1

Whats inside?
Internet
The traditional internet The new internet

1
4 15

Mobile
The British mobile market What are people doing on them? The app economy explained

17
19 25 34

Tablet
The tablet market Who owns a tablet? What are they doing with it?

39
41 43 47

Behaviours
Search Communication Socialising Spending Watching Listening Reading Gaming

51
53 61 65 95 111 125 133 143

All together now Conclusion

159 167

Men rule the web. Gamings for geeks. Women arent interested in tech. iTunes is the most popular music player. Those with the most followers on Twitter have the most influence. The iPad is mostly used on the go. Right? Wrong. Our collective knowledge about how people live today through technology is so tangled up by satisfying yet shallow soundbites, lazy research and the biased rhetoric of specialists, its hard to know what people really do today. How do they talk, watch, listen, read, play games, socialise, research and buy in todays increasingly digital world? How does this differ between the sexes and generations? If your brand is going to connect with consumers in the digital age, you need better answers to questions like these. This report is the start of that. By drawing together quality research from hundreds of different referenced sources it paints a picture of current media and technology consumption and how that might develop in the future. It should make you more knowledgeable. It should give you the arsenal to fight for strategies and creative solutions that go against tired convention. But it should also flag up when youre in danger of jumping on a bandwagon and wasting your precious marketing budget. In short, this report should help you unpick the truth from the myth.

Half the country go online every day There are 62 million people in the UK1 and more of us are going online, and spending more time there, every day. By August 2011, 77% of households2 were connected (up 4 percentage points on 2010), with 30 million going online every day or almost every day. 93% of them have broadband connections of 2Mbps or higher3, nearly a quarter (24%) had 10Mbps or above4 and 1% clocked in above 24Mbps in May 20105. In other words, a sizeable chunk of the country has access to the internet and data-heavy services like advanced websites and video. Were internationally mediocre for coverage and speed However, globally, thats poor: we dawdle at 26th on broadband penetration and speed rankings, with Bradford the unlikely and only British city to enter the global top 100. Generally, the south and cities are much better catered for than the north and countryside. The government knows this and knows how closely coupled high-speed internet is with improving the economic and social prospects of British homes and businesses. More internet in more places coming To that end, UK Culture Minister Jeremy Hunt has committed to get Britain the best superfast broadband infrastructure in Europe by the end of the current parliament and is investing 830m against this6. If that pans out, a pretty decent network is only going to get better, paving the way for more powerful and rich internet experiences. Mobile, the new kid on the block While most of us still go online at a desk, mobile is increasingly dragging us away. In 2009 23% went online with a phone. By 2010 it was 31%. In 2011 it was 45%7. To restate: nearly half of all internet users are doing it on their phones. Nor is it the case that these people are dusting off an old WAP device and checking their email. By 2012 46% of Brits were using a smartphone8, a

1 2 3

Office of National Statistics (ONS) Office of National Statistics (ONS) as cited by eMarketer, September 2010 Office of National Statistics (ONS) as cited by eMarketer, September 2010 4 Trends in broadband supply and uptake http://www.scotland.gov.uk/Publications/2011/02/23091236/9 5 Ofcom, as quotes on BBC http://www.bbc.co.uk/news/technology-11922424 6 Telegraph, http://www.telegraph.co.uk/technology/broadband/8448680/Superfast-broadband-scheme-proposed-for-5-million-rural-homes.html 7 http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-226727 8 http://paidcontent.org/article/419-smartphone-penetration-approaching-tipping-point-as-pc-usage-declines-/

growth on the previous year so deep in double digits its not even worth stating as it will be out of date in a month. Its likely this rate of growth will remain, or even ramp, in the coming years as smartphones go mainstream and the infrastructure gets a makeover with a new network, called the 4G mobile spectrum, landing in 2013. This will offer a big improvement on the current 3G network, which is limited to around 3.6Mbps, by allowing for speeds of up to 100Mbps out and about, or ten times that (1Gbps) when stationary, to around 95% of the country. That means while a one-minute YouTube video would take 30 seconds to download on todays mobile network, an HD feature length film would take about a tenth of the time on 4G. In other words mobiles will no longer have to pull data through the keyhole: the door will be wide open. This will usher in a blazingly fast mobile experience. In this world, the majority of the processing will happen in vast servers and all anyones mobile has to do is reach up into this cloud computer and tap into it, unconstrained by download speeds. Phones tomorrow will do what todays 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?

The traditional internet

The great time vampire We spend around 57 hours per month on computers9. Roughly half that time is spent offline in Word and PowerPoint, organising photos, watching films and playing games. The rest is spent online. So central is the internet to peoples lives that a third of Brits claim they couldnt live without it10. In fact, collectively, we are living with it more every day. In 2009 the average time spent online per day was 41 minutes; within a year it had jumped 20% to 52 minutes11; by the start of 2012 it was 1 hour 12 minutes or 36 hours a month12. Mobile will drive this stat into the absurd and well soon be online more than were awake. It will be like saying how long an average 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 some information, research and buy some stuff, check his bank balance, pop onto Facebook while listening to some music he downloaded, then game for a while before discussing it on a forum and finish up the day telling a mate on Skype how he sold something on eBay for a hefty profit, he would pretty much have exactly summed up British online activity in decreasing order of frequency. Heres a more thorough breakdown:

UKOM: http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/ GB TGI Net Q4 2009, December 2009 UKOM, December 2009 12 http://www.zdnet.co.uk/blogs/tech-tech-boom-10017860/brits-top-internet-addicts-league-in-europe-10025436/ (36 hours divided by 30 days = 1.2 hours per day. 0.2 of an hour is 12 minutes.
10 11

13

Although average time online and frequency is instructive in the broad sense, its a white rainbow, a bland average masking the colourful nuances. Lets break it down, ladies first. Women drive the digital mainstream Globally, there are fewer women on the internet than men, but they spend more time on it. In the UK, women have overtaken men online (51.3% vs 48.7%)14 and reflect the broader pattern of heavier usage, spending about 8% more time online15. For UK housewives specifically, nearly half of all their leisure time is spent online16. Two major activities account for this. The social sex Globally, women spend 30% more time on social networks than men17 a figure that has held constant into late 2011 with European women clocking up 8.2 hours a month on social networks versus men who register at 6.318. There are also more of them on social networks. In Europe 81% of men use social networks, trumped by women at 86%, a pattern that holds out for all regions. Its also good not to forget the less sexy but fundamentally central role of email and instant messaging, both activities where women talk men under the table on a global scale19.

13 14 15

Digital Trends Winter UK December 2011, Mintel Estimated data from http://www.emarketer.com/Reports/All/Emarketer_2000391.aspx ComScore, July 2010 16 http://news.bbc.co.uk/1/hi/technology/7789494.stm 17 ComScore http://bit.ly/YifIW 18 http://www.comscoredatamine.com/2011/12/women-spend-more-time-social-networking-than-men-worldwide/ 19 ComScore http://bit.ly/YifIW

The shopper of the species Globally, women spend 20% more time on retail sites than men20. Women buy more often than men, accounting for 59% of purchases on European websites (53% in the UK), but dont spend as much as men when they do. While European men spend 93.12 euros on an average web purchase, women spend 68.65 euros21. In the US, women buy more often than men too, but end up spending more. US women make up just under half of the internet population but generate 58% of e-commerce dollars22. The traditional digital woman Unsurprisingly, community, lifestyle and health sites especially around parenting, food and home continue to get more ladies dropping by than men23. British women are also nosier than their men, with 14% of wives reading their husbands emails and 10% checking their browsing history, (those figures for men are 8% and 7%, respectively24.) Clearly, technology has neither got in the way of mens sexual proclivities nor the orbiting suspicions of women. Women defy digital expectations So far weve seen nothing a casual bit of stereotyping wouldnt spit out. But there are some surprising findings which armchair bigots might not guess. Game birds Yes, cars, sport and a lot of high finance are still male-dominated but in personal finance and financial advice women have the edge, both in numbers visiting 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 and trivia games while the genres of action, adventure and sports are typically favoured by young guys. Leading the charge in gaming for the girls are the over 45s 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 21 22

ComScore http://bit.ly/YifIW http://www.internetretailer.com/2011/03/28/european-women-shop-more-often-online-men-spend-more ComScore http://bit.ly/YifIW 23 ComScore http://bit.ly/YifIW 24 http://www.networkworld.com/news/2010/052410-women-more-likely-to-snoop.html 25 ComScore http://bit.ly/YifIW 26 ComScore http://bit.ly/YifIW

Bad girls For example, porn slides in above the already-popular health, clothing, and family and parenting sites in overall global usage for women. Some 34% of ladies admit to using adult sites, while for men its 46%27. And given the obvious methodological problems of asking people whether they get their kicks from commoditised, choreographed human flesh, its probably safe to give a Viagra to those percentages. Other studies show British women are especially prurient. Six out of 10 women say they watch porn online28 and an alarmingly high 17% of women describe themselves as addicted29. Girls gamble Gambling is pretty much a parity sport too. About 7% of adults fritter away their cash online and women are, in fact, more likely to visit some gambling sites than men (e.g. lotto and sweepstakes)30. Being geeky Maybe most surprising is that global reach across all ages for technology sites doesnt vary that much between the sexes, although men spend more time there. Women may be geekier for less time but theyre still being geeky31. Watching less When it comes to online video, although reach is the same as men, women watch a lot less video, especially in the UK. Men spend nearly 20 hours a month watching, women barely reach 10 hours32. One clue to whats going on here 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 fulsome show or film length video, women are snacking from YouTube. Searching less Women also search less than men33. One theory to explain this is that while men might be employing more of a direct, hunter-style strike to pin down

27 28 29

ComScore http://bit.ly/YifIW http://www.guardian.co.uk/culture/2011/apr/07/women-addicted-internet-pornography http://www.internet-filter-review.toptenreviews.com/internet-pornography-statistics-pg6.html 30 ComScore http://bit.ly/YifIW 31 ComScore http://bit.ly/YifIW 32 ComScore http://bit.ly/YifIW 33 ComScore http://bit.ly/YifIW

information, women are using their 30% more time on social networks than men34 to shortcut the searching process by asking friends first. Dolls and dollars With the exception of mobile (see later section), women are the backbone of the internet: buying, chatting and playing, in innocent and not-so-innocent ways. To brands, the cleavage between social and spending should be attracting a lot of attention therein lies enormous opportunity. Digital blokes Porn, tech and sport; thats all that needs to be said about men online, isnt it? Not quite. The picture is a little more nuanced. If women are nurturers putting more time into maintaining social networks, searching less and getting information from their friends men are the information and entertainment hunters. Information, information, information Finding, storing and writing information. Thats what the men like to do. Men search more than women (71.6 searches per searcher per month for men vs 64 for women, US base35). When interacting with brands in social media, 36% of men claim information is their primary goal, while for women its 28% 36. Theyre also more likely to make use of browser bookmarking than to search again37. And finally, its the men making Wikipedia. Barely 13% of Wikipedias contributors are women38. Watching, learning, listening In terms of entertainment, the most popular activities for British men online are watching video (51% vs 42% of women), visiting chat rooms/message boards/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 women spend more time in social media overall, men outnumber them on this specific sector of social media, arguably because boards like this allow men to be much more specific in their information gathering.

34 35 36

ComScore http://bit.ly/YifIW ComScore http://bit.ly/YifIW Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct 37 Lightspeed Research 2009 http://www.iabuk.net/en/1/mensactivitiesonline.html 38 http://www.nytimes.com/2011/01/31/business/media/31link.html?_r=3&hp=&adxnnl=1&adxnnlx=1296491313-Gb/z5Xc+t9PSsze7krGSRg

Sport, cars and tech Around 40% of the global online male population read about sport online39,40, with women not far behind at around 35%. However, men are considerably more engaged spending nearly twice as much time on these sites41. When it comes to cars its a similar but less marked story: between 25% and 35% 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 time men do on these sites42. Technology is different. Apart from a small male lead in reach at the younger ages, around 55-60% of the sexes go to technology websites, with women only spending about 10% less time there43. The common assumption that tech is for the boys is just not supported by the data. Male preference for e-tail but overall still prefer a real shop 35% of men prefer e-tail to real shops compared to 29% of women44. Thats interesting because, although there is a slight male preference, most people prefer going to real shops. There are obvious reasons for this: you can touch and try in real shops and theyre a richer experience. Nevertheless, this preference suggests interesting user experiences that bridge the on- and offline worlds for both sexes. What are they buying most? Men may prefer to use online shopping more than women but they fall short of women on nearly all types of online shopping, only overindexing slightly on insurance and flights (they clearly like to get their oar in on the serious purchases) and, surprisingly, aligning on tech. A list of the most popular major online male purchases looks like this45:
39 40 41

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%)

ESPN 2009 http://www.iabuk.net/en/1/toptipsfortargettingmenonline.html http://www.marketingcharts.com/direct/women-encroach-on-male-sites-13840/comscore-online-women-sports-sites-august-2010jpg/ ESPN 2009 http://www.iabuk.net/en/1/toptipsfortargettingmenonline.html 42 ComScore http://bit.ly/YifIW 42 ComScore 43 ComScore http://bit.ly/YifIW 43 ComScore 44 http://oxygen.mintel.com/sinatra/oxygen/search_results/show&&type=NSItem&class=News&sort=recent&display=abridged&page=1/display/id=574641 &anchor=574641 45 Digital Trends UK, Spring, Mintel

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%)46

The connected child For most of todays children the internet is like air: its just there and always has been. Its also everywhere: in the bedroom, in school, in their hands and even in their games console. However, theres still a wealth gap that needs to be closed before all children have internet access. Most online, most gaming Over 90% of children have internet access at home and the majority also use the internet at school47. The average 7 to 10-year-old now spends around 8 hours a week online, climbing to 18 hours a week for 11-14s and 24 hours a week for those aged 15-1948. To repeat: teens are spending nearly half the time most people spend working per week just being online. What are they doing? As much as 70% claim that gaming is their most common online activity49, equating to 5 million regular young gamers. Poor kids left behind While the breadth and depth of the internet for Britains 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 an
46 47 48

Digital Trends UK, Spring, Mintel Youth TGI as cited by MediaTel, November 2010 Youth TGI as cited by MediaTel, November 2010 49 Survey commissioned by Disney as cited in "Next generation Media", Intelligence, Aegis Media, January 2010 50 http://www.guardian.co.uk/technology/2010/dec/28/uk-children-home-computer-access

10

attainment gap not just in computer literacy but also in all the attendant benefits being connected brings. Growing up smart Children are being brought up bathed in bits. Nearly half (41%) of 12 to 15year-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. The phrase digital natives isnt too far off. Its 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 a games console51. Among 12 to 15-year-olds this rises to 35% owning a smartphone52. To give that its context, smartphone penetration in the UK is estimated to be around 45% in 2012. In other words, the kids arent far behind before theyve even done their GCSEs. Deep digital And digital life is much more of their life. Rather heart-wrenchingly, 45% said they were sometimes happier online than in their real lives53 and, while this could be that they just have more fun playing games online than sitting uninspired in a classroom or being told to finish their plates, it does point to the depth of relationship the coming generation has with the internet. So strong is this relationship that among children aged 12-15, television is no longer the media most would miss were it to be taken away. Instead 26% now say theyd most miss their mobile, while 24% say the internet 54. Half of children say they would be sad and 10% saying theyd be lonely if they didnt have an internet connection55. Whats interesting is that there are only a few percentage points in it: television still holds a very strong appeal. Anyone saying TVs dead for the younger generations shouldnt. And we should be careful about following this fact into the future. Actual television viewing might decrease and the kids might say theyll miss it less if its taken away but the amount of television content watched probably wont

51 52 53

http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/ http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/ http://www.kidscape.org.uk/events/saferinternetday2011.asp 54 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

change; it will just be seen on different devices. Its the word television thats going to go out of fashion, not the shows on it. Social from the start Over half (54%) of children aged 8-15 who use the internet at home have a social networking profile56. As for Facebook, 44% of 8 to 13-year-olds are on it and 66% of six-year-olds are aware of it57. A quarter of children with a smartphone say that they regularly visit social networks on their phone58. Silver surfers Catching up Internet users over 65 are a relatively small group, accounting for only 6.1% of the UK online audience in March 201159. That said, theyre the fastest growing age bracket. In 2010 in the UK around 35% of over 65s had broadband60. The poor A bit behind If you breakdown the internet population by socio-economic group there is a robust pattern: poorer people have poorer internet penetration.

