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Digital Britain
Digital Britain
Digital Britain
Digital Britain
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Digital Britain

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  • 1. 1
  • 2. What’s inside?Internet 1 The traditional internet 4 The new internet 15Mobile 17 The British mobile market 19 What are people doing on them? 25 The app economy explained 34Tablet 39 The tablet market 41 Who owns a tablet? 43 What are they doing with it? 47Behaviours 51 Search 53 Communication 61 Socialising 65 Spending 95 Watching 111 Listening 125 Reading 133 Gaming 143All together now 159Conclusion 167 2
  • 3. 3
  • 4. Men rule the web. Gaming’s for geeks. Women aren’t interested in tech. iTunes is themost popular music player. Those with the most followers on Twitter have the mostinfluence. The iPad is mostly used on the go. Right? Wrong. Our collectiveknowledge about how people live today through technology is so tangled up bysatisfying yet shallow soundbites, lazy research and the biased rhetoric of specialists,it’s hard to know what people really do today.How do they talk, watch, listen, read, play games, socialise, research and buy intoday’s increasingly digital world? How does this differ between the sexes andgenerations? If your brand is going to connect with consumers in the digital age, youneed better answers to questions like these.This report is the start of that. By drawing together quality research from hundreds ofdifferent referenced sources it paints a picture of current media and technologyconsumption and how that might develop in the future. It should make you moreknowledgeable. It should give you the arsenal to fight for strategies and creativesolutions that go against tired convention. But it should also flag up when you’re indanger of jumping on a bandwagon and wasting your precious marketing budget.In short, this report should help you unpick the truth from the myth. 4
  • 5. 1
  • 6. Half the country go online every dayThere are 62 million people in the UK1 and more of us are going online, andspending more time there, every day.By August 2011, 77% of households2 were connected (up 4 percentagepoints on 2010), with 30 million going online every day or almost every day.93% of them have broadband connections of 2Mbps or higher3, nearly aquarter (24%) had 10Mbps or above4 and 1% clocked in above 24Mbps inMay 20105. In other words, a sizeable chunk of the country has access to theinternet and data-heavy services like advanced websites and video.We’re internationally mediocre for coverage and speedHowever, globally, that’s poor: we dawdle at 26th on broadband penetrationand speed rankings, with Bradford the unlikely and only British city to enter theglobal top 100. Generally, the south and cities are much better catered for thanthe north and countryside. The government knows this – and knows howclosely coupled high-speed internet is with improving the economic and socialprospects of British homes and businesses.More internet in more places comingTo that end, UK Culture Minister Jeremy Hunt has committed to get Britain thebest superfast broadband infrastructure in Europe by the end of the currentparliament and is investing £830m against this6. If that pans out, a prettydecent network is only going to get better, paving the way for more powerfuland rich internet experiences.Mobile, the new kid on the blockWhile most of us still go online at a desk, mobile is increasingly dragging usaway. In 2009 23% went online with a phone. By 2010 it was 31%. In 2011 itwas 45%7. To restate: nearly half of all internet users are doing it on theirphones.Nor is it the case that these people are dusting off an old WAP device andchecking their email. By 2012 46% of Brits were using a smartphone8, a1 Office of National Statistics (ONS)2 Office of National Statistics (ONS) as cited by eMarketer, September 20113 Office of National Statistics (ONS) as cited by eMarketer, September 20114 Trends in broadband supply and uptake http://www.scotland.gov.uk/Publications/2011/02/23091236/95 Ofcom, as quotes on BBC http://www.bbc.co.uk/news/technology-119224246 Telegraph, http://www.telegraph.co.uk/technology/broadband/8448680/Superfast-broadband-scheme-proposed-for-5-million-rural-homes.html7 http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-2267278 http://paidcontent.org/article/419-smartphone-penetration-approaching-tipping-point-as-pc-usage-declines-/ 2
  • 7. growth on the previous year so deep in double digits it’s not even worth statingas it will be out of date in a month.It’s likely this rate of growth will remain, or even ramp, in the coming years assmartphones go mainstream and the infrastructure gets a makeover with a newnetwork, called the 4G mobile spectrum, landing in 2013.This will offer a big improvement on the current 3G network, which is limited toaround 3.6Mbps, by allowing for speeds of up to 100Mbps out and about, orten times that (1Gbps) when stationary, to around 95% of the country. Thatmeans while a one-minute YouTube video would take 30 seconds to downloadon today’s mobile network, an HD feature length film would take about a tenthof the time on 4G. In other words mobiles will no longer have to pull datathrough the keyhole: the door will be wide open.This will usher in a blazingly fast mobile experience. In this world, the majority ofthe processing will happen in vast servers and all anyone’s mobile has to do isreach up into this ‘cloud computer’ and tap into it, unconstrained by downloadspeeds. Phones tomorrow will do what today’s best desktops can, just quicker.Digital Britain is established and only going to get more established, in speed,geography and devices.But what are people actually doing online? 3
  • 8. The traditional internetThe great time vampireWe spend around 57 hours per month on computers9. Roughly half that time isspent offline in Word and PowerPoint, organising photos, watching films andplaying games. The rest is spent online.So central is the internet to people’s lives that a third of Brits claim theycouldn’t live without it10. In fact, collectively, we are living with it more everyday. In 2009 the average time spent online per day was 41 minutes; within ayear it had jumped 20% to 52 minutes11; by the start of 2012 it was 1 hour 12minutes or 36 hours a month12. Mobile will drive this stat into the absurd andwe’ll soon be online more than we’re awake. It will be like saying how long anaverage person has access to oxygen for in a day.What are people doing online?If a man were to sit down at his computer, send a few emails, hunt for someinformation, research and buy some stuff, check his bank balance, pop ontoFacebook while listening to some music he downloaded, then game for a whilebefore discussing it on a forum and finish up the day telling a mate on Skypehow he sold something on eBay for a hefty profit, he would pretty much haveexactly summed up British online activity – in decreasing order of frequency.Here’s a more thorough breakdown:9 UKOM: http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/10 GB TGI Net Q4 2009, December 200911 UKOM, December 200912 http://www.zdnet.co.uk/blogs/tech-tech-boom-10017860/brits-top-internet-addicts-league-in-europe-10025436/ (36 hours divided by 30 days = 1.2hours per day. 0.2 of an hour is 12 minutes. 4
  • 9. 13Although average time online and frequency is instructive in the broad sense,it’s a ‘white rainbow’, a bland average masking the colourful nuances.Let’s break it down, ladies first.Women drive the digital mainstreamGlobally, there are fewer women on the internet than men, but they spend moretime on it. In the UK, women have overtaken men online (51.3% vs 48.7%)14and reflect the broader pattern of heavier usage, spending about 8% more timeonline15. For UK housewives specifically, nearly half of all their leisure time isspent online16.Two major activities account for this.The social sexGlobally, women spend 30% more time on social networks than men17 – afigure that has held constant into late 2011 with European women clocking up8.2 hours a month on social networks versus men who register at 6.318. Thereare also more of them on social networks. In Europe 81% of men use socialnetworks, trumped by women at 86%, a pattern that holds out for all regions.It’s also good not to forget the less sexy but fundamentally central role of emailand instant messaging, both activities where women talk men under the tableon a global scale19.13 Digital Trends Winter UK December 2011, Mintel14 Estimated data from http://www.emarketer.com/Reports/All/Emarketer_2000391.aspx15 ComScore, July 201016 http://news.bbc.co.uk/1/hi/technology/7789494.stm17 ComScore - http://bit.ly/9dth6f18 http://www.comscoredatamine.com/2011/12/women-spend-more-time-social-networking-than-men-worldwide/19 ComScore - http://bit.ly/9dth6f 5
  • 10. The shopper of the speciesGlobally, women spend 20% more time on retail sites than men20. Women buymore often than men, accounting for 59% of purchases on European websites(53% in the UK), but don’t spend as much as men when they do. WhileEuropean men spend 93.12 euros on an average web purchase, women spend68.65 euros21. In the US, women buy more often than men too, but end upspending more. US women make up just under half of the internet populationbut generate 58% of e-commerce dollars22.The traditional digital womanUnsurprisingly, community, lifestyle and health sites – especially aroundparenting, food and home – continue to get more ladies dropping by thanmen23. British women are also nosier than their men, with 14% of wivesreading their husband’s emails and 10% checking their browsing history,(those figures for men are 8% and 7%, respectively24.) Clearly, technology hasneither got in the way of men’s sexual proclivities nor the orbiting suspicions ofwomen.Women defy digital expectationsSo far we’ve seen nothing a casual bit of stereotyping wouldn’t spit out. Butthere are some surprising findings which armchair bigots might not guess.Game birdsYes, cars, sport and a lot of high finance are still male-dominated but inpersonal finance and financial advice women have the edge, both in numbersvisiting these sites and time spent on them.In online gaming women are a level ahead too25, although only on the gentler,casual games. Women overindex on puzzle, card, arcade, board, casino andtrivia games while the genres of action, adventure and sports are typicallyfavoured by young guys. Leading the charge in gaming for the girls are the over45s who spend nearly a third more time than men their age playing26.Add a bit of spice to the major themes mentioned – being social and spending– and you get to some of the more surprising female pursuits online.20 ComScore - http://bit.ly/9dth6f21 http://www.internetretailer.com/2011/03/28/european-women-shop-more-often-online-men-spend-more22 ComScore - http://bit.ly/9dth6f23 ComScore - http://bit.ly/9dth6f24 http://www.networkworld.com/news/2010/052410-women-more-likely-to-snoop.html25 ComScore - http://bit.ly/9dth6f26 ComScore - http://bit.ly/9dth6f 6
  • 11. Bad girlsFor example, porn slides in above the already-popular health, clothing, andfamily and parenting sites in overall global usage for women. Some 34% ofladies admit to using adult sites, while for men it’s 46%27. And given theobvious methodological problems of asking people whether they get their kicksfrom commoditised, choreographed human flesh, it’s probably safe to give aViagra to those percentages.Other studies show British women are especially prurient. Six out of 10 womensay they watch porn online28 and an alarmingly high 17% of women describethemselves as “addicted”29.Girls gambleGambling is pretty much a parity sport too. About 7% of adults fritter away theircash online and women are, in fact, more likely to visit some gambling sitesthan men (e.g. lotto and sweepstakes)30.Being geekyMaybe most surprising is that global reach across all ages for technology sitesdoesn’t vary that much between the sexes, although men spend more timethere. Women may be geekier for less time but they’re still being geeky31.Watching lessWhen it comes to online video, although reach is the same as men, womenwatch a lot less video, especially in the UK. Men spend nearly 20 hours amonth watching, women barely reach 10 hours32. One clue to what’s going onhere might be from the fact that women watch a lot more YouTube than men,as a share of their overall viewing. So while men are filling up on a fulsomeshow or film length video, women are snacking from YouTube.Searching lessWomen also search less than men33. One theory to explain this is that whilemen might be employing more of a direct, hunter-style strike to pin down27 ComScore - http://bit.ly/9dth6f28 http://www.guardian.co.uk/culture/2011/apr/07/women-addicted-internet-pornography29 http://www.internet-filter-review.toptenreviews.com/internet-pornography-statistics-pg6.html30 ComScore - http://bit.ly/9dth6f31 ComScore - http://bit.ly/9dth6f32 ComScore - http://bit.ly/9dth6f33 ComScore - http://bit.ly/9dth6f 7
  • 12. information, women are using their 30% more time on social networks thanmen34 to shortcut the searching process by asking friends first.Dolls and dollarsWith the exception of mobile (see later section), women are the backbone ofthe internet: buying, chatting and playing, in innocent and not-so-innocentways. To brands, the cleavage between social and spending should beattracting a lot of attention – therein lies enormous opportunity.Digital blokesPorn, tech and sport; that’s all that needs to be said about men online, isn’t it?Not quite. The picture is a little more nuanced. If women are nurturers – puttingmore time into maintaining social networks, searching less and gettinginformation from their friends – men are the information and entertainmenthunters.Information, information, informationFinding, storing and writing information. That’s what the men like to do. Mensearch more than women (71.6 searches per searcher per month for men vs64 for women, US base35). When interacting with brands in social media, 36%of men claim information is their primary goal, while for women it’s 28%36.They’re also more likely to make use of browser bookmarking than to searchagain37. And finally, it’s the men making Wikipedia. Barely 13% of Wikipedia’scontributors are women38.Watching, learning, listeningIn terms of entertainment, the most popular activities for British men online arewatching video (51% vs 42% of women), visiting chat rooms/messageboards/forums (32% vs 24% of women), listening to internet radio (again, 32%vs 24% of women), listening to downloaded music (31% vs 22% of women)and downloading and playing games (14% vs 6% of women).The chat room/message board/forum point is interesting: although womenspend more time in social media overall, men outnumber them on this specificsector of social media, arguably because boards like this allow men to be muchmore specific in their information gathering.34 ComScore - http://bit.ly/9dth6f35 ComScore - http://bit.ly/9dth6f36 Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct37 Lightspeed Research 2009 http://www.iabuk.net/en/1/mensactivitiesonline.html38 http://www.nytimes.com/2011/01/31/business/media/31link.html?_r=3&hp=&adxnnl=1&adxnnlx=1296491313-Gb/z5Xc+t9PSsze7krGSRg 8
  • 13. Sport, cars and techAround 40% of the global online male population read about sport online39,40,with women not far behind at around 35%. However, men are considerablymore engaged spending nearly twice as much time on these sites41.When it comes to cars it’s a similar but less marked story: between 25% and35% of the online male population visit automotive sites (increasing with age)while women clock in between 20% to 30% and spent about 75% of the timemen do on these sites42.Technology is different. Apart from a small male lead in reach at the youngerages, around 55-60% of the sexes go to technology websites, with womenonly spending about 10% less time there43. The common assumption that techis for the boys is just not supported by the data.Male preference for e-tail but overall still prefer a real shop35% of men prefer “e-tail” to real shops compared to 29% of women44. That’sinteresting because, although there is a slight male preference, most peopleprefer going to real shops. There are obvious reasons for this: you can touchand try in real shops – and they’re a richer experience. Nevertheless, thispreference suggests interesting user experiences that bridge the on- andoffline worlds for both sexes.What are they buying most?Men may prefer to use online shopping more than women but they fall short ofwomen on nearly all types of online shopping, only overindexing slightly oninsurance and flights (they clearly like to get their oar in on the seriouspurchases) and, surprisingly, aligning on tech. A list of the most popular majoronline male purchases looks like this45:  37% buy CDs or DVDs (women, 40%)  32% go to eBay (women, 41%)  28% get clothing and footwear (women, 45%)  30% buy books (women, 40%)  22% kit up on toys and games (women, 28%)  20% get insurance (women, 17%)39 ESPN 2009. Accessed from: http://www.iabuk.net/en/1/toptipsfortargettingmenonline.html in 2011; now no longer online40 http://www.marketingcharts.com/direct/women-encroach-on-male-sites-13840/comscore-online-women-sports-sites-august-2010jpg/41 ESPN 2009 Accessed from: http://www.iabuk.net/en/1/toptipsfortargettingmenonline.html in 2011; now no longer online42 ComScore - http://bit.ly/9dth6f42 ComScore - http://bit.ly/9dth6f43 ComScore - http://bit.ly/9dth6f43 ComScore - http://bit.ly/9dth6f44 http://oxygen.mintel.com/sinatra/oxygen/search_results/show&&type=NSItem&class=News&sort=recent&display=abridged&page=1/display/id=574641&anchor=57464145 Digital Trends UK, Spring, Mintel 9
  • 14.  20% book flights (women, 19%)  19% buy tickets for entertainment, like gigs and theatre (women, 21%)  17% buy music (women, 19%)  18% buy gifts like flowers or confectionary (women, 26%)  16% buy gadgets (women, 16% too)  15% buy food online (women, 24%)What are they buying least?  13% get cosmetics and perfumes (women, 27%)  13% purchase software (women, 10%)  10% book holidays (women, 10% too)  10% buy DIY and garden products (women, 9%)  9% buy computer hardware (women, 5%)  8% get home furnishings (women, 13%)  8% buy mobiles (women, 8% too)  5% purchase healthcare products (women, 10%)46The connected childFor most of today’s children the internet is like air: it’s just there and always hasbeen. It’s also everywhere: in the bedroom, in school, in their hands and even intheir games console. However, there’s still a wealth gap that needs to beclosed before all children have internet access.Most online, most gamingOver 90% of children have internet access at home and the majority also usethe internet at school47. The average 7 to 10-year-old now spends around 8hours a week online, climbing to 18 hours a week for 11-14s and 24 hours aweek for those aged 15-1948. To repeat: teens are spending nearly half thetime most people spend working per week just being online. What are theydoing? As much as 70% claim that gaming is their most common onlineactivity49, equating to 5 million regular young gamers.Poor kids left behindWhile the breadth and depth of the internet for Britain’s young is astonishing,there is a sorry shortfall among the poor. In the richest 10% of homes, 97%had an internet connection whereas in the poorest 10% of homes only 30%were connected50. The fear is that the technology gap is also breeding an46 Digital Trends UK, Spring, Mintel47 Youth TGI as cited by MediaTel, November 201048 Youth TGI as cited by MediaTel, November 201049 Survey commissioned by Disney as cited in "Next generation Media", Intelligence, Aegis Media, January 201050 http://www.guardian.co.uk/technology/2010/dec/28/uk-children-home-computer-access 10
  • 15. attainment gap not just in computer literacy but also in all the attendant benefitsbeing connected brings.Growing up smartChildren are being brought up bathed in bits. Nearly half (41%) of 12 to 15-year-olds have internet in their bedrooms, a leap of 31% in growth from 2009.Interestingly, nearly a quarter (23%) are going online via a games console. Thephrase ‘digital natives’ isn’t too far off.It’s perhaps time to give the phrase a younger cousin: the ‘smartphone native’.Around 18% of 5 to 15-year-olds own a smartphone and 16% go online via agames console51. Among 12 to 15-year-olds this rises to 35% owning asmartphone52.To give that its context, smartphone penetration in the UK is estimated to bearound 45% in 2012. In other words, the kids aren’t far behind before they’veeven done their GCSEs.Deep digitalAnd digital life is much more of their life. Rather heart-wrenchingly, 45% saidthey were sometimes happier online than in their real lives53 and, while thiscould be that they just have more fun playing games online than sittinguninspired in a classroom or being told to finish their plates, it does point to thedepth of relationship the coming generation has with the internet.So strong is this relationship that among children aged 12-15, television is nolonger the media most would miss were it to be taken away. Instead 26% nowsay they’d most miss their mobile, while 24% say the internet54. Half of childrensay they would be ‘sad’ and 10% saying they’d be ‘lonely’ if they didn’t have aninternet connection55.What’s interesting is that there are only a few percentage points in it: televisionstill holds a very strong appeal. Anyone saying TV’s dead for the youngergenerations shouldn’t.And we should be careful about following this fact into the future. Actualtelevision viewing might decrease and the kids might say they’ll miss it less ifit’s taken away but the amount of television content watched probably won’t51 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/52 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/53 http://www.kidscape.org.uk/events/saferinternetday2011.asp54 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/55 http://www.telegraph.co.uk/technology/news/9045134/British-children-feel-sad-without-internet-connection.html 11
  • 16. change; it will just be seen on different devices. It’s the word television that’sgoing to go out of fashion, not the shows on it.Social from the startOver half (54%) of children aged 8-15 who use the internet at home have asocial networking profile56. As for Facebook, 44% of 8 to 13-year-olds are on itand 66% of six-year-olds are aware of it57. A quarter of children with asmartphone say that they regularly visit social networks on their phone58.Silver surfersCatching upInternet users over 65 are a relatively small group, accounting for only 6.1% ofthe UK online audience in March 201159. That said, they’re the fastest growingage bracket. In 2010 in the UK around 35% of over 65s had broadband60.The poorA bit behindIf you breakdown the internet population by socio-economic group there is arobust pattern: poorer people have poorer internet penetration.56 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/57 http://www.thedrum.co.uk/news/2012/02/07/survey-find-larger-percentage-uk-children-using-facebook-us58 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/59 UKOM: http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/60 GB TGI Kantar Media UK Ltd Q1 2005-2011 (Oct – Sept) Mintel 12
  • 17. 61The good news is that the less affluent are catching up fast at 13.4% since200962, a slowing down on the previous rate most readily explained by therecession and increased vigilance over discretionary spend.Interaction with advertisingClick deflationBetween 2004 and 2009 click-through rates on online adverts fellprecipitously to 0.07%. Now, only one ad in 1500 is clicked63,64. The decline ischarted below: 65 .61 Researching Purchases Online – UK April 2011, Mintel62 Kantar as cited by MediaTel, June 201063 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=164 Mad Men are watching you http://www.economist.com/node/18651104 13
  • 18. RetargetingHowever, all is not lost in online advertising. Have you ever seen an ad onlinethat reminds you of something you were doing a few days ago on a site? That’sbecause when you went to that site it dropped something called a cookie ontoyour machine. That cookie was just a record of what you looked at. The ad yougot served was uncannily related to the stuff you were looking at because yourcomputer is telling it what you were looking at. This is retargeting and it isenjoying triple the normal click-through rate of online ads at about 0.22%66.However, there is an even more effective type of online advertising.Contextual targetingEver been on a site and seen an ad that seems to be on exactly the samesubject as the page you’re on? This is contextual targeting and is six timesmore effective than the industry average, enjoying 0.45% click-through rates67.And contextual targeting is cheaper. In fact, you get five times the clicks asretargeting at around half the price68.SummaryIn short, the internet is getting wider, flatter and deeper. More people aregetting it. The demographic differences are being ironed out. And we’respending more time on it from childhood right through to old age. That said,there are important differences in usage, from women’s social and spendinghabits to men’s information and entertainment addiction to children’s increasinginternet and mobile immersion. The way people interact with advertising ischanging too: we are no longer as interested in the general, the personalisedand contextual grab us – a lesson many brands simply don’t yet know.65 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=166 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=167 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=168 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1 14
  • 19. The new internet2011 was an important year for technology. A critical inflection point wasreached: the number of mobile and tablet devices shipped exceeded thenumber of PCs shipped69,70.We are moving into a post-PC era. There’s still going to be a role for the trustydesktop powerhouse but increasingly we will be accessing the internet throughnew devices.The fresh faces and the app economyMost immediately there are two devices for this: the smartphone and the tablet,both of which Apple has pioneered to mass success71.In many ways this has created a new internet, both in the alterations needed toview existing sites on these devices and in the arrival of the app, a softwareprogram for mobile devices fusing internet functionality with all the trickspowerful phones have up their sleeves.We will look at mobiles, tablets and apps in more detail in later sections.What’s on the horizon?But there is also increasing connectivity elsewhere. The next technologybattleground will be in TV. 350 million internet-enabled ones are expected tobe sold worldwide by 201572. Expect serious disruption, mostly likely brokeredby Apple.Shows will change as the internet invades them and they outsource elementsto it. Ads and product placement will become interactive. Gaming is the bestplace to look for an indication of what’s to come, as even back in 2009 videogame consoles accounted for 52% of living room kit with broadband73.But the real fun begins when all these devices talk to each other in interestingways. Mobile, tablet, TV and traditional PC-like devices will all work together inthe future, pulling shows, music, work, games and so on from the ‘cloud’74 on69 http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-201170 http://www.engadget.com/2012/02/03/canalys-more-smartphones-than-pcs-shipped-in-2011/71 This is not to say Apple invented these devices. They didn’t. However, they did create the markets which saw them become popular and competitorsape them.72 Parks Associates, January 201173 Worldwide data, http://www.isuppli.com/Home-and-Consumer-Electronics/News/Pages/Xbox-360-PS3-Vie-to-Win-Digital-Connected-Home-Battle.aspx74 As a reminder, the cloud refers to the collective processing and storage power available on the internet and which less powerful and storage-richdevices, like mobiles, can tap into. 15
  • 20. the internet. And it will go the other way too: interactivity will flourish.Visionaries will create entirely new engines for storytelling that combine all thisin ways that are hard to imagine now.Beyond that, new devices will be brought into the digital world. Nike hasalready shown the promise of this with Nike+, a chip that goes in runners’shoes and communicates information like speed and distance to their iPod, andNike FuelBand, a wristband that captures your activity throughout the day.Currently there are 35 billion devices that connect to the internet. It’s a lot butit’s just the start. It’s entirely plausible – and likely – that our heating, water,fridges, bikes and so on will connect up.Let’s start with mobile. 16
  • 21. 17
  • 22. MobileMobiles are cementing themselves further into our lives. We use them moreoften and for more things. Most people in Britain do not have a smartphone.Yet. Within a year they will be mass. Never has the mobile market seen somuch upheaval. Catalysed by bounds in hardware power and miniaturisation,new phones can now run a vast array of programs, called apps, creating ahuge new virtual economy and a dizzying range of new tools for living. InApple’s pioneering wake, others follow, most notably Google whose mobileoperating system looks set to become the winner by share but not quality ofexperience. For brands the opportunities are staggering, as mobiles become amagical bridge between customers and companies. 18
