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OFF THE GRID Marketing to the Next Generation Media Consumer
CONSUMER BEHAVIOR IS CHANGING Consumer  Empowerment
CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment Consumer  Empowerment
CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment Consumer  Empowerment
CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment Consumer  Empowerment
CONSUMER BEHAVIOR IS CHANGING
2010 Upfront: $18 Billion +20% YoY ADVERTISER BEHAVIOR ISN’T
RESEARCH OBJECTIVES How do these consumers think about media? Why are they making the decisions they are making? What chal...
OPT OUTS   (N=232) Don’t own a TV OR hadn’t watched live TV in the past week  AND streamed more  than 4 hours in an averag...
MORE OF THEM THAN YOU THINK Off the grid Audience Size (based on 170MM online adults 18+) 1 14 MM 34 MM 22 MM
IN-HOME INTERVIEWS
LET’S MEET THEM
WHO IS OFF THE GRID? Opt Outs  Opt-Outs do not watch television live. They watch video, and 90% have a TV, but they access...
VITALS Married, two kids Works in IT for non-profit Loves: reading, biking, spending time with family Loves: reading, biki...
CURTIS  /  30 ON DEMANDER VITALS Engaged, no kidsAttorney Early Adopter Engaged, no kidsAttorney Early Adopter MEDIA SET-U...
OFF THE GRIDDERS: ON MEDIA
ADVERTISERS WANT THEM ON DEMANDERS OPT OUTS REST OF INTERNET Young Age (mean) 38 36 42 % 18-24 23% 30% 15% Wealthy Median ...
<ul><li>Video #1 type of entertainment content </li></ul><ul><li>Choice is a right, not a privilege. </li></ul><ul><li>Exp...
OPTIMIZE EFFICIENCY  THROUGH CHOICE ON DEMANDERS OPT OUTS REST OF INTERNET # of media devices 5.4 3.9 4.6 % Netflix subscr...
ON DEMANDERS WATCH MORE Average Weekly Video Consumption (Hours)  27% STREAMED  ONLINE 52% STREAMED  ONLINE 16% STREAMED  ...
PRIME TIME IS WHEN THEY WATCH % watching video content from 8pm-11pm On Demanders Opt-Outs Rest of Internet 97% 73% 92%
On Demanders 55% WHAT’S ON  WHAT’S AVAILABLE % watching video content from 8pm-11pm
FINDING A BETTER WAY STREAMING ONLINE I prefer to watch on  my own schedule I can skip  commercials I prefer to watch a fe...
FINDING A BETTER WAY STREAMING ONLINE I prefer to watch on  my own schedule I can skip  commercials I prefer to watch a fe...
FINDING A BETTER WAY STREAMING ONLINE I prefer to watch on  my own schedule I can skip  commercials I prefer to watch a fe...
ADVERTISING
OFF THE GRIDDERS: ON ADVERTISING
Sig Higher at 95% Sig Higher at 90% ADS AREN’T LOVED (DUH) On Demanders perceptions of ads within video content vs. rest o...
MY LIFE YOUR MESSAGE > THE NEW MEDIA MENTAL MATH
DESIRE TO AVOID AVOID AD > WORK TO AVOID = THE NEW MEDIA MENTAL MATH
TOLERANCE IS A POOR BASIS  FOR A RELATIONSHIP
Sig Higher at 95% Sig Higher at 90% OPTING OUT CHILLS YOU OUT Opt outs’ perceptions of ads vs. on demanders Statement Onli...
SEEK ATTENTION, NOT FREQUENCY OPTIMAL FREQUENCY ? 1 2 3 4 5 6 7 8 9 ? 1? =
Top-of-Mind Ad Recall What ads do you recall seeing on the site? (first mention) CHOOSING TO ENGAGE WORKS Index to standar...
Off the grid 1 14 MM 34 MM 22 MM HOW MANY CAN WE AFFORD  TO LOSE?
THANK YOU
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  • Before we start, quick survey. How many people in this room generally watch TV shows time shifted more than on live TV? {SURVEY} Look at that. A room full of marketing professionals that is putting itself out of the reach of other marketing professionals. As marketers, one of the things we are trained in is to not generalize out from our own experiences. So we may think we’re different as we go around skipping commercials. But we’re not. We see a trend and in the trades more and more talk about this small group of people who might grow into a big problem. More and more people are like us -- going off the ADVERTISING grid -- watching what Hollywood produces but not what we produce. We wanted to understand what’s going on here. How many people are like us? What they think about their consumption choices and why they’re making those choices. And what are the implications for marketers like us. We’ll start with a familiar story.