56 57 58

http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/ http://www.thedrum.co.uk/news/2012/02/07/survey-find-larger-percentage-uk-children-using-facebook-us 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

61

The good news is that the less affluent are catching up fast at 13.4% since 200962, a slowing down on the previous rate most readily explained by the recession and increased vigilance over discretionary spend. Interaction with advertising Click deflation Between 2004 and 2009 click-through rates on online adverts fell precipitously to 0.07%. Now, only one ad in 1500 is clicked63,64. The decline is charted below:

65

61 62 63

Researching Purchases Online UK April 2011, Mintel Kantar as cited by MediaTel, June 2010 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1 64 Mad Men are watching you http://www.economist.com/node/18651104

13

Retargeting However, all is not lost in online advertising. Have you ever seen an ad online that reminds you of something you were doing a few days ago on a site? Thats because when you went to that site it dropped something called a cookie onto your machine. That cookie was just a record of what you looked at. The ad you got served was uncannily related to the stuff you were looking at because your computer is telling it what you were looking at. This is retargeting and it is enjoying 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 targeting Ever been on a site and seen an ad that seems to be on exactly the same subject as the page youre on? This is contextual targeting and is six times more effective than the industry average, enjoying 0.45% click-through rates67. And contextual targeting is cheaper. In fact, you get five times the clicks as retargeting at around half the price68. Summary In short, the internet is getting wider, flatter and deeper. More people are getting it. The demographic differences are being ironed out. And were spending more time on it from childhood right through to old age. That said, there are important differences in usage, from womens social and spending habits to mens information and entertainment addiction to childrens increasing internet and mobile immersion. The way people interact with advertising is changing too: we are no longer as interested in the general, the personalised and contextual grab us a lesson many brands simply dont yet know.

65 66 67

Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1 68 Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1

14

The new internet

2011 was an important year for technology. A critical inflection point was reached: the number of mobile and tablet devices shipped exceeded the number of PCs shipped69,70. We are moving into a post-PC era. Theres still going to be a role for the trusty desktop powerhouse but increasingly we will be accessing the internet through new devices. The fresh faces and the app economy Most 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 to view existing sites on these devices and in the arrival of the app, a software program for mobile devices fusing internet functionality with all the tricks powerful phones have up their sleeves. We will look at mobiles, tablets and apps in more detail in later sections. Whats on the horizon? But there is also increasing connectivity elsewhere. The next technology battleground will be in TV. 350 million internet-enabled ones are expected to be sold worldwide by 201572. Expect serious disruption, mostly likely brokered by Apple. Shows will change as the internet invades them and they outsource elements to it. Ads and product placement will become interactive. Gaming is the best place to look for an indication of whats to come, as even back in 2009 video game consoles accounted for 52% of living room kit with broadband73. But the real fun begins when all these devices talk to each other in interesting ways. Mobile, tablet, TV and traditional PC-like devices will all work together in the future, pulling shows, music, work, games and so on from the cloud74 on
69 70 71

http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011 http://www.engadget.com/2012/02/03/canalys-more-smartphones-than-pcs-shipped-in-2011/ This is not to say Apple invented these devices. They didnt. However, they did create the markets which saw them become popular and competitors ape them. 72 Parks Associates, January 2011 73 Worldwide data, http://www.isuppli.com/Home-and-Consumer-Electronics/News/Pages/Xbox-360-PS3-Vie-to-Win-Digital-Connected-HomeBattle.aspx 74 As a reminder, the cloud refers to the collective processing and storage power available on the internet and which less powerful and storage-rich devices, like mobiles, can tap into.

15

the internet. And it will go the other way too: interactivity will flourish. Visionaries will create entirely new engines for storytelling that combine all this in ways that are hard to imagine now. Beyond that, new devices will be brought into the digital world. Nike has already shown the promise of this with Nike+, a chip that goes in runners shoes and communicates information like speed and distance to their iPod, and Nike FuelBand, a wristband that captures your activity throughout the day. Currently there are 35 billion devices that connect to the internet. Its a lot but its just the start. Its entirely plausible and likely that our heating, water, fridges, bikes and so on will connect up. Lets start with mobile.

16

17

Mobile
Mobiles are cementing themselves further into our lives. We use them more often 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 so much upheaval. Catalysed by bounds in hardware power and miniaturisation, new phones can now run a vast array of programs, called apps, creating a huge new virtual economy and a dizzying range of new tools for living. In Apples pioneering wake, others follow, most notably Google whose mobile operating system looks set to become the winner by share but not quality of experience. For brands the opportunities are staggering, as mobiles become a magical bridge between customers and companies.

18

The British mobile market

The noble traditional mobile Ubiquitous except in certain pockets Mobile penetration in the UK has been above 100% since 200475 because many people owned more than one. However, splitting apart demographics to reveal true ownership shows that the young and old still underindex. For example 40% of 7 to 10-year-olds own their own phone. This rises to 90% for 11 to 14-year-olds76 and 97% for 16 to 19-year-olds which holds steady until 50 to 59-years-old when it dips back to 90% and then dips to 60% for 60+year-olds77. An increasingly fundamental role Whats 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 are contactable at all times, even in their sleep78. And, as mentioned already, for children aged 12-15, television is no longer the media most would miss were it to be taken away. Instead 26% say theyd most miss their mobile 79. It may be slight at the moment but its an indicative trend. A fundamentally increasing role And traditional mobile phone usage isnt slowing down either: 1.4 billion text and 10 million picture and video messages are sent every week in the UK, up 30% since 200980. Of course, this doesnt speak to the huge number of new uses on offer from the latest breed of advanced phones, the smartphone.

75 76 77

Guardian http://www.guardian.co.uk/business/2010/jan/01/25-years-phones-transform-communication Youth TGI as cited by MediaTel, November 2010 http://www.csu.nisra.gov.uk/Mobile_phone_ownership_by_sex_and_age_Trend.htm 78 OTX Research, March 2009 79 http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/ 80 The Mobile Data Association

19

Slick smartphones Extreme ramping The 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 units moved in 201081. This is mirrored in the data demands the networks are feeling. In 2010 global mobile data consumption was 2,844 petabytes. By the end of 2011 it had doubled to 7,164 petabytes82. Thats enough to fill about 240 million iPods83. In 2011 in the UK 27% of adults (13 million) owned a smartphone84, which represents a rocketing of 70% since 200985. If you cut this by the number of people online, smartphone ownership is more like 54%86. A coming mass market The conditions are perfect for even more accelerated growth. For a start networks 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 demand for new functionality beyond just voice. Combine this with an extrapolation of the current growth rate and smartphones are a hard technology to ignore. Its estimated they will account for 65% of all phones in Europe by the end of in 2011, 77% by 2012 and 82% by 2013 87. Were looking at a technology that will be mass very shortly. Whos got all the mobile internet? As you might expect, mobile internet declines gracefully as you approach old age and is used just a touch more by the men, as befits traditional technology adoption. Lets look at it in detail:

81 82 83

http://trak.in/tags/business/2012/02/08/smartphone-market-share-2011-12/ http://www.ispreview.co.uk/story/2012/02/14/cisco-vni-report-shows-huge-surge-in-mobile-broadband-data-traffic-during-2011.html 32Gb version 84 Note that 45% have gone online in 2011 with a mobile, the difference is that the remaining 18% arent using a smartphone 85 Comscore as cited by Cellular News, March 2010 86 Comscore as cited by Cellular News, March 2010 87 Carphone Warehouse/Gartner, February 2010

20

88

Kids already ahead By some sources, children are already overindexing on smartphone ownership versus the rest of the population. Many have better phones than the average punter. 18% of 5 to 15-year-olds own a smartphone, while among 12 to 15year-olds this rises to 35% owning a smartphone89. In a broader sense, the young are heavy mobile internet users: 40% of 16 to 34-year-olds go on the internet through their phone at least once at day90. Here come the girls Women havent cornered smartphones yet, as they have with the social and spending corners of the internet. In Europe the skew is 63:37% in mens favour. This is probably due to a mix of factors: men adopting earlier, having more phones paid for by employees who see benefits to advanced functionality and greater male earning power. The good news is that the balance is being redressed, with women strutting from 18% penetration in 2010 to 39% in 201191. The mummy effect Interestingly this adoption may be in part driven by motherhood. In a US study of 5,000 mums over half (53%) said they purchased their smartphone as a direct result having a child. Having a baby brings with it a flurry of feature
88 89 90

Researching Purchases Online UK April 2011, Mintel http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/ Researching Purchases Online UK April 2011, Mintel 91 http://www.ons.gov.uk/ons/dcp171778_227158.pdf

21

reprioritisation. The camera becomes even more important than the address book and text messaging, jumping to the most important feature for stills and second most important feature for movies. Apps, which were never a factor before motherhood, jump to number three on the list of top functions. Nearly a quarter of the apps they have are for their children92, for example games, language learning and interactive childrens story93. Whos using what? Beware of the industry As people who work in marketing, we should be very aware that our phones are not reflective of the population as a whole. For instance, iPhone makes up around 9% of all UK phones while 30% still use Nokia94. Whos winning the smartphone wars? Android is Ford Android is the fastest growing mobile operating system in the world 95, ramping exponentially to 300 million handsets globally by February 201296, giving it a global share of 52%97. In the UK it accounts for 34% of smartphones98. Right now, 700,000 Android devices are being activated every day globally99. Not to miss the chance for a comparison involving Wales, thats the equivalent to double all the people in Cardiff switching to Android every day. Phenomenal. The exponential rate of growth can be seen in the chart below:

100

92 93 94

http://www.babycenter.com/100_press-release-mobile-mom_10349212.bc http://www.apple.com/uk/iphone/apps-for-everything/momsdads.html 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-speech 96 https://plus.google.com/u/0/112599748506977857728/posts/Btey7rJBaLF 97 http://www.pcmag.com/article2/0,2817,2396404,00.asp 98 Mintel Digital Trends Winter 2011 99 http://techcrunch.com/2011/12/22/android-700000/ 100 http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011

22

Apple is BMW While Apples iPhone paved and will probably continue to pave the way, its market share gains are slowing down101. Its useful to think about Apple like the BMW of the smartphone market, while Android is the Ford: Androids looks set to be the affordable mass market smartphone whereas Apple will secure a smaller share with higher priced102, more stylish products on which they make deliriously 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 end of Apple devices for brands. Bye bye Symbian Symbian, the platform that sits under Nokia phones, will likely die. By 2015 its estimated global market share will be a woeful 0.1%. Nokia and Microsofts recent alliance to develop hardware and software respectively is their way of addressing the brutalisation of their share by the two Californian behemoths. Estimates for Microsofts mobile OS share settled at around 11% for 2012, at the end of 2011 they were less than 2%104. Strong BlackBerry And finally theres BlackBerry, which has strong mobile and tablet propositions but 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 market looks like this:

101 102

http://www.strategyanalytics.com/ Apple's share of the mobile phone industry profits is nearly 60%, http://www.macrumors.com/2011/05/17/apples-share-of-mobile-phone-industryprofits-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=3333519 105 http://www.telegraph.co.uk/technology/blackberry/9050236/BlackBerry-UKs-No-1-smartphone.html

23

106

106

http://www.gartner.com/it/page.jsp?id=1622614

24

What are people doing on them?

Smartphone usage by activity The average smartphone owner uses the actual phone only about 40% of the time. 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. Lets look at these in a little more detail. Still searching Search [on phones] is not where its at said Steve Jobs, Apples late boss, in 2010. Ever the salesman, he was putting forward a case for apps on mobiles as a way of getting stuff done rather than search. Steve was wrong on this one. Google own mobile search Mobile search engine traffic has seen an increase of 247% in the past year109, comparable to the early days of desktop search in Googles history. Yet Googles formidable monopoly is even more pronounced in the mobile search
107 108 109

Mary Meeker Report, April 2010 KPMG as cited by eMarketer , December 2010 Digital Strategy Consulting, October 2010

25

market: it serves 98.29% of mobile search queries globally, followed by Yahoo with 0.81%, Bing 0.46%, other sites who squabble over the remaining 0.46% of the crumbs110. Mobile search is different Search on mobile is not like search on a PC. Smaller screens force a smaller selection meaning its even more important brands stand out in search or even before the search is made. For example, mobile searchers simply dont drill past page one111. If you dont feature in the right places for the right searches, you dont exist. Mobile search engine optimisation (SEO) will become its own very important subfield. Searching for the brand However, given that searchers on mobile are twice as likely to search for a brand name as when searching from the desktop it would be ideal for a brand to be in someones head before a search is made. This means good old fashioned branding is arguably more important than ever. Expect to see Increased mobile searches for brand name popping up in big brand building TV ad effectiveness models soon. Android owners doing more browsing than Apple There are also some interesting differences within mobile users. Androiders browse more on their phones than Applers112. The reason? One, the apps are better on an Apple device, obviating a lot of browsing. Two, Android users are probably more techy. And three, there is a large search box on most Android phones, shortcutting straight to search. Theres a device bias to browse. Websites The website still central A bit of eavesdropping on certain quarters of the internet and youd be fooled into thinking youre non-existent if you dont have an app for people to interact with you on mobile. Not true. Websites still play an enormous role. The average smartphone user will visit up to 24 of them per day113.

110 111 112

Stat Counter as cited by Pingdom.com, July 2010 ComScore, September 2010 Mary Meeker Report, April 2010 113 http://www.mobiadnews.com/?p=5133

26

But poor experiences common The vast majority of these are traditional websites, not mobile-specific ones. That doesnt express a preference at all, just the status quo. And its a bad status quo. People expect a faultless experience regardless of the channel and what theyre getting on mobile is very different. 83% of people experienced problems trying to buy something through a site on a mobile 114. To brands the green light of opportunity should be going off to out-experience the competition. Apps Wired, a technology magazine, announced at the end of 2010 that The Web Is Dead. Long Live the Internet115. Their conceit was that theres more to the internet than web pages on computers: there are apps. At the same time Fast Company, a business magazine, ran an article which argued the economics of apps arent sustainable, users dont even use them that much and there are so many now its easier to head elsewhere, the browser and search. Who is right? As a brand investing money in creating an app or updating a site to be mobile friendly this is a vital question. Lets first untangle the different articles. The web is not dead, and neither are apps For one, the web isnt dead. Its still growing exponentially. Wireds graph showing web traffic dwindling is deceptive for reasons well footnote116. And as for the Fast Company, apps are economically viable, they were just looking at it wrong (again something well footnote117), frequency isnt always the right way to measure success (you wouldnt measure the usefulness of a bike pump by the number of times you used it) and yes, theyre hard to find sometimes, but that is simply innovation getting ahead of organisation.

114 115 116

The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/ http://www.wired.com/magazine/2010/08/ff_webrip/all/1 The vertical axis is relative, not absolute, cunningly smoothing out the webs actual exponential growth. Next is that their chosen unit is bandwidth; of course video badwidth has got bigger, quality is improving all the time. Time spent would be a more useful indication of behaviour. And finally they clumsily split things that cannot be split: for example, iPlayer and YouTube are both web and video 117 They cite a study that calculates average app revenue. Averages are only useful when data are spread equally. Some people have got very rich from making apps, others have made a loss. On average, the amount is positive but low. Nevertheless, developers are irrational and will continue to chase that 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 celeb income 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 invisible hoard 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

To app or not to app? So theres some poor/sneaky presentation of data bad Wired and some oversimplifications naughty Fast Company. Our view: as mobile internet is only going to get bigger, brands should have a reasoned presence there. But fretting 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 go with, if it even needs to be a mutually exclusive choice. For example, mobile sites are accessible by search, on the brands own terms (not subject to Apples 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 phones full functionalities making them perfect for providing branded utility and entertainment that is likely more than a one-time thing for people. Location, location, location 40% of Google Maps usage is now from mobiles. Over New Years Day 2011, mobile usage of Maps surpassed the desktop a first for Google products118. Although this could represent low information needs and high navigation needs for this particular time (youre not interested in the news, youre interested in getting back from the in-laws) its still instructive to see the importance of location to the mobile experience. In fact, 26% of people regularly use the maps on their phone; this rises to 63% for iPhone users 119. For brands this means getting basics like appearing on Google Places right through to sprucing up their mobile search strategy, to tap into local search phrases as well as taking advantage of Googles Mobile AdWords which can target a specified radius around a place with an ad. Watching on the go Increasingly TV isnt watched on a TV A third of British television viewers now watch shows on their computer and mobile. Globally, around 11% watch video on their mobiles120, in the UK thats an 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-mobileand-there-are-150-million-mobile-users/ 119 http://econsultancy.com/uk/blog/7645-ten-ways-brands-can-use-location-based-marketing 120 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

Increasingly what is watched isnt TV 13% of the videos watched via a mobile globally are from YouTube where until recently TV shows didnt exist122. In January 2011, YouTube delivered 200 million views a day through mobile, a tripling on the previous year123. By the end of 2011, it was 400 million views124. Although iTunes technically caters for more than phones and mostly to Apple products, its useful to see the scale of downloads. At the end of 2010, iTunes had delivered 450 million TV episodes and over 100 million movies to iPod, iPhones and iPads125. Thats not including video podcasts either, which will make up a good segment. A shoppers best friend Touch and go Commerce and mobile are knocking into each other in ever more interesting ways. At the most basic level phones can be used as intelligence gathering devices when in the field. In 2011, 95% of smartphone users had looked up local information, 88% had taken 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 price comparison 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 they knew how127. Barcode democracy A number of services that allow an items barcode to be scanned while in the shop are shortcutting the process of painstakingly typing something in. This allows for real-time price comparison and is offered by well-known retailers such as Tesco and Amazon. More recently, SearchReviews, a consumer review aggregator, has introduced a mobile app for both Apple and Android handsets through which consumers can 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 is largely uploaded to the site. 123 YouTube blog, http://youtube-global.blogspot.com/2011/01/music-videos-now-on-youtube-app-for.html 124 http://articles.businessinsider.com/2011-12-01/tech/30462152_1_total-views-youtube-android-phones 125 Apple, September 2010 126 US basehttp://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 127 Researching Purchases Online UK April 2011, Mintel

29

At the moment this is the preserve of the young, as older shoppers havent got around to figuring out their phones capabilities yet and struggle with the small screens. Buying on the go The next level up is to use the phone to buy something, a feat 21% of UK smartphone owners have claimed to do128. However, this figure is likely skewed by purchases of apps. Another study showed 8% bought something using their phone in 2011129. Each month in the UK, 4.2 million consumers are visiting retailers websites using their mobiles130 accounting for 3.3% of all ecommerce131. As we saw earlier many are dissatisfied with their mobile web experiences132. This, coupled with the clear level of demand for information delivered in this fashion, should galvanise brands into developing world-class mobile experiences now. Goodbye wallet Benjamin Vigier is an expert in near-field communications (NFC), a short-range wireless technology that lets two objects talk to one another. Applications include contactless payment for goods. Why is the relevant? Because Apple hired Vigier towards the end of 2010133 and, given the companys record in defining the tech agenda, it indicates that soon we may see smartphones replacing cards and cash134. Some brands are already mobilising. McDonalds, for instance, is in the process of kitting out its 1,200 UK branches with proximity payment cards which will allow payment through a simple wave of the card or NFC-enabled phone near the till. Barclaycard, Orange and Samsung are there together too, having launched Quick Tap, a contactless payment system based on Samsung Tocco mobile phones.