  • 23. The British mobile marketThe noble traditional mobileUbiquitous except in certain pocketsMobile penetration in the UK has been above 100% since 200475 becausemany people owned more than one. However, splitting apart demographics toreveal true ownership shows that the young and old still underindex. Forexample 40% of 7 to 10-year-olds own their own phone. This rises to 90% for11 to 14-year-olds76 and 97% for 16 to 19-year-olds which holds steady until50 to 59-years-old when it dips back to 90% and then dips to 60% for 60+-year-olds77.An increasingly fundamental roleWhat’s interesting is not just penetration but personal importance. For example,33% of 12 to 24-year-olds in the UK, US, Germany, India and Japan arecontactable at all times, even in their sleep78. And, as mentioned already, forchildren aged 12-15, television is no longer the media most would miss were itto be taken away. Instead 26% say they’d most miss their mobile79. It may beslight at the moment but it’s an indicative trend.A fundamentally increasing roleAnd traditional mobile phone usage isn’t slowing down either: 1.4 billion textand 10 million picture and video messages are sent every week in the UK, up30% since 200980. Of course, this doesn’t speak to the huge number of newuses on offer from the latest breed of advanced phones, the smartphone.75 Guardian http://www.guardian.co.uk/business/2010/jan/01/25-years-phones-transform-communication76 Youth TGI as cited by MediaTel, November 201077 http://www.csu.nisra.gov.uk/Mobile_phone_ownership_by_sex_and_age_Trend.htm78 OTX Research, March 200979 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/80 The Mobile Data Association 19
  • 24. Slick smartphonesExtreme rampingThe worldwide smartphone market leapt 61% in 2011 from the previous year.61%. In total 491.4 million units were shipped, against the 304.7 million unitsmoved in 201081.This is mirrored in the data demands the networks are feeling. In 2010 globalmobile data consumption was 2,844 petabytes. By the end of 2011 it haddoubled to 7,164 petabytes82. That’s enough to fill about 240 million iPods83.In 2011 in the UK 27% of adults (13 million) owned a smartphone84, whichrepresents a rocketing of 70% since 200985. If you cut this by the number ofpeople online, smartphone ownership is more like 54%86.A coming mass marketThe conditions are perfect for even more accelerated growth. For a startnetworks are hawking smartphones hard, as they are key to their own growth.Second, the selection is no longer limited to a range of premium devices,opening up the juicy middle of the market. And third, there is voracious demandfor new functionality beyond just voice.Combine this with an extrapolation of the current growth rate and smartphonesare a hard technology to ignore. It’s estimated they will account for 65% of allphones in Europe by the end of in 2011, 77% by 2012 and 82% by 201387.We’re looking at a technology that will be mass very shortly.Who’s got all the mobile internet?As you might expect, mobile internet declines gracefully as you approach oldage and is used just a touch more by the men, as befits traditional technologyadoption. Let’s look at it in detail:81 http://trak.in/tags/business/2012/02/08/smartphone-market-share-2011-12/82 http://www.ispreview.co.uk/story/2012/02/14/cisco-vni-report-shows-huge-surge-in-mobile-broadband-data-traffic-during-2011.html83 32Gb version84 Note that 45% have gone online in 2011 with a mobile, the difference is that the remaining 18% aren’t using a smartphone85 Comscore as cited by Cellular News, March 201086 Comscore as cited by Cellular News, March 201087 Carphone Warehouse/Gartner, February 2010 20
  • 25. 88Kids already aheadBy some sources, children are already overindexing on smartphone ownershipversus the rest of the population. Many have better phones than the averagepunter. 18% of 5 to 15-year-olds own a smartphone, while among 12 to 15-year-olds this rises to 35% owning a smartphone89. In a broader sense, theyoung are heavy mobile internet users: 40% of 16 to 34-year-olds go on theinternet through their phone at least once at day90.Here come the girlsWomen haven’t cornered smartphones yet, as they have with the social andspending corners of the internet. In Europe the skew is 63:37% in men’sfavour. This is probably due to a mix of factors: men adopting earlier, havingmore phones paid for by employees who see benefits to advanced functionalityand greater male earning power.The good news is that the balance is being redressed, with women struttingfrom 18% penetration in 2010 to 39% in 201191.The mummy effectInterestingly this adoption may be in part driven by motherhood. In a US studyof 5,000 mums over half (53%) said they purchased their smartphone as adirect result having a child. Having a baby brings with it a flurry of feature88 Researching Purchases Online – UK April 2011, Mintel89 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/90 Researching Purchases Online – UK April 2011, Mintel91 http://www.ons.gov.uk/ons/dcp171778_227158.pdf 21
  • 26. reprioritisation. The camera becomes even more important than the addressbook and text messaging, jumping to the most important feature for stills andsecond most important feature for movies. Apps, which were never a factorbefore motherhood, jump to number three on the list of top functions. Nearly aquarter of the apps they have are for their children92, for example games,language learning and interactive children’s story93.Who’s using what?Beware of the industryAs people who work in marketing, we should be very aware that our phonesare not reflective of the population as a whole. For instance, iPhone makes uparound 9% of all UK phones while 30% still use Nokia94.Who’s winning the smartphone wars?Android is FordAndroid is the fastest growing mobile operating system in the world95, rampingexponentially to 300 million handsets globally by February 201296, giving it aglobal share of 52%97. In the UK it accounts for 34% of smartphones98. Rightnow, 700,000 Android devices are being activated every day globally99. Not tomiss the chance for a comparison involving Wales, that’s the equivalent todouble all the people in Cardiff switching to Android every day. Phenomenal.The exponential rate of growth can be seen in the chart below: 10092 http://www.babycenter.com/100_press-release-mobile-mom_10349212.bc93 Accessed from: http://www.apple.com/uk/iphone/apps-for-everything/momsdads.html in 2001; now no longer online94 Comscore, as shown on http://txt4ever.wordpress.com/2011/06/16/uk-smartphone-demographics-analysed/95 http://www.guardian.co.uk/technology/blog/2011/feb/16/google-eric-schmidt-mobile-world-congress-speech96 https://plus.google.com/u/0/112599748506977857728/posts/Btey7rJBaLF97 http://www.pcmag.com/article2/0,2817,2396404,00.asp98 Mintel Digital Trends Winter 201199 http://techcrunch.com/2011/12/22/android-700000/100 http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011 22
  • 27. Apple is BMWWhile Apple’s iPhone paved – and will probably continue to pave – the way, itsmarket share gains are slowing down101. It’s useful to think about Apple like theBMW of the smartphone market, while Android is the Ford: Android’s looks setto be the affordable mass market smartphone whereas Apple will secure asmaller share with higher priced102, more stylish products on which they makedeliriously lush margins (Apple sells 4.2% of all mobile phones, but makes 52%of all profits103.) One upshot of this is that wealthier consumers are on the endof Apple devices for brands.Bye bye SymbianSymbian, the platform that sits under Nokia phones, will likely die. By 2015 itsestimated global market share will be a woeful 0.1%. Nokia and Microsoft’srecent alliance to develop hardware and software respectively is their way ofaddressing the brutalisation of their share by the two Californian behemoths.Estimates for Microsoft’s mobile OS share settled at around 11% for 2012, atthe end of 2011 they were less than 2%104.Strong BlackBerryAnd finally there’s BlackBerry, which has strong mobile and tablet propositionsbut a much less well-developed app store. In the UK they have a 27.7% share(8.5 million people)105.Current and projected global share of the mobile operating system marketlooks like this:101 http://www.strategyanalytics.com/102 Apples share of the mobile phone industry profits is nearly 60%, http://www.macrumors.com/2011/05/17/apples-share-of-mobile-phone-industry-profits-pushes-toward-60/103 http://www.forbes.com/sites/afontevecchia/2011/11/04/apple-took-52-of-smartphone-profits-on-4-2-market-share-in-q3-stock-to-hit-560/104 http://www.macworld.co.uk/apple-business/news/?newsid=3333519105 http://www.telegraph.co.uk/technology/blackberry/9050236/BlackBerry-UKs-No-1-smartphone.html 23
  • 28. 106106 http://www.gartner.com/it/page.jsp?id=1622614 24
  • 29. What are people doing on them?Smartphone usage by activityThe average smartphone owner uses the actual phone only about 40% of thetime. The rest of the time is spent on new activities like internet, games, music,email and navigation107.In the UK, smartphone owners self-report to doing the following activities:surfing the internet (80%), using social media (62%), watching TV/video clips(28%) and making purchases (21%)108.Let’s look at these in a little more detail.Still searching“Search [on phones] is not where it’s at” said Steve Jobs, Apple’s late boss, in2010. Ever the salesman, he was putting forward a case for apps on mobilesas a way of getting stuff done rather than search. Steve was wrong on this one.Google own mobile searchMobile search engine traffic has seen an increase of 247% in the past year109,comparable to the early days of desktop search in Google’s history. YetGoogle’s formidable monopoly is even more pronounced in the mobile search107 Mary Meeker Report, April 2010108 KPMG as cited by eMarketer , December 2010109 Digital Strategy Consulting, October 2010 25
  • 30. market: it serves 98.29% of mobile search queries globally, followed by Yahoowith 0.81%, Bing 0.46%, other sites who squabble over the remaining 0.46%of the crumbs110.Mobile search is differentSearch on mobile is not like search on a PC. Smaller screens force a smallerselection meaning it’s even more important brands stand out in search or evenbefore the search is made. For example, mobile searchers simply don’t drillpast page one111. If you don’t feature in the right places for the right searches,you don’t exist. Mobile search engine optimisation (SEO) will become its ownvery important subfield.Searching for the brandHowever, given that searchers on mobile are twice as likely to search for abrand name as when searching from the desktop it would be ideal for a brandto be in someone’s head before a search is made. This means good oldfashioned branding is arguably more important than ever. Expect to see‘Increased mobile searches for brand name’ popping up in big brand buildingTV ad effectiveness models soon.Android owners doing more browsing than AppleThere are also some interesting differences within mobile users. Androidersbrowse more on their phones than Applers112. The reason? One, the apps arebetter on an Apple device, obviating a lot of browsing. Two, Android users areprobably more techy. And three, there is a large search box on most Androidphones, shortcutting straight to search. There’s a device bias to browse.WebsitesThe website still centralA bit of eavesdropping on certain quarters of the internet and you’d be fooledinto thinking you’re non-existent if you don’t have an app for people to interactwith you on mobile. Not true. Websites still play an enormous role. The averagesmartphone user will visit up to 24 of them per day113.110 Stat Counter as cited by Pingdom.com, July 2010111 ComScore, September 2010112 Mary Meeker Report, April 2010113 http://www.mobiadnews.com/?p=5133 26
  • 31. But poor experiences commonThe vast majority of these are traditional websites, not mobile-specific ones.That doesn’t express a preference at all, just the status quo. And it’s a badstatus quo. People expect a faultless experience regardless of the channel andwhat they’re getting on mobile is very different. 83% of people experiencedproblems trying to buy something through a site on a mobile114. To brands thegreen light of opportunity should be going off to out-experience thecompetition.AppsWired, a technology magazine, announced at the end of 2010 that ‘The Web IsDead. Long Live the Internet‘115. Their conceit was that there’s more to theinternet than web pages on computers: there are apps.At the same time Fast Company, a business magazine, ran an article whichargued the economics of apps aren’t sustainable, users don’t even use themthat much and there are so many now it’s easier to head elsewhere, thebrowser and search.Who is right? As a brand investing money in creating an app or updating a siteto be mobile friendly this is a vital question. Let’s first untangle the differentarticles.The web is not dead, and neither are appsFor one, the web isn’t dead. It’s still growing exponentially. Wired’s graphshowing web traffic dwindling is deceptive for reasons we’ll footnote116. And asfor the Fast Company, apps are economically viable, they were just looking at itwrong (again something we’ll footnote117), frequency isn’t always the right wayto measure success (you wouldn’t measure the usefulness of a bike pump bythe number of times you used it) and yes, they’re hard to find sometimes, butthat is simply innovation getting ahead of organisation.114 The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/115 http://www.wired.com/magazine/2010/08/ff_webrip/all/1116 The vertical axis is relative, not absolute, cunningly smoothing out the web’s actual exponential growth. Next is that their chosen unit is bandwidth; ofcourse video badwidth has got bigger, quality is improving all the time. Time spent would be a more useful indication of behaviour. And finally theyclumsily split things that cannot be split: for example, iPlayer and YouTube are both web and video117 They cite a study that calculates average app revenue. Averages are only useful when data are spread equally. Some people have got very rich frommaking apps, other’s have made a loss. On average, the amount is positive but low. Nevertheless, developers are irrational and will continue to chasethat big win (even though statistically they are very unlikely to achieve it.) Apps will continue to be made. Fame is a useful analogy: the average celebincome is probably something like £20,000 and a fame level close to zero. In reality there are a load of very handsomely paid celebs but an invisiblehoard who never made it or are trying to still waiting tables. Average it all out and you get poor numbers, but people still try and chase the dream. 27
  • 32. To app or not to app?So there’s some poor/sneaky presentation of data – bad Wired – and someoversimplifications – naughty Fast Company. Our view: as mobile internet isonly going to get bigger, brands should have a reasoned presence there. Butfretting over whether to do an app or to create a mobile site is unnecessary:both serve different needs and only good judgement can inform which to gowith, if it even needs to be a mutually exclusive choice.For example, mobile sites are accessible by search, on the brand’s own terms(not subject to Apple’s firewalls), have a higher reach and are cheaper to build,making them better for occasional transaction or information gathering.Apps on the other hand offer a smoother experience using the phone’s fullfunctionalities making them perfect for providing branded utility andentertainment that is likely more than a one-time thing for people.Location, location, location40% of Google Maps usage is now from mobiles. Over New Year’s Day 2011,mobile usage of Maps surpassed the desktop – a first for Google products118.Although this could represent low information needs and high navigation needsfor this particular time (you’re not interested in the news, you’re interested ingetting back from the in-laws’) it’s still instructive to see the importance oflocation to the mobile experience. In fact, 26% of people regularly use themaps on their phone; this rises to 63% for iPhone users119. For brands thismeans getting basics like appearing on Google Places right through tosprucing up their mobile search strategy, to tap into local search phrases aswell as taking advantage of Google’s Mobile AdWords which can target aspecified radius around a place with an ad.Watching on the goIncreasingly TV isn’t watched on a TVA third of British television viewers now watch shows on their computer andmobile. Globally, around 11% watch video on their mobiles120, in the UK that’san audience of 2.7 million, growing at a rate of 75%121.118 Marissa Mayer of Google, speaking at SXSW, reported here http://techcrunch.com/2011/03/11/marissa-mayer-40-of-google-maps-usage-is-mobile-and-there-are-150-million-mobile-users/119 http://econsultancy.com/uk/blog/7645-ten-ways-brands-can-use-location-based-marketing120 http://blog.nielsen.com/nielsenwire/global/report-how-we-watch-the-global-state-of-video-consumption/121 ComScore via http://www.iabuk.net/en/1/mobilevideoconsumptionup75percent300910.mxs 28
  • 33. Increasingly what is watched isn’t TV13% of the videos watched via a mobile globally are from YouTube where untilrecently TV shows didn’t exist122. In January 2011, YouTube delivered 200million views a day through mobile, a tripling on the previous year123. By theend of 2011, it was 400 million views124.Although iTunes technically caters for more than phones and mostly to Appleproducts, it’s useful to see the scale of downloads. At the end of 2010, iTuneshad delivered 450 million TV episodes and over 100 million movies to iPod,iPhones and iPads125. That’s not including video podcasts either, which willmake up a good segment.A shopper’s best friendTouch and goCommerce and mobile are knocking into each other in ever more interestingways. At the most basic level phones can be used as intelligence gatheringdevices when ‘in the field’.In 2011, 95% of smartphone users had looked up local information, 88% hadtaken action off the back of this search within a day; for example, 77%contacted a business, with 61% calling and 59% visiting126.10% of people had used their phone to access a review, voucher or pricecomparison site, with 9% of people actually downloading an app to visit again.A further 17% said this would be something they would like to do if only theyknew how127.Barcode democracyA number of services that allow an item’s barcode to be scanned while in theshop are shortcutting the process of painstakingly typing something in. Thisallows for real-time price comparison and is offered by well-known retailerssuch as Tesco and Amazon.More recently, SearchReviews, a consumer review aggregator, has introduceda mobile app for both Apple and Android handsets through which consumerscan scan a barcode and obtain online reviews relevant to the product.122 YouTube now has an area called Shows which has syndicated network content, most notably and widely from Channel 4, whose back catalogue islargely uploaded to the site.123 YouTube blog, http://youtube-global.blogspot.com/2011/01/music-videos-now-on-youtube-app-for.html124 http://articles.businessinsider.com/2011-12-01/tech/30462152_1_total-views-youtube-android-phones125 Apple, September 2010126 US basehttp://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html127 Researching Purchases Online – UK April 2011, Mintel 29
  • 34. At the moment this is the preserve of the young, as older shoppers haven’t gotaround to figuring out their phone’s capabilities yet and struggle with the smallscreens.Buying on the goThe next level up is to use the phone to buy something, a feat 21% of UKsmartphone owners have claimed to do128. However, this figure is likely skewedby purchases of apps. Another study showed 8% bought something using theirphone in 2011129. Each month in the UK, 4.2 million consumers are visitingretailers’ websites using their mobiles130 accounting for 3.3% of all e-commerce131. As we saw earlier many are dissatisfied with their mobile webexperiences132. This, coupled with the clear level of demand for informationdelivered in this fashion, should galvanise brands into developing world-classmobile experiences – now.Goodbye walletBenjamin Vigier is an expert in near-field communications (NFC), a short-rangewireless technology that lets two objects talk to one another. Applicationsinclude contactless payment for goods.Why is the relevant? Because Apple hired Vigier towards the end of 2010133and, given the company’s record in defining the tech agenda, it indicates thatsoon we may see smartphones replacing cards and cash134.Some brands are already mobilising. McDonalds, for instance, is in the processof kitting out its 1,200 UK branches with proximity payment cards which willallow payment through a simple wave of the card – or NFC-enabled phone –near the till.Barclaycard, Orange and Samsung are there together too, having launchedQuick Tap, a contactless payment system based on Samsung Tocco mobilephones.128 KPMG as cited by eMarketer , December 2010129 http://econsultancy.com/uk/blog/8226-mobile-commerce-in-the-uk-stats-round-up130 GSMA & ComScore, August 2010131 http://econsultancy.com/uk/blog/8226-mobile-commerce-in-the-uk-stats-round-up132 The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/133 http://www.fastcompany.com/1682180/apple-nfc-expert-vigier-iphone-wireless-payments134 If this is the case Apple will likely take a share of every transaction (although not as aggressively as it does with the 30% on apps, see sectionbelow). Given the penetration and growth of Apple’s mobile offering this could open a vast new revenue stream for the company. 30
  • 35. An advertiser’s best friendRetail mobile search rampingTotal mobile search quadrupled in 2011 (vs 2010) according to Google andwithin that mobile retail search traffic soared by 181%. Mobile searches nowaccount for 11% of total retail searches135.Advertising drives mobile searchThe interaction between advertising and mobile phones is clearly establishedbut applied rarely. 71% search on their phones as a direct result of exposurefrom traditional media (68%), online ads (18%) or mobile ads (27%) (USbase)136. Yet there is little to encourage people to do this as customer journeysare currently woefully siloed to specific media, even though this does notreflect the realities of media use.Advertising drives leads and purchasesEight in 10 notice a mobile ad, while one in three notice a mobile search ad137.Incredibly half of those who see an ad on a mobile take action, like visiting awebsite (35%), making a purchase (49%) or recommending a brand orproduct to others (24%)138.And those ads with the highest click-through rate are those that blend with thephone’s functionality best. For example, Google mobile ads with the ‘click tocall’ feature, which makes a number immediately callable, have a 6-8% higherclick-through rate than those without this feature139.Closing the gap to purchaseOne can imagine how further retail functionality could be pulled through thekeyhole (e.g. clothes size, table reservation or even purchase) making it easierfor people and beneficial to the retailer.Touching othersA quarter of British mobile phone users in the UK use their handsets to accesssocial networking sites and blogs140. But it’s the rate of growth that’sastounding: in March 2010, 4.4 million people accessed social media sites or135 For that quarter, http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retail-search/136 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html137 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html138 US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html139 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues140 ComScore MobiLens, July 2010 31
  • 36. blogs through their mobile phone almost every day. A year later, it increased by80% to 7.9 million mobile users accessing social media almost every day141.As the pre-eminent Western social network, Facebook leads the way onnumbers for its mobile platform. There are more than 425 million active userscurrently accessing Facebook through mobile devices and they are twice asactive as non-mobile users142,143. It’s been estimated that a third of all itemsposted to the network are from mobile144. For Twitter it’s higher: 40% of thecontent comes from mobile, up from 20% 2010145.Where and when are they using it?Mobile internet traffic starts with sunrise at around 5am, grows rapidly andreaches a peak at 4.30pm146. The top occasions can be seen in the followingchart: 147It’s not just when we use it but where that’s interesting too. 35% of people fireup apps before they’ve even got out of bed148, 39% use it in the loo, 33%while watching TV, 22% while reading the newspaper149 and 70% while141 comScore Media Metrix, 9th May 2011, http://www.comscoredatamine.com/2011/05/mobile-social-media-usage-up-80-percent-in-the-uk/142 http://www.facebook.com/press/info.php?statistics143 https://developers.facebook.com/blog/post/2012/02/24/growing-mobile-apps-and-games-with-facebook-platform/144 http://danzarrella.com/new-data-on-mobile-facebook-posting.html#145 http://mashable.com/2011/01/07/40-of-all-tweets-come-from-mobile/146 http://www.mobiadnews.com/?p=5133147 http://mashable.com/2011/05/12/smartphone-apps-bed/148 http://mashable.com/2011/05/12/smartphone-apps-bed/149 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 32
  • 37. shopping150. The last three stats there show how widespread media ‘stacking’is. Yet, consumer journeys through advertising take no advantage of this fact.Sex and age differences in mobile usageAcross Europe there are a number of differences that emerge when youexamine sex and age. For example, on the chart below the higher the bubblethe more likely girls are to do it.The further right you get the more likely it’s an older person’s activity. So, youngwomen aren’t using apps that much but they’re doing a lot of social networking. Figure 1 comScore MobiLens; demographics of mobile activities for EU5 (FR, UK, GR, SP, IT), March 2010150 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 33
  • 38. The app economy explainedWhat are apps?Software on a mobileAn app is simply a program running on a phone, just like a program you’d runon a desktop. Instead of taking it from a disc, like you would a PC program, youcan download it directly from an app store, essentially a website hosting theapps.Limited but liberatedHowever, because of phones’ physical limitations – screen size, graphicsprocessing, download limits – an app is much more focused in functionality.That said it also has access to a lot more functionality, like where the phone is,what angle it’s at or what it’s picking up through the camera, ushering in awave of innovation. In the future, phones may be able to read our gestures151and even facial expressions152.Outsourcing innovationOne of Apple’s moments of genius in marketing the app, was giving the optionto anyone with an idea and the inclination and ability to create their own appand list it in the app store, subject to Apple’s fierce approval process. Nowanyone – a multinational brand or teenager in his room – can make an app. Andthey have in their hundreds of thousands.The app economyWho are the players?Apple and Google. There are others, but their impact is dwarfed by these twoplayers.Apple got it right first. While iTunes impressively and fundamentally reorderedthe music market, the app market’s popularity left iTunes in the dust.151 http://techcrunch.com/2011/05/18/gilt-tastes-ipad-swipe-without-touching/152 http://www.pcworld.com/article/228151/smile_to_unlock_iphone_app_uses_facial_recognition_to_secure_your_phone.html 34
  • 39. Figure 2 iTunes fundamentally reordered the music market, but the app store’s growth leave it in the dust. KPCB and Apple.However, Google’s app store, while less easy-to-use, is now growing faster.While it’s almost pointless stating the raw numbers as they’ll be out of datewithin weeks of writing them, the Google app store (formerly Android Market,renamed Google Play in 2012) currently has 450,000 apps, which have beendownloaded 10 billion times. Apple’s store has 500,000+ apps and, in March2012, had 25 billion downloads.Although there are other players, it’s these two that lead the pack in terms ofapp usage, as the chart below shows. Figure 3 Installed base vs app downloads, iOS and Android way ahead 35
  • 40. App store economics30% of revenue from apps on both the Apple App Store and Google Play goto Apple and Google; 70% goes to the producer of the app.About 30% of the apps on the App Store are free; the remaining 70% carry acost. Google Play on the other hand, largely because there is no vetting in thesubmission process, is mostly comprised of free apps (around 60%), while40% are paid for153.Partly as a result of these factors, the Apple App Store wins on revenue,leaving others a distant second. Estimates have been made that the App Storeis worth $7.08bn. To give that context RIM (BlackBerry), is worth $7.04bn.App economicsCombined app store data (Apple App Store for iPhone, BlackBerry App World,Nokia Ovi Store and the then-named Google Android Market) show over thecourse of 2010 there was a shift to lower price tiers, with the $1.00 to $1.99segment seeing the most growth154.What apps are most popular by download?153 AndroLib and 148App.biz, www.pingdom.com (August 2010) data154 Distimo Research 36
