Getting Consumers' Attention

Getting Consumers’ Attention Carl D. Howe, Director Anywhere Consumer Research August 25, 2009 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention June 2009 August 2009 Page Page 1 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. www.yankeegroup.com

Agenda • The Anywhere revolution • Changing consumer behavior around media • Recommendations • Q&A © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 4

Connectivity Sparks • A common network • Broadband demand • Wireless ubiquity These are forming the Anywhere Network © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 5

Anywhere Is a Revolution Battles under way and ahead will transform the world we live in. This will bring the largest technology change in our lifetimes. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 6

Food for Thought: NBC Universal’s “Heroes” Watch Episodes Online for Free • NBC Universal Total Audience Measurement Index (TAMi) • Second episode of “Heroes” • Note: Log scale • Audience size = 17 million people • Implications and repercussions • Pay TV, ISP, media © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 12

But TV Audiences Have Been Shrinking Source: Yankee Group and TV Bureau of Advertising, 2009 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 13

Internet Sites Are Growing Dramatically Source: Yankee Group, Internet Systems Consortium, MediaPost, ClickZ, AllBusiness.com, Media Buyer Planner, Zooknic.com, 2009 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 14

Mobile Internet Domains Are Growing More Than 500 Percent a Year Source: Yankee Group and dotMobi, 2009 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 15

Internet Ad Prices Are in Free Fall Source: Yankee Group, Internet Systems Consortium, MediaPost, Clickz, AllBusiness.com, Media Buyer Planner, Zooknic.com, 2009 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 16

U.S. Consumers Now Spend the Most Time Online How much time do you spend daily on the following activities? * Yankee Group estimate; this response was not listed in this survey question Source: Yankee Group Anywhere Consumer: 2008 U.S. Entertainment Survey © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 19

Plus They Multitask More Which of the following activities do you do while watching TV? E-Mail 60% Surf the web 56% • More than half of respondents Talk on the phone 53% acknowledge that they are online or Read a magazine 36% talking on the telephone while Read the newspaper 33% watching television. Instant message 27% • Advertisers take note: This shows None of the above 16% consumers are saturated with Listen to the radio 11% media. SMS 8% Other 11% 0% 10% 20% 30% 40% 50% 60% 70% Percent of Respondents n = 1,503 Source: Yankee Group Anywhere Consumer: 2008 U.S. Entertainment Survey © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 21

Is Anywhere Taking the Media Industry Here? © Copyright 2009. Yankee Group Research, Inc. All rights reserved. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention June 2009 August 2009 Page Page 23

Changing the Channels to Anywhere Media TV Internet Mobile Anywhere media media media media Screen independent, on demand and easy to consume Mobile Other TV Internet Internet Devices TV Internet Mobile Anywhere consumers consumers consumers Consumers Anywhere Media is media delivered to consumers when and where the consumer will pay attention to it. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 25

Consumers Use Internet Video as Video on Demand Why do you watch full episodes of TV shows online? • 82% of Internet video viewers watch Missed the episode when it was 82% TV shows online because they on TV missed the episode on TV. Catching up with older episodes 55% • VoD numbers pale in comparison. Has fewer commercials 36% Wanted to watch the program • DVR is more about ad skipping than again 30% time shifting. Was interrupted while watching on • 79% of DVR owners fast-forward TV 28% through commercials most or all of the time. Like older/classic TV shows 20% • DVR owners are more likely to watch online when they fail to watch or record Can watch outside of my home 10% an episode. Other 7% • Internet video is not yet compelling enough for viewers to cancel their 0% 20% 40% 60% 80% 100% pay-TV services. . n = 294 (watch full episodes of TV shows online) Source: Yankee Group Anywhere Consumer: 2008 U.S. Entertainment Survey © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 26

Anywhere Media Results in the U.S. Advertising revenue for TV won’t pass 2008 levels until 2012. $431 $566 $115 $184 $241 $323 Mobile Internet $28,436 $31,127 $23,204 $25,642 Internet $23,632 $23,289 TV $52,675 $50,459 $50,357 $51,686 $53,791 $56,177 2008 2009 2010 2011 2012 2013 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 28

Recommendations Media companies: • Think twice before committing to an ad-only business model. • Embrace a flexible content platform. Advertisers: • Negotiate extra spots in 2009 and 2010 with your media buys. • Look for ways to be less obtrusive. • Demand measurable results. Network operators • Recognize that video is the lead property. • Don’t overpromise behavioral ad data. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 30

Conclusions • Consumer attention will limit media and advertising growth. • Anywhere Media is transforming media and advertising. • Consumers are drowning in too much media. • Consumers will choose how and where they access media. • The media business must adapt to consumer choice. • TV advertising will get a reality check during the next two years. • Don’t think mobile is the last screen. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 33

Q&A Did you know? Teens still discover music through friends and radio. Yankee Group’s Attitude & Behavior Surveys track this data and more. Sign up for a complimentary snapshot of our most recent results at http://www.yankeegroup.com/live/survey_ data_snapshot.html. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 34

Q&A Did you know? Of people with a mobile phone, smartphone users spend significantly more time using the mobile Web. Yankee Group’s Attitude & Behavior Surveys track this data and more. Sign up for a complimentary snapshot of our most recent results at http://www.yankeegroup.com/live/survey_ data_snapshot.html. © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 35

Thank you! Carl D. Howe, Director, chowe@yankeegroup.com Next Yankee Group webinar: Pinning Down Cloud Computing September 29, 2009 Register at www.yankeegroup.com © Copyright 2009. Yankee Group Research, Inc. All rights reserved. Getting Consumers’ Attention August 2009 Page 36

Getting Consumers' Attention

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