128 129 130

KPMG as cited by eMarketer , December 2010 http://econsultancy.com/uk/blog/8226-mobile-commerce-in-the-uk-stats-round-up GSMA & ComScore, August 2010 131 http://econsultancy.com/uk/blog/8226-mobile-commerce-in-the-uk-stats-round-up 132 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-payments 134 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 section below). Given the penetration and growth of Apples mobile offering this could open a vast new revenue stream for the company.

30

An advertisers best friend Retail mobile search ramping Total mobile search quadrupled in 2011 (vs 2010) according to Google and within that mobile retail search traffic soared by 181%. Mobile searches now account for 11% of total retail searches135. Advertising drives mobile search The interaction between advertising and mobile phones is clearly established but applied rarely. 71% search on their phones as a direct result of exposure from traditional media (68%), online ads (18%) or mobile ads (27%) (US base)136. Yet there is little to encourage people to do this as customer journeys are currently woefully siloed to specific media, even though this does not reflect the realities of media use. Advertising drives leads and purchases Eight 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 a website (35%), making a purchase (49%) or recommending a brand or product to others (24%)138. And those ads with the highest click-through rate are those that blend with the phones functionality best. For example, Google mobile ads with the click to call feature, which makes a number immediately callable, have a 6-8% higher click-through rate than those without this feature139. Closing the gap to purchase One can imagine how further retail functionality could be pulled through the keyhole (e.g. clothes size, table reservation or even purchase) making it easier for people and beneficial to the retailer. Touching others A quarter of British mobile phone users in the UK use their handsets to access social networking sites and blogs140. But its the rate of growth thats astounding: in March 2010, 4.4 million people accessed social media sites or
135

For that quarter, http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retailsearch/ 136 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 137 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 138 US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 139 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues 140 ComScore MobiLens, July 2010

31

blogs through their mobile phone almost every day. A year later, it increased by 80% to 7.9 million mobile users accessing social media almost every day141. As the pre-eminent Western social network, Facebook leads the way on numbers for its mobile platform. There are more than 425 million active users currently accessing Facebook through mobile devices and they are twice as active as non-mobile users142,143. Its been estimated that a third of all items posted to the network are from mobile144. For Twitter its higher: 40% of the content 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 and reaches a peak at 4.30pm146. The top occasions can be seen in the following chart:

147

Its not just when we use it but where thats interesting too. 35% of people fire up apps before theyve even got out of bed148, 39% use it in the loo, 33% while watching TV, 22% while reading the newspaper149 and 70% while

141 142 143

comScore Media Metrix, 9th May 2011, http://www.comscoredatamine.com/2011/05/mobile-social-media-usage-up-80-percent-in-the-uk/ http://www.facebook.com/press/info.php?statistics 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=5133 147 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

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 usage Across Europe there are a number of differences that emerge when you examine sex and age. For example, on the chart below the higher the bubble the more likely girls are to do it. The further right you get the more likely its an older persons activity. So, young women arent using apps that much but theyre doing a lot of social networking.

Figure 1 comScore MobiLens; demographics of mobile activities for EU5 (FR, UK, GR, SP, IT), March 2010

150

http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html

33

The app economy explained

What are apps? Software on a mobile An app is simply a program running on a phone, just like a program youd run on a desktop. Instead of taking it from a disc, like you would a PC program, you can download it directly from an app store, essentially a website hosting the apps. Limited but liberated However, because of phones physical limitations screen size, graphics processing, 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 its at or what its picking up through the camera, ushering in a wave of innovation. In the future, phones may be able to read our gestures 151 and even facial expressions152. Outsourcing innovation One of Apples moments of genius in marketing the app, was giving the option to anyone with an idea and the inclination and ability to create their own app and list it in the app store, subject to Apples fierce approval process. Now anyone a multinational brand or teenager in his room can make an app. And they have in their hundreds of thousands. The app economy Who are the players? Apple and Google. There are others, but their impact is dwarfed by these two players. Apple got it right first. While iTunes impressively and fundamentally reordered the music market, the app markets popularity left iTunes in the dust.

151 152

http://techcrunch.com/2011/05/18/gilt-tastes-ipad-swipe-without-touching/ http://www.pcworld.com/article/228151/smile_to_unlock_iphone_app_uses_facial_recognition_to_secure_your_phone.html

34

Figure 2 iTunes fundamentally reordered the music market, but the app stores growth leave it in the dust. KPCB and Apple.

However, Googles app store, while less easy-to-use, is now growing faster. While its almost pointless stating the raw numbers as theyll be out of date within weeks of writing them, the Google app store (formerly Android Market, renamed Google Play in 2012) currently has 450,000 apps, which have been downloaded 10 billion times. Apples store has 500,000+ apps and, in March 2012, had 25 billion downloads. Although there are other players, its these two that lead the pack in terms of app usage, as the chart below shows.

Figure 3 Installed base vs app downloads, iOS and Android way ahead

35

App store economics 30% of revenue from apps on both the Apple App Store and Google Play go to 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 a cost. Google Play on the other hand, largely because there is no vetting in the submission process, is mostly comprised of free apps (around 60%), while 40% 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 Store is worth $7.08bn. To give that context RIM (BlackBerry), is worth $7.04bn. App economics Combined app store data (Apple App Store for iPhone, BlackBerry App World, Nokia Ovi Store and the then-named Google Android Market) show over the course of 2010 there was a shift to lower price tiers, with the $1.00 to $1.99 segment seeing the most growth154.

What apps are most popular by download?

153 154

AndroLib and 148App.biz, www.pingdom.com (August 2010) data Distimo Research

36

Data from the US shows how the app store can be broken out by popularity of category. Games, books and entertainment lead the pack155.

156

The most downloaded apps of all time are as follows. Just look how popular simple gaming and the social stuff is: PAID 01. Angry Birds (games) 02. Fruit Ninja (games) 03. Doodle Jump (games) 04. Cut the Rope (games) 05. Angry Birds Seasons (games) FREE 01. Facebook (social networking) 02. Pandora Radio (music) 03. Words With Friends (games) 04. Skype (social networking) 05. The Weather Channel (weather)157

App usage
155 156 157

http://www.mobclix.com/appstore/1 http://www.mobclix.com/appstore/1 http://sg.news.yahoo.com/25-billion-downloads-most-popular-ios-apps-145333092.html

37

While the app markets of Google and Apple are impressive and both companies like to market the numbers repeatedly to prove the extra value in their ecosystems, its worth digging deeper into usage. Its not just whether they have a smartphone, its if they download The average number of apps US adults have is 18158 but only 68% of those who have a phone with apps actively use them159. Older phone users in particular do not use the apps that are on their phones, and one in ten adults with a phone (11%) are not even sure if their phone is equipped with apps160. Its not just if they download, its what they use Added to that, even after downloading them people dont use apps. Across Android, iPhone, iPad, BlackBerry and Windows Phone 7 apps a quarter of apps downloaded were only used once161. While its entirely possible that the one use was enough (and in the context of brands the one go on an app may be enough to meet an objective), its much more likely that this represents the long tail of apps gathering dust. Smartphone penetration not indicative of smartphone usage As a result of stats like these, we should be careful not to equate penetration with 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.

158 159 160

http://pewinternet.org/Reports/2010/The-Rise-of-Apps-Culture/Overview.aspx US base http://www.pewinternet.org/Media-Mentions/2010/Report-Relatively-few-people-use-cellphone-apps.aspx 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

39

Tablet
Tablets are taking the world by storm. Even Steve Jobs was surprised by their success 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 but on fast-forward. The iPad and its myriad competitors are finding a mass audience quicker than pretty much any device in consumer tech history. Even the Queen has one now an indication of the much broader market Apple has drilled into. And while they tout portability, its the home theyre being used in, replacing the book in bed. Welcome to the age of casual computing.

40

The tablet market

How big is the tiger? iPad the fastest selling Apple device. Ever. According to Apples data its the fastest ramping device in terms of global shipments 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.

162

By 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 so startling that nobody predicted it, not bullish Wall Street analysts (Goldman Sachs predicted 6.2m sales164 in year one) or even wide-eyed gassing bloggers. The accelerated world The accelerated adoption curve is worth dwelling upon. One explanation is that we are in a point in technology history where were shifting to a new computing paradigm and while everything will plateau out in a few years, until the next step change comes along, were experiencing heady growth for the moment. Were getting drunk on new gadgets and the gloomy hangover is coming.
162 163 164

http://aaplinvestors.net/stats/iphonevsipod/ http://www.apple.com/pr/library/2010/07/20results.html http://techcrunch.com/2011/01/19/nobody-predicted-ipad-growth/

41

Or, and this seems more compelling, were looking directly into the face of our accelerated world, where theres more technology change occurring more frequently and reaching more people faster than ever. Tech companies must be rubbing 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 a slice, with Google eventually overtaking will likely be repeated in tablets. The iPad had 85% global share in the tablet market during 2010. This dropped to 62% by March 2012 as other players gained share165, chief among them Amazons Kindle and Samsung (see table). In 2011 an estimated 72.7m tablets were shipped, accounting for a quarter of all mobile PC sales166.

167

The UK market Between October 2010 and December 2011 tablet ownership trebled to 9%168. How does this breakdown? 0.1% own a tablet only, representing a tiny but new market of computer users or people whove relinquished all their other technology. 1.6% have a laptop and a tablet, while 0.5% have a tablet and desktop and 7.3% have the full house: laptop, desktop and tablet169. The future market Aggressive growth is predicted with estimates of 500 million units being sold in 2015170. To give that perspective around 360 million PCs are shipped each year. The market for computing is getting bigger as we enter the post-PC world.
165 166 167

http://news.cnet.com/8301-13579_3-57382808-37/ipads-share-of-tablet-market-to-dip-to-62-percent-this-year/ http://www.v3.co.uk/v3-uk/news/2135289/tablet-sales-grow-250-cent-2011-reach-million http://www.isuppli.com/Display-Materials-and-Systems/News/Pages/Apples-Toughest-Competition-in-the-Fourth-Quarter-Tablet-Market-WasApple.aspx 168 Digital Trends Winter Uk, December 2011 169 Mintel, Desktop, Laptops and Tablet Computers 2011 170 eMarketer, December 2010

42

Who owns a tablet?

Skews younger and male Lets air the caveat first. New technology is almost universally adopted by young affluent guys. So, tablet owner data at this stage in the products short life isnt necessarily indicative of the future audience. iPad conforms: 25 to 34year-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:

171 172

http://blog.nielsen.com/nielsenwire/online_mobile/connected-devices-how-we-use-tablets-in-the-u-s http://www.appstechnews.com/blog-hub/2012/feb/07/who-are-using-smartphones-tablets/

43

173

173

Mintel, Destop, Laptop and Tablet Computers 2011

44

Sharing it Its worth tempering the ownership data with the fact that 43% of Apple's iPad, Samsung's Galaxy Tab and the Motorola Xooms US buyers share their tablet with others in their house; 8% had bought it for someone else. We therefore need to be careful about being led by the buyer data as other audiences may be using tablets174, something day-to-day experience teaches us is the case, as kids and grandparents pick up the device. Multiple tablets In the UK while 74% of iPad households have just the one device, 16% have two or more. 18% of those with iPads were planning on purchasing another tablet or e-reader, with a heavy preference for iPad (66%)175. Receptiveness to advertising Like ads more The iPad audience may just be one of the most lucrative out there for marketers. In a study looking at iPad users, 46% said they enjoy interactive ads vs 27% on other devices, 35% said they enjoy any ads (vs 17%) and they were also more likely to click on simple text ads (40%) than those on other devices (19%). More likely to spend Theyre also the most likely to splash cash as a result of seeing an ad either later on a PC (36% iPad vs 27% all devices), in store (24% iPad vs 10% all devices), by telephone (12% iPad, 7% all devices) or on their iPad itself (8% iPad vs 5% all devices).
176

174 175

http://blog.nielsen.com/nielsenwire/online_mobile/connected-devices-how-we-use-tablets-in-the-u-s http://today.yougov.co.uk/sites/today.yougov.co.uk/files/Tablet_ownership_in_households.pdf 176 http://blog.nielsen.com/nielsenwire/consumer/the-connected-devices-age-ipads-kindles-smartphones-and-the-connected-consumer/

45

177

177 http://blog.nielsen.com/nielsenwire/consumer/the-connected-devices-age-ipads-kindles-smartphones-and-the-connected-consumer/

46

What are they doing with it?

Most used functionality Tablets are used mostly for consuming games (84%), information (78%), email (74%) and news (61%). Interestingly, people spend up to five times the amount of time reading news on their device as they do on publications websites178, most likely because theyre more comfortable sitting at a computer is not relaxing, sprawled on a bed is. Over half (56%) use them to social network. And while not quite as popular, nearly half of users read (46%), consume entertainment (51%) and shop (42%) on their tablets179. While shopping here is defined in its broadest sense other data show that nearly one in five UK tablet users (19%) make purchases with a tablet180.

181

Most used apps The 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)

178 179 180

http://thenextweb.com/media/2011/05/18/news-is-5-times-more-engaging-on-a-tablet-than-a-website/ Admob by Google Tablet Survey, March 2011, US base Digital Trends UK, Spring, Mintel 181 Admob by Google Tablet Survey, March 2011, US base

47

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)182 How 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.

184

Where are they using it?

By a long way, ease of portability and use are the reasons people get tablets over PCs or laptop185. However, current users arent taking that portability too far: 82% name the home as the primary place they use it, followed by out and about at 11% and work, 7%186.

182 183 184

http://sg.news.yahoo.com/25-billion-downloads-most-popular-ios-apps-145333092.html Admob by Google Tablet Survey, March 2011, US base Admob by Google Tablet Survey, March 2011, US base 185 The Nielsen Company, Q1 2011 Mobile Connect Device Report 186 Admob by Google Tablet Survey, March 2011, US base

48

When are they using it?

Tablets are used mostly during the week (69%) and at nights (69%). To a much lesser extent, people use them at weekends (31%) and during the day (38%). One way to think of it is that the tablet is replacing the book and TV as a way to relax in the evenings after work187.

How is this impacting usage of their other devices?

Despite most people (72%) saying tablets arent their primary computer, other electronics are gathering dust nonetheless188. 77% of users say they use their PC/laptop less now they have a tablet189. A different US study has shown the broader impact of this:

190

187 188 189

Admob by Google Tablet Survey, March 2011, US base Admob by Google Tablet Survey, March 2011, US base Admob by Google Tablet Survey, March 2011, US base 190 The Nielsen Company, Q1 2011 Mobile Connect Device Report

49

50

51

Behaviours
Technology has not changed the fundamentals of human behaviour but it has changed the way we behave fundamentally. People still want to talk, find things out and be delighted, its just were no longer beholden to a few devices to do this. Communication, information and entertainment now run through many tributaries, increasingly crossing each others paths. Too often people bemoaning the drying up of one miss the opportunities filling up elsewhere or the interesting intersections. This section looks at how we search, read, listen, get, watch, play and blend many of these activities together on our increasingly broad set of devices.

