Mass Media to ‘My Media’:
Profiling the New ‘On-Demand’
Consumer
Greg Sterling
Interactive Local Media
The Kelsey Group
What’s Going On? The ‘30K Foot View’
• Broadband Internet Adoption
• Proliferation of personal technology
devices
• Younger audiences who are
technologically oriented
• Fragmentation of audiences
= Disruption of traditional media and
new challenges for marketers
Global ‘Top 10’ Broadband Countries (Total
Number of Subscribers)
•
•
•
•
•
•
•
•
•
•
US
China
Japan
South Korea
France
Germany
UK
Canada
Italy
Spain
Source: Computer Industry Almanac (2005)
US Broadband: Growing or Slowing?
Nielsen (Growing):
• US Internet penetration: 74% of households
• 95.5 million US broadband users (growth 28% from 2005)
• Broadband: 68% of at-home users
The Skeptics (Slowing):
• Pew: 53% have home BB; growth flat (3% from 2004 to 2005); 32% of US
adults not connected to Internet
• Parks Assoc.: 42% have home BB; Internet growth flat (1% from 2005)
• Forrester: 62% will have BB at home – in 2010!
• Yankee Group: Reasons for not getting home BB – (1) too expensive, (2)
don’t want it, (3) dial-up sufficient
Source: Nielsen//NetRatings (2/06), Pew Internet & American Life Project (2005), Parks Associates (2/06), Yankee Group (2/06), Forrester Research (2005)
Broadband Growth: What’s at Stake?
Among other things:
• Internet growth for news, local search (at the expense of
traditional media) and ecommerce
• Internet as a daily “utility” and general communication and
entertainment medium
• Development of the market for online video (actual speeds an
issue here)
• Development of the market for VoIP telephony and related
services
Source: Nielsen//NetRatings (2/06), Pew Internet & American Life Project (2005), Parks Associates (2/06), Yankee Group (2/06), Forrester Research (2005)
Top Reason Spending More Time Online
% Selected as Top Reason
(Among those spending “Considerably/Somewhat More” time on Internet today vs. a year ago)
Total
High Speed Access at Home (a)
Dial-Up at Home (b)
51%b
45%
45%
41% 41%
30%
18%a
8%
6%
3%
Easier to go online given
advances in technology
Information on Internet has As more people are online it's
gotten better
an easy way to connect
socially
5%
6%
None of these are reasons
Base: Kelsey Group (2005). Consumers who are spending considerable/somewhat more time on Internet Total (n=159), High Speed (n=101), Dial-Up (n=46)*
* Small base size; use caution when projecting data
Lowercase letters indicate significant differences at the 95% confidence level
Internet Now Just Part of Daily Life
Number of Americans for whom Internet was ‘crucial’ or ‘important’
35
Millions of Americans
30
2002
2005
25
20
15
10
5
0
Changed jobs or
gotten addt'l
training
Dealt w/major
Chosen school or
illness/condition
college for
for self/other
self/child
Bought a car
Made a major
financial decision
Found a new
place to live
Source: Pew Internet and American Life Project (2006)
Life Events: Jobs, Cars & Real Estate
• The Internet produced 51% of all new hires in 2005,
while print newspaper classifieds were the source of
only 5% of the new hires
• Online influences purchase decisions of 79% of
would-be car buyers who are Internet users
• The percent of US homebuyers using the Internet as
part of their housing search process went from 2% in
1995 to 77% in 2005. Internet is now the number one
resource in the home-buying process
Source: DirectEmployers Association (2006), National Ass of Realtors (2005), JD Powers (2005), Compete, Inc. (2005)
Online Tops Newspapers with BB Users
News Sources
70
% of Americans
60