  • 41. Data from the US shows how the app store can be broken out by popularity ofcategory. Games, books and entertainment lead the pack155. 156The most downloaded apps of all time are as follows. Just look how popularsimple gaming and the social stuff is:PAID01. Angry Birds (games)02. Fruit Ninja (games)03. Doodle Jump (games)04. Cut the Rope (games)05. Angry Birds Seasons (games)FREE01. Facebook (social networking)02. Pandora Radio (music)03. Words With Friends (games)04. Skype (social networking)05. The Weather Channel (weather)157App usage155 http://www.mobclix.com/appstore/1156 http://www.mobclix.com/appstore/1157 http://sg.news.yahoo.com/25-billion-downloads-most-popular-ios-apps-145333092.html 37
  • 42. While the app markets of Google and Apple are impressive and bothcompanies like to market the numbers repeatedly to prove the extra value intheir ecosystems, it’s worth digging deeper into usage.It’s not just whether they have a smartphone, it’s if they downloadThe average number of apps US adults have is 18158 but only 68% of thosewho have a phone with apps actively use them159. Older phone users inparticular do not use the apps that are on their phones, and one in ten adultswith a phone (11%) are not even sure if their phone is equipped with apps160.It’s not just if they download, it’s what they useAdded to that, even after downloading them people don’t use apps. AcrossAndroid, iPhone, iPad, BlackBerry and Windows Phone 7 apps a quarter ofapps downloaded were only used once161. While it’s entirely possible that theone use was enough (and in the context of brands the one go on an app maybe enough to meet an objective), it’s much more likely that this represents thelong tail of apps gathering dust.Smartphone penetration not indicative of smartphone usageAs a result of stats like these, we should be careful not to equate penetrationwith usage. 27% of the UK might use a smartphone, but only 70% of that 27%might be using apps, of which many are sitting dormant. 10% of that 27%might not even know they have apps.158 http://pewinternet.org/Reports/2010/The-Rise-of-Apps-Culture/Overview.aspx159 US base http://www.pewinternet.org/Media-Mentions/2010/Report-Relatively-few-people-use-cellphone-apps.aspx160 http://www.localytics.com/blog/post/first-impressions-matter-26-percent-of-apps-downloaded-used-just-once/161 http://www.localytics.com/blog/post/first-impressions-matter-26-percent-of-apps-downloaded-used-just-once/ 38
  • 43. 39
  • 44. TabletTablets are taking the world by storm. Even Steve Jobs was surprised by theirsuccess claiming in an early investors call after launch that they may just have a‘tiger by the tail’. Essentially, we are seeing a repeat of the iPhone story – buton fast-forward. The iPad and its myriad competitors are finding a massaudience quicker than pretty much any device in consumer tech history. Eventhe Queen has one now – an indication of the much broader market Apple hasdrilled into. And while they tout portability, it’s the home they’re being used in,replacing the book in bed. Welcome to the age of casual computing. 40
  • 45. The tablet marketHow big is the tiger?iPad the fastest selling Apple device. Ever.According to Apple’s data it’s the fastest ramping device in terms of globalshipments ever sold in quarters after launch in consumer tech (see below),which has prompted a host of ‘me too’ products from Samsung, Motorola,Sony and even, bizarrely, clothes retailer Next. 162By the start of 2012 Apple had sold 55.28 million163. In 2010 it was 15 million,outselling Macs, their desktop and laptop computers, in units. By any measure,this was an incredible ramp for an entirely new computing product. It is sostartling that nobody predicted it, not bullish Wall Street analysts (GoldmanSachs predicted 6.2m sales164 in year one) or even wide-eyed gassingbloggers.The accelerated worldThe accelerated adoption curve is worth dwelling upon. One explanation is thatwe are in a point in technology history where we’re shifting to a new computingparadigm and while everything will plateau out in a few years, until the next stepchange comes along, we’re experiencing heady growth for the moment. We’regetting drunk on new gadgets and the gloomy hangover is coming.162 http://aaplinvestors.net/stats/iphonevsipod/163 http://www.apple.com/pr/library/2010/07/20results.html164 http://techcrunch.com/2011/01/19/nobody-predicted-ipad-growth/ 41
  • 46. Or, and this seems more compelling, we’re looking directly into the face of ouraccelerated world, where there’s more technology change occurring morefrequently and reaching more people faster than ever. Tech companies must berubbing their hands. Marketing departments should be planning.Who are the other players?The story with iPhone – Apple making a market and others scrabbling to get aslice, with Google eventually overtaking – will likely be repeated in tablets. TheiPad had 85% global share in the tablet market during 2010. This dropped to62% by March 2012 as other players gained share165, chief among themAmazon’s Kindle and Samsung (see table). In 2011 an estimated 72.7m tabletswere shipped, accounting for a quarter of all mobile PC sales166. 167The UK marketBetween October 2010 and December 2011 tablet ownership trebled to9%168. How does this breakdown? 0.1% own a tablet only, representing a tinybut new market of computer users or people who’ve relinquished all their othertechnology. 1.6% have a laptop and a tablet, while 0.5% have a tablet anddesktop and 7.3% have the full house: laptop, desktop and tablet169.The future marketAggressive growth is predicted with estimates of 500 million units being sold in2015170. To give that perspective around 360 million PCs are shipped eachyear. The market for computing is getting bigger as we enter the post-PCworld.165 http://news.cnet.com/8301-13579_3-57382808-37/ipads-share-of-tablet-market-to-dip-to-62-percent-this-year/166 http://www.v3.co.uk/v3-uk/news/2135289/tablet-sales-grow-250-cent-2011-reach-million167 http://www.isuppli.com/Display-Materials-and-Systems/News/Pages/Apples-Toughest-Competition-in-the-Fourth-Quarter-Tablet-Market-Was-Apple.aspx168 Digital Trends Winter – Uk, December 2011169 Mintel, Desktop, Laptops and Tablet Computers 2011170 eMarketer, December 2010 42
  • 47. Who owns a tablet?Skews younger and maleLet’s air the caveat first. New technology is almost universally adopted byyoung affluent guys. So, tablet owner data at this stage in the product’s shortlife isn’t necessarily indicative of the future audience. iPad conforms: 25 to 34-year-olds make up the major owner segment followed by 18 to 24-year-olds.65% of these owners are male171. This is a pattern that has held into 2011172.In the UK we can see the following pattern of ownership:171 http://blog.nielsen.com/nielsenwire/online_mobile/connected-devices-how-we-use-tablets-in-the-u-s172 http://www.appstechnews.com/blog-hub/2012/feb/07/who-are-using-smartphones-tablets/ 43
  • 48. 173173 Mintel, Destop, Laptop and Tablet Computers 2011 44
  • 49. Sharing itIt’s worth tempering the ownership data with the fact that 43% of Apples iPad,Samsungs Galaxy Tab and the Motorola Xoom’s US buyers share their tabletwith others in their house; 8% had bought it for someone else. We thereforeneed to be careful about being led by the buyer data as other audiences maybe using tablets174, something day-to-day experience teaches us is the case,as kids and grandparents pick up the device.Multiple tabletsIn the UK while 74% of iPad households have just the one device, 16% havetwo or more. 18% of those with iPads were planning on purchasing anothertablet or e-reader, with a heavy preference for iPad (66%)175.Receptiveness to advertisingLike ads moreThe iPad audience may just be one of the most lucrative out there formarketers. In a study looking at iPad users, 46% said they enjoy interactive adsvs 27% on other devices, 35% said they enjoy any ads (vs 17%) and they werealso more likely to click on simple text ads (40%) than those on other devices(19%).More likely to spendThey’re also the most likely to splash cash as a result of seeing an ad eitherlater on a PC (36% iPad vs 27% all devices), in store (24% iPad vs 10% alldevices), by telephone (12% iPad, 7% all devices) or on their iPad itself (8%iPad vs 5% all devices). 176174 http://blog.nielsen.com/nielsenwire/online_mobile/connected-devices-how-we-use-tablets-in-the-u-s175 http://today.yougov.co.uk/sites/today.yougov.co.uk/files/Tablet_ownership_in_households.pdf176 http://blog.nielsen.com/nielsenwire/consumer/the-connected-devices-age-ipads-kindles-smartphones-and-the-connected-consumer/ 45
  • 50. 177177 http://blog.nielsen.com/nielsenwire/consumer/the-connected-devices-age-ipads-kindles-smartphones-and-the-connected-consumer/ 46
  • 51. What are they doing with it?Most used functionalityTablets are used mostly for consuming games (84%), information (78%), email(74%) and news (61%). Interestingly, people spend up to five times theamount of time reading news on their device as they do on publications’websites178, most likely because they’re more comfortable – sitting at acomputer is not relaxing, sprawled on a bed is. Over half (56%) use them tosocial network. And while not quite as popular, nearly half of users read (46%),consume entertainment (51%) and shop (42%) on their tablets179. Whileshopping here is defined in its broadest sense other data show that nearly onein five UK tablet users (19%) make purchases with a tablet180. 181Most used appsThe top five most downloaded paid iPad applications of all time are as follows:01. Pages (productivity)02. Angry Birds HD (games)03. Angry Birds Seasons (games)04. Penultimate (productivity)05. Scrabble for iPad (games)178 http://thenextweb.com/media/2011/05/18/news-is-5-times-more-engaging-on-a-tablet-than-a-website/179 Admob by Google Tablet Survey, March 2011, US base180 Digital Trends UK, Spring, Mintel181 Admob by Google Tablet Survey, March 2011, US base 47
  • 52. The top five most downloaded free iPad applications of all time are as follows:01. Angry Birds HD Free (games)02. The Weather Channel for iPad (weather)03. Netflix (entertainment)04. Skype for iPad (social networking)05. Kindle – Read books, Magazines & More (books)182How long are they using it for?Nearly three quarters (68%) of owners use their tablet for more than 2 hours a day,with 30% using it for 1-2 hours183. 184Where are they using it?By a long way, ease of portability and use are the reasons people get tablets over PCsor laptop185. However, current users aren’t taking that portability too far: 82% namethe home as the primary place they use it, followed by out and about at 11% and work,7%186.182 http://sg.news.yahoo.com/25-billion-downloads-most-popular-ios-apps-145333092.html183 Admob by Google Tablet Survey, March 2011, US base184 Admob by Google Tablet Survey, March 2011, US base185 The Nielsen Company, Q1 2011 Mobile Connect Device Report186 Admob by Google Tablet Survey, March 2011, US base 48
  • 53. When are they using it?Tablets are used mostly during the week (69%) and at nights (69%). To a much lesserextent, people use them at weekends (31%) and during the day (38%). One way tothink of it is that the tablet is replacing the book and TV as a way to relax in theevenings after work187.How is this impacting usage of their other devices?Despite most people (72%) saying tablets aren’t their primary computer, otherelectronics are gathering dust nonetheless188. 77% of users say they use theirPC/laptop less now they have a tablet189. A different US study has shown the broaderimpact of this: 190187 Admob by Google Tablet Survey, March 2011, US base188 Admob by Google Tablet Survey, March 2011, US base189 Admob by Google Tablet Survey, March 2011, US base190 The Nielsen Company, Q1 2011 Mobile Connect Device Report 49
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  • 55. 51
  • 56. BehavioursTechnology has not changed the fundamentals of human behaviour – but it haschanged the way we behave fundamentally. People still want to talk, find thingsout and be delighted, it’s just we’re no longer beholden to a few devices to dothis. Communication, information and entertainment now run through manytributaries, increasingly crossing each other’s paths. Too often peoplebemoaning the drying up of one miss the opportunities filling up elsewhere orthe interesting intersections. This section looks at how we search, read, listen,get, watch, play and blend many of these activities together on our increasinglybroad set of devices. 52
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  • 58. SearchWith an estimated 40 billion pages and 1.5 billion images online191, search isabsolutely core to the internet. Google takes more than a billion searches aday, answering them in less than a quarter of a second on average192. 16% ofthose queries have never been seen before. That’s the face of change,quantified, right there.No matter how much pundits drive themselves into a frenzy over the rise ofsocial (‘visits to social overtook visits to search in May 2010’193), search is hereto stay. Nearly 90% of Brits search online194. While global PC searchescontinue to grow (doubling in reach in the last two years195), it’s mobile searchthat’s seeing staggering growth. Any brand worth its salt will have a searchstrategy for desktop but most won’t have a mobile search strategy. They aregoing to need one.The playersGoogle dominates. The search engine is the largest player in the world with an84.65% share196. Its other search engine is the world’s second largest byvolume of search. It goes by the name of YouTube197.The others have tiny shares: in February 2012 Yahoo had 5.42%, Baidu had4.67%, Bing had 2.11% and others shared the remaining crumbs198.Search behaviourHow many searches do people make?Four in 10 respondents (40%) used a search engine more than twenty times inany given week199, with usage smoothly declining as people got older200.How deep into search do people go?79% will go through multiple pages of results if their search isn’t satisfied onpage one201. Note this is not the case on mobiles. Mobile searchers simply191 http://www.businessblogshub.com/wp-content/uploads/2010/10/google-statistics.jpg192 http://www.google.com/ads/answers/numbers.html193 Online Leisure-UK- December 2010 (Mintel)194 Digital Trends April 2011, Mintel195 Digital Trends April 2011, Mintel196 http://marketshare.hitslink.com/search-engine-market-share.aspx?qprid=4197 http://www.businessinsider.com/youtube-2010-11198 http://www.karmasnack.com/about/search-engine-market-share/199 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour200 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour201 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour 54
  • 59. don’t drill past page one202. If you don’t feature in the right places for the rightsearches, you don’t exist. 89% will change the terms they’re using to try andrefine results but, if they don’t find what they want, 89% will change searchengine203.What makes people more likely to click a result?Short answer: image, video or multiple listings204. 53% said they’d be morelikely to click a search link if there was an image; 26% if there was a video and48% if the brand appeared multiple times. We’d want to see actual usage data(not just what people unreliably say what they’d do) to flesh this out but theseindicate digital strategies that flood the long tail of search with video and imageto improve search ranking and the attendant search leads.How sensitive are people to time delays in getting search results?People are extremely sensitive to even very slight delays in their searches. AGoogle study found a delay of 100 to 400 milliseconds when displaying searchresults led users to conduct 0.2 to 0.6 % fewer searches205. This may seemsmall but multiplied across a global brand’s site it could seriously affectconversion and the bottom line. If people are used to it on Google, brandsbetter keep up or they’ll get punished by impatient users.Search for products and servicesSearch is the absolutely daddy of internet advertising. The relationship betweensearch and commerce is truly phenomenal and the major reason Google’smarket capitalisation is $201.72bn (Feb 2012)206. While online displayadvertising in its most basic form is suffering severe click deflation, search isbooming. People are interested in things they’re searching for; display ads area distraction.83% of internet users use search engines to find specific products orbrands207; 67% search for product and price information online at least once amonth208 and over a third of mobile internet users searched for a product orservice to buy209. From desktops 20% of searches are about location, frommobile it’s 40%210.202 ComScore, September 2010203 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour204 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour205 http://www.technologyreview.com/web/32338/?a=f206 http://uk.finance.yahoo.com/q?s=GOOG207 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour208 Researching Purchases Online – UK- April 2011(Mintel)209 http://www.slideshare.net/Tomtrendstream/welcome-to-social-entertainment-annual-report-2011?from=ss_embed210 http://www.google.com/ads/answers/numbers.html 55
  • 60. Why search for products and services?80% research a specific product or brand before purchasing online; 76% useit before purchasing offline; 78% to find the best price of a specific product orbrand211.Mobile is stealing more and more of the show when it comes to shopping. Justtake a look at how Americans used search and their phones in the lead up toChristmas 2011:When are the searches for products and services?Within the shopping category, more searches are made on Sunday than on anyother day of the week212. Then there are spikes at lunch and spikes in theevening all other days213.How many searches are for branded terms?Roughly 90% of searches for the top 2,000 search terms in the UK werebranded in nature. This has been growing steadily: in 2007 they accounted for81%, in 2005 66%214. This is often referred to as navigational search: peopleknow roughly where they want to get but searching is easier than typing out aweb address. It just shows how brands act as shortcuts to categories and211 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour212 Accessed from: http://googlebarometer.blogspot.com/2009/06/rise-of-meticulous-shopper.html in 2011; now no longer online213 http://www.google.com/ads/answers/numbers.html214 Hitwise Intelligence – Robin Goad – UK: 9 in 10 UK searches are navigational / branded 56
  • 61. makes one of the strongest commercial arguments for brand marketing. Brandshould be doing whatever they can to get at ‘end of fingertips’ when people aresearching.What are the top branded search terms? 215How many people realise the search ads are ads?63% do; 37% don’t216. You’d want to be in search anyway but the size of thelatter number is just another reason to be there.How search and real life interactSearching to go in storeAround a quarter of internet users report to searching online and thencompleting the purchase by speaking to someone in store217. In fact, this mightbe much higher as other data show 74% of internet users used search to findplaces to buy brands offline218.Advertising drives desktop search78% of internet users search after seeing an advert elsewhere219.Advertising drives mobile searchThe interaction between advertising and mobile phones is established butapplied rarely. 71% search on their phones as a direct result of exposure fromtraditional media (68%), online ads (18%) or mobile ads (27%) (US base)220.215 http://www.experian.com/hitwise/press-release-facebook-was-the-top-search-term-for-2011.html216 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour217 Web aggregators – UK – November 2010 (Mintel)218 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour219 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour 57
  • 62. Advertising drives leads and purchasesEight in 10 notice a mobile ad, while one in three notice a mobile search ad.Incredibly, half of those who see an ad on a mobile take action, either visiting awebsite (35%), making a purchase (49%) or recommending a brand orproduct to others (24%) (US base)221.Search by demographicThe young using search lessThe effect is very slight but the younger you are the less likely you are to haveused a search engine. This may reflect the increasing use of social networks,which use friends as sources of information over search222.Well off search lessAnother slight effect is the increased search occurring as you travel down thesocio-economic ladder until you hit the bottom when it lifts again223.220 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html221 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html222 Old vs young on the net- UK- May 2010 (Mintel)223 Old vs young on the net- UK- May 2010 (Mintel) 58
  • 63. 224New developmentsThe algorithm gets socialGoogle’s breakthrough invention was to figure out how to serve you the mostrelevant search results, based on their PageRank algorithm. Instead ofanalysing page content and trying to make decisions based on that, it simplyand ingeniously tapped into the collective brain by incorporating into itsalgorithm the number of links coming to a page. The more popular a page withpeople, the more popular Google read it to be. Page quality didn’t have to bedecided by a computer: it was already decided en masse by lots of peoplemaking the small decision to link to a page. The algorithm has naturally got a lotmore complex since then, but that’s what’s at its heart.Today there’s even more collective social information to tap into, that’svolunteered by social networks. Bing, Microsoft’s search engine, has added asocial layer to search by tapping into the knowledge of who your friends areand what they like. You can see your friends’ recommendations when yousearch in Bing. Google is doing the same with its G+ product225.But as search engines start to incorporate more of this information into theiralgorithms, the brands which have social currency in the bank will come out224 Old vs young on the net- UK- May 2010 (Mintel)225 http://googlesocialweb.blogspot.com/2011/05/social-search-goes-global.html 59
  • 64. winners. If nothing else a social presence is an investment in your searchfuture.The pocket shopperIn the last two years mobile search has grown 500%, a rate comparable to theearly days of desktop search226. One in every 10 retail searches is donethrough mobile227,228, although the path to purchase was varied. And 12% ofall paid search clicks were made on a tablet or smartphone, representing a50% increase since October 2011 alone229.The opportunity for brands here is enormous both in terms of getting a mobilestrategy sorted and not getting one sorted. The former could deliver enormousvalue to brands; the latter could suffocate fresh revenue as multichannelcompetitors seize the prospects themselves.226 http://digital-stats.blogspot.com/2012/02/googles-mobile-search-volumes-doubled-y.html227 http://www.bizreport.com/2011/10/1-in-10-retail-searches-done-via-mobile.html228 http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retail-search/229 http://www.marketwire.com/press-release/marin-software-reports-49-increase-in-uk-mobile-paid-search-click-share-during-q4-1608510.htm 60
  • 65. 61
  • 66. CommunicationEmailEmail still plays an enormous role despite social networks. Close to 90% of theinternet population use it230.Social networksThe rise and rise of the social networkBrits are visiting social networks more and more. Since April 2009, when 46%of people said they used social networks, usage has leapt 16% to 62% ofpeople saying they’ve visited sites like Facebook231 in 2010. As of 1st March2012 there were 30,249,340 people on Facebook232. There’s a lot more ofthat in the next section, but right now we’ll just focus on communication.Communication through social networksAlthough usage of the networks is skyrocketing, communication through themessaging functions is down. 37% of US teens sent messages through socialnetworking sites233, down from 42% in 2008234. The same research has shownhow group messaging is also down in the same group (from 61% to 50%)235.What this research misses is how communication is carried out through theFacebook wall where both one-to-one (albeit public) and one-to-manycommunication can occur. And with 30 billion pieces of content shared everymonth globally236, it’s no wonder other methods of communication are taking aknocking.Actually, social networks are canabalising real life communication, with one inthree people talking to their friends online more than face to face237. 25 to 34-years-olds are most likely to do this (43% vs 32%238), reflecting the workinghabits and technological proclivities of this group. Here’s the full analysis:230 Digital Trends Winter 2011, Mintel231 Digital Trends April 2011, Mintel232 http://www.facebook.com/ads/create233 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf234 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf235 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf236 http://www.facebook.com/press/info.php?statistics237 Social Media and Networking, Mintel, May 2011238 Social Media and Networking, Mintel, May 2011 62
  • 67. 239Instant messengerRoughly 25% of people use instant messaging. Note, this stat excludes anyinstant messenger activity occurring on social networks240. Given thatFacebook offers this functionality it’s very likely this under represents the extentof instant messaging.Face-to-face and online telephonyVoice and video online telephony has hovered around 15% penetration in theUK since about 2009241. There are a few reasons that we can expect to seethis increase: the network’s getting stronger, the tech is getting better, the bigboys are on it and mobiles can increasingly do it.Microsoft’s purchase of Skype signaled a large ambition. “We will movebeyond email and text to rich experiences. Talking to colleagues across theworld will be as seamless as talking to them across the table” said SteveBallmer, Microsoft’s chief242. Given that Microsoft has the Windows Phone,Xbox (a games console), Hotmail (email), Windows Live Messenger (an instantmessenger), Windows (an operating system) and Exchange Server (enterprisesoftware), this isn’t necessarily hyperbole.Globally, the service has 170m users, growing at 40% year on year (that’s600k new registrations every day), clocking up 207bn calling minutes, 40% ofwhich is video based243.239 Social Media and Networking, Mintel, May 2011240 Digital Trends April 2011, Mintel241 Digital Trends April 2011, Mintel242 http://techcrunch.com/2011/05/10/ballmer-bates-skype/243 http://techcrunch.com/2011/05/10/ballmer-bates-skype/ 63
  • 68. And as Apple’s Facetime – a video-based communication app on the iPhone,iPad and iPod Touch – is aped on other smartphones they’ll be moreoccasions for online telephony than those just at a desk. 64
  • 69. 65
  • 70. SocialisingOf all the areas of online life, none deserves more of a whipping than the flakyresearch, truly epic navel-gazing and, in the context of brands, commerciallymyopic world of social media. And yet of all the areas of online life, nonedeserves more rigorous investigation. Along with the blossoming of mobile,social computing is the major behaviour-technological shift of our time. Tobrands a hype-free understanding of this is crucial to establishing whethercommercial advantage can come of joining in and, if so, the best way to dothat.What is social media?Definition, history and scopeAt its simplest social media just means ordinary people have got a bigger seatat the internet.In the past the web was mostly a one-way medium, like a backlit magazine. Thefirst comment boxes on pages were arguably the start of social media. Overtime more, easier tools have been added letting more people join in.The breadth of social media is enormous, making a tight definition necessarilybroad. However, it is possible to split social media out into several differenttypes. These include: Communication Social Media includes blogs and social networks. Collaboration Social Media covers wikis (collectively authored pages), social bookmarking, social news, and document management and editing. Multimedia Social Media capture photography, video, music, audio and presentation sharing as well as livecasting. Consumer Social Media exists in pockets of activity on other social media (e.g. Facebook) as well as product reviews, business reviews or community forums around product and services. And Entertainment Social Media very broadly bundles together virtual worlds, like World of Warcraft, and gaming platforms, like Farmville.How big is social media?Answers to this question mix up visits, time, penetration and frequency of use.Let’s untangle them. 66