52

53

Search
With an estimated 40 billion pages and 1.5 billion images online191, search is absolutely core to the internet. Google takes more than a billion searches a day, answering them in less than a quarter of a second on average192. 16% of those queries have never been seen before. Thats the face of change, quantified, right there. No matter how much pundits drive themselves into a frenzy over the rise of social (visits to social overtook visits to search in May 2010193), search is here to stay. Nearly 90% of Brits search online194. While global PC searches continue to grow (doubling in reach in the last two years195), its mobile search thats seeing staggering growth. Any brand worth its salt will have a search strategy for desktop but most wont have a mobile search strategy. They are going to need one. The players Google dominates. The search engine is the largest player in the world with an 84.65% share196. Its other search engine is the worlds second largest by volume of search. It goes by the name of YouTube197. The others have tiny shares: in February 2012 Yahoo had 5.42%, Baidu had 4.67%, Bing had 2.11% and others shared the remaining crumbs198. Search behaviour How many searches do people make? Four in 10 respondents (40%) used a search engine more than twenty times in any 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 isnt satisfied on page one201. Note this is not the case on mobiles. Mobile searchers simply

191 192 193

http://www.businessblogshub.com/wp-content/uploads/2010/10/google-statistics.jpg http://www.google.com/ads/answers/numbers.html Online Leisure-UK- December 2010 (Mintel) 194 Digital Trends April 2011, Mintel 195 Digital Trends April 2011, Mintel 196 http://marketshare.hitslink.com/search-engine-market-share.aspx?qprid=4 197 http://www.businessinsider.com/youtube-2010-11 198 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-behaviour 200 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour 201 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour

54

dont drill past page one202. If you dont feature in the right places for the right searches, you dont exist. 89% will change the terms theyre using to try and refine results but, if they dont find what they want, 89% will change search engine203. What makes people more likely to click a result? Short answer: image, video or multiple listings204. 53% said theyd be more likely to click a search link if there was an image; 26% if there was a video and 48% if the brand appeared multiple times. Wed want to see actual usage data (not just what people unreliably say what theyd do) to flesh this out but these indicate digital strategies that flood the long tail of search with video and image to 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. A Google study found a delay of 100 to 400 milliseconds when displaying search results led users to conduct 0.2 to 0.6 % fewer searches205. This may seem small but multiplied across a global brands site it could seriously affect conversion and the bottom line. If people are used to it on Google, brands better keep up or theyll get punished by impatient users. Search for products and services Search is the absolutely daddy of internet advertising. The relationship between search and commerce is truly phenomenal and the major reason Googles market capitalisation is $201.72bn (Feb 2012)206. While online display advertising in its most basic form is suffering severe click deflation, search is booming. People are interested in things theyre searching for; display ads are a distraction. 83% of internet users use search engines to find specific products or brands207; 67% search for product and price information online at least once a month208 and over a third of mobile internet users searched for a product or service to buy209. From desktops 20% of searches are about location, from mobile its 40%210.

202 203 204

ComScore, September 2010 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour 205 http://www.technologyreview.com/web/32338/?a=f 206 http://uk.finance.yahoo.com/q?s=GOOG 207 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour 208 Researching Purchases Online UK- April 2011(Mintel) 209 http://www.slideshare.net/Tomtrendstream/welcome-to-social-entertainment-annual-report-2011?from=ss_embed 210 http://www.google.com/ads/answers/numbers.html

55

Why search for products and services? 80% research a specific product or brand before purchasing online; 76% use it before purchasing offline; 78% to find the best price of a specific product or brand211. Mobile is stealing more and more of the show when it comes to shopping. Just take a look at how Americans used search and their phones in the lead up to Christmas 2011:

When are the searches for products and services? Within the shopping category, more searches are made on Sunday than on any other day of the week212. Then there are spikes at lunch and spikes in the evening all other days213. How many searches are for branded terms? Roughly 90% of searches for the top 2,000 search terms in the UK were branded in nature. This has been growing steadily: in 2007 they accounted for 81%, in 2005 66%214. This is often referred to as navigational search: people know roughly where they want to get but searching is easier than typing out a web address. It just shows how brands act as shortcuts to categories and
211 212 213

http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour http://googlebarometer.blogspot.com/2009/06/rise-of-meticulous-shopper.html http://www.google.com/ads/answers/numbers.html 214 Hitwise Intelligence Robin Goad UK: 9 in 10 UK searches are navigational / branded

56

makes one of the strongest commercial arguments for brand marketing. Brand should be doing whatever they can to get at end of fingertips when people are searching. What are the top branded search terms?

215

How many people realise the search ads are ads? 63% do; 37% dont216. Youd want to be in search anyway but the size of the latter number is just another reason to be there. How search and real life interact Searching to go in store Around a quarter of internet users report to searching online and then completing the purchase by speaking to someone in store217. In fact, this might be much higher as other data show 74% of internet users used search to find places to buy brands offline218. Advertising drives desktop search 78% of internet users search after seeing an advert elsewhere219. Advertising drives mobile search The interaction between advertising and mobile phones is established but applied rarely. 71% search on their phones as a direct result of exposure from traditional media (68%), online ads (18%) or mobile ads (27%) (US base)220.
215 216 217

http://www.experian.com/hitwise/press-release-facebook-was-the-top-search-term-for-2011.html http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour Web aggregators UK November 2010 (Mintel) 218 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour 219 http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour

57

Advertising drives leads and purchases Eight 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 a website (35%), making a purchase (49%) or recommending a brand or product to others (24%) (US base)221. Search by demographic The young using search less The effect is very slight but the younger you are the less likely you are to have used a search engine. This may reflect the increasing use of social networks, which use friends as sources of information over search222.

Well off search less Another slight effect is the increased search occurring as you travel down the socio-economic ladder until you hit the bottom when it lifts again223.

220 221 222

http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html Old vs young on the net- UK- May 2010 (Mintel) 223 Old vs young on the net- UK- May 2010 (Mintel)

58

224

New developments The algorithm gets social Googles breakthrough invention was to figure out how to serve you the most relevant search results, based on their PageRank algorithm. Instead of analysing page content and trying to make decisions based on that, it simply and ingeniously tapped into the collective brain by incorporating into its algorithm the number of links coming to a page. The more popular a page with people, the more popular Google read it to be. Page quality didnt have to be decided by a computer: it was already decided en masse by lots of people making the small decision to link to a page. The algorithm has naturally got a lot more complex since then, but thats whats at its heart. Today theres even more collective social information to tap into, thats volunteered by social networks. Bing, Microsofts search engine, has added a social layer to search by tapping into the knowledge of who your friends are and what they like. You can see your friends recommendations when you search in Bing. Google is doing the same with its G+ product225. But as search engines start to incorporate more of this information into their algorithms, the brands which have social currency in the bank will come out

224 225

Old vs young on the net- UK- May 2010 (Mintel) http://googlesocialweb.blogspot.com/2011/05/social-search-goes-global.html

59

winners. If nothing else a social presence is an investment in your search future. The pocket shopper In the last two years mobile search has grown 500%, a rate comparable to the early days of desktop search226. One in every 10 retail searches is done through mobile227,228, although the path to purchase was varied. And 12% of all paid search clicks were made on a tablet or smartphone, representing a 50% increase since October 2011 alone229. The opportunity for brands here is enormous both in terms of getting a mobile strategy sorted and not getting one sorted. The former could deliver enormous value to brands; the latter could suffocate fresh revenue as multichannel competitors seize the prospects themselves.

226 227 228

http://digital-stats.blogspot.com/2012/02/googles-mobile-search-volumes-doubled-y.html http://www.bizreport.com/2011/10/1-in-10-retail-searches-done-via-mobile.html 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

61

Communication
Email Email still plays an enormous role despite social networks. Close to 90% of the internet population use it230. Social networks The rise and rise of the social network Brits 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% of people saying theyve visited sites like Facebook231 in 2010. As of 1st March 2012 there were 30,249,340 people on Facebook232. Theres a lot more of that in the next section, but right now well just focus on communication. Communication through social networks Although usage of the networks is skyrocketing, communication through the messaging functions is down. 37% of US teens sent messages through social networking sites233, down from 42% in 2008234. The same research has shown how 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 the Facebook wall where both one-to-one (albeit public) and one-to-many communication can occur. And with 30 billion pieces of content shared every month globally236, its no wonder other methods of communication are taking a knocking. Actually, social networks are canabalising real life communication, with one in three people talking to their friends online more than face to face237. 25 to 34years-olds are most likely to do this (43% vs 32%238), reflecting the working habits and technological proclivities of this group. Heres the full analysis:

230 231 232

Digital Trends Winter 2011, Mintel Digital Trends April 2011, Mintel http://www.facebook.com/ads/create 233 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf 234 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf 235 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf 236 http://www.facebook.com/press/info.php?statistics 237 Social Media and Networking, Mintel, May 2011 238 Social Media and Networking, Mintel, May 2011

62

239

Instant messenger Roughly 25% of people use instant messaging. Note, this stat excludes any instant messenger activity occurring on social networks240. Given that Facebook offers this functionality its very likely this under represents the extent of instant messaging. Face-to-face and online telephony Voice and video online telephony has hovered around 15% penetration in the UK since about 2009241. There are a few reasons that we can expect to see this increase: the networks getting stronger, the tech is getting better, the big boys are on it and mobiles can increasingly do it. Microsofts purchase of Skype signaled a large ambition. We will move beyond email and text to rich experiences. Talking to colleagues across the world will be as seamless as talking to them across the table said Steve Ballmer, Microsofts chief242. Given that Microsoft has the Windows Phone, Xbox (a games console), Hotmail (email), Windows Live Messenger (an instant messenger), Windows (an operating system) and Exchange Server (enterprise software), this isnt necessarily hyperbole. Globally, the service has 170m users, growing at 40% year on year (thats 600k new registrations every day), clocking up 207bn calling minutes, 40% of which is video based243.

239 240 241

Social Media and Networking, Mintel, May 2011 Digital Trends April 2011, Mintel Digital Trends April 2011, Mintel 242 http://techcrunch.com/2011/05/10/ballmer-bates-skype/ 243 http://techcrunch.com/2011/05/10/ballmer-bates-skype/

63

And as Apples Facetime a video-based communication app on the iPhone, iPad and iPod Touch is aped on other smartphones theyll be more occasions for online telephony than those just at a desk.

64

65

Socialising
Of all the areas of online life, none deserves more of a whipping than the flaky research, truly epic navel-gazing and, in the context of brands, commercially myopic world of social media. And yet of all the areas of online life, none deserves more rigorous investigation. Along with the blossoming of mobile, social computing is the major behaviour-technological shift of our time. To brands a hype-free understanding of this is crucial to establishing whether commercial advantage can come of joining in and, if so, the best way to do that. What is social media? Definition, history and scope At its simplest social media just means ordinary people have got a bigger seat at the internet. In the past the web was mostly a one-way medium, like a backlit magazine. The first comment boxes on pages were arguably the start of social media. Over time more, easier tools have been added letting more people join in. The breadth of social media is enormous, making a tight definition necessarily broad. However, it is possible to split social media out into several different types. 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. Lets untangle them.

66

By visits, social and search are tied. Visits to search sites were by the smallest amount overtaken by the visits to social networks in 2010244 but its slight (11.3% of internet visits vs 11.9%245). In 2011, 39.4 million people visited social networking sites in the UK, up 46% since 2008246. 30 million of these visits 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 in the UK, 800 million were in social (23%, but not comparable to the 22.7% referenced earlier due to different data sources and methodologies)249. If internet consumption were made into a single hour then it would look like this:

250

By 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 more traditional digital activities like email and search. By 2011, 73% were using social media on a regular basis253. By frequency of use, email, news and information gathering, product and price info and shopping still outweigh social networking254.
244 245 246

Online Leisure UK December 2010 (Mintel) Online Leisure UK December 2010 (Mintel) Social Media and Networking, Mintel, May 2011 247 Social Media and Networking, Mintel, May 2011 248 ClickZ, May 2010, http://www.clickz.com/3640446 249 http://weblogs.hitwise.com/james-murray/2011/09/if_uk_internet_usage_was_just.html 250 http://weblogs.hitwise.com/james-murray/2011/09/if_uk_internet_usage_was_just.html 251 Social_Networking UK April 2010 (Mintel) 252 Researching Purchases Online UK April 2011, Mintel 253 http://www.mediavisioninteractive.com/blog/index.php/social-media/social-media-grows-uk 254 Researching Purchases Online UK April 2011, Mintel

67

So the answer becomes, yes, social media is the biggest online activity but not everyones doing it and there are other things people are doing more frequently. A broadening role Keeping up with friends is the number one activity for most (68%) people on social networks and gaining in importance. However, social media are also taking a broader role for people. One of those is keeping up with news and trends, rising in usage from 11% to 14% between 2009 and 2010255. Family is also being welcomed in: seeing what they are up to has increased 5% points to 42% in 2010256. 14% and 15% play role play and basic games, a behaviour so new there isnt enough to show a growth rate257. Networking for business is up 4% points to 10%. And finally, 42% have had a conversation with a brand via social media258. Whos using it? Overall Broadly speaking, more women are using it (61% women vs 54% men), those in full-time education are nearly at saturation (91%) and the older you go the less social networking you see (16-24, 86%; 25-34, 75%; 35-44, 59%; 4554, 45% and 55+, 29%259). Segmenting the social Mintel has sliced up social network users into five groups: Online Socialites make up 34% of the social media population. They are power users, access multiple networks from different devices and are more interested in deals and brands than the average. Although they say they dont notice the ads on social networks more than the average, they are more likely to buy something 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 to keep up with their friends through laptops (84% against average of 76%) and phones (70% vs 54% average). 93% say they rarely pay attention to the ads,
255 256 257

Social_Networking UK April 2010 (Mintel) Social_Networking UK April 2010 (Mintel) 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

1% would buy products as a result of seeing an ad and only 3% would want to. This group just arent hip to social and shopping getting mixed up. Sidekicks are most likely to be young (16-24), in education and single261. Offline Socialisers make up 25% of the population. They are likely to be accessing from PCs and underindex massively on mobile phone access (26% vs 54% average). 95% would say they rarely pay attention to the ads and only 2% want to shop on social networks. The sort of people likely to be in this group are the over 55s, the retired, empty nesters and the separated, divorced or widowed262. The Social Explorers account for the final 19% of the population. Their network use is much broader than just friends, as with the Sidekicks. Instead they like to read news, play games, find new friends, locate deals and learn about brands. They are mostly accessing through laptops and slightly overindex on mobile access (57% vs 54%). They are much keener about ads on the networks and 9% would buy as a result of seeing an ad. 15% of them would be interested in e-commerce on social media. They are more likely to be working and in large households with five or more people263. Ladies Globally, women spend 30% more time on social networking sites than men. Women average 5.5 hours per month compared to mens 4 hours264. In the UK, penetration is greater for women: 61% are on social media against 54% of men265. While women have the edge on social networking, men have it for social networking on phones, reflecting ownership patterns more than any desire to social network more on a mobile. In 2010 19% of women and 22% of men who social network accessed a social network through a mobile phone266, a discrepancy that should iron out as girls get more smartphones. By 2011, 8 million were accessing social media through their phones, a doubling since the previous year267. While roughly a quarter of people use social networks to game on, women are more likely to (27%) than men (24%)268. The traditional gamer in peoples heads is a teenage lad. That needs updating for social media.