Dial-Up Users
BB Users
65
57
50 49
50
52
49
43
41
38
40
30
26
17
20
12
10
0
Local TV
National TV
Radio
Local paper
Internet
National
paper
Source: Pew Internet & American Life Project (12/05), n=3,011
Local Shopping: Media Source Usage
Media Used in Past Year When Shopping for Products/Services in Local Area
(Yes Responses)
Wave 3
Wave 2
Wave 1
75%
73%
70% 70%
60%
62%
58%
70%
73%
59%
55%
47%
36%
26% 27%
24%
20%
13%
39% 41%
24% 22%
18% 18%
21%
10%
0
Net: Internet
Printed
Media
Yellow Pages
Internet
Search
Engines
Internet
Yellow Pages
Verticals
Direct Mail/E- Newspapers
Local
Mail/Coupon
newspapers
Books
website
City Guide
Web Site
Source: The Kelsey Group (3/06)
Base: Total Consumers, Wave 3 (n=500), Wave 2 (n=501), Wave 1 (n=1,006)
Proliferation of ‘My Media’ Devices
17.8m DVRs (US)
iPOD: 1b Songs
47.4m (2009)
3+m Videos
Music Market: $1.5b (2005) to
$10.7b (2010)
PC: ‘Favorite Appliance’
94m Americans Online Daily
930m Units to Ship (2006)
36m Mobile Video Users (2009)
78.6m Mobile Gamers (2009)
$1.8b (2009)
Source: eMarketer (8/05), In-Stat (3/06), Strategy Analytics (1/06), Burst Media (7/05), Pew Internet & American Life Project (1/06)
Disruptive Devices
Top Reasons for Owning DVRs:
•
•
•
•
Time shifting (watch shows when I want)
Avoid commercials
Rewind or fast-forward during show
Watch favorite shows faster by skipping
ads
Slingbox:
• Enables TV to be viewed from a PC (and
now mobile devices) – “place shifting”’
• “Every computer is now your TV”
Source: Find/SVP (8/05), Sling Media (2006)
Disruptive Devices
PC+ Internet: ‘All-Purpose’ Appliance:
• 65.2% use the Internet to connect with
friends/family. Internet is now widely seen as a
important communication tool to stay connected
with our “social networks”
•
76.5% of users (24 and younger) listen to music
online. 39.1% say the Internet is the primary way
they listen to music
•
•
53.3 percent (24 and younger) watch video online
•
86% of users say daily routine would be
“disrupted” if home computer were taken away;
42.1% say disrupted "significantly"
47.3% of online consumers use the Internet to
gather news
Source: Burst Media (7/05) n=13,000 ages 14 and older; Pew Internet & American Life Project (1/06)
Disruptive Devices
Mobile Phones:
•
More mobile phones globally than landlines (incl. US). 2.5b
wireless subs globally
•
•
•
400m mobile phones in China
15% of US users accessed Internet in 2005 (vs. 6% in 2004)
Wireless now 1/3 of home phone minutes vs. 1/4 in 2004. 20%
of US wireless users plan to drop fixed lines at home (esp.
under 24 and <$50K)
But . . . Data may not be the salvation of industry:
•
•
•
US: 75% not interested in video on mobile phones
•
•
Other studies more bullish on wireless data
69% not interested in music on mobile phones
43% would even pay for phones that prevent marketing
messages!
Coming threat: cell+VoIP/Wi-Fi phones
Source: In-Stat (2005), Strategy Analytics (1/06), Chinese gov’t figures (2006), Royal Bank of Canada (2006), Forrester Research (2005)
Emergence of the ‘My Media’ Generation
Yahoo!-OMD Worldwide study of 5,000 in 13-24
age group in 11 countries (2005):
• Internet most important single medium, more popular globally than
TV, as medium they “couldn’t live without”
• Internet has surpassed radio as the preferred medium for music in all
11 countries
• They “can’t recall a time before cell phones”
• They’re multi-taskers: perform 3-4 other tasks while online and 2-3
while watching TV
• Universally expect customization/personalization in media
experiences: e.g., MP3s, ringtones, wallpaper, IM “avatars,” etc.
