metrics including online and offline purchase. The report also states that marketers will choose publishing partners based on quality of content and targeting capabilities.
So what? This report endorses the efforts Condé Nast has made to improve its video, mobile and social efforts. Our sales staff might identify more opportunities to build digital elements into ad packages for marketers that have historically focused on print.
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Quick Takes
Digital Video Most Often Streamed Between Noon-6PM
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Teen Vogue Boasts More Instagram Followers than Any Other Magazine; Four Other CN Titles in the Top 15
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Apple Gains Market Share, but Samsung Still Owns One-Quarter of Total Mobile Phone Market
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Farmers Markets Continue to Pop Up in the US
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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