261 262 263

Social_Networking UK April 2010 (Mintel) Social_Networking UK April 2010 (Mintel) Social_Networking UK April 2010 (Mintel) 264 ComScore, July 2010 265 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.php 268 Social Media and Networking, Mintel, May 2011

69

Gents Men spend less time in social media but when they do its more informational: in social media 36% of men claim information is their primary goal, while for women its 28%269. Men are also more likely to make use of browser bookmarking than to search again or use a social bookmarking service270. Men are more likely than women to maintain a profile on LinkedIn (18% vs 10%) 271. And finally, its the men making Wikipedia, with 77% of Wikipedias contributors being male272. Children and Inbetweeners The proportion of young people who use social networking sites climbs steadily from 36% of seven-year-olds to peak at 95% of 17-year-olds, before starting to fall273. Blogging holds less interest than it did in the past. 14% of US online teens now 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 to commenting 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 (1417, 10%) overindex. The young 16 to 24-year-olds overindex on all sorts of social media usage, as youd expect. 69% of them do it275. Social networking is their number one activity online:

269 270 271

Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct Lightspeed Research 2009 http://www.iabuk.net/en/1/mensactivitiesonline.html 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+t9PSsze7krGSRg 273 TGI as cited by MediaTel, July 2010 274 http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf 275 Social Media and Networking, Mintel, May 2011

70

276

Young social networkers are more likely to buy online Heavy 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 music downloads277. Young social networkers are more influential Among 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 and cosmetics, 40% more likely to be asked about mobile phones or fashion, and 20% more likely to be asked about new music.278 Silver socialites Its been estimated 20% of grandparents are on social networks279. And the over 55s are the fastest growing group on Facebook, growing 84% between 2009 and 2011280. For the over 50s, social media consumption on their mobile has risen by 52% year on year281 and, if the data are to be believed, theyre more 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.
276 277 278

Social Media and Networking, Mintel, May 2011 TGI as cited by MediaTel, July 2010 TGI as cited by MediaTel, July 2010 279 http://www.telegraph.co.uk/technology/facebook/8589986/One-in-seven-grandparents-on-Facebook.html 280 http://www.broadbandchoices.co.uk/news/over-55s-flock-to-facebook-290611.html 281 TGI MobiLens, January 2011 282 http://www.marketingweek.co.uk/over-50s-bigger-mobile-social-networkers-than-under-30s/3022307.article 283 Social Media and Networking, Mintel, May 2011

71

284

Where and when are people doing it? Devices In 2011 laptops lead the way, followed by PCs and then phones:

However, there are some slight sex differences here. Guys are more likely to use all devices but laptops285:

284 285

Social Media and Networking, Mintel, May 2011 Social Media and Networking, Mintel, May 2011

72

And there are also some age differences with the young overindexing on all devices286:

Places Everywhere is the short answer. The top time for social networking is late evening. In fact, 72% of Brits spend 16 minutes a day on the likes of Facebook and Twitter287. Disturbingly, 7% said theyd even check out a message during an intimate moment288.
286 287 288

Social Media and Networking, Mintel, May 2011 http://www.telegraph.co.uk/technology/social-media/8191767/Almost-three-quarters-of-BritonsSF Gate, March 2010

73

289

What are they doing on them? Overall Keeping in touch with, reconnecting and hearing updates from friends is the number one reason, as you would expect290. Perhaps more suprising is that a quarter 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.

291

289 290 291

http://mashable.com/2011/05/12/smartphone-apps-bed/ Social Media and Networking, Mintel, May 2011 Social Media and Networking, Mintel, May 2011

74

Gaming Gaming 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 to be female, between 35 and 44 years old (32%, vs average of 25%), be not working (34%) and have kids (30% vs 24% without kids). So, the social gamers are parents, most likely mums, relaxing. How is mobile mixing things up? Mobile social networking favours the young but everyone is catching up By 2011, 8 million were accessing social media through their phones, a doubling since the previous year293. Right now, its mostly the young using the mobile social web with a very slight male advantage, an early adopter crease that time should iron out. Although the average for social media access through mobile is 21%294, the kids 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 (3544, 19% in 2010299, 24% in 2011300) and the middle-aged and older adults massively under index (45-54, 5% in 2010, 12% in 2011301; 55+, 3% in 2010302, 9% in 2011). If youre social networking on mobile, youre Facebooking As we saw earlier Facebook is, by a long stretch, the most frequented site on the UK mobile web. Overall, of the 21% of British social networkers getting their fix through mobile303, 97% are using Facebook304 and nearly half are using Twitter (41%305). MySpace still receives a respectable 28% share, with Friends Reunited (22%), Bebo (17%) and LinkedIn (13%) receiving the rest.

292 293 294

Social Media and Networking, Mintel, May 2011 ComScore, as accessed through http://www.digitalstrategyconsulting.com/intelligence/2011/09/accessing_social_media_via_mob.php Social_Networking UK April 2010 (Mintel) 295 Social_Networking UK April 2010 (Mintel) 296 Social Media and Networking, Mintel, May 2011 297 Social_Networking UK April 2010 (Mintel) 298 Social Media and Networking, Mintel, May 2011 299 Social_Networking UK April 2010 (Mintel) 300 Social Media and Networking, Mintel, May 2011 301 Social Media and Networking, Mintel, May 2011 302 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

The networks Who are the major players? By 2012, Facebook was by far the most used communcation social network by users (30.5 million), visits and minutes spent. The other players in a distant second were Twitter (a micromessaging service), LinkedIn (a professional social network), Tumblr (a blogging platform), Pinterest (a digital corkboard) MySpace (a social network) and Google Plus (Googles social infrastructure). Heres a full breakdown:

306

Communication social media Facebook What is Facebook? Facebook is a social network which allows you to create a profile, connect to friends, upload photos and videos and give updates about your status. Most of the activity on your account is channelled through the Wall or Timeline, essentially a feed of anything youre doing and have done. Others experience this through their News Feeds, the edited highlights of all their friends and followed brands Walls. International scale and growth Facebook is the worlds largest social network with 845 million active users by January 2012307. The network is growing at 40% year on year. Facebook in Europe Facebook has a market share greater than 50%, and in most cases greater than 70%, in nearly all the major territories in Europe308.
306 307 308

http://www.guardian.co.uk/technology/2012/feb/28/google-plus-time-dwindles-pinterest http://newsroom.fb.com/content/default.aspx?NewsAreaId=22 http://www.prdaily.eu/PRDailyEU/Articles/7512.aspx

76

309

The British Facebooker Facebook is well entrenched and phenomenally engaging. 30.5m Brits use Facebook, giving the network a 73.6% penetration310. On average, 13,679,000 use 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 the site over a month looking at 608 separate pages312. Brits have an average of 173 friends on social networking sites313. While these numbers are impressive we should remember that one in five people are not on Facebook. Brands should be sure their audience doesnt fit into this group before marketing on the platform314. Non users are most likely to be male, over 45, self-employed or retired315. Taking it to the edge Facebook edits this selection using an algorithm called EdgeRank, which is based on three things. First, the level of affinity between the person and content creator. Second, the weight attached to each bit of content; every Like and comment (comments are heavier) add up. The more people interact, the more that update will be served. And third, how fresh it is. The EdgeRank decays over time. Brands are subject to the same algorithm meaning, high
309 310 311

http://www.prdaily.eu/PRDailyEU/Articles/7512.aspx http://www.facebook.com/press/info.php?statistics http://www.facebook.com/press/info.php?statistics 312 http://www.facebook.com/press/info.php?statistics 313 InSites Consulting as cited by eMarketer, March 2010 314 Social Media and Networking, Mintel, May 2011 315 Social Media and Networking, Mintel, May 2011

77

engagement is a must to appear on peoples news feeds. Or, cannily, Facebook offers brands the chance to buy back lapsed fans with engagement advertising. This might smart a bit: Facebook makes you pay to get the fans with ads and then makes you pay again to get them back. Of course, driving this is one selection pressure: how interesting brand content is. If youre on Facebook, its engage or disappear. An argument for media efficiency As 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 never reach them with messages from your page, can benefit media efficiency. So, you get a fan and they lapse because your content isnt interesting to them. You run an ad about something and that persons name is shown under that ad as Jenny likes Sainsburys or whatever. Jennys friends are more likely to click that because of Jennys name being there, so CTR is increased. If for nothing else then, collecting Facebook fans helps set up stickier ads and therefore better media efficiency. The British Mobile Facebooker Facebook has 250m people accessing it through mobile316. Staggeringly, of the 21% of Brits who access social networks on their phone 97% had accessed Facebook317. Thats about 6.4m people. EdgeRank does not currently apply on mobile. Twitter What is Twitter? The simplest way to think about Twitter is that its instant messaging, limited to 140 characters, that everyone can see. If you wanted to see someones updates all youd need to do is follow them. If you wanted to catch someones attention, youd @ reply them, which involves putting the @ symbol before their twitter name (often referred to as Twitter handle). Tweets can be organised by hastags, simply a word with a hash in front of it. For example, you could 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 or ironic (e.g. Cleaning the house #rocknroll).

316 317

http://www.facebook.com/press/info.php?statistics Pg. 48 Social_Networking UK April 2010 (Mintel)

78

Global scale and reach There are 500 million Twitter accounts318, 100 million of them are defined as active319. In Febraury 2012, there were an estimated 24 million UK accounts320, a third of which are active. In short, youre looking at a Twitter base of around 8 million in the UK. Nearly a predominantly mobile service In 2011 40% of the content on Twitter came from mobile, up from 20% on 2010321 indicating a broader trend of computing away from the desk. If this rate continues to grow it could become one of the first major social networks to be predominantly powered by mobile. Older, better-educated Though this is US data and isnt benchmarked against the general population (although Facebook is increasingly a good proxy for that), we can see how Twitter users differ from Facebook. For one, they are older with a lot less to shout about for the 13-25 segment and a lot more grey hairs in the 26-55+ category than Facebook. Secondly, their income profile is different with more at the bottom and more at the top. Finally, twitterers are a little bit more educated with 28% being college grads versus Facebook users coming in at 22%. Ad man beware London is the city with the most twitterers, followed by Los Angeles 322. Both happen to be hubs for the British and US media which should set some flags waving. As digitally savvy advertisers bang in the centre of London, were in the eye of the storm and run the risk of massively overestimating the reach and influence of Twitter to a wider audience. As a result caution should be taken when recommending any Twitter activity for a brand. Ad man take note
Age 13-17 18-25 26-34 35-44 45-54 55+ Income $0-25k $26-50k $51-75k $76-100k $100-150k $150k+ Education College Grad Twitter 4 13 30 27 17 9 17 33 23 15 7 4 28 Facebook 11 29 23 18 12 7 13 34 30 12 7 4 22

318 319 320

http://kathryncorrick.co.uk/2011/02/03/twitter-now-claim-to-have-over-200-million-accounts/ http://www.mediabistro.com/alltwitter/twitter-active-total-users_b17655 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

Around 20% of tweets contain a reference to a brand or product323, which should immediately scream a Twitter-based listen and respond strategy for customer service, reputation management, lead generation and broader opportunity hunting. Beyond the people referencing a brand, many actively follow the brand themselves. Globally this sits at around 25% of Twitter users (vs, for example, 40% of Facebook users). Interestingly, the Twitter audience appears to be more loyal than the Facebook one. 67% of those 25% will purchase from a specific brand they follow; on Facebook its a lower 51%324. Old influence in new clothes A common refrain in social media is about the democratisation of information. Anyone can now have a voice. Thats true but its important to temper that heady ideology with some facts about the flow of information through networks because theyre not always intuitive. The question for those in the influence business should be Whose voice matters? Youd expect the more followers a person attracts, the more influence they have. Nope. Number of followers does not contribute in any significant way to trend creation or propagation325. Its the mainstream media who start and feed the major trends. So CNN, the New York Times, El Pais and the BBC may have millions fewer followers than Ashton Kutcher, Barack Obama or Lady Gaga but their voices matter more. Twitterers then act as filters and amplifiers to this326. In fact, roughly 50% of consumed tweets with links are generated by 20,000 elite users327. For brands this should scream the need for a digitally savvy PR strategy that uses the big players for mass influence and then bolsters this along the way using smaller influencers.

323 324 325

Twitter as referenced by the Telegraph, February 2010 http://www.digitalsurgeons.com/facebook-vs-twitter-infographic White Paper from HP,http://h30507.www3.hp.com/t5/Data-Central/HP-research-shows-mainstream-media-drive-Twitter-trends-to-a/ba-p/87985 326 White Paper from HP http://h30507.www3.hp.com/t5/Data-Central/HP-research-shows-mainstream-media-drive-Twitter-trends-to-a/ba-p/87985 327 http://research.yahoo.com/pub/3386

80

LinkedIn What is LinkedIn? LinkedIn is the worlds 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 there are an estimated 3.6m users of the site, giving it an 8.5% reach330. 400k visit daily, looking over the course of a month at 32 pages and spending nearly 18 minutes on the site331. Although traditionally used as a tool for individuals to find jobs or recruiters to find people, through its 'Groups' functionality LinkedIn has given brands reason to use its platform. LinkedIn Groups allows brands to engage existing and future employees in conversations focused on professional interests and initiate discussions with audiences aligned with their core business. However, LinkedIn is not only a place for professional networking and conversation; its another prime opportunity for a brand to showcase its breadth and depth online. LinkedIns Company Page functionality is the equivalent of a Facebook brand page enabling businesses to gain followers and recommendations creating a social business network for brands. Bebo Although initially meant for older users Bebo found success among younger users 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 doesnt have the funds to make Bebo a worthy competitor to the other social networks. Since late 2008 visitors to Bebo have fallen by 41%332 bringing uniques in 2011 to a still respectable 4.771m a month, which is a reach of 11.2%. 809,000 people visit every day, spending on average nearly 4 minutes on the site333.

328 329 330

http://press.linkedin.com/about http://press.linkedin.com/about http://www.facebook.com/press/info.php?statistics 331 http://www.facebook.com/press/info.php?statistics 332 ComScore as quoted in Social_Networking UK April 2010 (Mintel) 333 http://www.facebook.com/press/info.php?statistics

81

Friends Reunited Friends Reunited was one of the UKs first social networks centred around bringing former school friends back together. In 2011 it had 800,000 visitors a month, a reach of 1.9% and average daily visitors of 55,000334. MySpace MySpace, once the darling of the internet music scene, is haemorrhaging users. Even after launching MySpace Music which offered unlimited streaming of music, unique visits fell by nearly 1 million between December 2009 and February 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 its uniques336. So, there may be some cheap media to be squeezed out of MySpace but no long-term presence should be planned there. FourSquare Poor FourSquare, it comes up with an innovative new way of social networking through location and then Facebook goes and does the same thing for itself. Although in 2011 it had 10 million users337, Facebooks functionality is now more attractive to brands, offering free social reach, as information about a check-in is shared with a proportion of friends. Collaboration social media Wikipedia Along with YouTube and Facebook, Wikipedia is arguably one of the most famous social media platforms. The free encyclopedia has 21 million articles, 3.8 million of which are in English written collaboratively by volunteers around the world338. It is written predominantly by men (77% vs 13% women) 339 and frequently appears at the top of organic search results. So, as far as brands are concerned, keeping your page accurate not persuasive should be a priority.

334 335 336

http://www.facebook.com/press/info.php?statistics http://www.facebook.com/press/info.php?statistics http://reyt.net/myspace-com-lost-54-of-its-visitors-in-12-months/9235 337 http://techcrunch.com/2011/06/24/foursquare-closes-50m-at-a-600m-valuation/ 338 http://en.wikipedia.org/wiki/Wikipedia 339 http://www.nytimes.com/2011/01/31/business/media/31link.html?_r=3&hp=&adxnnl=1&adxnnlx=1296491313-Gb/z5Xc+t9PSsze7krGSRg

82

Multimedia social media YouTube What is YouTube? YouTubes 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 its also the worlds 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 to a social network341. 30.4 million Brits visit it every month342. Incredibly its still growing, with visits up 45% from December 2010. YouTube numbers are pretty staggering in a number of different areas. Lets take 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 Earth YouTube 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 row Monetisation YouTube is monetising over 3 billion video views per week globally
340 341 342

http://www.businessinsider.com/youtube-2010-11 http://thenextweb.com/google/2012/01/11/hitwise-uk-visits-to-youtube-up-45-accounting-for-1-in-4-visits-to-social-networks/ http://thenextweb.com/google/2012/01/11/hitwise-uk-visits-to-youtube-up-45-accounting-for-1-in-4-visits-to-social-networks/

83

98 of AdAge's Top 100 advertisers have run campaigns on YouTube and the Google Display Network Hundreds of advertisers are using TrueView in-stream, YouTubes 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 off

Product metrics YouTube has more HD content than any other online video site YouTube has thousands of full-length movies on YouTube 10% of YouTube's 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 websites Content ID Content ID, YouTubes 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 YouTube's total monetised views come from Content ID More than 120 million videos have been claimed by Content ID Social 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 day343

343

http://www.youtube.com/t/press_statistics

84

Flickr What is Flickr? Flickr is a photo and video sharing website. In addition to being a place for people to keep and share their photos, the service is widely used by bloggers to host images they put in their blogs. How big is Flickr? Flickr currently hosts over 5 billion images, handles over 3,000 image uploads per minute344 and sees roughly 80 million unique visitors345. While UK data on the site are thin on the ground, Flickr courts roughly 2% of the internets daily traffic with users spending on average 5 minutes 15 seconds on the site346. It is widely considered to be the pre-eminent photography social network. Instagram Instagram is a free photo sharing application designed for use on Apple iOS (iPod, iPad, iPhone) devices. It has 7 million users globally whove uploaded 150 million photos at a rate of 1.3m photos a day or 15 photos per second. However, it is noteworthy as its currently growing fast347. Pinterest Pinterest, a digital corkboard, allowing you to pin pictures and objects you love in a colourful and fun way, has suddenly got a lot of attention. By March 2012 it had 13 million visitors, 250,000 of whom were from the UK348, and most of them women (97% of their Facebook fans are women349) spending an average of 25 minutes on the site across the month350. Home improvement, design, fashion, food, weddings and craft categories make up the majority of the boards pinned, making it a perfect for brands in these areas. Burberry, for example (pinterest.com/burberry), has dived in and is very likely seeing more traffic to its shops on and offline as a result.