  • The trajectory has been towards greater and greater viewer control. Let’s think about where we came from. Family up close to black &amp; white tv. Up close because small screen, you had to change the channels manually, and bang it now and then to adjust the picture.
  • 1970’s. Smaller family, color tv, still right up close. Then you got the remote control and could sit back. Oh, and mute commercials too.
  • The VCR comes in and now you can save a program and watch it later. Ffalling asleep before the end of Johnny Carson no longer has consequences. And of course gaming devices started to be widely hooked up to the television, so now the TV isn’t just for TV anymore.
  • The DVD player comes in and you can now get better quality movies and boxed sets of tv programs. When the TiVo comes out, though, it’s a whole new world. Season pass. Lists of saved shows. People start to forget when their show is on and what channel carries it.
  • Then come devices like smartphones and the ipad and you have whole different devices to bring tv shows with you. Netflix starts streaming and cheap boxes like Roku and every major game platform and Apple TV let you stream movies through to the TV. And if you want to stream from the internet, there are a good variety of ways to do it, both legal and illegal. So, there’s a systemic change going on with viewing habits, all towards empowering viewers.
  • But the upfronts this year would seem to tell the opposite story. Marketers came roaring back to TV. Advertisers came back to what has worked historically and is also easy to do. And the networks celebrated. We wanted to understand exactly what’s going on here. Because amidst all the celebration, we hear a hissing sound. So we identified two groups of media consumers to learn more about.
  • Again, the questions we wanted to get answers for. How do these consumers think about media? Why are they making the decisions they are making? What challenges do these consumers pose for interruptive advertising? How can we reach them more effectively?
  • We then did a survey of comScore panelists and then we also looked at their online media consumption behavior passively. You can see the way we qualified each group for the survey here. We’ve got some very pretty charts and graphs coming up, so these are the definitions we’ll be using. Throughout, the quantitative data we present comes from comScore. TV OPT OUTS (N=232) Don’t own a TV OR Hadn’t watched live TV in the past week AND streamed more than 4 hours in an average week across online, mobile or through their TV ON DEMANDERS (N=305) Streamed more than 4 hours in an average week AND spend more time streaming video than watching live TV REST OF INTERNET (N=622) Included in the study for comparison purposes.
  • About a third of the online adult audience fits one of our two groups. That’s not “small but growing.” That’s large AND growing. According to comScore, that’s 56 million people that are becoming increasing difficult for advertisers to reach.
  • We met people in their homes and talked about their media consumption, their technology, their feelings about how things have changed for them as media consumers over the years, the way advertising reaches them. They were recruited to be a mix of post-college, 30-something, and Gen X. They were frequent consumers of video content who watch at least 75% of their programming through non-live broadcast or other means. They were not hard to find. 2 of the homes met our opt-out criteria. 6 were “On Demanders.” The interviews were conducted by ethnographers from TRU and took place in August in Chicago and San Francisco.
  • We’re going to meet a few of the folks we interviewed. Again, they’re not luddites, not freaks in the woods. They are completely plugged in culturally. Overall, these are busy, ambitious people balancing jobs, family, and life.
  • We set out to study two groups of people that are increasingly difficult for advertisers to reach. CLICK Opt Outs are defined as not watching live tv. But as we’ll see, these people are still heavy consumers of programming. In fact 90% own a tv, they’re just filling it through DVR, DVD, and streaming sources. CLICK Heavier still are the on-demanders. These folks are shifting away from live TV, watching live a bit, but less frequently than they used to. They’re buying all the new devices that allow them to watch on their own schedule. CLICK This is about real people, not a group of crazy hippies living in Yurts. These people are you. And your neighbors. There are a lot more of them than you think.
  • Even if they don’t own a tv, they watch a lot of programming. This is Wes. He’s an opt-out. Wes made the point that his kids no longer know from program guides and channels. They understand programming as lists of shows they can choose from at any time.
  • These people are influential. Their friends turn to them for advice and they’re happy to share. They are ravenous consumers of media, in all forms. Curtis is one of our On-Demanders. We couldn’t name a show that he and his fiance weren’t current on. He listed all the devices he’s had over the years and it’s an archive of every media gadget you’ve ever heard of.