  • 71. By visits, social and search are tied. Visits to search sites were by the smallestamount overtaken by the visits to social networks in 2010244 but it’s slight(11.3% of internet visits vs 11.9%245). In 2011, 39.4 million people visitedsocial networking sites in the UK, up 46% since 2008246. 30 million of thesevisits were to Facebook, representing 86% growth since 2008247.By share of time, social eclipses all other online activities with a 22.7% 2010(up 159% against 2007)248. By 2011, of the 3.4 billion hours spent online inthe UK, 800 million were in social (23%, but not comparable to the 22.7%referenced earlier due to different data sources and methodologies)249. Ifinternet consumption were made into a single hour then it would look like this: 250By penetration, 61% of British online folk used it in 2010251, with roughly 55%having used it at least once a month252 which puts it second to a lot of moretraditional digital activities like email and search. By 2011, 73% were usingsocial media on a regular basis253.By frequency of use, email, news and information gathering, product and priceinfo and shopping still outweigh social networking254.244 Online Leisure – UK – December 2010 (Mintel)245 Online Leisure – UK – December 2010 (Mintel)246 Social Media and Networking, Mintel, May 2011247 Social Media and Networking, Mintel, May 2011248 ClickZ, May 2010, http://www.clickz.com/3640446249 http://weblogs.hitwise.com/james-murray/2011/09/if_uk_internet_usage_was_just.html250 http://weblogs.hitwise.com/james-murray/2011/09/if_uk_internet_usage_was_just.html251 Social_Networking – UK – April 2010 (Mintel)252 Researching Purchases Online – UK April 2011, Mintel253 http://www.mediavisioninteractive.com/blog/index.php/social-media/social-media-grows-uk254 Researching Purchases Online – UK April 2011, Mintel 67
  • 72. So the answer becomes, yes, social media is the biggest online activity but noteveryone’s doing it and there are other things people are doing morefrequently.A broadening roleKeeping up with friends is the number one activity for most (68%) people onsocial networks and gaining in importance. However, social media are alsotaking a broader role for people. One of those is keeping up with news andtrends, rising in usage from 11% to 14% between 2009 and 2010255. Family isalso being welcomed in: seeing what they are up to has increased 5% pointsto 42% in 2010256. 14% and 15% play role play and basic games, a behaviourso new there isn’t enough to show a growth rate257. Networking for business isup 4% points to 10%. And finally, 42% have had a conversation with a brandvia social media258.Who’s using it?OverallBroadly speaking, more women are using it (61% women vs 54% men), thosein full-time education are nearly at saturation (91%) and the older you go theless social networking you see (16-24, 86%; 25-34, 75%; 35-44, 59%; 45-54, 45% and 55+, 29%259).Segmenting the socialMintel has sliced up social network users into five groups:Online Socialites make up 34% of the social media population. They are powerusers, access multiple networks from different devices and are more interestedin deals and brands than the average. Although they say they don’t notice theads on social networks more than the average, they are more likely to buysomething they see advertised on these sites. They are more likely to be male,25-34, working and with children260.The Sidekicks make up 22% of the population and mostly use Facebook tokeep up with their friends through laptops (84% against average of 76%) andphones (70% vs 54% average). 93% say they rarely pay attention to the ads,255 Social_Networking – UK – April 2010 (Mintel)256 Social_Networking – UK – April 2010 (Mintel)257 Social_Networking – UK – April 2010 (Mintel)258 http://www.digitalbuzzblog.com/slideshare-social-media-around-the-world-2011/259 Social_Networking – UK – April 2010 (Mintel)260 Social_Networking – UK – April 2010 (Mintel) 68
  • 73. 1% would buy products as a result of seeing an ad and only 3% would want to.This group just aren’t hip to social and shopping getting mixed up. Sidekicksare most likely to be young (16-24), in education and single261.Offline Socialisers make up 25% of the population. They are likely to beaccessing from PCs and underindex massively on mobile phone access (26%vs 54% average). 95% would say they rarely pay attention to the ads and only2% want to shop on social networks. The sort of people likely to be in thisgroup are the over 55s, the retired, empty nesters and the separated, divorcedor widowed262.The Social Explorers account for the final 19% of the population. Their networkuse is much broader than just friends, as with the Sidekicks. Instead they like toread news, play games, find new friends, locate deals and learn about brands.They are mostly accessing through laptops and slightly overindex on mobileaccess (57% vs 54%). They are much keener about ads on the networks and9% would buy as a result of seeing an ad. 15% of them would be interested ine-commerce on social media. They are more likely to be working and in largehouseholds with five or more people263.LadiesGlobally, women spend 30% more time on social networking sites than men.Women average 5.5 hours per month compared to men’s 4 hours264. In theUK, penetration is greater for women: 61% are on social media against 54% ofmen265.While women have the edge on social networking, men have it for socialnetworking on phones, reflecting ownership patterns more than any desire tosocial network more on a mobile. In 2010 19% of women and 22% of menwho social network accessed a social network through a mobile phone266, adiscrepancy that should iron out as girls get more smartphones. By 2011, 8million were accessing social media through their phones, a doubling since theprevious year267.While roughly a quarter of people use social networks to game on, women aremore likely to (27%) than men (24%)268. The traditional gamer in people’sheads is a teenage lad. That needs updating for social media.261 Social_Networking – UK – April 2010 (Mintel)262 Social_Networking – UK – April 2010 (Mintel)263 Social_Networking – UK – April 2010 (Mintel)264 ComScore, July 2010265 Social_Networking – UK – April 2010 (Mintel)266 Social_Networking – UK – April 2010 (Mintel)267 ComScore, as accessed through http://www.digitalstrategyconsulting.com/intelligence/2011/09/accessing_social_media_via_mob.php268 Social Media and Networking, Mintel, May 2011 69
  • 74. GentsMen spend less time in social media but when they do it’s more informational:in social media 36% of men claim information is their primary goal, while forwomen it’s 28%269. Men are also more likely to make use of browserbookmarking than to search again or use a social bookmarking service270. Menare more likely than women to maintain a profile on LinkedIn (18% vs 10%)271.And finally, it’s the men making Wikipedia, with 77% of Wikipedia’scontributors being male272.Children and InbetweenersThe proportion of young people who use social networking sites climbs steadilyfrom 36% of seven-year-olds to peak at 95% of 17-year-olds, before startingto fall273.Blogging holds less interest than it did in the past. 14% of US online teensnow say they blog, down from 28% of teen internet users in 2006. Similarly,blog commenting is down. 52% of US teen social network users report tocommenting on friends’ blogs, down from the 76% who did so in 2006274.Roughly 8% of American teens (12-17) use Twitter. Against this average boys(14-17, 7%) and younger teens (12-13, 5%) underindex and older teens (14-17, 10%) overindex.The young16 to 24-year-olds overindex on all sorts of social media usage, as you’dexpect. 69% of them do it275. Social networking is their number one activityonline:269 Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct270 Lightspeed Research 2009. Accessed from: http://www.iabuk.net/en/1/mensactivitiesonline.html in 2011; now no longer online271 Social_Networking – UK – April 2010 (Mintel)272 http://www.nytimes.com/2011/01/31/business/media/31link.html?_r=3&hp=&adxnnl=1&adxnnlx=1296491313-Gb/z5Xc+t9PSsze7krGSRg273 TGI as cited by MediaTel, July 2010274 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf275 Social Media and Networking, Mintel, May 2011 70
  • 75. 276Young social networkers are more likely to buy onlineHeavy social networkers aged 11-14 are 65% more likely to buy clothes online,40% more likely to buy books online and 20% more likely to purchase musicdownloads277.Young social networkers are more influentialAmong 11-14s, heavy social networkers (three times a day or more) are 50%more likely to be asked for advice by their school friends about toiletries andcosmetics, 40% more likely to be asked about mobile phones or fashion, and20% more likely to be asked about new music.278Silver socialitesIt’s been estimated 20% of grandparents are on social networks279. And theover 55s are the fastest growing group on Facebook, growing 84% between2009 and 2011280. For the over 50s, social media consumption on their mobilehas risen by 52% year on year281 and, if the data are to be believed, they’remore likely to use it on their phones than under 30s282.How many social networks do people use?While one in five internet users in the UK has never used a social network,40% are on one and 40% more than one283.276 Social Media and Networking, Mintel, May 2011277 TGI as cited by MediaTel, July 2010278 TGI as cited by MediaTel, July 2010279 http://www.telegraph.co.uk/technology/facebook/8589986/One-in-seven-grandparents-on-Facebook.html280 http://www.broadbandchoices.co.uk/news/over-55s-flock-to-facebook-290611.html281 TGI MobiLens, January 2011282 http://www.marketingweek.co.uk/over-50s-bigger-mobile-social-networkers-than-under-30s/3022307.article283 Social Media and Networking, Mintel, May 2011 71
  • 76. 284Where and when are people doing it?DevicesIn 2011 laptops lead the way, followed by PCs and then phones:However, there are some slight sex differences here. Guys are more likely touse all devices but laptops285:284 Social Media and Networking, Mintel, May 2011285 Social Media and Networking, Mintel, May 2011 72
  • 77. And there are also some age differences with the young overindexing on alldevices286:PlacesEverywhere is the short answer. The top time for social networking is lateevening. In fact, 72% of Brits spend 16 minutes a day on the likes of Facebookand Twitter287. Disturbingly, 7% said they’d even check out a message duringan “intimate moment”288.286 Social Media and Networking, Mintel, May 2011287 Accessed from: http://www.telegraph.co.uk/technology/social-media/8191767/Almost-three-quarters-of-Britons- in 2011; now no longer online288 SF Gate, March 2010 73
  • 78. 289What are they doing on them?OverallKeeping in touch with, reconnecting and hearing updates from friends is thenumber one reason, as you would expect290. Perhaps more suprising is that aquarter of social networkers use it to game, 15% use it to find cheap deals,13% use it to find out information from brands and a small 7% use it to date. 291289 http://mashable.com/2011/05/12/smartphone-apps-bed/290 Social Media and Networking, Mintel, May 2011291 Social Media and Networking, Mintel, May 2011 74
  • 79. GamingGaming in social media challenges the assumptions of what a gamer is like292.Most imagine spotty teens. For social gaming a person is much more likely tobe female, between 35 and 44 years old (32%, vs average of 25%), be notworking (34%) and have kids (30% vs 24% without kids). So, the socialgamers are parents, most likely mums, relaxing.How is mobile mixing things up?Mobile social networking favours the young but everyone is catching upBy 2011, 8 million were accessing social media through their phones, adoubling since the previous year293. Right now, it’s mostly the young using themobile social web with a very slight male advantage, an early adopter creasethat time should iron out.Although the average for social media access through mobile is 21%294, thekids are twice as likely to say socialising on the go is important to them (16-24,40% in 2010295, 44% in 2011296), young adults are catching up fast (25-34,29% in 2010297, 41% in 2011298), adults just come in under the average (35-44, 19% in 2010299, 24% in 2011300) and the middle-aged and older adultsmassively under index (45-54, 5% in 2010, 12% in 2011301; 55+, 3% in2010302, 9% in 2011).If you’re social networking on mobile, you’re FacebookingAs we saw earlier Facebook is, by a long stretch, the most frequented site onthe UK mobile web. Overall, of the 21% of British social networkers gettingtheir fix through mobile303, 97% are using Facebook304 and nearly half areusing Twitter (41%305). MySpace still receives a respectable 28% share, withFriends Reunited (22%), Bebo (17%) and LinkedIn (13%) receiving the rest.292 Social Media and Networking, Mintel, May 2011293 ComScore, as accessed through http://www.digitalstrategyconsulting.com/intelligence/2011/09/accessing_social_media_via_mob.php294 Social_Networking – UK – April 2010 (Mintel)295 Social_Networking – UK – April 2010 (Mintel)296 Social Media and Networking, Mintel, May 2011297 Social_Networking – UK – April 2010 (Mintel)298 Social Media and Networking, Mintel, May 2011299 Social_Networking – UK – April 2010 (Mintel)300 Social Media and Networking, Mintel, May 2011301 Social Media and Networking, Mintel, May 2011302 Social_Networking – UK – April 2010 (Mintel)303 Social_Networking – UK – April 2010 (Mintel)304 Social_Networking – UK – April 2010 (Mintel)305 Social_Networking – UK – April 2010 (Mintel) 75
  • 80. The networksWho are the major players?By 2012, Facebook was by far the most used communcation social network byusers (30.5 million), visits and minutes spent. The other players in a distantsecond were Twitter (a micromessaging service), LinkedIn (a professionalsocial network), Tumblr (a blogging platform), Pinterest (a digital corkboard)MySpace (a social network) and Google Plus (Google’s social infrastructure).Here’s a full breakdown: 306Communication social mediaFacebookWhat is Facebook?Facebook is a social network which allows you to create a profile, connect tofriends, upload photos and videos and give updates about your status. Most ofthe activity on your account is channelled through the ‘Wall’ or ‘Timeline’,essentially a feed of anything you’re doing and have done. Others experiencethis through their ‘News Feeds’, the edited highlights of all their friends’ andfollowed brands’ Walls.International scale and growthFacebook is the world’s largest social network with 845 million active users byJanuary 2012307. The network is growing at 40% year on year.Facebook in EuropeFacebook has a market share greater than 50%, and in most cases greaterthan 70%, in nearly all the major territories in Europe308.306 http://www.guardian.co.uk/technology/2012/feb/28/google-plus-time-dwindles-pinterest307 http://newsroom.fb.com/content/default.aspx?NewsAreaId=22308 http://www.prdaily.eu/PRDailyEU/Articles/7512.aspx 76
  • 81. 309The British FacebookerFacebook is well entrenched and phenomenally engaging. 30.5m Brits useFacebook, giving the network a 73.6% penetration310. On average, 13,679,000use Facebook daily311. The average visitor comes to the site nearly three times(2.7) a day and will clock up nearly six and a half hours (384.6 minutes) on thesite over a month looking at 608 separate pages312. Brits have an average of173 friends on social networking sites313. While these numbers are impressivewe should remember that one in five people are not on Facebook. Brandsshould be sure their audience doesn’t fit into this group before marketing onthe platform314. Non users are most likely to be male, over 45, self-employed orretired315.Taking it to the edgeFacebook edits this selection using an algorithm called EdgeRank, which isbased on three things. First, the level of affinity between the person andcontent creator. Second, the weight attached to each bit of content; every Likeand comment (comments are heavier) add up. The more people interact, themore that update will be served. And third, how fresh it is. The EdgeRankdecays over time. Brands are subject to the same algorithm meaning, high309 http://www.prdaily.eu/PRDailyEU/Articles/7512.aspx310 http://www.facebook.com/press/info.php?statistics311 http://www.facebook.com/press/info.php?statistics312 http://www.facebook.com/press/info.php?statistics313 InSites Consulting as cited by eMarketer, March 2010314 Social Media and Networking, Mintel, May 2011315 Social Media and Networking, Mintel, May 2011 77
  • 82. engagement is a must to appear on people’s news feeds. Or, cannily,Facebook offers brands the chance to buy back lapsed fans with engagementadvertising. This might smart a bit: Facebook makes you pay to get the fanswith ads and then makes you pay again to get them back. Of course, drivingthis is one selection pressure: how interesting brand content is. If you’re onFacebook, it’s engage or disappear.An argument for media efficiencyAs people are much more likely to click on a Facebook ad if their friends’names are attached to it, paying for and building fan bases, even if you neverreach them with messages from your page, can benefit media efficiency. So,you get a fan and they lapse because your content isn’t interesting to them.You run an ad about something and that person’s name is shown under that adas “Jenny likes Sainsbury’s” or whatever. Jenny’s friends are more likely to clickthat because of Jenny’s name being there, so CTR is increased. If for nothingelse then, collecting Facebook fans helps set up stickier ads and thereforebetter media efficiency.The British Mobile FacebookerFacebook has 250m people accessing it through mobile316. Staggeringly, ofthe 21% of Brits who access social networks on their phone 97% hadaccessed Facebook317. That’s about 6.4m people. EdgeRank does notcurrently apply on mobile.TwitterWhat is Twitter?The simplest way to think about Twitter is that it’s instant messaging, limited to140 characters, that everyone can see. If you wanted to see someone’supdates all you’d need to do is ‘follow’ them. If you wanted to catch someone’sattention, you’d ‘@ reply’ them, which involves putting the @ symbol beforetheir twitter name (often referred to as Twitter handle). Tweets can beorganised by hastags, simply a word with a hash in front of it. For example, youcould tweet “Twitter is the second biggest social network #statistics#socialmedia”. Often hashtags will develop around events (e.g. #worldcup),memes (e.g. #thingsnottodoafterabreakup) or simply be used to be funny orironic (e.g. “Cleaning the house #rocknroll”).316 http://www.facebook.com/press/info.php?statistics317 Pg. 48 Social_Networking – UK – April 2010 (Mintel) 78
  • 83. Global scale and reachThere are 500 million Twitter accounts318, 100 million of them are defined asactive319. In Febraury 2012, there were an estimated 24 million UKaccounts320, a third of which are active. In short, you’re looking at a Twitterbase of around 8 million in the UK.Nearly a predominantly mobile serviceIn 2011 40% of the content on Twitter came from mobile, up from 20% on2010321 indicating a broader trend of computing away from the desk. If thisrate continues to grow it could become one of the first major social networks tobe predominantly powered by mobile.Older, better-educated Age Twitter FacebookThough this is US data and isn’t benchmarked 13-17 4 11against the general population (although 18-25 13 29Facebook is increasingly a good proxy for that), 26-34 30 23 35-44 27 18we can see how Twitter users differ from 45-54 17 12Facebook. For one, they are older with a lot less 55+ 9 7to shout about for the 13-25 segment and a lot Income $0-25k 17 13more grey hairs in the 26-55+ category than $26-50k 33 34Facebook. Secondly, their income profile is $51-75k 23 30different with more at the bottom and more at the $76-100k 15 12 $100-150k 7 7top. Finally, twitterers are a little bit more $150k+ 4 4educated with 28% being college grads versus EducationFacebook users coming in at 22%. College Grad 28 22Ad man bewareLondon is the city with the most twitterers, followed by Los Angeles322. Bothhappen to be hubs for the British and US media which should set some flagswaving. As digitally savvy advertisers bang in the centre of London, we’re in theeye of the storm and run the risk of massively overestimating the reach andinfluence of Twitter to a wider audience. As a result caution should be takenwhen recommending any Twitter activity for a brand.Ad man take note318 http://kathryncorrick.co.uk/2011/02/03/twitter-now-claim-to-have-over-200-million-accounts/319 http://www.mediabistro.com/alltwitter/twitter-active-total-users_b17655320 http://wallblog.co.uk/2012/02/01/brazil-now-second-biggest-country-on-twitter-uk-fourth/321 http://mashable.com/2011/01/07/40-of-all-tweets-come-from-mobile/322 http://twittergrader.com/top/cities 79
  • 84. Around 20% of tweets contain a reference to a brand or product323, whichshould immediately scream a Twitter-based ‘listen and respond’ strategy forcustomer service, reputation management, lead generation and broaderopportunity hunting.Beyond the people referencing a brand, many actively follow the brandthemselves. Globally this sits at around 25% of Twitter users (vs, for example,40% of Facebook users). Interestingly, the Twitter audience appears to bemore loyal than the Facebook one. 67% of those 25% will purchase from aspecific brand they follow; on Facebook it’s a lower 51%324.Old influence in new clothesA common refrain in social media is about the democratisation of information.Anyone can now have a voice. That’s true but it’s important to temper thatheady ideology with some facts about the flow of information through networksbecause they’re not always intuitive. The question for those in the influencebusiness should be “Whose voice matters?”You’d expect the more followers a person attracts, the more influence theyhave. Nope. Number of followers does not contribute in any significant way totrend creation or propagation325. It’s the mainstream media who start and feedthe major trends. So CNN, the New York Times, El Pais and the BBC may havemillions fewer followers than Ashton Kutcher, Barack Obama or Lady Gaga buttheir voices matter more.Twitterers then act as filters and amplifiers to this326. In fact, roughly 50% ofconsumed tweets with links are generated by 20,000 elite users327.For brands this should scream the need for a digitally savvy PR strategy thatuses the big players for mass influence and then bolsters this along the wayusing smaller influencers.323 Twitter as referenced by the Telegraph, February 2010324 http://www.digitalsurgeons.com/facebook-vs-twitter-infographic325 White Paper from HP,http://h30507.www3.hp.com/t5/Data-Central/HP-research-shows-mainstream-media-drive-Twitter-trends-to-a/ba-p/87985326 White Paper from HP http://h30507.www3.hp.com/t5/Data-Central/HP-research-shows-mainstream-media-drive-Twitter-trends-to-a/ba-p/87985327 http://research.yahoo.com/pub/3386 80
  • 85. LinkedInWhat is LinkedIn?LinkedIn is the world’s largest professional social network328.How big is LinkedIn?As of November 2011, LinkedIn reported more than 135m registered users,spanning more than 200 countries and territories worldwide329. In the UK thereare an estimated 3.6m users of the site, giving it an 8.5% reach330. 400k visitdaily, looking over the course of a month at 32 pages and spending nearly 18minutes on the site331.Although traditionally used as a tool for individuals to find jobs or recruiters tofind people, through its Groups functionality LinkedIn has given brands reasonto use its platform. LinkedIn Groups allows brands to engage existing andfuture employees in conversations focused on professional interests and initiatediscussions with audiences aligned with their core business.However, LinkedIn is not only a place for professional networking andconversation; it’s another prime opportunity for a brand to showcase itsbreadth and depth online. LinkedIn’s Company Page functionality is theequivalent of a Facebook brand page enabling businesses to gain followersand recommendations creating a social business network for brands.BeboAlthough initially meant for older users Bebo found success among youngerusers with its mix of high security, ease of use and focus on teen video drama(like KateModern). This demographic is still its audience.Owner AOL has publicly admitted it doesn’t have the funds to make Bebo aworthy competitor to the other social networks. Since late 2008 visitors toBebo have fallen by 41%332 bringing uniques in 2011 to a still respectable4.771m a month, which is a reach of 11.2%. 809,000 people visit every day,spending on average nearly 4 minutes on the site333.328 http://press.linkedin.com/about329 http://press.linkedin.com/about330 http://www.facebook.com/press/info.php?statistics331 http://www.facebook.com/press/info.php?statistics332 ComScore as quoted in Social_Networking – UK – April 2010 (Mintel)333 http://www.facebook.com/press/info.php?statistics 81
  • 86. Friends ReunitedFriends Reunited was one of the UK’s first social networks centred aroundbringing former school friends back together. In 2011 it had 800,000 visitors amonth, a reach of 1.9% and average daily visitors of 55,000334.MySpaceMySpace, once the darling of the internet music scene, is haemorrhagingusers. Even after launching MySpace Music which offered unlimited streamingof music, unique visits fell by nearly 1 million between December 2009 andFebruary 2010 to 4.02m a month, giving the network a UK reach of 9.4%335.Overall between January 2011 and January 2012, the site halved in itsuniques336. So, there may be some cheap media to be squeezed out ofMySpace but no long-term presence should be planned there.FourSquarePoor FourSquare, it comes up with an innovative new way of social networkingthrough location and then Facebook goes and does the same thing for itself.Although in 2011 it had 10 million users337, Facebook’s functionality is nowmore attractive to brands, offering free social reach, as information about acheck-in is shared with a proportion of friends.Collaboration social mediaWikipediaAlong with YouTube and Facebook, Wikipedia is arguably one of the mostfamous social media platforms. The free encyclopedia has 21 million articles,3.8 million of which are in English written collaboratively by volunteers aroundthe world338. It is written predominantly by men (77% vs 13% women)339 andfrequently appears at the top of organic search results. So, as far as brands areconcerned, keeping your page accurate – not persuasive – should be a priority.334 http://www.facebook.com/press/info.php?statistics335 http://www.facebook.com/press/info.php?statistics336 http://reyt.net/myspace-com-lost-54-of-its-visitors-in-12-months/9235337 http://techcrunch.com/2011/06/24/foursquare-closes-50m-at-a-600m-valuation/338 http://en.wikipedia.org/wiki/Wikipedia339 http://www.nytimes.com/2011/01/31/business/media/31link.html?_r=3&hp=&adxnnl=1&adxnnlx=1296491313-Gb/z5Xc+t9PSsze7krGSRg 82
  • 87. Multimedia social mediaYouTubeWhat is YouTube?YouTube’s one of those ones it feels awkward to explain, such is its ubiquity.One thing you might not know about the video-sharing website is that it’s alsothe world’s second largest search engine340.How big is YouTube?YouTube is the third most visited site in the UK, after Google and Facebook,and in December 2011 accounted for one in every four British internet visits toa social network341. 30.4 million Brits visit it every month342. Incredibly it’s stillgrowing, with visits up 45% from December 2010.YouTube numbers are pretty staggering in a number of different areas. Let’stake a closer look at some from March 2012.Traffic 60 hours of video are uploaded every minute, or one hour of video is uploaded to YouTube every second – this number has doubled every year nearly Over 4 billion videos are viewed a day Over 800 million unique users visit YouTube each month Over 3 billion hours of video are watched each month on YouTube More video is uploaded to YouTube in one month than the three major US networks created in 60 years 70% of YouTube traffic comes from outside the US YouTube is localised in 39 countries and across 54 languages In 2011, YouTube had more than 1 trillion views or almost 140 views for every person on EarthYouTube Partner Program Created in 2007, YouTube has 30,000+ partners from 27 countries They pay out millions of dollars a year to partners Hundreds of partners are making six figures a year Partner revenue has more than doubled for four years in a rowMonetisation YouTube is monetising over 3 billion video views per week globally340 http://www.businessinsider.com/youtube-2010-11341 http://thenextweb.com/google/2012/01/11/hitwise-uk-visits-to-youtube-up-45-accounting-for-1-in-4-visits-to-social-networks/342 http://thenextweb.com/google/2012/01/11/hitwise-uk-visits-to-youtube-up-45-accounting-for-1-in-4-visits-to-social-networks/ 83
  • 88.  98 of AdAges Top 100 advertisers have run campaigns on YouTube and the Google Display Network Hundreds of advertisers are using TrueView in-stream, YouTube’s ad that only charge advertisers upon interaction 60% of in-stream ads are now skippable, creating a new selection pressure for ads that engage from the offProduct metrics YouTube has more HD content than any other online video site YouTube has thousands of full-length movies on YouTube 10% of YouTubes videos are available in HD YouTube mobile gets over 600 million views a day, and traffic from mobile devices tripled in 2011 The YouTube player is embedded across tens of millions of websitesContent ID Content ID, YouTube’s video scanner, looks at over 100 years of video every day to find copyrighted material More than 3,000 partners use Content ID, including every major US network broadcaster, movie studio and record label YouTube has more than eight million reference files (over 500,000 hours of material) in its Content ID database; among the most comprehensive in the world. The number has doubled in the last year Over a third of YouTubes total monetised views come from Content ID More than 120 million videos have been claimed by Content IDSocial 500 years of YouTube video are watched every day on Facebook, and over 700 YouTube videos are shared on Twitter each minute 100 million people like, share and comment on YouTube every week An auto-shared tweet results in 6 new youtube.com sessions on average, and YouTube sees more than 500 tweets per minute containing a YouTube link More than 50% of videos on YouTube have been rated or include comments from the community Millions of videos are favorited every day343343 http://www.youtube.com/t/press_statistics 84