344 345 346

http://blog.flickr.net/en/2010/09/19/5000000000/ http://en.wikipedia.org/wiki/Flickr http://www.alexa.com/siteinfo/flickr.com 347 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-boards 349 http://www.guardian.co.uk/technology/shortcuts/2012/feb/27/pinterest-a-man-free-zone 350 http://www.guardian.co.uk/technology/2012/feb/28/google-plus-time-dwindles-pinterest

85

Consumer social media Needs and influencers Consumer social media can be thought of as the use of social media in any stage of the purchase process. Its real promise, unsurprisingly, lives in the social bit. To get there, lets first look at why people buy products and services. One, they need them. Historically the web has answered peoples needs through them searching, finding, reading, comparing and buying. Essentially, it is about answering demand and creating advertising that people go looking for. Two, people dont necessarily need something but are influenced to buy it. This can come from all sorts of places like TV, radio, deals, news, peer review, advertising, celebrities and, crucially, friends (one study found people mention brands over 90 times per week when talking with friends, family and colleagues351). Essentially activity here for brands is about creating demand and making advertising in its broadest sense that goes looking for people. Influenced by algorithm Leaving aside the physical world and all the persuasion methods there, the real winner of the digital world for influence historically has been algorithm-driven affinity analysis better known to most people as messages like Customers Who Bought This Item Also Bought the increasingly personalised pages they see when on e-commerce sites or utilities like iTunes Genius, an Apple service taking the sting out of finding new music. This all boils down to computers looking for patterns in data and spitting out things we might want based on things we have already or have shown an interest in having. The new influencer The promise of consumer social media is that it trumps the algorithm by coming from a more trusted source: your friends and peers. Even the purchase power that a much larger group of people can wield is being used in new ways to be useful to both people and brands. As Emily White, Facebooks Director of Local has said The wisdom of friends has taken over from the wisdom of crowds352. And theres evidence: people remember ads more (two times recall vs nonname) and are four times more likely to buy something if their friends name is attached to the product353. It also increases weight of purchase: 67% of

351 352 353

Original research cant be found; quoted from http://www.bazaarvoice.com/resources/stats http://www.guardian.co.uk/technology/2011/jan/31/facebook-places-deals-uk-europe http://www.slideshare.net/victori98pt/advertising-effectiveness-understandin-the-value-of-a-social-media-impression

86

shoppers spend more money online after recommendations from online friends or like-minded people354. Can social media drive revenue? Social media can plug into the purchase process in ways that make money for brands and shopping easier and more exciting for people. For example, by getting on peoples radars directly or through their friends it can turn people who arent buying from you into people who are. By continuing this or additionally providing them with support it can help turn them into repeat customers who buy more or more often. And by doing it right over time, or getting that one time just right, it can make them want to shout about you to their friends. The theory is tight. The evidence is not. For example, brand fans in social media are likely to spend more ($70 more than non-fans in one study), more likely to continue using the brand (28% more than non-fans) and 41% more likely to recommend the brand to a friend355. They visit nine times more often, and four times as many pages, than non-community users356 and overall report a better experience from forums than via calls or mail357. What this research suggests is that people who get involved with brands in social media become heavier brand users than non-fans. Flaky social media conclusions The problem is all this research is just the social version of the Rosser Reeves Fallacy, which is basically when you get your cause and your effect on back to front. Just because two things are happening together does not mean one causes the other. In the case of the research above, brands biggest fans (in the wider sense of the word) are much more likely to be their social network fans and also spend more in the first place. All that research ends up saying is, people who like you more, like you more. Thanks, research. We need to be able to remove the general fan effect to establish the true value of social media to business. No research of this nature exists to our knowledge. So, right now the theory shouts opportunity and while there are a few exciting snippets which suggest it works, the really rigorous evidence just isnt in yet. Can social media cut costs?
354 355 356

http://www.bazaarvoice.com/resources/stats http://www.syncapse.com/media/syncapse-value-of-a-facebook-fan.pdf McKinsey, 2000 357 Jupiter, 2006

87

Theoretically, social media should be able to reduce customer service costs after set-up costs are discounted. For example, a slice of call centre costs can be directed online where a cheaper resolution is possible, because either staff time per query is reduced or, when other people advocates have answered the question, customer services are not engaged at all. Research has found that 43% of support forum visits are in lieu of opening up a support case by phone358 and that cost per interaction in customer support averages $12 via the contact center versus $0.25 via self-service options. So a 98% cost saving is possible, all other things being equal359. Second, it can deliver business intelligence which would have been more costly 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 longer need to reach with paid media. When you can talk to a million people whenever you like you dont need to buy inefficient media packages, nor pay a media agency to broker this on your behalf. In short, cost per response/impression drops. Again, while the theory is solid, the evidence is empty. We are aware of no rigorous research by a brand that quantifies the economic benefits social media can offer. That said, lets continue to look at the theory and what some brands are doing to gauge the opportunity. The awareness and consideration stage Lets start with when someone needs something. Only 15% of people use social networks to find deals and 13% of people use social media to find something out about brands360. Most people say they rarely pay attention to advertising on social networking sites in 2011 (66%). Only 14% admit to paying attention to them361. Assuming people are good judges of their own behaviour (and theyre probably not), two thirds of any market is off limits for social network advertising. Interestingly, over half of people just arent interested in buying through their social network (56%)362.
358 359 360

Cisco, 2004 Social media and the banking community:socialmediatoday.com Social Media and Networking, Mintel, May 2011 361 Social Media and Networking, Mintel, May 2011 362 Social Media and Networking, Mintel, May 2011

88

363

However, there are other methods of raising awareness and consideration. Facebook provides brands with mass reach through the functionality it offers to anyone: the News Feed. Below you can see Apples App Store page, to which they post new apps a few times a day. Given nearly five million people like the page, even a 10% view rate and a 1% purchase rate after that means each post is driving five thousand downloads and potential purchases. At 15 posts a week and a rough average of $2 for a download this page could be driving around $5.4m in revenue a year. Of course this is estimated but it simply shows the opportunity for brands with links to purchase. However, are people interested in brands on Facebook? Havent they come there to be with friends, not companies? We know for a fact that they do like interacting with brands. However, the extent to which this can drive business results is still in question. A 2011 study by Forrester Research found that the average click-through rate (CTR) on Facebook is 1% and the conversion rate is 2%. Email on the other hand boasts 11% CTR and 4% conversion rate364. The research stage This involves pulling friends into the research stage either directly or indirectly. For example, Levis have a Friends Store which collects together products which your friends and the wider community have Liked.

363 364

Social Media and Networking, Mintel, May 2011 http://blogs.wsj.com/digits/2011/04/07/facebook-wont-become-e-commerce-force-analyst-says/?mod=WSJBlog

89

Other brands are giving people the option to be more direct by converting the sort 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 site while Samsung go a little further and post a poll to your Wall with a specific product-related question, in this case what size you should get.

90

Pulling on the broader weight of consumer social media to help people get around the staggering choice and indecision this comes with. Sites like Just Buy This One (a new venture from Reevoo) collect review information and only show the very best-rated products by price category.

The purchase stage 15% of people like the idea of being able to buy something through social media and men are nearly twice as keen (18%) as women (10%) suggesting that 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 something just 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 moment to move your e-commerce operation into Facebook: Facebooks functionality just isnt good enough.

91

However, when it becomes powerful is when social becomes a tool for free reach. So when you buy certain products youre proud of, you want to tell people. Making the act of buying a social object allows people to brag about their new clothes, kit or cosmetics. While 44% of people dont like the idea of buying on social networks365, 83% of shoppers said they would be interested in sharing this information366. And when transaction becomes communication it also allows brands to get free reach through Facebook word of mouth. Finally, when enough people show an interest in buying something, a brand can relax because its got volume, while customers are happy because they get a deal. This is the premise of new consumer social media companies like Groupon, which we discuss in depth in the next section, Spending. Customer service After purchase, social media offers the opportunity to help people with any issues they may have. This is often one of the major roles a Facebook or Twitter page plays. Issues For all the good things social media bring, there is an uglier side. For example, identity theft and fraud, bullying, childrens exposure to improper content, employers cautioning or dismissing staff for content on their profile and the increased risk of meeting new people online are all large issues. Bullying 18% of European young people have been bullied/harassed/stalked via the internet and mobile phones, of which social media play a large part367. Employers Nearly half of HR professionals in Europe claim to perform online checks on candidates and as many as a quarter of all job applications are turned down because of online reputation and profiles368. Inappropriate content 4% of European children from 12 to 14 (8% of 15 to 17-year-olds) have uploaded sexually provocative, partially or entirely nude pictures of
365 366 367

Social Media and Networking, Mintel, May 2011 Original research cant be found; quoted from http://www.bazaarvoice.com/resources/stats Hasebrink, U., Livingstone, S., Haddon, L. and lafsson, K.(2009) Comparing childrens online opportunities and risks 368 EU Data Protection Day 2010, http://www.gala-marketlaw.com/pdfs/Privacyissuesinsocialnetworking.pdf

92

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 internet and 22% have had intimate relations with a person they found online370. Privacy and location security 81% of social network users do not place any restrictions on who can see their recent activity, including updates generated by geo-location-based tools that report where their users are visiting371.

369 370 371

Adiconsum and Safe The Children, accessed through http://www.gala-marketlaw.com/pdfs/Privacyissuesinsocialnetworking.pdf Adiconsum and Safe The Children, accessed through http://www.gala-marketlaw.com/pdfs/Privacyissuesinsocialnetworking.pdf Webroot as cited by eMarketer, March 2010

93

94

95

Spending
No other medium has so impacted the traditional marketing funnel as much as the internet372. As nearly two in every three people (64%) have made a first purchase from a brand because of an online experience, its vital brands get their digital house in order and understand how people are behaving when theyre buying. In this section well look at how people buy online, both through a good old-fashioned computer and through mobile devices, and how this interacts with the real world. The British e-commerce market A 68bn market Total UK online sales reached 58.8bn by the end of 2010 an 18% increase on 2009. In 2011, we spent 68bn, a similar hike373. A weekly affair Over two in five (42.6%) Brits shop online at least once a week and the average shopper is now spending 71 per month on online goods374. Whos buying online? Internet shoppers fit into four major groups Online shoppers can be split into two main groups: the frequent and the infrequent. 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 dont really read or submit reviews (1314% 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.
372 373 374

Razorfish Digital Brand Experience Study as cited by Bazaarvoice.com,December 2009 http://www.guardian.co.uk/business/2012/jan/19/online-retail-sales-soar-december eCommera.com, August 2010 375 Researching Purchases Online UK April 2011, Mintel

96

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. Theyre 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 dont rely on the internet for product information or purchases376. They dont 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 optimise purchase paths. Women lead online buying Globally, women spend 20% more time on retail sites than men377. Women buy more often than men, accounting for 59% of purchases on European websites (53% in the UK), but dont spend as much as men when they do. While European men spend 93.12 euros on an average web purchase, women spend 68.65 euros378. In the US, women buy more often than men too but end up spending more. US women make up just under half of the internet population but generate 58% of e-commerce dollars379. Men are information hungry and prefer e-tail slightly more Men may shop less than women but when they do theyre all about the information. Men search more than women380, care more about information when interacting with brands in social media381 and are more likely to refer to professional reviews than others382. Overall, 35% of men prefer e-tail to real shops compared to 29% of women383. The interesting thing about that stat is the overwhelming preference is to shop in store, prompting strategies that improve the experience between online and offline worlds.

376 377 378

Researching Purchases Online UK April 2011, Mintel ComScore http://bit.ly/YifIW http://www.internetretailer.com/2011/03/28/european-women-shop-more-often-online-men-spend-more 379 ComScore http://bit.ly/YifIW 380 US base, ComScore http://bit.ly/YifIW 381 Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct 382 Researching Purchases Online UK April 2011, Mintel 383 http://oxygen.mintel.com/sinatra/oxygen/search_results/show&&type=NSItem&class=News&sort=recent&display=abridged&page=1/display/id=57464 1&anchor=574641

97

Teen buying Teens are shopping more and more online. 16% of 11-14s and 34% of 1519s shop online at least once a month, up from 13% and 27% respectively in 2008384. And even if theyre 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 those aged 15-19. Boys are more likely than girls to do this, and they are also more likely to be influenced by comments and reviews posted online385. What are they buying? 25% of young people aged 11-14 purchase clothes online, 23% purchase video games, 21% purchase DVDs, 20% purchase CDs and 18% purchase music downloads386. Among 15-19s the most popular online purchases are clothes, bought by just under half of the group, DVDs (35%), CDs (31%), computer games (29%), books (26%) and music downloads (25%)387. What are they buying? A widening market There is a growing confidence in splashing the cash on bigger ticket items. The proportion of shoppers prepared to spend 1,000 or more for a single product online increased in the UK from 12% in 2008 to 25% in 2009388. Some categories still underrepresented 71% of Brits have bought something online; however, what theyre buying varies quite a lot. The most common category is entertainment (45%), followed by clothes (41%) and holidays (41%). Pubs, restaurants and takeaways clock in lowest with 10%, although as mobile opens up location-based purchases we can expect to see this rise. A full breakdown can be seen below:

384 385 386

Youth TGI as cited by MediaTel, November 2010 Youth TGI as cited by MediaTel, November 2010 Youth TGI as cited by MediaTel, November 2010 387 Youth TGI as cited by MediaTel, November 2010 388 The Centre for Retail Research 2010, January 2010

98

99

Where are they buying? The big three The majority of British shopping happens in three places: eBay (42.76% reach), Amazon (42.49%) and Tesco (18.79%)389. The remainder occurs across brand websites and smaller players. It makes sense for brands to focus attention on these sites but experience would suggest they dont. Most brands do not have an official presence on eBay and many dont know about the A+ page, a souped-up Amazon page, which, according to Amazon, increases conversion significantly390. When are they buying? The Wednesday rush 4pm 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 well look at typical paths to purchase. Why brands still matter Internet shopping has many blessings, for example, readily accessible information, lots of reviews, analyses from actual users, easy bargain hunting and crossovers to the offline world (e.g. vouchers and rewards)392. However, its been around for a bit now and were British so we have grumbles. They include: the apple to orange comparisons made by price comparison websites (there are other factors people want to include), mopping up decentralised information, having to research in one place and buy in another (people tend to research on a price comparison websites but then buy from the retailer) and review apathy awareness that people tend to leave only bad reviews, 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 is supercharged by the internet. This means brands are more needed than ever to act as mental shortcuts in categories. The evidence bears this out. Most people
389 390 391

http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/ Will Lion, personal communication with Amazon Digital Strategy Consulting, September 2010 392 Researching Purchases Online UK April 2011, Mintel 393 Researching Purchases Online UK April 2011, Mintel

100

buy from sites they trust, like the brands directly or retailers like Tesco and Amazon394. Personal influence still king Another reason brands continue to have importance is that other people are the biggest influence on buying. 90% of people seek the advice of friends and families as part of most decisions and 80% wont make a decision until they get their stamp of approval395. This effect is stronger than online reviews left by others: half of people agree with the statement I pay more attention to recommendations from my family and friends than online reviews. People agreeing to this are more likely to be young (16-24) or older females (55+). Driving advocacy should therefore be high on a brands agenda. Hard coding personal influence Given the influence others have on our decisions, the search engines are starting to incorporate social information in results. For example, Bing now includes friends Facebook Likes. So, for example, when someone searches for a hotel they can see in the results which of their friends have Liked it396. Similarly, Googles +1 button is shown against searches. 30% of Brits claim this would make them more likely to buy something397, although well wait for actual data here, as theres probably a gulf between what people say theyll do and 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 first page. In the Socialising section, we saw how huge social was to the mobile experience. Taken together, if the future of computing is mobile and social, brands who want to get onto peoples search results will need to start flooding the search engines with a long tail of social data. What does that mean? Mobilising now to add social plugins to their products and sites and building influence on social networks, predominantly Facebook, in order to stand out against competitors in search. In the past, personal influence was in the air. Now its going codified and mathematically influences a brands visibility on the two windows to the web that matter the most: social and search. Lets look at the journeys people take on their path to buying.
394 395 396

Online Spending Habits UK February 2011, Mintel http://www.bing.com/community/site_blogs/b/search/archive/2011/05/16/news-announcement-may-17.aspx http://www.bing.com/community/site_blogs/b/search/archive/2011/05/16/news-announcement-may-17.aspx 397 Researching Purchases Online UK April 2011, Mintel

101

Searching for research Search is the start. 83% of UK online shoppers use search engines to begin research for a purchase398. Many of these will end up in product or service reviews. Researching by review While friends and family rule, reviews still play a big role with three in five of us referring to them399 (this is higher for younger and wealthier groups). More than half (53%) think reviews by strangers are more useful than those on TV or in magazines as these are the people living with the products not just using them for the period they have that column waiting to be filled400. And for the big purchases nearly 60% of us are reading reviews. Both men and women are just as likely to read reviews online, although male consumers are more likely to refer to professional reviews when doing research401, which should fine-tune influencer strategies for marketing to men.