  • Let’s hear from them directly. VIDEO Remember, these people aren’t much different than you or I. They are all around us. And they are desirable to advertisers.
  • Both groups swing younger than the average, with opt-outs particularly younger. In fact, a third of opt-outs are 18-24. That means they’ve already been trained to get their entertainment this way... they aren’t coming back. The On Demanders, on the other hand, are a little older, have higher median incomes, and because of the age difference are more likely to have graduated college. And check out the On Demander’s social graph. 25% more connections than the rest of internet. They talk to a lot of people and their point of view has the power to spread.
  • Opt-outs aren’t opting out of video, they’re opting out of LIVE television. Remember, 90% of them have TV’s at home. It’s a great device for watching video, that’s what it’s for. What are they doing? They are reclaiming total control of their media schedules. They are becoming more and more unwilling to compromise on their ideal viewing experiences.
  • The big theme we found was that if you’re off the grid it’s largely because you are seeking to increase the efficiency of your life by making media more flexible, making media work on your terms rather than you on its. To do that, the On Demanders own more devices. But the interesting thing about device ownership is that the general internet population doesn’t lag that far behind. They have the tools and so we can expect that they will start to look a lot more like On Demanders in the near future. Strikingly, nearly half of the On Demanders have netflix subscriptions and 40% own video enabled mobile devices.
  • While the opt-outs are spending a bit less time than the norm with video content, On Demanders are spending almost an hour a day more. 30 hours a week for on demanders. 21 hours for opt-outs. And 25 hours for the rest of the internet. CLICK Let’s look at sources. Opt-Outs are getting fully half of their video content through streaming online. On Demanders still do watch a third of their TV live, but they are supplementing with online streaming -- a quarter if it. And if On Demanders really are managing their time well and skipping commercials, they can watch closer to 40 hours of programming in those 30 hours. Talk about efficient.
  • We were interested to see if there has been any change in viewing by daypart. There is certainly more online consumption during the day, but Prime time is still the most active time of day for watching video. Even the opt-outs are watching during this period. Makes sense. Prime time is when you have time to really sit down and watch something. You’re home during prime time and that’s where your couch and your tv are. These people are still couch potatoes, they’re just more involved potatoes.
  • The programming matters, we’re not saying that people don’t want to watch primetime shows. They’re just gathering the shows they want from all over the schedule and watching when they want. So it’s no longer about what’s on -- which is about consuming the way some guy in Burbank plans for you to consume -- it’s about what’s available. And that’s empowering. No more Friday nights from my youth, when Friday night was the dumping ground for lame comedies and cop shows.
  • We asked our respondents for the top reasons that they watch video in different non-live modes. These are the three that bubbled to the top for laptop, mobile, and streaming on tv.
  • It’s all about making the programming conform to their schedule and needs. This is critical. What they are saying throughout all of this is “My time is valuable. I want to maximize that value, not waste it. If I watch on my schedule, I don’t have to put up with a show I don’t like.”
  • “ And I don’t really like ads so I don’t have to put up with them either.” That’s not good news here in this room. But when we all go home tonight... Awesome.
  • Let’s look at how our groups think about advertising.
  • Let’s hear it directly from some of them.
  • The bad news is that on demanders are really negative about advertising, especially on TV but much more negative in any mode than the opt-outs or the rest of the internet. The biggest reason is the sheer number of ads. Acceptance of ads declines with the volume of ads you ask them to watch.
  • As we’ve discussed, the Off The Gridders are trying to be more efficient with their time. Why? Because their time is valuable to them. CLICK As a marketer, you’re not just competing with other marketers, you’re competing with everything else they’ve got going on. And if you ask someone to describe their priorities to you, they’re going to tell you something obvious. My life is more important than your message. My time is worth more when I put it to my uses than when I give it to you to use for your purposes.
  • And because they have all that control, they know very well how to sidestep you and go on with their lives. When they see you, they do a quick calculation. If it is easy to avoid you, they will avoid you. And it’s generally pretty easy. But sometimes, it’s not. Sometimes it’s just too hard to get away. Sometimes they’re trapped. Then they will grit their teeth and tolerate you.