  • 89. FlickrWhat is Flickr?Flickr is a photo and video sharing website. In addition to being a place forpeople to keep and share their photos, the service is widely used by bloggersto host images they put in their blogs.How big is Flickr?Flickr currently hosts over 5 billion images, handles over 3,000 image uploadsper minute344 and sees roughly 80 million unique visitors345. While UK data onthe site are thin on the ground, Flickr courts roughly 2% of the internet’s dailytraffic with users spending on average 5 minutes 15 seconds on the site346. Itis widely considered to be the pre-eminent photography social network.InstagramInstagram is a free photo sharing application designed for use on Apple iOS(iPod, iPad, iPhone) devices. It has 7 million users globally who’ve uploaded150 million photos at a rate of 1.3m photos a day or 15 photos per second.However, it is noteworthy as it’s currently growing fast347.PinterestPinterest, a digital corkboard, allowing you to ‘pin’ pictures and objects youlove in a colourful and fun way, has suddenly got a lot of attention. By March2012 it had 13 million visitors, 250,000 of whom were from the UK348, andmost of them women (97% of their Facebook fans are women349) spending anaverage of 25 minutes on the site across the month350. Home improvement,design, fashion, food, weddings and craft categories make up the majority ofthe boards pinned, making it a perfect for brands in these areas. Burberry, forexample (pinterest.com/burberry), has dived in and is very likely seeing moretraffic to its shops on and offline as a result.344 http://blog.flickr.net/en/2010/09/19/5000000000/345 http://en.wikipedia.org/wiki/Flickr346 http://www.alexa.com/siteinfo/flickr.com347 http://techcrunch.com/2011/03/10/instagram-adding-130000-users-per-week/348 http://www.guardian.co.uk/technology/2012/mar/04/pinterest-share-interest-picture-boards349 http://www.guardian.co.uk/technology/shortcuts/2012/feb/27/pinterest-a-man-free-zone350 http://www.guardian.co.uk/technology/2012/feb/28/google-plus-time-dwindles-pinterest 85
  • 90. Consumer social mediaNeeds and influencersConsumer social media can be thought of as the use of social media in anystage of the purchase process. Its real promise, unsurprisingly, lives in thesocial bit. To get there, let’s first look at why people buy products and services.One, they need them. Historically the web has answered people’s needsthrough them searching, finding, reading, comparing and buying. Essentially, itis about answering demand and creating advertising that people go looking for.Two, people don’t necessarily need something but are influenced to buy it. Thiscan come from all sorts of places like TV, radio, deals, news, peer review,advertising, celebrities and, crucially, friends (one study found people mentionbrands over 90 times per week when talking with friends, family andcolleagues351). Essentially activity here for brands is about creating demandand making advertising – in its broadest sense – that goes looking for people.Influenced by algorithmLeaving aside the physical world and all the persuasion methods there, the realwinner of the digital world for influence historically has been algorithm-drivenaffinity analysis better known to most people as messages like ‘CustomersWho Bought This Item Also Bought’ – the increasingly personalised pagesthey see when on e-commerce sites or utilities like iTunes Genius, an Appleservice taking the sting out of finding new music. This all boils down tocomputers looking for patterns in data and spitting out things we might wantbased on things we have already or have shown an interest in having.The new influencerThe promise of consumer social media is that it trumps the algorithm by comingfrom a more trusted source: your friends and peers. Even the purchase powerthat a much larger group of people can wield is being used in new ways to beuseful to both people and brands. As Emily White, Facebook’s Director ofLocal has said “The wisdom of friends has taken over from the wisdom ofcrowds”352.And there’s evidence: people remember ads more (two times recall vs non-name) and are four times more likely to buy something if their friend’s name isattached to the product353. It also increases weight of purchase: 67% of351 Accessed from: http://www.bazaarvoice.com/resources/stats in 2011; now no longer online352 http://www.guardian.co.uk/technology/2011/jan/31/facebook-places-deals-uk-europe353 http://www.slideshare.net/victori98pt/advertising-effectiveness-understandin-the-value-of-a-social-media-impression 86
  • 91. shoppers spend more money online after recommendations from online friendsor like-minded people354.Can social media drive revenue?Social media can plug into the purchase process in ways that make money forbrands and shopping easier and more exciting for people. For example, bygetting on people’s radars – directly or through their friends – it can turnpeople who aren’t buying from you into people who are. By continuing this oradditionally providing them with support it can help turn them into repeatcustomers who buy more or more often. And by doing it right over time, orgetting that one time just right, it can make them want to shout about you totheir friends.The theory is tight. The evidence is not. For example, brand fans in social mediaare likely to spend more ($70 more than non-fans in one study), more likely tocontinue using the brand (28% more than non-fans) and 41% more likely torecommend the brand to a friend355. They visit nine times more often, and fourtimes as many pages, than non-community users356 and overall report a betterexperience from forums than via calls or mail357. What this research suggests isthat people who get involved with brands in social media become heavierbrand users than non-fans.Flaky social media conclusionsThe problem is all this research is just the social version of the Rosser ReevesFallacy, which is basically when you get your cause and your effect on back tofront. Just because two things are happening together does not mean onecauses the other.In the case of the research above, brands’ biggest fans (in the wider sense ofthe word) are much more likely to be their social network fans and also spendmore in the first place. All that research ends up saying is, people who like youmore, like you more. Thanks, research. We need to be able to remove thegeneral “fan effect” to establish the true value of social media to business. Noresearch of this nature exists to our knowledge.So, right now the theory shouts opportunity and while there are a few excitingsnippets which suggest it works, the really rigorous evidence just isn’t in yet.Can social media cut costs?354 http://www.bazaarvoice.com/resources/stats355 http://www.syncapse.com/media/syncapse-value-of-a-facebook-fan.pdf356 McKinsey, 2000357 Jupiter, 2006 87
  • 92. Theoretically, social media should be able to reduce customer service costsafter set-up costs are discounted. For example, a slice of call centre costs canbe directed online where a cheaper resolution is possible, because either stafftime per query is reduced or, when other people – advocates – have answeredthe question, customer services are not engaged at all.Research has found that 43% of support forum visits are in lieu of opening up asupport case by phone358 and that cost per interaction in customer supportaverages $12 via the contact center versus $0.25 via self-service options. So a98% cost saving is possible, all other things being equal359.Second, it can deliver business intelligence which would have been morecostly to collect by other means or, if ignored, could have incurred future costs.In some respects, online communities can be thought of as free focus groups.And third, it can build communities of opt-in brand fans who you no longerneed to reach with paid media. When you can talk to a million people wheneveryou like you don’t need to buy inefficient media packages, nor pay a mediaagency to broker this on your behalf. In short, cost per response/impressiondrops.Again, while the theory is solid, the evidence is empty. We are aware of norigorous research by a brand that quantifies the economic benefits socialmedia can offer.That said, let’s continue to look at the theory and what some brands are doingto gauge the opportunity.The awareness and consideration stageLet’s start with when someone needs something. Only 15% of people usesocial networks to find deals and 13% of people use social media to findsomething out about brands360.Most people say they rarely pay attention to advertising on social networkingsites in 2011 (66%). Only 14% admit to paying attention to them361. Assumingpeople are good judges of their own behaviour (and they’re probably not), twothirds of any market is off limits for social network advertising. Interestingly, overhalf of people just aren’t interested in buying through their social network(56%)362.358 Cisco, 2004359 “Social media and the banking community”:socialmediatoday.com360 Social Media and Networking, Mintel, May 2011361 Social Media and Networking, Mintel, May 2011362 Social Media and Networking, Mintel, May 2011 88
  • 93. 363However, there are other methods of raising awareness and consideration.Facebook provides brands with mass reach through the functionality it offers toanyone: the News Feed. Below you can see Apple’s App Store page, to whichthey post new apps a few times a day. Given nearly five million people like thepage, even a 10% view rate and a 1% purchase rate after that means eachpost is driving five thousand downloads and potential purchases. At 15 posts aweek and a rough average of $2 for a download this page could be drivingaround $5.4m in revenue a year. Of course this is estimated but it simplyshows the opportunity for brands with links to purchase.However, are people interested in brands on Facebook? Haven’t they comethere to be with friends, not companies? We know for a fact that they do likeinteracting with brands. However, the extent to which this can drive businessresults is still in question. A 2011 study by Forrester Research found that theaverage click-through rate (CTR) on Facebook is 1% and the conversion rate is2%. Email on the other hand boasts 11% CTR and 4% conversion rate364.The research stageThis involves pulling friends into the research stage either directly or indirectly.For example, Levis have a Friends Store which collects together productswhich your friends and the wider community have ‘Liked’.363 Social Media and Networking, Mintel, May 2011364 http://blogs.wsj.com/digits/2011/04/07/facebook-wont-become-e-commerce-force-analyst-says/?mod=WSJBlog 89
  • 94. Other brands are giving people the option to be more direct by converting thesort of questions you might ask someone over a drink into social functionality.Best Buy give the option of asking your friends on Facebook from their sitewhile Samsung go a little further and post a poll to your Wall with a specificproduct-related question, in this case what size you should get. 90
  • 95. Pulling on the broader weight of consumer social media to help people getaround the staggering choice and indecision this comes with. Sites like JustBuy This One (a new venture from Reevoo) collect review information and onlyshow the very best-rated products by price category.The purchase stage15% of people like the idea of being able to buy something through socialmedia – and men are nearly twice as keen (18%) as women (10%) suggestingthat innovation here is better aimed at men to get more traction.However, there is a lot of debate as to why you would want to buy somethingjust because it sits under the banner of your favorite social media network.There is a lot to be said for that view. It is completely pointless at the momentto move your e-commerce operation into Facebook: Facebook’s functionalityjust isn’t good enough. 91
  • 96. However, when it becomes powerful is when social becomes a tool for freereach. So when you buy certain products you’re proud of, you want to tellpeople. Making the act of buying a ‘social object’ allows people to brag abouttheir new clothes, kit or cosmetics. While 44% of people don’t like the idea ofbuying on social networks365, 83% of shoppers said they would be interestedin sharing this information366. And when transaction becomes communication italso allows brands to get free reach through Facebook word of mouth.Finally, when enough people show an interest in buying something, a brand canrelax because it’s got volume, while customers are happy because they get adeal. This is the premise of new consumer social media companies likeGroupon, which we discuss in depth in the next section, ‘Spending’.Customer serviceAfter purchase, social media offers the opportunity to help people with anyissues they may have. This is often one of the major roles a Facebook or Twitterpage plays.IssuesFor all the good things social media bring, there is an uglier side. For example,identity theft and fraud, bullying, children’s exposure to improper content,employers cautioning or dismissing staff for content on their profile and theincreased risk of meeting new people online are all large issues.Bullying18% of European young people have been “bullied/harassed/stalked” via theinternet and mobile phones, of which social media play a large part367.EmployersNearly half of HR professionals in Europe claim to perform online checks oncandidates and as many as a quarter of all job applications are turned downbecause of ‘online reputation and profiles’368.Inappropriate content4% of European children from 12 to 14 (8% of 15 to 17-year-olds) haveuploaded sexually provocative, partially or entirely nude pictures of365 Social Media and Networking, Mintel, May 2011366 Accessed from: http://www.bazaarvoice.com/resources/stats in 2011; now no longer online367 Hasebrink, U., Livingstone, S., Haddon, L. and Ólafsson, K.(2009) Comparing children’s online opportunities and risks368 EU Data Protection Day 2010, http://www.gala-marketlaw.com/pdfs/Privacyissuesinsocialnetworking.pdf 92
  • 97. themselves369. 43% of their posts in social media have sexual references, 43%submit personal information to ‘friends’, 41% watch sexually explicit content ,40% have handed over mobile numbers to someone they ‘met’ on the internetand 22% have had ‘intimate relations’ with a person they found online370.Privacy and location security81% of social network users do not place any restrictions on who can see theirrecent activity, including updates generated by geo-location-based tools thatreport where their users are visiting371.369 Adiconsum and Safe The Children, accessed through http://www.gala-marketlaw.com/pdfs/Privacyissuesinsocialnetworking.pdf370 Adiconsum and Safe The Children, accessed through http://www.gala-marketlaw.com/pdfs/Privacyissuesinsocialnetworking.pdf371 Webroot as cited by eMarketer, March 2010 93
  • 98. 94
  • 99. 95
  • 100. SpendingNo other medium has so impacted the traditional marketing funnel as much asthe internet372. As nearly two in every three people (64%) have made a firstpurchase from a brand because of an online experience, it’s vital brands gettheir digital house in order and understand how people are behaving whenthey’re buying. In this section we’ll look at how people buy online, both througha good old-fashioned computer and through mobile devices, and how thisinteracts with the real world.The British e-commerce marketA £68bn marketTotal UK online sales reached £58.8bn by the end of 2010 – an 18% increaseon 2009. In 2011, we spent £68bn, a similar hike373.A weekly affairOver two in five (42.6%) Brits shop online at least once a week and theaverage shopper is now spending £71 per month on online goods374.Who’s buying online?Internet shoppers fit into four major groupsOnline shoppers can be split into two main groups: the frequent and theinfrequent.Frequent online shoppers can be subdivided again into two categories:  casual shoppers (24%), who use the internet often but are not necessarily aware of all the tools to find the best price. 80% have bought something on the internet, chief among them holidays and travel, entertainment and clothes. They don’t really read or submit reviews (13- 14% do) and tend to rely on professional reviews for more serious products like finance and utlities.  bargain hunters (28%) who use the internet to get the best deal, with 64% comparing prices and 46% using cashback services. They read reviews more than any other group (84%) and 25% have submitted one375.372 Razorfish Digital Brand Experience Study as cited by Bazaarvoice.com,December 2009373 http://www.guardian.co.uk/business/2012/jan/19/online-retail-sales-soar-december374 eCommera.com, August 2010375 Researching Purchases Online – UK April 2011, Mintel 96
  • 101. Infrequent online shoppers can be subdivided into:  avid internet users (14%) who lack the disposable income for frequent online purchases, buying mostly entertainment and clothes. They’re the group most likely to leave reviews (30%) and just shy of half (48%) use voucher or cashback services. They use – and express the highest interest in using – comparison and money saving websites on their PC and phones.  apathetic shoppers (34%) who don’t rely on the internet for product information or purchases376. They don’t really use money saving sites (20%) or are low on reading reviews from others (44%) and pros (36%) versus other groups.Brands should map their audience against these to tailor and optimisepurchase paths.Women lead online buyingGlobally, women spend 20% more time on retail sites than men377. Womenbuy more often than men, accounting for 59% of purchases on Europeanwebsites (53% in the UK), but don’t spend as much as men when they do.While European men spend 93.12 euros on an average web purchase, womenspend 68.65 euros378. In the US, women buy more often than men too but endup spending more. US women make up just under half of the internetpopulation but generate 58% of e-commerce dollars379.Men are information hungry and prefer e-tail slightly moreMen may shop less than women but when they do they’re all about theinformation. Men search more than women380, care more about informationwhen interacting with brands in social media381 and are more likely to refer toprofessional reviews than others382.Overall, 35% of men prefer ‘e-tail’ to real shops compared to 29% ofwomen383. The interesting thing about that stat is the overwhelming preferenceis to shop in store, prompting strategies that improve the experience betweenonline and offline worlds.376 Researching Purchases Online – UK April 2011, Mintel377 ComScore - http://bit.ly/9dth6f378 http://www.internetretailer.com/2011/03/28/european-women-shop-more-often-online-men-spend-more379 ComScore - http://bit.ly/9dth6f380 US base, ComScore - http://bit.ly/9dth6f381 Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct382 Researching Purchases Online – UK April 2011, Mintel383 http://oxygen.mintel.com/sinatra/oxygen/search_results/show&&type=NSItem&class=News&sort=recent&display=abridged&page=1/display/id=574641&anchor=574641 97
  • 102. Teen buyingTeens are shopping more and more online. 16% of 11-14s and 34% of 15-19s shop online at least once a month, up from 13% and 27% respectively in2008384.And even if they’re not buying online, a third of 11 to 14-year-olds ‘always’refer to the internet before making any purchase, rising to almost half of thoseaged 15-19. Boys are more likely than girls to do this, and they are also morelikely to be influenced by comments and reviews posted online385.What are they buying? 25% of young people aged 11-14 purchase clothesonline, 23% purchase video games, 21% purchase DVDs, 20% purchase CDsand 18% purchase music downloads386.Among 15-19s the most popular online purchases are clothes, bought by justunder half of the group, DVDs (35%), CDs (31%), computer games (29%),books (26%) and music downloads (25%)387.What are they buying?A widening marketThere is a growing confidence in splashing the cash on bigger ticket items. Theproportion of shoppers prepared to spend £1,000 or more for a single productonline increased in the UK from 12% in 2008 to 25% in 2009388.Some categories still underrepresented71% of Brits have bought something online; however, what they’re buyingvaries quite a lot. The most common category is entertainment (45%), followedby clothes (41%) and holidays (41%). Pubs, restaurants and takeaways clockin lowest with 10%, although as mobile opens up location-based purchaseswe can expect to see this rise. A full breakdown can be seen below:384 Youth TGI as cited by MediaTel, November 2010385 Youth TGI as cited by MediaTel, November 2010386 Youth TGI as cited by MediaTel, November 2010387 Youth TGI as cited by MediaTel, November 2010388 The Centre for Retail Research 2010, January 2010 98
  • 103. 99
  • 104. Where are they buying?The big threeThe majority of British shopping happens in three places: eBay (42.76%reach), Amazon (42.49%) and Tesco (18.79%)389. The remainder occursacross brand websites and smaller players. It makes sense for brands to focusattention on these sites – but experience would suggest they don’t. Mostbrands do not have an official presence on eBay and many don’t know aboutthe A+ page, a souped-up Amazon page, which, according to Amazon,increases conversion significantly390.When are they buying?The Wednesday rush4pm Wednesday is peak-time for workplace shopping, which sees a 75%increase of shopping391 as employees reach the hump of the week.How are they buying?In this section we’ll look at typical paths to purchase.Why brands still matterInternet shopping has many blessings, for example, readily accessibleinformation, lots of reviews, analyses from actual users, easy bargain huntingand crossovers to the offline world (e.g. vouchers and rewards)392.However, it’s been around for a bit now and we’re British so we have grumbles.They include: the apple to orange comparisons made by price comparisonwebsites (there are other factors people want to include), mopping updecentralised information, having to research in one place and buy in another(people tend to research on a price comparison websites but then buy from theretailer) and review apathy – awareness that people tend to leave only badreviews, making them overall painful to gauge393.Basically, people are experiencing what they always have in advanced markets:too much information and some of it not good enough, except this issupercharged by the internet. This means brands are more needed than ever toact as mental shortcuts in categories. The evidence bears this out. Most people389 http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/390 Will Lion, personal communication with Amazon391 Digital Strategy Consulting, September 2010392 Researching Purchases Online – UK April 2011, Mintel393 Researching Purchases Online – UK April 2011, Mintel 100
  • 105. buy from sites they trust, like the brands directly or retailers like Tesco andAmazon394.Personal influence still kingAnother reason brands continue to have importance is that other people arethe biggest influence on buying. 90% of people seek the advice of friends andfamilies as part of most decisions and 80% won’t make a decision until theyget their stamp of approval395. This effect is stronger than online reviews left byothers: half of people agree with the statement “I pay more attention torecommendations from my family and friends than online reviews”. Peopleagreeing to this are more likely to be young (16-24) or older females (55+).Driving advocacy should therefore be high on a brand’s agenda.Hard coding personal influenceGiven the influence others have on our decisions, the search engines arestarting to incorporate social information in results. For example, Bing nowincludes friends’ Facebook Likes. So, for example, when someone searches fora hotel they can see in the results which of their friends have Liked it396.Similarly, Google’s +1 button is shown against searches. 30% of Brits claimthis would make them more likely to buy something397, although we’ll wait foractual data here, as there’s probably a gulf between what people say they’ll doand what they do. Our bet would be more than 30% are influenced.In the ‘Searching’ section earlier, we showed how vital it is for brands to exist,especially in mobile search where users tend not to drill down beyond the firstpage. In the ‘Socialising’ section, we saw how huge social was to the mobileexperience.Taken together, if the future of computing is mobile and social, brands whowant to get onto people’s search results will need to start flooding the searchengines with a long tail of social data. What does that mean? Mobilising now toadd social plugins to their products and sites and building influence on socialnetworks, predominantly Facebook, in order to stand out against competitors insearch.In the past, personal influence was in the air. Now it’s going codified andmathematically influences a brand’s visibility on the two windows to the webthat matter the most: social and search. Let’s look at the journeys people takeon their path to buying.394 Online Spending Habits – UK – February 2011, Mintel395 http://www.bing.com/community/site_blogs/b/search/archive/2011/05/16/news-announcement-may-17.aspx396 http://www.bing.com/community/site_blogs/b/search/archive/2011/05/16/news-announcement-may-17.aspx397 Researching Purchases Online – UK April 2011, Mintel 101
  • 106. Searching for researchSearch is the start. 83% of UK online shoppers use search engines to beginresearch for a purchase398. Many of these will end up in product or servicereviews.Researching by reviewWhile friends and family rule, reviews still play a big role with three in five of usreferring to them399 (this is higher for younger and wealthier groups). More thanhalf (53%) think reviews by strangers are more useful than those on TV or inmagazines as these are the people living with the products not just using themfor the period they have that column waiting to be filled400. And for the bigpurchases nearly 60% of us are reading reviews. Both men and women are justas likely to read reviews online, although male consumers are more likely torefer to professional reviews when doing research401, which should fine-tuneinfluencer strategies for marketing to men. 402That said, 46% find it hard to know which reviews to believe403, opening thedoors for user experiences that drastically constrain choice likejustbuythisone.com.Differences in reviews readMost people review products online; however, this varies a lot by productgroup. People tend to read consumer reviews for electronics, entertainmentproducts, holidays and travel and home appliances, but usually turn toprofessional reviews for financial products and utilities.398 RichRelevance and Bazaarvoice as cited by eMarketer, November 2010399 Researching Purchases Online – UK April 2011, Mintel400 Researching Purchases Online – UK April 2011, Mintel401 Researching Purchases Online – UK April 2011, Mintel402 Researching Purchases Online – UK April 2011, Mintel403 Researching Purchases Online – UK April 2011, Mintel 102
  • 107. 404Is everyone joining the conversation?Joining the conversation. There’s a phrase every social media guru isbreathlessly telling us everyone is doing. The reality is that only one in five hasleft a review and a much lower 13% of people have entered a conversationabout it on an online forum405. When it comes to brands in social media mostpeople are just watching.Who’s leaving reviews?Young men aged 16-24 are writing most of the reviews, especially for tech kitand entertainment products406.404 Researching Purchases Online – UK April 2011, Mintel405 Researching Purchases Online – UK April 2011, Mintel406 Researching Purchases Online – UK April 2011, Mintel 103
  • 108. Researching priceSince the economic downturn, nearly 60% of people are being more carefulwith their money and researching prices more thoroughly online407. This isespecially marked for the young and those with a smaller household income,unsurprisingly408. Four in ten people used comparison websites in 2011without actually buying anything from them409.However, increasingly people are becoming confused and sceptical about theresults from these services, mostly because they vary a lot. Coupled with thefact that these sites are middlemen, people are using them to get a feel for theprice of something and then head onto the retailer to get more information andpurchase. Overall, they’re being visited less than they were a year ago:407 Researching Purchases Online – UK April 2011, Mintel408 Researching Purchases Online – UK April 2011, Mintel409 Researching Purchases Online – UK April 2011, Mintel 104