402

That said, 46% find it hard to know which reviews to believe403, opening the doors for user experiences that drastically constrain choice like justbuythisone.com. Differences in reviews read Most people review products online; however, this varies a lot by product group. People tend to read consumer reviews for electronics, entertainment products, holidays and travel and home appliances, but usually turn to professional reviews for financial products and utilities.
398 399 400

RichRelevance and Bazaarvoice as cited by eMarketer, November 2010 Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel 401 Researching Purchases Online UK April 2011, Mintel 402 Researching Purchases Online UK April 2011, Mintel 403 Researching Purchases Online UK April 2011, Mintel

102

404

Is everyone joining the conversation? Joining the conversation. Theres a phrase every social media guru is breathlessly telling us everyone is doing. The reality is that only one in five has left a review and a much lower 13% of people have entered a conversation about it on an online forum405. When it comes to brands in social media most people are just watching. Whos leaving reviews? Young men aged 16-24 are writing most of the reviews, especially for tech kit and entertainment products406.

404 405 406

Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel

103

Researching price Since the economic downturn, nearly 60% of people are being more careful with their money and researching prices more thoroughly online407. This is especially marked for the young and those with a smaller household income, unsurprisingly408. Four in ten people used comparison websites in 2011 without actually buying anything from them409. However, increasingly people are becoming confused and sceptical about the results from these services, mostly because they vary a lot. Coupled with the fact that these sites are middlemen, people are using them to get a feel for the price of something and then head onto the retailer to get more information and purchase. Overall, theyre being visited less than they were a year ago:

407 408 409

Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel

104

410

Finding a bargain Different categories have different bargain hunting behaviours, which reflect purchase size more than anything else. For example, as youd expect, restaurants are high on vouchers while utilities are low411. Inversely, financial products and holidays command a lot of price comparison visits, while restaurants and groceries dont. Were suckers for vouchers on the small stuff but dont shop around. Yet were addicted to price comparison for big ticket items and arent so interested in the vouchers.

410 411

Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel

105

How is social changing commerce? Consumer Social Media in the Socialising section deals with the various stages throughout the purchase process and how social networks can be useful to commerce. Here we dig a little into sites that arent social networks but could broadly be classed as social media. Finding a bargain with Money Saving Expert MoneySavingExpert.com provides consumers with information, guides, tools and tips on saving money both online and offline across a range of products including credit cards, shopping, utilities, phone services, banking, travel, motoring, insurance and mortgages. Its widely regarded as the go to place for bargains and unbiased consumer information. According to the site, in February 2012 it was clocking 23 million visits a month from 13 million different people and sending a very healthy 7 million emails each week412. The demographic breakdown of visitors looks like this. Note the wealthy female bias.

Finding a bargain with vouchers 37% have used voucher or cashback websites to save money on their purchases, with people under 35 most likely to use these discounts413. Overall the sector has seen impressive growth and is nearing 1% of all UK internet visits.
412 413

http://www.moneysavingexpert.com/site/about-the-site Researching Purchases Online UK April 2011, Mintel

106

414

Finding a bargain with Groupon and LivingSocial Recent entrants are Groupon and LivingSocial, both of which offer people different, discounted local offers every day. The sites generate their revenue by taking a cut on each sale, which is reportedly as much as 50% of the value of each voucher or deal 415. Revenue for 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 certainly popular. There are reported to be 142 million subscribers of Groupon (Mar 2012)420 and Living Social on the other hand has 85 million users421. In January 2010, LivingSocial offered $20 Amazon gift cards for $10, attracting 1.4 million purchases422. In March 2011, they offered two tickets for $9 via Fandangos, a movie tickets and timings company, pulling a million sales in two days423. In August 2010, Gap made $11 million through Groupon by offering $50 jeans for $25. 144,000 people took advantage424. Few other case studies exist, suggesting brands should simply test and learn; however, a 2011 Harvard Business Review paper found offering vouchers is more profitable for merchants which are patient or relatively unknown, and for merchants with low marginal costs 425.
414 415 416

Researching Purchases Online UK April 2011, Mintel Researching Purchases Online UK April 2011, Mintel http://online.wsj.com/article/SB10001424053111903791504576589211214409214.html 417 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.html 419 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=107818 423 http://www.pcmag.com/article2/0,2817,2381289,00.asp 424 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

Whos using these type of sites? Take a look below:

Facebook as shop In August 2009, US-based flower and gift retailer 1-800-Flowers.com was the first company to launch a retail store within Facebook. Since then a number of brands, like Disney, ASOS (a clothing retailer), and Max Factor (a cosmetics brand) have followed suit sensing an opportunity. There are even businesses popping up who will clone your e-commerce store to Facebook426. Were dubious that moving your shop at great expense just so it can sit underneath the blue Facebook banner is effective. Brands are behaving as if people havent worked out how to escape from the Facebook.com URL. Added to that, people may not want to buy in Facebook: its the equivalent of trying to sell stuff in a bar. Rather its the social power that Facebook offers that should be tapped, helping augment existing sales by free social reach, instead of cannibalising their own shops. Thats why Tesco, Amazon and Warner Brothers are all signed up to sell via Facebook. However, with Facebooks social plugins much of this functionality can be installed on brand websites. Were still out on it.

426

For example see http://storefrontsocial.com/

108

How is mobile changing commerce? Touch and go Commerce and mobile are knocking into each other in ever more interesting ways. At the most basic level phones can be used as intelligence gathering devices when in the field. Total mobile search quadrupled in 2011 (vs 2010) according to Google and within that mobile retail search traffic soared by 181%. Mobile searches now account for 11% of total retail searches427. In 2011, 95% of smartphone users had looked up local information, 88% had taken 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 price comparison site, with 9% of people actually downloading app to visit again. A further 17% said this would be something they would like to do if only they knew how429. Barcode democracy A number of services that allow an items barcode to be scanned while in the shop are shortcutting the process of painstakingly typing something in. This allows for real-time price comparison and is offered by well-known retailers such as Tesco and Amazon. More recently, SearchReviews, a consumer review aggregator, has introduced a mobile app for both Apple and Android handsets through which consumers can scan a barcode and obtain online reviews relevant to the product. At the moment this is the preserve of the young, as older shoppers havent got around to figuring out their phones yet and struggle with the small screens. Buying on the go The next level up is to use the phone to buy something, a feat 21% of UK smartphone owners have claimed to do430. Although this figure is likely skewed by purchases of apps, it doesnt take away from another fact: each month in the UK, 4.2 million consumers are visiting retailers websites using their
427

For that quarter, http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retailsearch/ 428 US basehttp://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 429 Researching Purchases Online UK April 2011, Mintel 430 KPMG as cited by eMarketer , December 2010

109

mobiles431. As we saw earlier many are dissatisfied with their mobile web experiences432. This coupled with the clear level of demand for information delivered in this fashion should galvanise brands into developing world-class mobile experiences now. Advertising drives mobile search The interaction between advertising and mobile phones is clearly established but rarely applied. 71% search on their phones as a direct result of exposure from traditional media (68%), online ads (18%) or mobile ads (27%) (US base)433. Yet there is little to encourage people to do this as customer journeys are currently woefully siloed to specific media, even though this does not reflect the realities of media use. Advertising drives leads and purchases Eight 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 a website (35%), making a purchase (49%) or recommending a brand or product to others (24%)435. And those ads with the highest click through rate are those that blend with the phones functionality best. For example, Google mobile ads with the click to call feature, which makes a number immediately callable, have a 6-8% higher CTR than those without this feature436. Closing the gap to purchase One can imagine how further retail functionality could be pulled through the keyhole (e.g. like clothes size or table reservation or even purchase) for increased ease of use and commercial benefit of the retailer.

431 432 433

GSMA & ComScore, August 2010 The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/ http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 434 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 435 US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 436 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues

110

111

Watching
It is the age of screens. Across the planet there is an insatiable appetite for video-based entertainment and information. Were seeing an explosion of content to watch and an explosion of devices on which to watch it. The video reservoir is fuller than ever and every new device just punches new holes in the dam. In this section well look at the not-so-old-fashioned TV and the shows on it. Well examine how these shows are flowing on to different devices, as well as content that calls online home. And finally well look at how online is flowing into TV. TV still king We may wake up in the morning and look into a small screen all the way into the office, when we look at a slightly bigger screen all day, but its the big screen at home in the evening thats the daddy. Television is the most widely watched screen in the world437. Across the globe people watch more than four hours of television a day438. Interestingly, we Europeans get the medal for vegetating the least to the soft electronic glow and by a fair amount439, with Brits only very slightly above European TV watching levels440 (UK index is 91, European average is 89; for context Asia and Latin America are 104 and the States and Middle East, Africa and Pakistan is 101).

437 438 439

How People Watch A Global Nielsen Consumer Report. How People Watch A Global Nielsen Consumer Report. How People Watch A Global Nielsen Consumer Report. 440 How People Watch A Global Nielsen Consumer Report.

112

HDTV defining larger share However, while Brits watch less, we like it pin sharp when we do: were equal with the States on HDTV ownership and only beaten by Australia and Hong Kong internationally. Globally, HDTV adoption is continuing at good pace from its 30% penetration, with 11% of people claiming a definite interest in getting one in the coming year. Ownership is markedly high among adults 55-59, who have more money and time than other groups. Online video is queen Online video has already reached an astonishing point of ubiquity, with 70% of global internet users having watched a video online441. Netflix, a US video-on-demand company, hogs 29.7% of downstream traffic at peak 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 arent keeping pace. Penetration in the UK for video watching is around 60% 444 and not only are fewer people watching, theyre watching less than their global counterparts. The Brits are about 25% less likely than the global online population to watch video online. The Chinese on the other hand are about 25% more likely to watch video online vs the world (and 50% more likely than us Brits).

445

However, the audience shouldnt be underestimated just because it doesnt stack up internationally. The number of people that watch TV online has grown
441 442 443

How People Watch A Global Nielsen Consumer Report. http://www.bbc.co.uk/news/technology-13439641 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

sixfold within the last year in the UK446. Over 15 million people in the UK watch over 200 million videos daily447. While iPlayer grew by 14% for desktop and laptop and grew 580% on tablets, the use of the service on TVs grew by over 1,000%448. We like video so much were getting it at work. Globally, 57% of respondents watch online video on their computer, a figure that predictably grows for younger people449. As employers see this eating into valuable work time many have blocked it. The US and Europe are now 40% and 30% less likely to consume video in the workplace now than the rest of the world. iPlayer: an in-depth look In 2011, iPlayer received 1.94 billion requests for TV and radio programmes across a range of devices450. Interestingly, iPlayer is used in a similar way to linear TV viewing times although there is proportionally more daytime and late peak use451 among the average 1.5 million people frequenting the site every day. Below you can see this usage pattern along with increasing user numbers across 2010:

446 447 448

YouGov, May 2010 ComScore Video Metrix, January 2011 http://econsultancy.com/uk/blog/9214-ipad-drives-four-times-more-iplayer-traffic-than-connected-tvs 449 How People Watch A Global Nielsen Consumer Report. 450 http://www.bbc.co.uk/mediacentre/latestnews/2012/iplayer.html 451 http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf

114

Were watching more live TV on iPlayer too. 13% of all iPlayer viewers are from watching simulcast, which is growing month on month gently and which peaks expectedly around major sporting events452

Whos watching on iPlayer? The early adopter imbalance is being smoothed out over time but men still have the edge453. However, iPlayer is a younger adults playground: the over 55s are highly under-represented given they make up over a third of television viewers454. The charts below give a more detailed breakdown of users:

452 453 454

http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf http://www.bbc.co.uk/blogs/bbcinternet/img/BBC_iPlayer_Monthly_performance_pack_DEC_2010.pdf

115

Watching on the go 11% of the global online audience watch some video or mobile TV on their phones455. The regional variation is marked; Asia is predictably ahead (145 on the index) but Europe (55) and North America (45) are intriguingly behind, even beaten by regions like the Middle East, Africa and Pakistan (136) as well as Latin America (118). What were seeing here is mobile adoption leapfrogging traditional PC usage in these developing countries. In other words, they havent got around to having computers yet but do have mobiles and are using them to feast on video. The current sex differences are interesting although conform to expectations. Men overindex by 18%, women underindex by 9%. This crease will probably get ironed out as women increasingly own the sort of phones that let them watch video but men always appear to have the edge in terms of entertainment consumption. Women like socialising more. The same is likely to be true but to a lesser extent with age. Adults aged 25-29 overindex by 73% while the 60 to 64-year-olds are 73% less likely to use it. So, brands like Lynx should walk right in here but those at the Saga Holidays end of the spectrum should hold off.

455

How People Watch A Global Nielsen Consumer Report.

116

Watching TV on mobile How much of what were watching on mobile is syndicated TV (versus funny cat videos)? By 2010 in the UK it was 4.7% of the online population. By late 2011, 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 TV viewing and, indeed, expect it to be small. Firstly, streaming TV is heavy on data consumption and networks are increasingly clamping down on unfettered browsing to preserve their fragile networks. This pushes TV viewing into wifi zones, home and work, places where theres a better option (the TV) and a worse option (being fired for misconduct), or into downloads, which we have seen in other sections are extremely healthy (at the end of 2010, iTunes had delivered 450 million TV episodes and over 100 million movies to iPod, iPhones and iPads457). Finally, now we have tablets, small screen viewing is less attractive. Its probably tablets that will win in mobile video. The screens are simply bigger and better. Watching on tablets By late 2011, 11% of tablet users said they were watching TV on it (versus 53% who said they were using it for entertainment, which is methodologically irriating as it conflates video and music consumption). Tablets (and thats mostly iPad, accounting for 97% of video plays) are winning in terms of holding video attention, with owners watching 30% more than desktop-only users and completing videos 100% more458. Second to TV, tablets are soaking up the majority of long-form content.

456 457 458

Desktop, Laptop and Tablet Computers, August, 2011 Apple, September 2010 http://www.ooyala.com/papers/Ooyala-Video-Index-Report-Q3-2011.pdf

117

459

As for the type of video people are watching, it breaks down like this:

460

459 460

http://econsultancy.com/uk/blog/9025-video-plays-on-tablet-mobile-and-connected-tv-doubled-in-q4 http://www.statista.com/statistics/192209/percentage-of-video-types-regularly-watched-on-tablets-in-the-us/

118

Watching through games consoles Its hard to gauge how big watching on games consoles is if you dont have one or move in the circles of people who do. Globally, there are around 186m gaming devices. Specifically there are 94.97 million Wiis, Nintendos console as of December 31 2011461, there are 66 million Xbox 360s, Microsofts console, as of January 2012462, and there are 57 million PlayStation 3s, Sonys console, as of November 2011463. In the UK thats 8.3 million Wiis464 that is one in every three households 3.9 million Xbox 360s 465 and 3 million PlayStations466 Connected games consoles are the second most used platform (after computers467) in the world for watching web content468. iPlayer, 4oD and ITV Player, the on-demand versions of the major British networks, all have presences on the PlayStation, as do Netflix and Hulu, the two major ondemand internet streaming video companies from the US. Five is in talks to get Demand Five, their on-demand service, on the platform. Over Christmas 2009 5% of the views on iPlayer were from someone watching it on a PlayStation469. By Christmas 2010, this was up to 7% (but remember this is 7% of a much larger number of requests because the service is growing at 27%). By 2011, it was 10%. In total there were 7 million requests for TV and radio by PlayStationers (surpassing those by Wii users) out of a total of 145 million requests the iPlayer had overall in this period, representing growth month on month by 31%470.

461 462 463

http://en.wikipedia.org/wiki/Wii#System_saleshttp://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e1103.pdf http://www.reuters.com/article/2012/01/10/us-ces-microsoft-idUSTRE80909P20120110 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 smartphones 468 http://www.isuppli.com/Home-and-Consumer-Electronics/News/Pages/Xbox-360-PS3-Vie-to-Win-Digital-Connected-Home-Battle.aspx 469 http://www.bbc.co.uk/blogs/bbcinternet/2011/01/december_2010_bbc_iplayer_mont.html 470 http://www.bbc.co.uk/blogs/bbcinternet/2011/01/december_2010_bbc_iplayer_mont.html

119

Time-shifted viewing A sizeable chunk of Brits watch time-shifted TV. Nearly one in three access TV on demand and 32% of internet users own a personal video recorder471. We come on to discuss the impact this has had on the traditional ad break later in the section. The silver screen There were 157 million visits to the cinema in Britain in 2010472, peaking in the summer 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-yearolds, 31% of 7 to 14-year-olds and 22% of 25 to 34-year-olds attending the cinema at least once a month. Genres differ with age. Musicals, family films and animations appealed to tweens (7-14); youth-themed drama, crime, action-led films and comedies hit the spot for teens and young adults (15-24); adventure and animated features did 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 3DTV Globally 12% of online consumers say they have or would have a definite interest in getting a 3D TV476. Our view: 78% of people there are making a good call at the moment. 3D TV isnt quite there yet. Frankly the content is bad, the glasses goofy and technology imperfect. Even if your average consumer hasnt twigged this, the premium that typically accompanies new-to-market technologies simply prices them out of the game. Taken together, unless a brand wants to court wealthy innovation junkies then 3D advertising is probably just not worth it. Watching in 3D cinema This, however, does not speak to the opportunities offered up by 3D cinema, global installations of which grew 250% in the last year (614% in Western
471 472 473

Digital Trends, April 2011, Mintel http://www.launchingfilms.com/research-databank/ http://www.bbc.co.uk/news/entertainment-arts-15092801 474 http://www.bbc.co.uk/news/entertainment-arts-15092801 475 http://www.statistics.gov.uk/cci/nugget.asp?id=572 476 How People Watch A Global Nielsen Consumer Report.