Source: Yahoo!-OMD Worldwide (9/05)
The ‘My Media’ Generation
• 87% of 12-17 year-olds use the Internet and 57% have
created a blog, a webpage or posted content online
• 50% of 10-18 year-olds have their own mobile phone
• 50% of teens would rather have TV taken away than their
mobile phone privileges revoked
• 66% of 13-21 year-olds rely on IM more than email
Source: Pew Internet & American Life Project (2005), GfK NOP Technology (2005), Itracks (2005)
US 12-17 Yr. Olds’ Top Online Activities/Sites by
Time Spent (Reverse Order)
• Sports
• Community
• Gaming information
• Kids entertainment sites
• Auctions
• Online gaming
• Retail
• Discussion/Chat
• Email
• Instant messaging
•
•
•
•
•
•
•
•
•
•
Viacom (Sports)
Intuit
Wells Fargo
eBay
EA Online
Facebook.com
MSN-Microsoft sites
Yahoo! sites
MySpace.com
Time-Warner (AOL)
sites
Source: comScore (2/06)
18-24 Yr-Olds Use More New Media
Those Who 'Regularly' or 'Occasionally' Use New Media
Average of Other Age Groups
18-24 yr olds
90
80
60
50
40
30
20
10
In
te
rn
et
R
ad
io
VR
s
/D
Ti
Vo
es
sa
gi
ng
/S
M
S
Ph
on
es
Pi
ct
ur
e
R
lli
te
Sa
te
Te
xt
M
ad
io
S
D
P3
/iP
O
an
tM
In
st
M
es
sa
gi
lo
gs
ng
0
B
% of US Users
70
Source: BIGresearch (6/05)
Reaching the ‘My Media’ Generation
‘New media’ much more influential than traditional
media for this group:
• European youth (16-24) view the Internet as most favorable
advertising channel. Online ads “most informative” form of advertising
• 50%+ of US college students have purchased a product or service
based on an online ad; 34% said online ads were “most influential”
way for them to learn more about a product or service
• US 18-24 year olds more influenced in purchase decisions by “new
media” (Internet, IM, blogs, mobile phones, iPODs, text messaging,
etc.) than any other age group
• But fundamentally it’s getting harder to reach this group
Source: MSN Europe-University of York (2006), Experience, Inc. (2/06), BIGresearch (6/05)
The New Media Universe
• Media consumption in the US now takes up more time on
average (9 hours) than sleep or work
• US adults do an average of 3 additional things while
online and 2.5 additional activities while watching TV
• TV remains the dominant medium in terms of
minutes/hours of use, the computer is second
• Much more information is being consumed by users, from
multiple media sources
• Result is diminished influence of traditional media or any
single medium and the rise of more complex purchase
behavior
Source: OMD North America (3/06), Ball State University (10/05), The Kelsey Group (3/06)
Time Spent with Media: 2005 vs. 2004
More Time
Unchanged
Less Time
61%
37%
40%
39%
36%
34%
30%
27%
25%
39%
28%
27%
24%
21%
9%
Internet
Television
Newspapers
Radio
Magazines
Source: BURST Media (2005) n=2,616
But What Is the Internet? A Tower of Babel
New Sites Proliferating Like Mushrooms
The ‘F-Word’: Fragmentation
• Consumers are using a range of media and information
sources to make purchase decisions, depending in part
on how much “consideration” is involved
• Consumers frequently start their research process at a
search engine, but they very often end up at more
specialized sites (e.g., verticals, directories, social nets)
• The vast majority of buying happens offline, locally with
very little understanding by the seller/merchant of how the
consumer actually got there
• More and more local buying is Internet influenced (think
back: Jobs, Cars & Real Estate)
Local Buying vs. E-Commerce
But Internet Influences Offline Spending
E-Commerce
2.5%
Offline
Spending
97.5%
Total US Retail
Source: US Commerce Dept; Kelsey Group estimates, comScore (2006)
Fragmentation: Consumers Using ‘3 or More’
Information Sources
Professional Services
Trade Services
35%
13%
31%
9%
11%
6%
Wave 1
Wave 2
Wave 3
Wave 1
Wave 2
Wave 3
Wave 1: October, 2003; Wave II: September, 2005; Wave III: March, 2006
Source: The Kelsey Group (3/06)
“UserView III” (n=500)
Sources Used in Car-Purchase Decision
Most Influential/Important Sources
% who identified
50%
40%
39%
34%
23%
20%
9%
Search
Consumer
reviews
Third party sites
OEM sites
Dealership
Friends/Family Newspapers or