  • 109. 410Finding a bargainDifferent categories have different bargain hunting behaviours, which reflectpurchase size more than anything else. For example, as you’d expect,restaurants are high on vouchers while utilities are low411. Inversely, financialproducts and holidays command a lot of price comparison visits, whilerestaurants and groceries don’t. We’re suckers for vouchers on the small stuffbut don’t shop around. Yet we’re addicted to price comparison for big ticketitems and aren’t so interested in the vouchers.410 Researching Purchases Online – UK April 2011, Mintel411 Researching Purchases Online – UK April 2011, Mintel 105
  • 110. How is social changing commerce?Consumer Social Media in the ‘Socialising’ section deals with the variousstages throughout the purchase process and how social networks can beuseful to commerce. Here we dig a little into sites that aren’t social networksbut could broadly be classed as social media.Finding a bargain with Money Saving ExpertMoneySavingExpert.com provides consumers with information, guides, toolsand tips on saving money both online and offline across a range of productsincluding credit cards, shopping, utilities, phone services, banking, travel,motoring, insurance and mortgages. It’s widely regarded as the go to place forbargains and unbiased consumer information. According to the site, in February2012 it was clocking 23 million visits a month from 13 million different peopleand sending a very healthy 7 million emails each week412. The demographicbreakdown of visitors looks like this. Note the wealthy female bias.Finding a bargain with vouchers37% have used voucher or cashback websites to save money on theirpurchases, with people under 35 most likely to use these discounts413. Overallthe sector has seen impressive growth and is nearing 1% of all UK internetvisits.412 http://www.moneysavingexpert.com/site/about-the-site413 Researching Purchases Online – UK April 2011, Mintel 106
  • 111. 414Finding a bargain with Groupon and LivingSocialRecent entrants are Groupon and LivingSocial, both of which offer peopledifferent, discounted local offers every day.The sites generate their revenue by taking a cut on each sale, which isreportedly as much as 50% of the value of each voucher or deal415. Revenuefor Groupon in 2011 was $312.9 million416, $224 million for LivingSocial417.While both businesses have been criticised over their long-term feasibility418(LivingSocial made a loss of $558 million in 2011419), they are certainlypopular. There are reported to be 142 million subscribers of Groupon (Mar2012)420 and Living Social on the other hand has 85 million users421.In January 2010, LivingSocial offered $20 Amazon gift cards for $10, attracting1.4 million purchases422. In March 2011, they offered two tickets for $9 viaFandango’s, a movie tickets and timings company, pulling a million sales in twodays423. In August 2010, Gap made $11 million through Groupon by offering$50 jeans for $25. 41,000 people took advantage424. Few other case studiesexist, suggesting brands should simply test and learn; however, a 2011Harvard Business Review paper found “offering vouchers is more profitable formerchants which are patient or relatively unknown, and for merchants with lowmarginal costs” 425.414 Researching Purchases Online – UK April 2011, Mintel415 Researching Purchases Online – UK April 2011, Mintel416 http://online.wsj.com/article/SB10001424053111903791504576589211214409214.html417 http://techcrunch.com/2011/04/04/livingsocial-files-to-authorize-up-to-565m-in-series-e-funding/418 http://news.yahoo.com/groupons-fall-earth-swifter-fast-rise-184713324.html419 http://www.washingtonpost.com/business/economy/livingsocial-lost-558-million-in-2011/2012/02/01/gIQAjId3hQ_story.html?wpisrc=al_bizlocal_b/420 http://www.grouponworks.co.uk/421 http://socialcommercetoday.com/social-commerce-platform-overview-livingsocial-its-not-just-a-deal-its-an-adventure/422 http://www.saipantribune.com/newsstory.aspx?cat=3&newsID=107818423 http://www.pcmag.com/article2/0,2817,2381289,00.asp424 http://mashable.com/2010/08/19/gap-groupon/425 To Groupon or Not to Groupon:The Protability of Deep Discounts http://www.hbs.edu/research/pdf/11-063.pdf 107
  • 112. Who’s using these type of sites? Take a look below:Facebook as shopIn August 2009, US-based flower and gift retailer 1-800-Flowers.com was thefirst company to launch a retail store within Facebook. Since then a number ofbrands, like Disney, ASOS (a clothing retailer), and Max Factor (a cosmeticsbrand) have followed suit sensing an opportunity. There are even businessespopping up who will clone your e-commerce store to Facebook426.We’re dubious that moving your shop at great expense just so it can situnderneath the blue Facebook banner is effective. Brands are behaving as ifpeople haven’t worked out how to escape from the Facebook.com URL. Addedto that, people may not want to buy in Facebook: it’s the equivalent of trying tosell stuff in a bar.Rather it’s the social power that Facebook offers that should be tapped,helping augment existing sales by free social reach, instead of cannibalisingtheir own shops. That’s why Tesco, Amazon and Warner Brothers are allsigned up to sell via Facebook. However, with Facebook’s social plugins muchof this functionality can be installed on brand websites. We’re still out on it.426 For example see http://storefrontsocial.com/ 108
  • 113. How is mobile changing commerce?Touch and goCommerce and mobile are knocking into each other in ever more interestingways. At the most basic level phones can be used as intelligence gatheringdevices when ‘in the field’.Total mobile search quadrupled in 2011 (vs 2010) according to Google andwithin that mobile retail search traffic soared by 181%. Mobile searches nowaccount for 11% of total retail searches427.In 2011, 95% of smartphone users had looked up local information, 88% hadtaken action off the back of this search within a day; for example, 77%contacted a business, with 61% calling and 59% visiting428.10% of people had used their phone to access a review, voucher or pricecomparison site, with 9% of people actually downloading app to visit again. Afurther 17% said this would be something they would like to do if only theyknew how429.Barcode democracyA number of services that allow an item‘s barcode to be scanned while in theshop are shortcutting the process of painstakingly typing something in. Thisallows for real-time price comparison and is offered by well-known retailerssuch as Tesco and Amazon.More recently, SearchReviews, a consumer review aggregator, has introduceda mobile app for both Apple and Android handsets through which consumerscan scan a barcode and obtain online reviews relevant to the product.At the moment this is the preserve of the young, as older shoppers haven’t gotaround to figuring out their phones yet and struggle with the small screens.Buying on the goThe next level up is to use the phone to buy something, a feat 21% of UKsmartphone owners have claimed to do430. Although this figure is likely skewedby purchases of apps, it doesn’t take away from another fact: each month inthe UK, 4.2 million consumers are visiting retailers’ websites using their427 For that quarter, http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retail-search/428 US basehttp://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html429 Researching Purchases Online – UK April 2011, Mintel430 KPMG as cited by eMarketer , December 2010 109
  • 114. mobiles431. As we saw earlier many are dissatisfied with their mobile webexperiences432. This coupled with the clear level of demand for informationdelivered in this fashion should galvanise brands into developing world-classmobile experiences – now.Advertising drives mobile searchThe interaction between advertising and mobile phones is clearly establishedbut rarely applied. 71% search on their phones as a direct result of exposurefrom traditional media (68%), online ads (18%) or mobile ads (27%) (USbase)433. Yet there is little to encourage people to do this as customer journeysare currently woefully siloed to specific media, even though this does notreflect the realities of media use.Advertising drives leads and purchasesEight in 10 notice a mobile ad, while one in three notice a mobile search ad434.Incredibly half of those who see an ad on a mobile take action, like visiting awebsite (35%), making a purchase (49%) or recommending a brand orproduct to others (24%)435.And those ads with the highest click through rate are those that blend with thephone’s functionality best. For example, Google mobile ads with the ‘click tocall’ feature, which makes a number immediately callable, have a 6-8% higherCTR than those without this feature436.Closing the gap to purchaseOne can imagine how further retail functionality could be pulled through thekeyhole (e.g. like clothes size or table reservation or even purchase) forincreased ease of use and commercial benefit of the retailer.431 GSMA & ComScore, August 2010432 The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/433 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html434 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html435 US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html436 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues 110
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  • 116. WatchingIt is the age of screens. Across the planet there is an insatiable appetite forvideo-based entertainment and information. We’re seeing an explosion ofcontent to watch and an explosion of devices on which to watch it. The videoreservoir is fuller than ever and every new device just punches new holes in thedam. In this section we’ll look at the not-so-old-fashioned TV and the shows onit. We’ll examine how these shows are flowing on to different devices, as wellas content that calls online home. And finally we’ll look at how online is flowinginto TV.TV still kingWe may wake up in the morning and look into a small screen all the way intothe office, when we look at a slightly bigger screen all day, but it’s the bigscreen at home in the evening that’s the daddy. Television is the most widelywatched screen in the world437. Across the globe people watch more than fourhours of television a day438.Interestingly, we Europeans get the medal for vegetating the least to the softelectronic glow – and by a fair amount439, with Brits only very slightly aboveEuropean TV watching levels440 (UK index is 91, European average is 89; forcontext Asia and Latin America are 104 and the States and Middle East, Africaand Pakistan is 101).437 How People Watch – A Global Nielsen Consumer Report.438 How People Watch – A Global Nielsen Consumer Report.439 How People Watch – A Global Nielsen Consumer Report.440 How People Watch – A Global Nielsen Consumer Report. 112
  • 117. HDTV defining larger shareHowever, while Brits watch less, we like it pin sharp when we do: we’re equalwith the States on HDTV ownership and only beaten by Australia and HongKong internationally. Globally, HDTV adoption is continuing at good pace fromits 30% penetration, with 11% of people claiming a definite interest in gettingone in the coming year. Ownership is markedly high among adults 55-59, whohave more money and time than other groups.Online video is queenOnline video has already reached an astonishing point of ubiquity, with 70% ofglobal internet users having watched a video online441.Netflix, a US video-on-demand company, hogs 29.7% of downstream traffic atpeak times in the US and is now the biggest source of internet traffic there442.iPlayer accounts for 6.6% of peak download traffic in the UK443.This pattern holds true more generally: the British aren’t keeping pace.Penetration in the UK for video watching is around 60%444 and not only arefewer people watching, they’re watching less than their global counterparts.The Brits are about 25% less likely than the global online population to watchvideo online. The Chinese on the other hand are about 25% more likely towatch video online vs the world (and 50% more likely than us Brits). 445However, the audience shouldn’t be underestimated just because it doesn’tstack up internationally. The number of people that watch TV online has grown441 How People Watch – A Global Nielsen Consumer Report.442 http://www.bbc.co.uk/news/technology-13439641443 http://www.sandvine.com/downloads/documents/05-17-2011_phenomena/Sandvine Global Internet Phenomena Report.pdf;444 How People Watch – A Global Nielsen Consumer Report.445 How People Watch – A Global Nielsen Consumer Report. 113
  • 118. sixfold within the last year in the UK446. Over 15 million people in the UK watchover 200 million videos daily447. While iPlayer grew by 14% for desktop andlaptop and grew 580% on tablets, the use of the service on TVs grew by over1,000%448.We like video so much we’re getting it at work. Globally, 57% of respondentswatch online video on their computer, a figure that predictably grows foryounger people449. As employers see this eating into valuable work time manyhave blocked it. The US and Europe are now 40% and 30% less likely toconsume video in the workplace now than the rest of the world.iPlayer: an in-depth lookIn 2011, iPlayer received 1.94 billion requests for TV and radio programmesacross a range of devices450.Interestingly, iPlayer is used in a similar way to linear TV viewing times althoughthere is proportionally more daytime and late peak use451 among the average1.5 million people frequenting the site every day. Below you can see this usagepattern along with increasing user numbers across 2010:446 YouGov, May 2010447 ComScore Video Metrix, January 2011448 http://econsultancy.com/uk/blog/9214-ipad-drives-four-times-more-iplayer-traffic-than-connected-tvs449 How People Watch – A Global Nielsen Consumer Report.450 http://www.bbc.co.uk/mediacentre/latestnews/2012/iplayer.html451 http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf 114
  • 119. We’re watching more live TV on iPlayer too. 13% of all iPlayer viewers are fromwatching simulcast, which is growing month on month gently and which peaksexpectedly around major sporting events452Who’s watching on iPlayer? The early adopter imbalance is being smoothedout over time but men still have the edge453. However, iPlayer is a youngeradult’s playground: the over 55s are highly under-represented given they makeup over a third of television viewers454. The charts below give a more detailedbreakdown of users:452 http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf453 http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf454 http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf 115
  • 120. Watching on the go11% of the global online audience watch some video or mobile TV on theirphones455. The regional variation is marked; Asia is predictably ahead (145 onthe index) but Europe (55) and North America (45) are intriguingly behind, evenbeaten by regions like the Middle East, Africa and Pakistan (136) as well asLatin America (118). What we’re seeing here is mobile adoption leapfroggingtraditional PC usage in these developing countries. In other words, they haven’tgot around to having computers yet but do have mobiles – and are using themto feast on video.The current sex differences are interesting although conform to expectations.Men overindex by 18%, women underindex by 9%. This crease will probablyget ironed out as women increasingly own the sort of phones that let themwatch video but men always appear to have the edge in terms of entertainmentconsumption. Women like socialising more. The same is likely to be true but toa lesser extent with age. Adults aged 25-29 overindex by 73% while the 60 to64-year-olds are 73% less likely to use it. So, brands like Lynx should walkright in here but those at the Saga Holidays end of the spectrum should holdoff.455 How People Watch – A Global Nielsen Consumer Report. 116
  • 121. Watching TV on mobileHow much of what we’re watching on mobile is syndicated TV (versus funnycat videos)? By 2010 in the UK it was 4.7% of the online population. By late2011, it was around 10%, with 3% watching regularly and 7% occasionally456.However, there are a number of reasons not to focus too much on mobile TVviewing and, indeed, expect it to be small. Firstly, streaming TV is heavy on dataconsumption and networks are increasingly clamping down on unfetteredbrowsing to preserve their fragile networks. This pushes TV viewing into wifizones, home and work, places where theres a better option (the TV) and aworse option (being fired for misconduct), or into downloads, which we haveseen in other sections are extremely healthy (at the end of 2010, iTunes haddelivered 450 million TV episodes and over 100 million movies to iPod,iPhones and iPads457). Finally, now we have tablets, small screen viewing isless attractive. It’s probably tablets that will win in mobile video. The screensare simply bigger and better.Watching on tabletsBy late 2011, 11% of tablet users said they were watching TV on it (versus53% who said they were using it for entertainment, which is methodologicallyirriating as it conflates video and music consumption). Tablets (and that’smostly iPad, accounting for 97% of video plays) are winning in terms of holdingvideo attention, with owners watching 30% more than desktop-only users andcompleting videos 100% more458. Second to TV, tablets are soaking up themajority of long-form content.456 Desktop, Laptop and Tablet Computers, August, 2011457 Apple, September 2010458 http://www.ooyala.com/papers/Ooyala-Video-Index-Report-Q3-2011.pdf 117
  • 122. 459As for the type of video people are watching, it breaks down like this: 460459 http://econsultancy.com/uk/blog/9025-video-plays-on-tablet-mobile-and-connected-tv-doubled-in-q4460 http://www.statista.com/statistics/192209/percentage-of-video-types-regularly-watched-on-tablets-in-the-us/ 118
  • 123. Watching through games consolesIt’s hard to gauge how big watching on games consoles is if you don’t haveone or move in the circles of people who do. Globally, there are around 186mgaming devices. Specifically there are 94.97 million Wiis, Nintendo’s consoleas of December 31 2011461, there are 66 million Xbox 360s, Microsoft’sconsole, as of January 2012462, and there are 57 million PlayStation 3s, Sony’sconsole, as of November 2011463. In the UK that’s 8.3 million Wiis464 – that isone in every three households – 3.9 million Xbox 360s 465 and 3 millionPlayStations466Connected games consoles are the second most used platform (aftercomputers467) in the world for watching web content468. iPlayer, 4oD and ITVPlayer, the on-demand versions of the major British networks, all havepresences on the PlayStation, as do Netflix and Hulu, the two major on-demand internet streaming video companies from the US. Five is in talks to getDemand Five, their on-demand service, on the platform.Over Christmas 2009 5% of the views on iPlayer were from someone watchingit on a PlayStation469. By Christmas 2010, this was up to 7% (but rememberthis is 7% of a much larger number of requests because the service is growingat 27%). By 2011, it was 10%. In total there were 7 million requests for TV andradio by PlayStationers (surpassing those by Wii users) out of a total of 145million requests the iPlayer had overall in this period, representing growthmonth on month by 31%470.461 http://en.wikipedia.org/wiki/Wii#System_saleshttp://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e1103.pdf462 http://www.reuters.com/article/2012/01/10/us-ces-microsoft-idUSTRE80909P20120110463 http://www.psu.com/Global-PS3-sales-hit-56-million--a013466-p0.php.464 Darren Allan (2010-10-04). "One in three UK households own a Nintendo Wii". Gfk Chart Track (techwatch.co.uk). Retrieved 2010-11-01.465 Matt Martin (2009-01-13). "Console installed base reaches 22m in UK". GamesIndustry.biz. Eurogamer. Retrieved 2009-01-15.466 Richard Mitchell (2010-01-25). "UK PS3 sales surpass 3 million". Joystiq. Retrieved 2010-02-04.467 Note, this is worldwide data for 2009, which will not include tablet and smartphones468 http://www.isuppli.com/Home-and-Consumer-Electronics/News/Pages/Xbox-360-PS3-Vie-to-Win-Digital-Connected-Home-Battle.aspx469 http://www.bbc.co.uk/blogs/bbcinternet/2011/01/december_2010_bbc_iplayer_mont.html470 http://www.bbc.co.uk/blogs/bbcinternet/2011/01/december_2010_bbc_iplayer_mont.html 119
  • 124. Time-shifted viewingA sizeable chunk of Brits watch time-shifted TV. Nearly one in three access TVon demand and 32% of internet users own a personal video recorder471. Wecome on to discuss the impact this has had on the traditional ad break later inthe section.The silver screenThere were 157 million visits to the cinema in Britain in 2010472, peaking in thesummer with 62 million visits473. By 2011 this had grown to 65 million474.Teenagers and young adults go most frequently. With 41% of 15 to 24-year-olds, 31% of 7 to 14-year-olds and 22% of 25 to 34-year-olds attending thecinema at least once a month.Genres differ with age. Musicals, family films and animations appealed totweens (7-14); youth-themed drama, crime, action-led films and comedies hitthe spot for teens and young adults (15-24); adventure and animated featuresdid it for adults (35-44, bear in mind there are parenting effects going on here);drama, musical and action-led films appealed to the middle aged (45-54);whereas older adults (55+) went to see drama, musical and comedy films475.3D: great or gimmick?Watching on 3DTVGlobally 12% of online consumers say they have or would have a definiteinterest in getting a 3D TV476. Our view: 78% of people there are making agood call at the moment. 3D TV isn’t quite there yet. Frankly the content is bad,the glasses goofy and technology imperfect. Even if your average consumerhasn’t twigged this, the premium that typically accompanies new-to-markettechnologies simply prices them out of the game. Taken together, unless abrand wants to court wealthy innovation junkies then 3D advertising is probablyjust not worth it.Watching in 3D cinemaThis, however, does not speak to the opportunities offered up by 3D cinema,global installations of which grew 250% in the last year (614% in Western471 Digital Trends, April 2011, Mintel472 http://www.launchingfilms.com/research-databank/473 http://www.bbc.co.uk/news/entertainment-arts-15092801474 http://www.bbc.co.uk/news/entertainment-arts-15092801475 Accessed from: http://www.statistics.gov.uk/cci/nugget.asp?id=572 in 2011; now no longer online476 How People Watch – A Global Nielsen Consumer Report. 120
  • 125. Europe) and 3D box office receipts were estimated to be $5.5bn in 2010477. Intotal around 55% of digital screens in cinemas are now capable of 3D478.So while the great 3D films are still at a trickle, the kit is increasingly there – acrucial difference to the TV market. That means for brands looking to do 3D TVads, cinema is a better bet than TV.Cinema owners will know this, however, and will therefore be squeezing brandsfor as much cash as they can. To justify that premium 3D advertising may justhave to be for premium products for the moment. That makes sense too if youwant to carry over an ad onto 3D TV channels, for reasons mentioned above.That said there is some evidence that there’s commercially beneficial noveltyeffect here. Even for lowly fast moving consumer goods slipping in anotherdimension to an ad can ostensibly boost sales. For example, Birds Eye FishFingers in Australia has seen 20% sales growth off the back of a 3D ad479. Itisn’t clear, however, whether this figure states overall sales lift, or sales lift overand above plain old 2D advertising.The connected TVSomething that’s arguably more exciting than 3D is the advent of internet TVs,that is, television with internet. It’s already possible to buy a box to watch videoand interact with other content ‘over the top’ via broadband. Heavyweights likeApple as well as smaller players like Boxee and Roku are experimenting here.Increasingly, however, the box is tucked away inside the TV.Certainly people have more of an appetite for this: about one in five (22%)480global online consumers owns or has a definite interest in purchasing a TV withinternet connection in the next year – and this is fairly insensitive todemographic differences.What connected TVs meanThe internet being added to TVs does two things.One, it breaks the conventions of traditional distribution – people choose whatthey want and watch it when they want, which has implications for the future ofchannels – without changing anyone’s location (no computer or mobileneeded). This means people can i) purchase their TV and films on a case-by-case basis or with an ‘all you can eat’ subscription service; or ii) watch it free477 Sony Professional, http://www.sony.co.uk/biz/article/id/1237478607682478 Screen Digest, as quoted on http://www.sony.co.uk/biz/article/id/1237478607682479 http://www.marketingmag.com.au/case-studies/birds-eye-fish-fingers-3d-cinema-campaign-11931/480 How People Watch – A Global Nielsen Consumer Report. 121
  • 126. because the ads pay for it. All these will be used by networks in the future,because it reduces risk to advertising volatility.This may mean that ad breaks as we know them will diminish, with bigimplications for interruptive media. If brands cannot ride others’ content anymore, they will have to create their own content or find other ways to moveinside the programme or add value to it to persuade. But that’s probably notgoing to happen: free is too good a deal, even if the cost is enduring some ads.The second big change is that it makes TV truly interactive.We’ll be able to interact with shows and ads and content around these too.The clues are visible already: in 2011 275 million people had ‘Liked’ a TV showon Facebook and 17 of the 100 most Liked Pages represent TV shows481.New companies like Zeebox offer analyses of what’s on screen, and use theinformation gathered to amass things from the web – whether it be a pair ofshoes a character is wearing in Gossip Girl or a car being driven in Top Gear.The app comethBeyond that it’s very likely that what we’ve seen in the mobile app market willbe played out in the TV app market. The doors are open for brands to entertain,inform, inspire, incite and sell to people as they watch or spend time with theirTV.As content swells, brands could step in to recommend (e.g., The Economistcould lead its readers towards highbrow exploration.) Ikea could ‘index’furniture in shows and films, so a visit to their app would let you save or buysomething you like. Or Heat could provide a conduit for people to gossip aboutthe characters or story in any pop show.More advanced than that, when phone, tablet and TV start talking to each othereffortlessly, one can imagine new possibilities for TV itself, blurring gaming,websites, video calling etc into one new medium made from different media.SummaryTV isn’t dead: it’s very much alive and going places: online, on mobile, ongames consoles and on tablet. If anything, that’s increasing the amount wewatch, not cutting it. But distribution is just the start: the medium is changingtoo. The watch out will be for those crying for the death of television. It isn’tdying. It may be changing but we’re addicted to watching. What will befascinating is how this changes.481 http://www.insidefacebook.com/2011/05/18/tv-shows-facebook-television/ 122
  • 127. First up, it’s getting another dimension added to it and while 3D may be slow totake off it presents brands with short-term novelty wins and longer-termcreative opportunities. Secondly, and where we’d put our money for the realfireworks, it’s becoming truly interactive through internet TV and throughconnected devices like tablets and smartphones being able to ‘talk’ with TVs orshows and let people interact with TV.To marketers, areas like t-commerce (television commerce; we might have justcoined that) and innovations around interactive product placement open up.Beyond that, opportunities abound for letting people interact with their TVs in adizzying variety of ways – something brands, learning from the success of themobile app markets, could capitalise on by being bold and early. 123
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  • 130. ListeningTo simplify and exaggerate, the album and the download are dying while thesingle and the stream are rising. No single channel is being used by more than60% of the world482. Fragmentation is rife. The usual story is repeated formusic: the behaviour is just finding new valleys to run through – and valleyswith as little friction from money or advertising as possible.Whale blubber and the music industryAn industry no one’s paying for any moreThe producer and musician Brian Eno sums it up, “I think records were just alittle bubble through time and those who made a living from them for a whilewere lucky. There is no reason why anyone should have made so much moneyfrom selling records except that everything was right for this period of time … Itwas a bit like if you had a source of whale blubber in the 1840s and it could beused as fuel. Before gas came along, if you traded in whale blubber, you werethe richest man on Earth. Then gas came along and youd be stuck with yourwhale blubber. Sorry mate – historys moving along. Recorded music equalswhale blubber.”Here is the chart that keeps music execs up at night: 483482 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf483 http://www.fastcompany.com/1672447/the-state-of-internet-music-on-youtube-pandora-itunes-and-facebook 126