  • No one wants to be tolerated. We want to be loved. Or at least respected. A relationship in which one person is suffering through their time with the other, ends poorly. So as modern marketers, we need to understand that a lot of this is our fault. That people are trying to avoid us because we have not been respectful of their time.
  • Remember when I showed that slide about the perceptions of on demanders and how they dislike ads? Well, we see the flip side of that is the the opt-outs, who because they don’t watch live TV are naturally bombarded less, are much more receptive to ads. They’re more likely to find them interesting, memorable, enjoyable and to be moved by them.
  • Back to a party. Cute 18-34 year old woman comes up to you, says something witty, flips her hair and walks away. A great moment, a memorable party... that one time it happened to me. When she comes back four more times and says the same thing, you’re not so interested anymore. The modern marketer thinks about frequency differently and isn’t locked into a formula for “optimal” or one definition of “effective.” In transforming ourselves into this modern marketer, we need to stop thinking about the repetitive reach of the past, and start thinking about optimizing for attention. Raw frequency is one big reason for ad avoidance. Over the last fifty years, marketing science has been trying to learn the optimal frequency to get a response. It’s a bit ridiculous, since no two campaigns and products are alike. Once you start targeting people more narrowly, viewing success as getting them to engage in a meaningful experience, optimizing for attention rather than repetition, you might find that the optimal frequency is ONCE.
  • In a previous study we did with comScore, we learned that ads resonate better with those who CHOOSE to engage. Look at the difference in recall between an engaged display ad and an interruptive video ad experience. About 4x. Near universal recall amongst engagers. And engagers also can repeat back desired brand attributes at significant multiples over non-engagers.
  • Which is imperative. There are a lot of people going off the advertising grid, and if we don’t change ourselves to suit their needs and get on theirs, we cannot succeed.
  • Transcript of "Monahan_Shlachter"

    1. 1. OFF THE GRID Marketing to the Next Generation Media Consumer
    2. 2. CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment
    3. 3. CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment Consumer Empowerment
    4. 4. CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment Consumer Empowerment
    5. 5. CONSUMER BEHAVIOR IS CHANGING Consumer Empowerment Consumer Empowerment
    6. 6. CONSUMER BEHAVIOR IS CHANGING
    7. 7. 2010 Upfront: $18 Billion +20% YoY ADVERTISER BEHAVIOR ISN’T
    8. 8. RESEARCH OBJECTIVES How do these consumers think about media? Why are they making the decisions they are making? What challenges do these consumers pose for interruptive advertising? How can we reach them more effectively?
    9. 9. OPT OUTS (N=232) Don’t own a TV OR hadn’t watched live TV in the past week AND streamed more than 4 hours in an average week across online, mobile or through their TV. ON DEMANDERS (N=305) Streamed more than 4 hours in an average week AND spend more time streaming video than watching live TV. Watch less live TV than a year ago. REST OF INTERNET (N=622) Included in the study for comparison purposes. QUANTITATIVE comScore panelists invited to participate in a 20 minute online survey. comScore passively studied the behavior of respondents through their panel.
    10. 10. MORE OF THEM THAN YOU THINK Off the grid Audience Size (based on 170MM online adults 18+) 1 14 MM 34 MM 22 MM
    11. 11. IN-HOME INTERVIEWS
    12. 12. LET’S MEET THEM
    13. 13. WHO IS OFF THE GRID? Opt Outs Opt-Outs do not watch television live. They watch video, and 90% have a TV, but they access video through the DVR, streaming, or DVD. On Demanders On Demanders still watch live TV but watch a lot more of it time shifted through DVR, streaming or DVD. All of them are watching less live TV than a year ago.
    14. 14. VITALS Married, two kids Works in IT for non-profit Loves: reading, biking, spending time with family Loves: reading, biking, spending time with family MEDIA SET-UP No TVs in the house; has a 22” monitor hooked up to his laptop in the bedroom to stream Netflix video content. Accesses everything (besides extensive music collection) via the internet. Only need for viewing live content is sporting events. For a big game, Wes meets friends at a sports bar. WES / 40 OPT-OUT
    15. 15. CURTIS / 30 ON DEMANDER VITALS Engaged, no kidsAttorney Early Adopter Engaged, no kidsAttorney Early Adopter MEDIA SET-UP Has traditional televisions with satellite; streams through Netflix on the Wii; also uses AppleTV, Slingbox. a DVD player, iphone.Bought a Slingbox for his dad so they could watch each others’ content.