Magazines
Source: Yahoo! (2005)
Search ‘Intensity’ In Online Purchases
comScore studied (for Google) the impact of search on
latent online purchase behavior and offline buying
during US holiday 2005 season:
• The transactions that were tracked (25%) happened mostly
locally, in physical stores
• Ecommerce buyers typically did not make a purchase in the
same session
• The volume of searches per online buyer was striking:
Average searches per buyer across all categories: 65.1
Home & Garden: 70.2
Consumer Electronics: 88.0
Music, Movies, Video: 59.0
Toys & Hobbies: 46.2
Apparel & Accessories: 15.4
Source: comScore (3/06)
Local Search: Reach and Growth
• Internet now has an 84% local reach among online
population
• 43% of search engine users are seeking a local
merchant to buy something offline
• 54% of search users have substituted
Internet/search for the “phone book” mostly for
specific local lookups
• 92 of search-influenced purchases in CE category
were offline
• There are 51.3 million users of mapping sites
• Local is growing faster than general Web search
Source: Kelsey Group (2005, iCrossing (6/05), comScore (10/05)
Current Local Search Volume
(Major Engines Only)
100%
90%
80%
Search Volume
70%
60%
50%
40%
30%
20%
10%
0%
'Conservative': Explicit
'Expansive': Implicit
Source: Kelsey Group estimates, comScore (2005)
Implicit Local: Users Often Have Local Intent
Without Entering Local Modifiers
Commonly Searched Local Keywords
Post Office
Dentist
Plumber
Physician
Churches
Attorney
Hospitals
Restaurants
Wal-Mart
Hotels
0
10
20
30
40
50
60
Millions of queries
Source: comScore local keyword search report, qSearch (9/05)
Snapshot of Local Search: 3 SN Sites, 3 Cities
Los Angeles:
San Francisco:
San Diego:
•
•
•
•
•
•
Google Local: 12.67%
Yahoo! Local: 12.06%
Google Local: 16.36%
Yahoo! Local: 9.87%
Top Local Queries:
Top Local Queries:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
restaurants
Banquet Rooms
Movie Theaters
Nail Care
bowling
hairstylist
car wash
Day spa
florist
Veterinary Medicine
Cosmetic Surgery
Google Local: 18.33%
Yahoo! Local: 4.36%
Top Local Queries:
Nail Salons
•
Chinese medicine school •
Barbers
•
Restaurants
•
Organic Food
•
Day Care
•
massage
•
clubs
•
bridal shops
•
pizza
•
Day Spas
Hair Salons
restaurants
Bowling
car wash
preschool
grocery store
Car Accessories
Fitness
animal care
Source: Enquisite by Metamend (Jan-Mar, ’06)
Where Consumers Would ‘Turn to First’ for
Local Business Information: All Groups
Other , 1.5%
Don't Know (D/N) 1.6%
Friend, 2.2%
Online YP, 7.0%
Directory Assistance
(DA), 11.8%
Print YP, 61.0%
Search Engine, 12.5%
Source: Kelsey Group – Feb. 2006; U.S. consumers n =1,000
‘Turn to First’: 18 to 34
Other , 1.5%
D/N, 1.5%
Friend, 4.6%
Online YP, 8.2%
Print YP, 44.1%
DA, 20.4%
Search Engine, 18.4%
Source: Kelsey Group – Feb. 2006; U.S. consumers n =1,000
‘Turn to First’: $75K+ Income
D/N, 0.3%
Other , 0.2%
Online YP, 13.6%
DA, 6.1%
Print YP, 51.0%
Search Engine, 27.4%
Source: Kelsey Group – Feb. 2006; U.S. consumers n =1,000
‘Turn to First’: College/Grad School
Other , 1.6%
Friend, 0.8%
Online YP, 13.2%
DA, 4.6%
Search Engine, 19.7%
Print YP, 58.5%
Source: Kelsey Group – Feb. 2006; U.S. consumers n =1,000
Local Shopping: Media Source Usage
Media Used in Past Year When Shopping for Products/Services in Local Area
(Yes Responses)
Wave 3
Wave 2
Wave 1
75%
73%
70% 70%
60%
62%
58%
70%
73%
59%
55%
47%
36%
26% 27%
24%
20%
13%
39% 41%
24% 22%
18% 18%
21%
10%
0
Net: Internet
Printed
Media
Yellow Pages
Internet
Search
Engines
Internet
Yellow Pages
Verticals
Direct Mail/E- Newspapers
Local
Mail/Coupon
newspapers
Books
website
City Guide
Web Site
Source: The Kelsey Group (3/06)
Base: Total Consumers, Wave 3 (n=500), Wave 2 (n=501), Wave 1 (n=1,006)
Implications for Marketers
• It’s more and more challenging to
reach/engage consumers (esp. 18-24
year-olds)
• No local medium has the “monopoly” it
once did
• Search hasn’t replaced traditional
media either
• Online behavior is complex,
convoluted; it’s hard to know where the
consumer is in the buying cycle
• Tracking/capturing the influences on
consumers is challenging
Thanks