  • 131. The cost of piracyThe BPI (British Recorded Music Industry) reckons piracy cost the UK musicindustry an around £200 million in 2009. More than two fifths (42%) of 16-34ssurveyed listen to ‘mostly free’ music, while half of a younger group (16-24s)‘see no problem with free downloading using file-sharing tools such asTorrents’. Among the over-25s this drops sharply. Old habits die hard.Despite the lure of the free, almost a quarter of 16-24s agree that a monthlysubscription with unlimited downloads/streaming is good value for money484.In a study of the most popular file types on piracy sites, music came out at a2.9% share485. The music industry should actually be quite happy with that. It’sHollywood that will need a wardrobe change after they see roughly half of allpiracy occurring in the world is of films and TV. 486However, there is a bigger threat to music than piracy and the chances areyou’ve done it.484 Mintel Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music Special Report, April 2010485 http://arstechnica.com/tech-policy/news/2011/02/where-have-all-the-music-pirates-gone.ars486 http://arstechnica.com/tech-policy/news/2011/02/where-have-all-the-music-pirates-gone.ars 127
  • 132. How are we listening to music?CDs: the slow leaking balloonIn Britain, 58.5% of music buyers buy only CDs. Yes, still. That’s down from65.8% in 2009 but it’s still surprisingly high. The digital revolution runs aheadbut with a long, heavy tail.Video resuscitated the radio starHow are most people listening to music digitally?Actually we’re watching it. Well, we might be. Most people (57% of globalonline consumers487) go onto sites like YouTube, find the music they want andthen press play. Whether they’re actually watching or not we don’t know butanecdotal evidence suggests not.The next most popular way is piracy, with just shy of half the world feelingslightly furtive in their bedrooms as they download illegally.After this a quarter do audio-only streaming, both free and paid; and 17%download music legally488.Mobile activities – like using music apps and downloading a song to mobile –look low at roughly 20% but global smartphone penetration isn’t a lot higher. Ifthey’ve got the latest phones, they’re using it for music489. 490487 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf488 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf489 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf490 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf 128
  • 133. Who are the music watchers?Predominantly the young, who are also more likely to watch on their phonestoo491.Who are the legal downloaders?Interestingly, the young are the biggest downloaders of legal music. For musicexecs the sweet spot is the 21 to 24-year-old bracket, who appear to careenough about music to pay for it, especially on their mobiles492.491 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf492 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf 129
  • 134. Who are the streamers?21 to 24-year-olds are most likely to stream493. Two thirds of the users ofSpotify, a music streaming service with at least 10 million users (that’s from2010 and Spotify aren’t giving us an update), are under 29494. What’sinteresting is that more people know about streaming services and chose notto use them than those who know and are interested.What are we listening to?More singlesThe internet has changed the unit of music from the album to the single495. Inthe UK, digital singles sales have risen by a third496 while total album tales havefallen by a fifth. Although digital albums have grown at 56% year-on-year rate,this needs to be understood in the context of the size of the album market vsthe singles one. This graph helps:493 http://digital-stats.blogspot.com/2011/04/23-of-spotifys-free-users-are-under-29.html494 http://digital-stats.blogspot.com/2011/04/23-of-spotifys-free-users-are-under-29.html495 http://www.fastcompany.com/1672447/the-state-of-internet-music-on-youtube-pandora-itunes-and-facebook496 Mintel Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music Special Report, April 2010 130
  • 135. Behind this single fetish is iTunes, another of Apple’s breakthrough products,which has had 11.7 billion downloads from over 160m iTunes accounts across23 countries497. In the UK, 13% of the population (equivalent to 20% onlinepopulation in UK) purchased digital music in 2009498, 70% of it from iTunes499.Radio, but less from a radioTime spent listening to the radio in the morning is nearly half what it was adecade ago among teens and young adults (41% vs 74%). However, as withmany other media the true shift is in device rather than behaviour: 36% ofyoung people now listen to online radio500 and in 2010, 20% of UKsmartphone users had installed a radio app, which more than half (53%) usedat least once a week501.Pandora, an internet radio service, is the most popular online radio service witha 52% market share and close to 60 million registered users. It has more than1 billion stations and represents a small yet punchy 1.7% of all radio listening.497 digitalmusicnews.com, September 2010498 http://interestingsnippets.tumblr.com/day/2010/06/21499 http://pcworld.about.net/news/Oct272004id118350.htm500 eMarketer, October 2010501 RAJAR, July 2010 131
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  • 138. ReadingAre we still reading?It’s tempting to think with all the other distractions, reading is withering away. Itisn’t. Nearly nine out of ten adults are book readers502. The picture is similar tothat going on with TV: the medium is diversifying but the fundamental behaviourisn’t. High street shops may be struggling503 but e-books are growing504.Amazon’s sales of its ‘Kindle books’ overtook those of its paperbacks andhardbacks combined way back in early 2011505,506,507.A new chapter: the e-readerIn a market growing at 2% annually across the board, e-books enjoyed 20%sales growth in 2010508. In 2011, Hachette, a publisher with 20% of the e-book market reported sales of e-books were up 500%509.The battle here will be between dedicated e-readers and tablets. In 2010 8%of British readers had an e-reader, like the Amazon Kindle and Sony Reader. Bylate 2011 it was 9% (vs 5% with tablets) and a high 40% said they wouldconsider buying one. A full breakdown can be seen in the table below:502 Mintel, Books and e-books – UK – February 2011503 Mintel, Books and e-books – UK – February 2011504 Mintel, Books and e-books – UK – February 2011505 Books sold through Amazon’s Kindle ecosystem on Apple iPad, iPod touch, iPhone, Mac, PC, BlackBerry, and Android-based handsets506 http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1565581&highlight=507 http://www.guardian.co.uk/books/2011/may/19/amazon-waterstones-ebook-sales508 The Publishers Association as quoted in The Guardian, http://www.guardian.co.uk/media/2011/may/03/ebook-sales-amazon-kindle509 http://futurebook.net/content/how-high-can-e-book-market-go 134
  • 139. E-readers or tablets?What’s going to dominate? For the reading aficionado the e-book reader hastwo advantages. First, their display’s matt surface make for a better readingexperience in any light. Second, they’re cheaper by around a factor of five. Infact in 2011 Asda released a discounted e-reader, the snappily named ViewQuest Mediabox 5in Media Tablet with the more concise price of £52 (AKindle is now £89 having been £111 in 2011)However, the tablet’s breadth of functionality in one package is too good toignore, a theory supported by the fact that slightly more readers indicate they’dwant a tablet than a dedicated e-reader510 (44% of book readers wouldconsider tablets versus 40% e-reader)511.The loveliness of paperBut what about the real book? 49% of readers would rather stick with them512.That warms our hearts, not for any particular neo-Luddite hipster reasons justbecause the digital experience lops off so much of the joy: the feel, bookishsmell and physical trophy you have when you’re done. There’s pleasure inpaper.Who’s reading?90% of adults read, with a bias towards women, the educated, the wealthier,the older and those living in the south, particularly London513.On the other hand, e-book penetration is markedly lower at one fifth of thepopulation514. And the demographics look different too. E-book readers aremore likely to be male, younger (16-34) and either in full time education orprosperous young early adopters515.What are they reading?A varied spread: 80% read hardbacks, 85% paperbacks, 83% fiction and 81%non-fiction516. Figures indicated that £84m of the £120m in digital book sales– some 70% – were from the professional and academic sector, up 29% onthe previous year517. Specialised non-fiction rules in the land of the e-book, andApple can smell blood: in March 2012 they unveiled a new version of their510 Mintel, Books and e-books – UK – February 2011511 It’s worth noting that these figures are from research carried out during Christmas 2010. Anecdotal evidence suggests this was a key time for both e-readers and tablets, meaning data here could be significantly out.512 Mintel, Books and e-books – UK – February 2011513 Mintel, Books and e-books – UK – February 2011514 Mintel, Books and e-books – UK – February 2011515 Mintel, Books and e-books – UK – February 2011516 Mintel, Books and e-books – UK – February 2011517 The Publishers Association as quoted in The Guardian, http://www.guardian.co.uk/media/2011/may/03/ebook-sales-amazon-kindle 135
  • 140. iBook store that supports advanced textbook functionality, like quizzes, note-taking, study cards and interactive diagrams. Education’s going to become ahot topic; brands might even want to become authors.What do people expect to pay for e-books?Most people expect e-books to have 40-70% the price of a real book shavedoff; that is, between £3 and £6518. Reality is of the same mind: in 2010 theaverage price for an e-book was £4.56, up from £3.93 in 2009519.Magazines and newspapersHeadline: declineMagazines and comics are suffering a 16% market contraction (2005-2009)and make it onto the unenviable list of top 25 contracting markets in Britain520.Blame can be laid squarely at the ‘cheap spot’ between the economic slumpand internet opportunism. It’s free to get your goss online. This young womansays it best, “I look online if theres any news worth reading, or watch the newson TV. Magazines I can live without; the stories end up online eventuallyanyway!”521 We’ve got so comfortable with the post-scarcity economics ofnews and entertainment online that over three quarters of us are unwilling toshell out a single penny for online magazines and news. Those that are willingare only willing up to a point: £5 a month is the upper limit for subscriptionsand 25p the boundary for an article522.The freemium bombAnd no wonder when the newspapers put it all out there for nothing. By thestart of 2010 The Guardian was the UK’s largest newspaper website with12.6m monthly UK visitors. Mail Online clocks in next at 11.4m, then TheTelegraph (10.1m), then the Sun (8.1m), Mirror (5.1m) and Independent(3.8m)523. And that’s just home visits. Increasingly these newspapers arefinding a global audience524. For the same time period The Guardian recorded37m worldwide visitors and Mail Online 32.8m, a 67% annual increase.Another factor is the rise of the freesheet, which has doubled while newspapercirculations have been sliced by around 15% in the last five years525. This hascannibalised magazine and newspaper buying, especially among the young,518 Mintel, Books and e-books – UK – February 2011519 The Publishers Association as quoted in The Guardian, http://www.guardian.co.uk/media/2011/may/03/ebook-sales-amazon-kindle520 Mintel, British Lifestyles 2010521 Mintel, British Lifestyles 2010522 Mintel, Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music – UK – April 2010523 We’ll update these numbers when new one come along, so apologies for being a tad out of date.524 ABCe as quoted in Mintel, Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music – UK – April 2010525 Mintel, British Lifestyles 2010 136
  • 141. roughly half of whom have a ‘mostly free newspaper’ habit (half of 16-24s and43% of 25-34s526). Over 45s are keeping the industry’s necks above thewater: they buy most of the papers they read versus, for example, those tenyears their junior who only buy a fifth of the newspapers they read527.Ad spend draining outOverall ABC’s top 100 ‘actively purchased’ magazines were down by 17%over 2011528. Ads spend suffered in unison: newspapers and magazinessuffered the largest percentage change in spend (-25%) of any media in 2009.Innovate or dieSome have tried a good old bit of economic engineering: from reducing theprice to stimulate volume (step forward Daily Star and The Sun in 2008/2009)to hiking the price to sustain value (enter Daily Mirror in 2009, The Times, TheIndependent, the Guardian and The Daily Telegraph in 2009/10).Another solution to the snag of post-scarcity economics has been simply tofind some scarcity worth paying for. Newspapers and magazines are thereforetrumping issues and starting movements or squeezing all the juice out of theirlifestyle sections, supplements and freebie incentives. Some, like TheTelegraph, have even created gaming sections for which they charge.Some newspapers and magazines are so confident in their scarcity value,they’re charging for it through digital channels.The Wall Street Journal and Financial Times have successfully put a form ofpaywall up, offering a few articles as a free amuse-bouche, then charging forthe rest, or sections, of the menu.Rupert Murdoch, Chairman, and CEO of News Corporation, went further withThe Times and The Sunday Times in June 2010 shutting them down almostentirely to free traffic. The Times lost two thirds of its traffic almostimmediately529 and has since reported 105,000 paid subscribers530.The New York Times has done the same. They secured a digital subscriptionbase of 100,000 in 2010531 and 250,000 by 2011532 which their CEO Janet526 Mintel, Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music – UK – April 2010527 Mintel, Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music – UK – April 2010528 Mintel, Paid-For vs Free – Consumer Attitudes to Pricing in Media and Music – UK – April 2010529 http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010/07/the_times_paywall_hit_or_miss.html530 http://blogs.independent.co.uk/2010/11/02/the-times-paywall-the-verdict/531 http://www.guardian.co.uk/commentisfree/cifamerica/2011/aug/03/new-york-times-paywall532 http://blogs.forbes.com/jeffbercovici/2011/04/21/ny-times-says-paywalls-working-100k-subscribers-and-counting/ 137
  • 142. Robinson considered a success: “Initial volume has meaningfully exceeded ourexpectations”533.Another method has been to charge for the glass but not the wine. TheGuardian, for example, has iPhone and iPad apps, the former of which sold70,000 in its first month. It may cost £2.39 to get but the refills are free.And finally newspapers have begun to take advantage of social media, creatingapps on Facebook that share to a set of person’s friends when they have readsomething. By the end of 2011 The Guardian was seeing more than 4 millionusers of its Facebook app534.More time is needed before any conclusions can be made on this newbusiness experiment but we’ll bet on good old economic scarcity winning out.For the facts and froth, mass journalism will be free because it’s simply notworth paying for. On the other hand, those who recognise thoughtful, qualityjournalism will be willing to pay for it.Blogs and forumsDefinitions and scopeA blog is a type of website where ‘posts’ – which can contain text, images orvideo – are displayed in reverse-chronological order. In 2011, there were over156 million public blogs in existence535 covering topics as diverse as politics,cooking, fashion, education, travel and pornography.However, only 5% are likely to have been updated in the last 120 days536. So,although there is still a vast number of working blogs there is also a lot oftestament to experimentation, unfulfilled ambition and general maturation of theblogging world.Bloggers today have been blogging for an average of two years537 and thegentle decline seen in the UK of blogger numbers (8% of UK internet userskeep a blog updated, down from 10% in April 2009538) is indicative of a widerglobal trend. In short, only the dedicated and profitable blogs remain.Some in this latter group are so popular they’ve sold for large amounts, fromthe silly (LOLCats, a site that couples comedy captions with images of cats,was sold for $2m in 2008539) to the serious (The Huffington Post, a US news533 http://blogs.forbes.com/jeffbercovici/2011/04/21/ny-times-says-paywalls-working-100k-subscribers-and-counting/534 http://www.guardian.co.uk/media/pda/2011/nov/30/guardian-facebook-app535 "BlogPulse". The Nielsen Company. February 16, 2011. Retrieved 2011-02-17.536 Accessed from: Technorati, http://technorati.com/blogging/state-of-the-blogosphere/ in 2011; now no longer online537 http://technorati.com/blogging/article/who-bloggers-brands-and-consumers-day/#ixzz1Lme0oGYD538 Digital Trends, April 2011, Mintel539 http://blogs.seattleweekly.com/dailyweekly/2009/04/seattle_cheezburger_cats_conti.php 138
  • 143. website and content aggregating blog, was sold to AOL for $315m in February2011)540.What type of people blog – demographics?Americans mostly, who have a 29.2% share. The Brits come second with6.75%. Japan gets third position (4.9%), followed by Brazil (4.2%), Canada(3.9%), Germany (3.3%), Italy (3.2%), Spain (3.1%), France (2.9%) and Russia(2.3%)541.Bloggers tend to be well-educated (43% have a grad degree) and moreaffluent than the rest of the population. For 11% it’s their primary source ofincome, although mostly not their only one542. Sex differences are muddledhere. Some sources report they are disproportionally (two thirds) male543 whileothers state parity (50.9% males; 49.1% female544). So blogging is eithergender neutral or tips to males.When it comes to age, the bulk of bloggers are between 21 and 35 years old.Perhaps surprisingly, 26% are over 36 years old and 7% are over 51 years old.The under 20 segment makes up 20% of the overall numbers545.What type of people blog – mindsets?Technorati, a blogging search engine, has split global bloggers up into anumber of different categories.Leading by share are the hobbyists (65%) who blog for fun and measuresuccess only by their personal fulfilment.The self-employed, who blog full time or occasionally for their own company,come in next at 21%.Part timers have a 13% share. They dedicate significant amounts of time totheir blog (3 hours plus a week) to supplement their income, clocking up anaverage blog income of $6,333.Finally the corporates blog on behalf of another company, although only aquarter work a forty-hour week to do this and the average take-home salary is$17,101, indicating together with other self-reported data that a living cannoteasily be made from corporate blogging546.540 "The Huffington Post Media Group Makes Key Announcements". The Huffington Post. 2011-03-14.541 Inside Blog Demographics, Sysomos, June 2010542 Inside Blog Demographics, Sysomos, June 2010543 Inside Blog Demographics, Sysomos, June 2010544 Inside Blog Demographics, Sysomos, June 2010545 Inside Blog Demographics, Sysomos, June 2010546 Inside Blog Demographics, Sysomos, June 2010 139
  • 144. Mummy bloggers – a deeper lookMummy bloggers are misunderstood. There’s a view that sees them as young,bored housewives. In fact 84% have had a career and 68% still do. Mostidentify as middle class (67%) and the biggest chunk fall in the 30-39 year agebracket (55%) with 30% 40-49 years old. Their social media activity outstripstheir traditional media consumption by as much as three times, spending morethan seven hours a week on social media (96% use Facebook and 81% useTwitter) versus the 2-3 hours they spend on newspapers, mags, radio and TVeach week547. This has a lot of relevance for brands. A US study has found that44% of mums used social media for recommendations on brands and productsand used specialised content sites for information and counsel from fellowparents548.547 The Britmums Blog, 11th April 2011548 21st Century Moms report, cited by Promo magazine, 7th July 2009 140
  • 145. What’s everyone talking about?The graph below shows global blogging topics by popularity:Specific to mummy bloggers is parenting and children but lifestyle (71%), food(46%) and travel (32%) are all discussed too. More than half write reviews forproducts and a third more would like to. More than half (55%) are interested inadvertiser and sponsor relationships and a further 35% would consider it549.What’s everyone using to blog?549 The Britmums Blog, 11th April 2011 141
  • 146. Who’s reading blogs?Most people. 80% of broadband users have visited a blog or forum550 and theaverage number of views even hobbyists blogs get is moderate to high.Brand implicationsConsumer opinions posted online have the same degree of trust as brandwebsites and are only second to advice from someone you actually know551.This means brands should invest heavily in making sure these consumeropinions are as favourable as your products and services allow, often throughradical changes to the way their customer service is set up.550 Digital Trends, April 2011, Mintel551 Nielsen Online Global Consumer Survey, cited in their blog, 7th July 2009 142
  • 147. 143
  • 148. GamingGaming is no longer the solace of spotty boys with no girlfriends. Gaming isnow mainstream thanks to the family-friendly Wii, commuter-friendly iPhone,and perversely popular procrastinator-friendly bunch of social media games likeFarmville. With the expansion of the market into new media the audience hasexpanded with it. Segregating an audience by genre or into ‘casual gamers’ or‘hardcore gamers’ doesn’t really apply any more. The ‘hardcore’ are just aslikely to enjoy playing Angry Birds on their iPhone as well as FIFA on their Xboxand World of Warcraft on their PC.The impressive gaming marketA mainstream pastimeGaming is now so widespread that consoles, the devices needed to play manyof them (including Xbox, PlayStation, Nintendo Wii, PSP, Nintendo DS etc),once the preserve of the ‘hardcore’, are owned by over 60% of internet usersand nearly 80% of under 35s552. The market has been driven by innovation anditeration. Soon we will be arriving at the eighth generation of consoles.Add in casual gaming on social networks like Zynga’s Farmville on Facebook(12 million global monthly active users, but falling down from a whopping 80million global users in Feb 2010553), and mobile gaming like Rovio’s AngryBirds (over 500 million downloads at the close of 2011 and climbing554) andyou can see that penetration of gaming is reaching epidemic proportions with31 million or 78% of the UK’s online population playing555.552 Mintel Video Games and Consoles – October 2010553 http://uk.wireless.ign.com/articles/121/1211408p1.html554 http://www.joystiq.com/2011/03/14/angry-birds-downloads-soar-past-100-million-across-all-platforms/555 http://www.newzoo.com/press/NationalGamersSurvey2010_Summary_UK.pdf 144
  • 149. How much is the market worth?The global video games market was estimated at $74 billion556 in 2011, up $4billion557 on the previous year and expected to grow to roughly to $87 billion by2014558. The games industry outstrips most other entertainment properties bya country mile (the digital music industry’s paltry $4.6 billion in 2011559). Thechart below gives an idea of how large the market is and its growth rate.556 http://www.guardian.co.uk/technology/gamesblog/2011/jul/06/gartner-global-game-spending557 Deloitte Market Study Dutch Games Industry, April 2011558 Digi-Capital Global Video Games Investment Review, February 2011559 IFPI Digital Music Report 2011 145
  • 150. To prove how mainstream gaming is, take EA’s mega franchise FIFA. WithOctober 2010’s annual launch of the 17th game in the series, FIFA 11smashed every record standing in 2010. It became the fastest selling videogame and at the time, it beat Avatar to become the biggest entertainmentproduct in the world. FIFA 11 sold 2.6 million copies within the first week oflaunch ($150 million) and has sold over 100 million copies to date making$2.5 billion dollars in the process560. For comparison’s sake, Avatar, thebiggest and fastest grossing movie of all time, took $77 million at the US boxoffice on the opening weekend and grossed $2.7 billion over its lifetime561. Sothere is no doubt that huge titles like FIFA fight for consumer’s attention withthe big boys. A year later in November 2011, Call of Duty: Modern Warfare 3blasted its way into new records, taking $400 million in the first 24 hours in theUS and UK alone.560 Internal EA figures561 http://boxofficemojo.com/movies/?id=avatar.htm 146
  • 151. Why so negative about video games?Despite the news painting video games as the root cause of most of theworld’s ills – from teenagers murdering their fellow students562, to obesity inhelpless Xbox addicted children563, the video games industry is doing well. TheUK market is the third largest in the world, behind Japan and the US, with£2.875 billion in sales in 2010564, although this slipped 13% in 2011565. Thetalent in the UK is highly respected, with a great many studios responsible fordozens of world famous games – Grand Theft Auto566 and LittleBigPlanet567among them. Today UK games studios employ over 9,000 games developersand are responsible for global sales of £1.7 billion and contributing £400million to the GDP568.Yet video games are misunderstood, and often discussed (in the mediaespecially) in sneeringly negative terms. Hence the government has alwaysbeen disinterested and treated the video games industry with disapprovingpaternal distain. This neglect filtered through into poor policy decisions with thegovernment’s dogged refusal to offer UK studios any tax incentives. Thisresulted in a severe brain drain, a 9% drop in headcount and a fall in taxrevenues by £55m569, seeing home grown talent moving abroad to countrieswith much more buoyant industries and supportive governments.In March of this year, with a new innovation rhetoric to live up to570, thegovernment u-turned and finally introduced a minor tax break to studios571. Andan industry which spawned the ZX Spectrum and Lara Croft is finally andsomewhat begrudgingly getting the recognition it deserves.PiracyLike most other entertainment industries, video games suffer from massiveamounts of piracy with an estimated four pirated copies downloaded to everylegitimate copy sold representing a loss of £1.45 billion in sales572.The level of piracy differs wildly between platform, with PC gaming (platform ofchoice for proper nerds) long been blighted by piracy. And where there is theinternet, there will always be hackers demanding that their entertainment comefor free and more fool any big company to try and stop them.562 Accessed from: http://www.nydailynews.com/lifestyle/health/2009/04/24/2009-04-24what_role_might_video_game_addiction_have_played_in_the_columbine_shootings.html in 2011; now no longer online563 http://www.sciencedaily.com/releases/2004/03/040318073351.htm564 Mintel Video Games and Consoles – October 2010565 http://www.digitalspy.co.uk/gaming/news/a358574/uk-games-revenue-down-13-percent-in-2011.html566 http://en.wikipedia.org/wiki/DMA_Design567 http://en.wikipedia.org/wiki/Media_Molecule568 http://www.culture.gov.uk/what_we_do/creative_industries/3274.aspx569 http://www.guardian.co.uk/technology/2011/jan/25/tiga-games-tax-relief570 http://www.bbc.co.uk/news/uk-england-london-11689437571 http://www.bbc.co.uk/news/technology-12829815572 http://www.escapistmagazine.com/news/view/107255-Piracy-Outpacing-Sales-by-4-1-Says-U-K-Game-Body 147
  • 152. Who is actually buying and playing these games?Overall, in 2010 UK consumers bought a total of 63 million videogames, morethan one per person in the UK573.Consoles are still the gamers’ platform of choice with 62% of online populationplaying on them574. Yet gamers are spreading their budget across multipleplatforms hence mobile and social gaming being the fastest growing mediums.We’ve seen a 60% increase in people playing games on their smartphonesfrom 2009 to 2010575 and enable everyone from your mum to the mosthardened geek to get their gaming fix on the move and whilst procrastinating atwork.ConsolesPC gaming is still the heartland of the hardcore, with consoles increasinglyappealing more to both older consumers and to women. There is still a skew573 http://www.ukie.info/content/ukie-releases-2010-year-end-figures-another-strong-year-video-games-and-interactive-entertai574 National Gamers Survey 2010 http://www.newzoo.com/press/NationalGamersSurvey2010_Summary_UK.pdf575 http://www.jackpotcity.com/blog/post/the-rise-of-mobile-games/ 148