    16. 16. OFF THE GRIDDERS: ON MEDIA
    17. 17. ADVERTISERS WANT THEM ON DEMANDERS OPT OUTS REST OF INTERNET Young Age (mean) 38 36 42 % 18-24 23% 30% 15% Wealthy Median Income $65,000 $42,000 $54,000 Educated Some College + 86% 73% 70% Influential Size of online network 245 193 201
    18. 18. <ul><li>Video #1 type of entertainment content </li></ul><ul><li>Choice is a right, not a privilege. </li></ul><ul><li>Expect to watch what, how, when, and where they want </li></ul>VIDEO IS KING OF ENTERTAINMENT “ Netflix arrivals are from a big queue of things I’ve been wanting to see; Roku is for impulse desires and search-and-discovery hits; I use bit torrent for off-the-grid films.” – Scott, SF
    19. 19. OPTIMIZE EFFICIENCY THROUGH CHOICE ON DEMANDERS OPT OUTS REST OF INTERNET # of media devices 5.4 3.9 4.6 % Netflix subscribers 47% 25% 24% % Mobile Video Devices 40% 25% 31%
    20. 20. ON DEMANDERS WATCH MORE Average Weekly Video Consumption (Hours) 27% STREAMED ONLINE 52% STREAMED ONLINE 16% STREAMED ONLINE
    21. 21. PRIME TIME IS WHEN THEY WATCH % watching video content from 8pm-11pm On Demanders Opt-Outs Rest of Internet 97% 73% 92%
    22. 22. On Demanders 55% WHAT’S ON WHAT’S AVAILABLE % watching video content from 8pm-11pm
    23. 23. FINDING A BETTER WAY STREAMING ONLINE I prefer to watch on my own schedule I can skip commercials I prefer to watch a few episodes all at once WATCHING ON MOBILE DEVICE I can do it from any location I prefer to watch on my own schedule I travel a lot Streaming to tv I prefer to watch on my own schedule I can skip commercials I prefer to watch a few episodes all at once
    24. 24. FINDING A BETTER WAY STREAMING ONLINE I prefer to watch on my own schedule I can skip commercials I prefer to watch a few episodes all at once WATCHING ON MOBILE DEVICE I can do it from any location I prefer to watch on my own schedule I travel a lot Streaming to tv I prefer to watch on my own schedule I can skip commercials I prefer to watch a few episodes all at once
    25. 25. FINDING A BETTER WAY STREAMING ONLINE I prefer to watch on my own schedule I can skip commercials I prefer to watch a few episodes all at once WATCHING ON MOBILE DEVICE I can do it from any location I prefer to watch on my own schedule I travel a lot Streaming to tv I prefer to watch on my own schedule I can skip commercials I prefer to watch a few episodes all at once
    26. 26. ADVERTISING
    27. 27. OFF THE GRIDDERS: ON ADVERTISING
    28. 28. Sig Higher at 95% Sig Higher at 90% ADS AREN’T LOVED (DUH) On Demanders perceptions of ads within video content vs. rest of internet Statement LIVE TV Online Mobile Ads are annoying The ads interfere with my show Ads are too long There are too many ads I wish I could fast forward through the ads There are too many ads for each video content segment
    29. 29. MY LIFE YOUR MESSAGE > THE NEW MEDIA MENTAL MATH
    30. 30. DESIRE TO AVOID AVOID AD > WORK TO AVOID = THE NEW MEDIA MENTAL MATH
    31. 31. TOLERANCE IS A POOR BASIS FOR A RELATIONSHIP
    32. 32. Sig Higher at 95% Sig Higher at 90% OPTING OUT CHILLS YOU OUT Opt outs’ perceptions of ads vs. on demanders Statement Online Mobile Ads are interesting Ads are memorable Ads make me think favorably about the brand being advertised I enjoy watching the ads
    33. 33. SEEK ATTENTION, NOT FREQUENCY OPTIMAL FREQUENCY ? 1 2 3 4 5 6 7 8 9 ? 1? =
    34. 34. Top-of-Mind Ad Recall What ads do you recall seeing on the site? (first mention) CHOOSING TO ENGAGE WORKS Index to standard IAB banner ad.
    35. 35. Off the grid 1 14 MM 34 MM 22 MM HOW MANY CAN WE AFFORD TO LOSE?
    36. 36. THANK YOU
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