  • 153. towards men and younger people (80% of under-25s own at least one kind ofconsole), but the demographic is broadening576.The recent acceptance of gaming as a mainstream pastime has been largelydriven by the success of Nintendo’s Wii. Launching with its revolutionarymotion controller (instead of the standard button-based gamepad), the Wii washeavily marketed as a family-friendly console: something that is educational(Brain Training) and healthy (Wii Fit), to try and negate the perception thatvideo games are evil brain-rotting devices.And they overwhelmingly succeeded with one third of UK households nowowning a Wii577. You or someone you know will likely own one.The Wii is the most casual of all the consoles, perfect for fun group-basedactivity games with kitsch customisable avatars (Miis) made for bowling, tennis,golf or driving Mario karts. Wiis have been a very popular gift at Christmas withmany gamers buying them for their parents or girlfriends, hence thedemographic for consoles broadening.Proper gamingWiis may be for your mum, but Xbox 360 and PS3 are the two ‘proper’consoles available. And the two camps enjoy their rivalry – ‘are you Xbox orPS3?’ is normally the first question gamers ask each other followed by a sharpintake of breath and a light ribbing about the other one’s poor taste if theanswer doesn’t match theirs.Xbox 360 launched first in May 2005 and was the first of the ‘next generation’consoles which really took gaming to the next level with the integration ofonline gaming.PlayStation followed suit with its PS3 but over 18 months later, by which timeXbox was firmly established with a large catalogue of titles and its Xbox Liveonline gaming service. This head start from Xbox still affects PlayStation today,both in perception that it has fewer titles, and in total sales578. Although Wiismashes them both with 94.74 million579 sold globally.Online gamingOne of the main drivers of console ownership is online gaming – the ability tolink up with your friends and random strangers and play against them over the576 Mintel Video Games and Consoles – October 2010577 http://www.techwatch.co.uk/2010/10/04/one-in-three-uk-households-own-a-nintendo-wii/578 http://www.scei.co.jp/corporate/release/110415_e.html579 http://en.wikipedia.org/wiki/Wii 149
  • 154. internet. As unappealing as continually being killed by obnoxious Americanteenagers sounds for anyone who isn’t male and under 25580, online gaminghas grown exponentially and is now fairly ubiquitous. Nearly all new gamesnowadays have some form of online multiplayer almost as a hygiene factor. If ithasn’t got the ability to play online, it better be an incredible game or publisherswon’t even touch it.Online gaming is powered through the various manufacturer networks – thesuperior and £40-a-year Xbox Live (50 million subscribers, half of themGold/paying members581), the recently-hacked-and-free PlayStation Network(60 million subscribers582), and the furthest behind (in quality) free NintendoWii network. As long as you’ve got the same game as your online friends, thenyou can join them in shooting, racing, and fighting with or against them inwhatever manner the game allows. Games such as Activision’s Call of Duty,and EA’s Crysis 2 are built upon their multiplayer with the offline mode beingonly about 5-8 hours of gameplay and acting almost like a training module forthe online world.Who’s innovating?Most technology industries thrive by iterating and instilling a desire in gamers toupgrade to the latest gadget. A new phone could be top of the range for agood five quarters, now it’s more like two or at best three583. The consoleindustry used to be like that. But now, very aware that bringing out a newconsole is equivalent of losing your entire consumer base and rebuilding fromscratch, there is a desire in the industry to extend the lifecycle as much aspossible of the current generation of consoles. This is evident with Microsoftdeclaring that Xbox 360 is half way through its life cycle and Xbox 720 won’tbe launching until 2015.Yet, the console market is far from static in terms of innovation. The Wiisignaled a sea change into motion controlled gaming with its Wiimote whereyou control the game by waving your arm around holding what is essentially amagic wand instead of pushing buttons. The novelty of the Wiimote is one ofthe main drivers in the continued success of the console.Wii’s success prompted Sony to launch (albeit three years later in June 2009)the PlayStation Move, which is essentially a copy of the Wiimote, a motion-sensitive games controller. Microsoft went one step further and dispensed withthe controller altogether with the launch of Kinect – where you are thecontroller. Prancing about in your living room like a lunatic proved wildly popular580 Mintel Video Games and Consoles – October 2010581 http://www.joystiq.com/2011/01/05/xbox-360-hits-50-million-worldwide-xbox-live-users-top-30-milli/582 http://www.joystiq.com/2011/01/05/60-million-psn-accounts-created-to-date-says-sonys-stringer/583 Sony Ericsson – internal 150
  • 155. as Kinect holds the world record for the fastest consumer electronic device,beating the iPad to the top spot. With 133,333 devices shipping per day and 8million in the first two months, it’s Kinect that is responsible for Microsoft beingconfident that the 360 will last another four years.Feeding the habitOn average UK Xbox 360 gamers spend £64 a month on their hobby with13% of gamers spending more than £100 on games each month584. With71% of gamers choosing to play at least three different genres and with themplaying anywhere between five and 11 hours a week (in a week that only has35-45 hours of free time)585 gaming for some is a full time hobby.Why game?A well-designed game is immersive, amusing, entertaining and downrightjoyful586. Games are played for a whole host of emotional reasons that comesfrom either overcoming obstacles in ‘hard play’ or simply the sheer joy ofescapism in ‘easy play’.These emotions are mostly to do with the feedback reward associated with asense of accomplishment or fiero (personal triumph over adversity)587. There isnothing quite like the unadulterated adrenalin rush that comes with completinga level by the skin of your teeth that has had you stuck and frustrated for days.Other drivers among the more hardcore gamers that are part of a fairly elitistcommunity are playing for recognition and notoriety among their peers – they’reall about looking bad and being badder.Segmenting gamersGamers don’t think about games in terms of genres instead they focus ondifferent games for different experiences, depending on what they feel like. Andso it makes sense for marketers to segment accordingly588. Game experiencesare split roughly into four groups: competitive and action games, like thezombie apocalypse shooter Left for Dead or the Sci-Fi loveliness of the Haloseries; escapism like the post-nuclear world of role playing game Fallout or15th-century Italy in the beautifully designed world of Assassin’s Creed;strategy games like Zelda or Civilisation Revolution; and finally social gameslike Wii Sports or Mario Party.584 http://www.mcvuk.com/news/43330/UK-Xbox-gamers-spend-64-a-month585 EA segmentation – September 2010586 http://www.youtube.com/watch?v=sIb8JdoWF00587 http://www.xeodesign.com/xeodesign_whyweplaygames.pdf588 EA segmentation – September 2010 151
  • 156. The rise of social gamingWhat are they and who’s playing them?Casual games are defined as those that can be played on social networks oronline in short bursts, such as Farmville, Mafia Wars or Bejeweled Blitz589.Social and casual games are responsible for the expansion of the demographicof gamers with the majority or 25% of the 28 million British social gamersbeing in their 30s590 and 58% are female.591How big is the market?UK gamers spent £555 million on casual games, 15% of total game spend in2010 and up $4-6% by 2011592. These numbers are only set to rise givenGoogle’s recent investment in Zynga, Disney’s $763.2 million acquisition ofdeveloper Playdom, and the $300 million purchase of Playfish by ElectronicArts. The size of the buyouts and those doing the buying should be anothersignal, if more were needed, that gaming is truly heavyweight on theentertainment – and business – stage.589 National Gamers Survey 2010 http://www.newzoo.com/press/NationalGamersSurvey2010_Summary_UK.pdf590 http://www.jackpotcity.com/blog/post/the-rise-of-mobile-games/591 Popcap, February 2010592 http://www.newzoo.com/ENG/1504-Detail.html&id=82 152
  • 157. A different type of gamingSocial games aren’t as immersive as console games and are designed for thegamer to ‘dip in and out’. Nevertheless gamers are a little more obsessive thanaverage and have an incredible ability to fritter away hours and hours playingwhat appear to be the most mundane of games.The rise of mobile gamingApple taking mobile gaming forwardSince Nokia put the hugely addictive Snake on their phones in the ’90s, it hasalways been that mobile phones come with games. But with the launch of theiPhone – with the accelerometer and touch screen making for a perfect gamingdevice – mobile gaming has taken off in a big way.Games are the most popular app on Apple’s App Store making up between70-80% of all apps, with nearly 100,000 games currently available593. 70% ofthese are free and the remaining 30% have undercut594 those of the NintendoDS, the most popular portable gaming device with 151 million worldwide salesby 2012, which sells games for around $15595. Total game applicationdownloads were at 340k in 2010, 423k in 2011 and are estimated to be 567kin 2012, representing 34% growth596. In total, 37% of connected Brits haveplayed casual games on a smartphone (versus 9% on a portable gamesconsole)597. The App Store from Apple and Google Play on Android lead theway in providing these games.With tablets seeing 300% growth (now at 9% penetration in the UK598) andgaming being even better on them due to higher screen sizes and moreprocessing power, mobile gaming is going to take off in a big way. 10% ofconnected Brits have played a game on their tablet599, especially popularamong the 25 to 34-year-old age bracket600.Financially, while half of people say they will only download free games, there’sa juicy market there for developers too, with half (obviously) coughing up601.Early indications of the size of the coming market come from successes like thegame Infinity Blade, which grossed $30 million in its first 12 months up toDecember 2011602. Combine this with the coming upgrade to the593 www.apple.com/ipodtouch/from-the-app-store594 http://148apps.biz/app-store-metrics/595 http://en.wikipedia.org/wiki/Nintendo_DS_sales596 Mobile Application Gaming, Mintel, February 2012597 Mobile Application Gaming, Mintel, February 2012598 Mintel, Digital Trends Winter, Uk, December 2011599 Mobile Application Gaming, Mintel, February 2012600 Mobile Application Gaming, Mintel, February 2012601 Mobile Application Gaming, Mintel, February 2012602 Mobile Application Gaming, Mintel, February 2012 153
  • 158. communications network (see 4G in first chapter) and mobile gaming is goingto get truly formidable.How big is the market?iPhone users spend nearly $60 a year on downloading games603. This, alongwith competitors, has pushed the market to $5.6 billion in size, growing at arate of 19% annually604. Games houses take mobile gaming so seriously theyare snapping specialist companies up. In October 2010 EA bought Chillingo,the publisher of the phenomenally successful Angry Birds, for $20 million.How is mobile gaming different?Portable gaming devices have been around since the beginning of gaming,made popular in the ’90s with Nintendo’s Gameboy, more recently Sony’sPlayStation Portable and the Nintendo DS and most recently the PlayStationVita. But they have always tended to replicate the console experience andsomewhat missed the point of how gamers like to play when on the go. Mobilegaming is about dipping in and out, catching five minutes here and there whenon the way to somewhere, which is what iPhone and now Android gamesdevelopers have really nailed. For example, iPhone users spend an average of12 minutes a day on their gaming apps605.A market set to growWith smartphone ownership growing at 70% a year606, set to grow to 82%penetration in Europe within three years607, we will only see mobile gaminggrowing with it.What’s coming?Augmented reality and 3DNew technology is opening up new ways to game and games manufacturershave begun to embrace innovations like 3D and augmented reality (AR).Nintendo, known for pushing boundaries, launched their new portable Nintendo3DS in 2011, which does both 3D (without glasses) and AR. So you can nowplay archery on your coffee table and hold your Nintendo in the palm of yourhand. And we’re sure it won’t be long before we see AR iPhone games alongwith a 3D iPhone screen thrown in for good measure (although you can besure Apple will wait until they get it right until they release it.)603 http://gigaom.com/2010/01/12/the-apple-app-store-economy/604 http://www.totaltele.com/view.aspx?ID=455555605 http://www.ismashphone.com/2011/01/infographic-shows-that-the-average-iphone-user-spends-84-minutes-using-apps.html606 Comscore as cited by Cellular News, March 2010607 Carphone Warehouse/Gartner, February 2010 154
  • 159. Mind ControlBrain computer interfaces like Neurosky608 that use electrodes to read brainsignals have allowed games companies to develop games like Mattel’sMindflex609 where you control the game by simply thinking. Much like 3D, thesebrain-computer interfaces haven’t yet taken off due to the apparatus you needfor it to work (dorky glasses for 3D and a clunky headset for mind control). Butonce they make the headset less like an air-traffic controller’s, and the gamesless primitive, it may see an increase in popularity.Whatever the technology enables us to do in the future, good gaming willalways be a combination of great storytelling, challenge and exploration. Somethings will never change.Brands and gamingGaming, if done right, is an effective way to either reach people or to getpeople to engage with brands.Creating appsBrands have been successful creating their own games to drive engagement,like Dare’s Barclaycard Waterslide game – the most successful branded freegame to hit the App Store with 14 million downloads610.However, to create a game for a product or campaign, there has to be sometangible reason why, rather than to just drive engagement just because peoplelike playing games. With Waterslide, and its successor Rollercoaster, theywere a natural extension of the ATL campaign. Or take the hugely popular,simple and well designed Audi driving game. But these well designed brandedgames are few and far between because most of them are designed bymarketers, who make pretty bad games designers.Applying game theoryBrands are experimenting in gaming in a looser sense recently too with a rashof playful campaigns popping up. One of the best being VW’s Fun Theory –proving that you can change people’s behavior by making things more fun –and executed with the incredibly charming Piano Stairs611. VW has done awhole host of different varieties of their fun theory and doesn’t seem to berunning out of ideas from Arcade Bottle Bank to Speed Camera Lottery.608 http://www.neurosky.com609 http://www.mindflexgames.com/what_is_mindflex.php610 Dare – casestudy611 http://www.thefuntheory.com/piano-staircase 155
  • 160. Trying to create gaming campaigns doesn’t always work – see Cadbury’sLondon 2012 campaign Spots and Stripes for an example of what not to do. Afeat in integration yes, but the result is a confusing fog of messaging and anexercise in social media box-ticking wrapped up in a loose idea of gettingBritain to play games (for a further dissection see footnote612).Other brands have fared slightly better. Orange campaigns have alwaysembraced technology and have judged what customers will engage with. Themultiple-award winning Spot the Bull for Glastonbury was very popularprimarily as the barrier to entry was low and the prize – Glastonbury tickets –was within reach and sought after; Balloonacy, while an innovative use oftechnology, was more involved and the prize wasn’t obtainable for mostentrants leaving most people trying it once and not bothering after.Entering the gaming cultureBrands don’t have to create games to tap into gaming: there is an increasingnumber of in-game advertising options for brands to exploit. From productplacement within the game; in-game streetside billboard advertising; brandeditems available in casual games like Farmville; to banner advertising in mobilegames, the opportunities are plentiful and many brands have already seensuccesses. Take the promotion in Farmville of offering McDonalds brandedgoods for people to include in their farms. Bizarre as it sounds from advertisingusing virtual goods in a virtual world, McDonalds understood the collaborativenature of Farmville and instead of placing banner ads around the game, theyadded value to the gameplay and as a result have achieved a permanentpresence in it. Activity such as this is only set to increase with in-gameadvertising estimated to be worth $1 billion by 2014613.GamificationWe’ve seen how brands have cottoned onto how popular games are, yet asidefrom a few examples, they have by and large misinterpreted what is meant by‘fun’. It started with FourSquare where you collect badges and mayorships for‘checking in’ to places with a leader-board thrown in for added competition.But then things got weird. You started earning badges for ‘checking in’ to ablog, or for watching a TV show614. Health ‘miles’ courtesy of Virgin Health615,or perhaps the most bizarre of all, Mindbloom’s Life Game616 earning points forachieving life goals. So to avoid jumping on the gamification bandwagon, hereare some basic things about gaming that everyone should bear in mind617:612 http://feed.thisisdare.com/2010/11/spots-v-stripes/613 In-Game Advertising: Market Assessment and Forecasts to 2014 – Screen Digest as cited by MMO news614 http://blogs.telegraph.co.uk/technology/shanerichmond/100005500/check-in-apps-for-couch-potatoes/615 http://us.virginhealthmiles.com/pages/home.aspx616 Accessed from: http://www.mindbloom.com/the-life-game/ in 2011; now no longer online617 http://www.slideshare.net/dings/pawned-gamification-and-its-discontents?from=ss_embed 156
  • 161. 1. Games are only fun when they are well designed. Like most of the stuff out there, 90% of it is rubbish. You just look at Little Britain – The Video Game618 for evidence of this fact.2. Rewards are not achievements. The real achievement is the mastery. Taking the easiest bits to reproduce (points) and applying them to everything just results in stuff with gamey bits.3. Competition is not for everyone. Women tend to prefer non-competitive and cooperative play619. Know your users, and playtest with them.4. People will always play the system. Try and anticipate the unintended behaviour – is it possible that players of EcoDrive620 are actually driving more dangerously to try and cheat the system?5. Whoever must play, cannot play. Design a system where people are free to play their own way, not just collect points through prescribed actions.SummaryGaming carries with it a lot of baggage: that it is niche, that it is for a certaintype of person and that it has a generally pernicious effect. As we have seen,the top games compete with the top films on numbers, a housewife is just aslikely to game as a teen and the more violent games are only one part of a hugeand varied market that is finding a new audience with its increasingly mobileand social identity. Gaming is set only to get more popular and more accepted.For brands grasping the opportunity, and grasping it correctly, gaming couldwell be very rewarding.618 http://www.metascores.net/games/platforms/ps2/littlebritainthevideogame619 http://www.squidoo.com/VideoGamesWomenLike620 Accessed from: http://feed.daredigital.com/2010/08/clear-thinking/ in 2011; now no longer online 157
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  • 164. All together nowWe look at media and devices separately because they’re discrete and it feelsoverwhelming to try and look at them collectively. But we must because theyare not used discretely. They are meshed, stacked and mixed all the time.Computers sit idly on laps while ads play from televisions and texts ping backand forth. In the last few sections, the story has been how many behaviours areflowing into new devices. Where all the new devices come together is wherethe new behaviours are emerging and arguably where some of the mostimportant insights about the way people live through technology are today –important because no one’s looking at them in great detail and becauseunderstanding them can surely unlock large commercial advantage.What is media meshing?No consensus has been reached on the vocabulary. There’s meshing, stacking,dual screen and other things. While the metaphors differ, what they’redescribing doesn’t. Media meshing is the use of more than one medium at atime. It’s using a phone while watching TV. It’s surfing the internet whilelistening to the radio. It’s sitting in bed with an iPad browsing TopShop dealswhile watching an iPlayer show through your bedroom TV.TV and internet meshingHow much meshing is going on?70% of Europeans are doing it. 66% once a week, 56% several times a weekand for 40% it’s a daily habit621. While there is no significant gender bias here,the young (16-24s) are 20% more likely to be doing it every day than theaverage.When is TV and internet meshing is going on?Weekends. While 23% mesh during the working week, 47% pile up theinternet and TV on the weekends622.What are they doing while watching TV?They’re communicating through various channels – email, IM, text and socialnetworks – as well as doing some general surfing. The usual sex differences621 Meet Europe’s media multi-taskers, Microsoft Advertising622 Meet Europe’s media multi-taskers, Microsoft Advertising 160
  • 165. emerge too: the girls are communicating more, while the men are entertainingthemselves with video and other content623.How are tablets affecting this?They’re stealing share of multitasking, essentially. Tablets are used 70% of thetime in front of the TV624, opening up some intriguing cross-media possibilities.623 Meet Europe’s media multi-taskers, Microsoft Advertising624 http://www.independent.co.uk/life-style/gadgets-and-tech/connected-consumers-are-in-bed-with-ereaders-sharing-the-tv-screen-with-their-tablet-2286915.html 161
  • 166. What do people do when the ads come on?39% switch channels. 37% say they use the internet625. Given how high thisnumber is there’s certainly scope for much more integrated marketing betweenTV and internet beyond simply serving up the URL. Who knows what they arebut the story-telling possibilities between the two are exciting, especially ascommunication is the top meshing activity.625 Meet Europe’s media multi-taskers, Microsoft Advertising 162
  • 167. Early explorers have experimented. For example, while people were watchingSkins, a gritty teen drama, Windows Live Messenger added functionality thatallowed people to interact with elements of the show and get additionalcontent. This drove double the targeted conversations and triple theanticipated reach626.Honda has also innovated here using ‘screen hopping’, a technique whichallows sound from the TV to be recognised by a phone app. This allowedpeople to literally capture characters on the TV screen to their phone, wherethey could interact with them627. The idea is pretty weak but it’s the possibilitythat’s interesting.How do TV ads affect online research?Half of people have looked for an ad or its music online after seeing it on TV.While this is gender-neutral it’s much more of young person’s activity. 66% ofyoung people (16-24) do this, although a still-respectable 35% of 45 to 55-year-olds do this too.How do TV and internet ads affect purchase driving?One in three media meshers have visited a shop as a result of an internet ad,versus 67% of do from TV, which is comparable to digital location they visit likeAmazon, eBay, comparison sites and the brand’s own website.626 http://skins.wikia.com/wiki/Skins_(UK)#cite_note-16627 http://www.youtube.com/watch?feature=player_embedded&v=UbDYdjhnfEg 163
  • 168. 628Mobile meshing overallNearly half (49%) of people with mobile web do it while watching TV. 30% aresimultaneously listening to the radio, 17% are using computers, 14% arereading newspapers and 13% are reading magazines629.Mobile and TV meshingHow much meshing is going on?Nearly nine in ten people (86%) have used their phones while watching TV.This rises to over nine in ten for 13 to 24-year-olds.628 Meet Europe’s media multi-taskers, Microsoft Advertising629 http://econsultancy.com/uk/blog/7466-how-europeans-are-media-meshing-with-mobile-internet-4 164
  • 169. What are they doing on their phones while watching TV? 630How are they using their phones to research and buy?Mobile is the destination for the impulsive. When the laptop is out of reach,45% said their phones were great for unplanned and time-sensitive research.41% said they used their phones for impulse buys631.Mobile, advertising and retail meshingThe interaction between advertising and mobile phones is established butrarely applied. 71% search on their phones as a direct result of exposure fromtraditional media (68%), online ads (18%) or mobile ads (27%) (US base)632.Yet there is little to encourage people to do this as customer journeys arecurrently woefully siloed to specific media, even though this does not reflectthe realities of media use.Advertising drives leads and purchasesEight in ten notice a mobile ad, while one in three notice a mobile search ad633.Incredibly half of those who see an ad on a mobile take action, like visiting awebsite (35%), making a purchase (49%) or recommending a brand orproduct to others (24%)634.630 US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html631 US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html632 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html633 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html634 US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 165
  • 170. And those ads with the highest click-through rate are those that blend with thephone’s functionality best. For example, Google mobile ads with the ‘click tocall’ feature, which makes a number immediately callable, have a 6-8% higherclick-through rate than those without this feature635.Closing the gap to purchase 636The phone is an untapped force in the world of commerce. 90% of peoplehave used their mobile in a shop, 50% directly for the purpose of helping withtheir shopping. For example 48% send their friends and families a picture tocheck. 51% said they make a purchase after consulting their mobile637.10% of people had used their phone to access a review, voucher or pricecomparison site, with 9% of people actually downloading app to visit again. Afurther 17% said this would be something they would like to do if only theyknew how638.Brand implicationsMake sure you can be found through mobile search. If not, work onoptimisation and, in the interim, pay to appear. Then exploit location-basedbehaviours. At the simplest your stores should appear to people in mapsresults and have all the correct information. At its most advanced this involvescreating a cross-channel strategy for both your products and your services, aswell as your marketing, because people use their phones in store, online, offlineand while consuming other media.635 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues636 US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html637 US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html638 Researching Purchases Online – UK April 2011, Mintel 166
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  • 172. ConclusionTV is dying. No one’s reading anymore. Men rule the web. Gaming’s for geeks.Women aren’t interested in tech. iTunes is the most popular music player.Those with the most followers on Twitter have the most influence. The iPad ismostly used on the go. Remember those statements?Well, TV and reading are alive and well, just finding new homes and forms. Menmay rule some very small parts of the web but it’s the women doing most of thecore internet activity: talking and shopping. Gaming is just as much somethinga middle-aged woman might be doing as a spotty lad. Women are visiting techsites just as much as men. Most people ‘watch’ their music, through sites likeYouTube; iTunes is a distant second. Twitter influence is actually very much inthe court of ‘Old World’ media brands, not those with the most followers. TheiPad is used overwhelmingly at home on weekday evenings.These are only a few examples of the received wisdom for which there aremore complex, subtler truths. Hopefully this report has addressed many of themas well as fleshing out our understanding of how people talk, watch, listen,read, play games, socialise, research and buy in today’s increasingly digitalworld.The internet is becoming flatter, deeper and quicker. It’s reaching more people,on more occasions, on more devices, more speedily. Brands need to preparefor that future. Specifically, they need to ready themselves for an internet thatno longer lives on a desk and that is no longer run by institutions. Prepare forpeople and places.Given the scope of its ambition, this report is necessarily incomplete. Overtime, as the evidence comes in, we can grow and refine our understanding.So, this isn’t an ending, this is the start.Thanks for reading. 168
  • 173. Thank youPulling together a book of this scale is no mean feat. Thank you to the team atDare for making it possible.This document is intended to be used by the recipient only and should not be copied, published or sold.Every effort has been made to acknowledge original sources and to comply with copyright law. If cases are identified where thishas not been done, please notify Dare London. 169

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