120

Europe) and 3D box office receipts were estimated to be $5.5bn in 2010 477. In total 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 a crucial difference to the TV market. That means for brands looking to do 3D TV ads, cinema is a better bet than TV. Cinema owners will know this, however, and will therefore be squeezing brands for as much cash as they can. To justify that premium 3D advertising may just have to be for premium products for the moment. That makes sense too if you want to carry over an ad onto 3D TV channels, for reasons mentioned above. That said there is some evidence that theres commercially beneficial novelty effect here. Even for lowly fast moving consumer goods slipping in another dimension to an ad can ostensibly boost sales. For example, Birds Eye Fish Fingers in Australia has seen 20% sales growth off the back of a 3D ad479. It isnt clear, however, whether this figure states overall sales lift, or sales lift over and above plain old 2D advertising. The connected TV Something thats arguably more exciting than 3D is the advent of internet TVs, that is, television with internet. Its already possible to buy a box to watch video and interact with other content over the top via broadband. Heavyweights like Apple 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%)480 global online consumers owns or has a definite interest in purchasing a TV with internet connection in the next year and this is fairly insensitive to demographic differences. What connected TVs mean The internet being added to TVs does two things. One, it breaks the conventions of traditional distribution people choose what they want and watch it when they want, which has implications for the future of channels without changing anyones location (no computer or mobile needed). This means people can i) purchase their TV and films on a case-bycase basis or with an all you can eat subscription service; or ii) watch it free
477 478 479

Sony Professional, http://www.sony.co.uk/biz/article/id/1237478607682 Screen Digest, as quoted on http://www.sony.co.uk/biz/article/id/1237478607682 http://92.52.70.83/news/australia/3d-cinema-add-leads-20-fmcg-sales-growth 480 How People Watch A Global Nielsen Consumer Report.

121

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 big implications for interruptive media. If brands cannot ride others content any more, they will have to create their own content or find other ways to move inside the programme or add value to it to persuade. But thats probably not going 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. Well 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 show on Facebook and 17 of the 100 most Liked Pages represent TV shows481. New companies like Zeebox offer analyses of whats on screen, and use the information gathered to amass things from the web whether it be a pair of shoes a character is wearing in Gossip Girl or a car being driven in Top Gear. The app cometh Beyond that its very likely that what weve seen in the mobile app market will be 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 their TV. As content swells, brands could step in to recommend (e.g., The Economist could 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 buy something you like. Or Heat could provide a conduit for people to gossip about the characters or story in any pop show. More advanced than that, when phone, tablet and TV start talking to each other effortlessly, one can imagine new possibilities for TV itself, blurring gaming, websites, video calling etc into one new medium made from different media. Summary TV isnt dead: its very much alive and going places: online, on mobile, on games consoles and on tablet. If anything, thats increasing the amount we watch, not cutting it. But distribution is just the start: the medium is changing too. The watch out will be for those crying for the death of television. It isnt dying. It may be changing but were addicted to watching. What will be fascinating is how this changes.
481

http://www.insidefacebook.com/2011/05/18/tv-shows-facebook-television/

122

First up, its getting another dimension added to it and while 3D may be slow to take off it presents brands with short-term novelty wins and longer-term creative opportunities. Secondly, and where wed put our money for the real fireworks, its becoming truly interactive through internet TV and through connected devices like tablets and smartphones being able to talk with TVs or shows and let people interact with TV. To marketers, areas like t-commerce (television commerce; we might have just coined that) and innovations around interactive product placement open up. Beyond that, opportunities abound for letting people interact with their TVs in a dizzying variety of ways something brands, learning from the success of the mobile app markets, could capitalise on by being bold and early.

123

124

125

Listening
To simplify and exaggerate, the album and the download are dying while the single and the stream are rising. No single channel is being used by more than 60% of the world482. Fragmentation is rife. The usual story is repeated for music: the behaviour is just finding new valleys to run through and valleys with as little friction from money or advertising as possible. Whale blubber and the music industry An industry no ones paying for any more The producer and musician Brian Eno sums it up, I think records were just a little bubble through time and those who made a living from them for a while were lucky. There is no reason why anyone should have made so much money from selling records except that everything was right for this period of time It was a bit like if you had a source of whale blubber in the 1840s and it could be used as fuel. Before gas came along, if you traded in whale blubber, you were the richest man on Earth. Then gas came along and you'd be stuck with your whale blubber. Sorry mate history's moving along. Recorded music equals whale blubber. Here is the chart that keeps music execs up at night:

483

482 483

http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf http://www.fastcompany.com/1672447/the-state-of-internet-music-on-youtube-pandora-itunes-and-facebook

126

The cost of piracy The BPI (British Recorded Music Industry) reckons piracy cost the UK music industry an around 200 million in 2009. More than two fifths (42%) of 16-34s surveyed listen to mostly free music, while half of a younger group (16-24s) see no problem with free downloading using file-sharing tools such as Torrents. 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 monthly subscription 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 a 2.9% share485. The music industry should actually be quite happy with that. Its Hollywood that will need a wardrobe change after they see roughly half of all piracy occurring in the world is of films and TV.

486

However, there is a bigger threat to music than piracy and the chances are youve done it.

484 485 486

Mintel Paid-For vs Free Consumer Attitudes to Pricing in Media and Music Special Report, April 2010 http://arstechnica.com/tech-policy/news/2011/02/where-have-all-the-music-pirates-gone.ars http://arstechnica.com/tech-policy/news/2011/02/where-have-all-the-music-pirates-gone.ars

127

How are we listening to music? CDs: the slow leaking balloon In Britain, 58.5% of music buyers buy only CDs. Yes, still. Thats down from 65.8% in 2009 but its still surprisingly high. The digital revolution runs ahead but with a long, heavy tail. Video resuscitated the radio star How are most people listening to music digitally? Actually were watching it. Well, we might be. Most people (57% of global online consumers487) go onto sites like YouTube, find the music they want and then press play. Whether theyre actually watching or not we dont know but anecdotal evidence suggests not. The next most popular way is piracy, with just shy of half the world feeling slightly 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 isnt a lot higher. If theyve got the latest phones, theyre using it for music489.

490

487 488 489

http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf 490 http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf

128

Who are the music watchers? Predominantly the young, who are also more likely to watch on their phones too491.

Who are the legal downloaders? Interestingly, the young are the biggest downloaders of legal music. For music execs the sweet spot is the 21 to 24-year-old bracket, who appear to care enough about music to pay for it, especially on their mobiles492.

491 492

http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf http://www.nielsen.com/content/dam/corporate/us/en/reports-downloads/2011-Reports/Nielsen%20-%20Fragmented%20World%20of%20Music.pdf

129

Who are the streamers? 21 to 24-year-olds are most likely to stream493. Two thirds of the users of Spotify, a music streaming service with at least 10 million users (thats from 2010 and Spotify arent giving us an update), are under 29494. Whats interesting is that more people know about streaming services and chose not to use them than those who know and are interested.

What are we listening to? More singles The internet has changed the unit of music from the album to the single495. In the UK, digital singles sales have risen by a third496 while total album tales have fallen 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 vs the singles one. This graph helps:

493 494 495

http://digital-stats.blogspot.com/2011/04/23-of-spotifys-free-users-are-under-29.html http://digital-stats.blogspot.com/2011/04/23-of-spotifys-free-users-are-under-29.html http://www.fastcompany.com/1672447/the-state-of-internet-music-on-youtube-pandora-itunes-and-facebook 496 Mintel Paid-For vs Free Consumer Attitudes to Pricing in Media and Music Special Report, April 2010

130

Behind this single fetish is iTunes, another of Apples breakthrough products, which has had 11.7 billion downloads from over 160m iTunes accounts across 23 countries497. In the UK, 13% of the population (equivalent to 20% online population in UK) purchased digital music in 2009498, 70% of it from iTunes499. Radio, but less from a radio Time spent listening to the radio in the morning is nearly half what it was a decade ago among teens and young adults (41% vs 74%). However, as with many other media the true shift is in device rather than behaviour: 36% of young people now listen to online radio500 and in 2010, 20% of UK smartphone users had installed a radio app, which more than half (53%) used at least once a week501. Pandora, an internet radio service, is the most popular online radio service with a 52% market share and close to 60 million registered users. It has more than 1 billion stations and represents a small yet punchy 1.7% of all radio listening.

497 498 499

digitalmusicnews.com, September 2010 http://interestingsnippets.tumblr.com/day/2010/06/21 http://pcworld.about.net/news/Oct272004id118350.htm 500 eMarketer, October 2010 501 RAJAR, July 2010

131

132

133

Reading
Are we still reading? Its tempting to think with all the other distractions, reading is withering away. It isnt. Nearly nine out of ten adults are book readers502. The picture is similar to that going on with TV: the medium is diversifying but the fundamental behaviour isnt. High street shops may be struggling503 but e-books are growing504. Amazons sales of its Kindle books overtook those of its paperbacks and hardbacks combined way back in early 2011505,506,507. A new chapter: the e-reader In 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 ebook 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. By late 2011 it was 9% (vs 5% with tablets) and a high 40% said they would consider buying one. A full breakdown can be seen in the table below:

502 503 504

Mintel, Books and e-books UK February 2011 Mintel, Books and e-books UK February 2011 Mintel, Books and e-books UK February 2011 505 Books sold through Amazons Kindle ecosystem on Apple iPad, iPod touch, iPhone, Mac, PC, BlackBerry, and Android-based handsets 506 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-sales 508 The Publishers Association as quoted in The Guardian, http://www.guardian.co.uk/media/2011/may/03/ebook-sales-amazon-kindle 509 http://futurebook.net/content/how-high-can-e-book-market-go

134

E-readers or tablets? Whats going to dominate? For the reading aficionado the e-book reader has two advantages. First, their displays matt surface make for a better reading experience in any light. Second, theyre cheaper by around a factor of five. In fact in 2011 Asda released a discounted e-reader, the snappily named View Quest Mediabox 5in Media Tablet with the more concise price of 52 (A Kindle is now 89 having been 111 in 2011) However, the tablets breadth of functionality in one package is too good to ignore, a theory supported by the fact that slightly more readers indicate theyd want a tablet than a dedicated e-reader510 (44% of book readers would consider tablets versus 40% e-reader)511. The loveliness of paper But 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 just because the digital experience lops off so much of the joy: the feel, bookish smell and physical trophy you have when youre done. Theres pleasure in paper. Whos 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 the population514. And the demographics look different too. E-book readers are more likely to be male, younger (16-34) and either in full time education or prosperous 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% on the previous year517. Specialised non-fiction rules in the land of the e-book, and Apple can smell blood: in March 2012 they unveiled a new version of their
510 511

Mintel, Books and e-books UK February 2011 Its worth noting that these figures are from research carried out during Christmas 2010. Anecdotal evidence suggests this was a key time for both ereaders and tablets, meaning data here could be significantly out. 512 Mintel, Books and e-books UK February 2011 513 Mintel, Books and e-books UK February 2011 514 Mintel, Books and e-books UK February 2011 515 Mintel, Books and e-books UK February 2011 516 Mintel, Books and e-books UK February 2011 517 The Publishers Association as quoted in The Guardian, http://www.guardian.co.uk/media/2011/may/03/ebook-sales-amazon-kindle

135

iBook store that supports advanced textbook functionality, like quizzes, notetaking, study cards and interactive diagrams. Educations going to become a hot 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 shaved off; that is, between 3 and 6518. Reality is of the same mind: in 2010 the average price for an e-book was 4.56, up from 3.93 in 2009519. Magazines and newspapers Headline: decline Magazines 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 slump and internet opportunism. Its free to get your goss online. This young woman says it best, I look online if there's any news worth reading, or watch the news on TV. Magazines I can live without; the stories end up online eventually anyway!521 Weve got so comfortable with the post-scarcity economics of news and entertainment online that over three quarters of us are unwilling to shell out a single penny for online magazines and news. Those that are willing are only willing up to a point: 5 a month is the upper limit for subscriptions and 25p the boundary for an article522. The freemium bomb And no wonder when the newspapers put it all out there for nothing. By the start of 2010 The Guardian was the UKs largest newspaper website with 12.6m monthly UK visitors. Mail Online clocks in next at 11.4m, then The Telegraph (10.1m), then the Sun (8.1m), Mirror (5.1m) and Independent (3.8m)523. And thats just home visits. Increasingly these newspapers are finding a global audience524. For the same time period The Guardian recorded 37m worldwide visitors and Mail Online 32.8m, a 67% annual increase. Another factor is the rise of the freesheet, which has doubled while newspaper circulations have been sliced by around 15% in the last five years 525. This has cannibalised magazine and newspaper buying, especially among the young,
518 519 520

Mintel, Books and e-books UK February 2011 The Publishers Association as quoted in The Guardian, http://www.guardian.co.uk/media/2011/may/03/ebook-sales-amazon-kindle Mintel, British Lifestyles 2010 521 Mintel, British Lifestyles 2010 522 Mintel, Paid-For vs Free Consumer Attitudes to Pricing in Media and Music UK April 2010 523 Well 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 2010 525 Mintel, British Lifestyles 2010

136

roughly half of whom have a mostly free newspaper habit (half of 16-24s and 43% of 25-34s526). Over 45s are keeping the industrys necks above the water: they buy most of the papers they read versus, for example, those ten years their junior who only buy a fifth of the newspapers they read527. Ad spend draining out Overall ABCs top 100 actively purchased magazines were down by 17% over 2011528. Ads spend suffered in unison: newspapers and magazines suffered the largest percentage change in spend (-25%) of any media in 2009. Innovate or die Some have tried a good old bit of economic engineering: from reducing the price 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, The Independent, the Guardian and The Daily Telegraph in 2009/10). Another solution to the snag of post-scarcity economics has been simply to find some scarcity worth paying for. Newspapers and magazines are therefore trumping issues and starting movements or squeezing all the juice out of their lifestyle sections, supplements and freebie incentives. Some, like The Telegraph, have even created gaming sections for which they charge. Some newspapers and magazines are so confident in their scarcity value, theyre charging for it through digital channels. The Wall Street Journal and Financial Times have successfully put a form of paywall up, offering a few articles as a free amuse-bouche, then charging for the rest, or sections, of the menu. Rupert Murdoch, Chairman, and CEO of News Corporation, went further with The Times and The Sunday Times in June 2010 shutting them down almost entirely to free traffic. The Times lost two thirds of its traffic almost immediately529 and has since reported 105,000 paid subscribers530. The New York Times has done the same. They secured a digital subscription base of 100,000 in 2010531 and 250,000 by 2011532 which their CEO Janet

526 527 528

Mintel, Paid-For vs Free Consumer Attitudes to Pricing in Media and Music UK April 2010 Mintel, Paid-For vs Free Consumer Attitudes to Pricing in Media and Music UK April 2010 Mintel, Paid-For vs Free Consumer Attitudes to Pricing in Media and Music UK April 2010 529 http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010/07/the_times_paywall_hit_or_miss.html 530 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-paywall 532 http://blogs.forbes.com/jeffbercovici/2011/04/21/ny-times-says-paywalls-working-100k-subscribers-and-counting/

137

Robinson considered a success: Initial volume has meaningfully exceeded our expectations533. Another method has been to charge for the glass but not the wine. The Guardian, for example, has iPhone and iPad apps, the former of which sold 70,000 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, creating apps on Facebook that share to a set of persons friends when they have read something. By the end of 2011 The Guardian was seeing more than 4 million users of its Facebook app534. More time is needed before any conclusions can be made on this new business experiment but well bet on good old economic scarcity winning out. For the facts and froth, mass journalism will be free because its simply not worth paying for. On the other hand, those who recognise thoughtful, quality journalism will be willing to pay for it. Blogs and forums Definitions and scope A blog is a type of website where posts which can contain text, images or video are displayed in reverse-chronological order. In 2011, there were over 156 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 days 536. So, although there is still a vast number of working blogs there is also a lot of testament to experimentation, unfulfilled ambition and general maturation of the blogging world. Bloggers today have been blogging for an average of two years537 and the gentle decline seen in the UK of blogger numbers (8% of UK internet users keep a blog updated, down from 10% in April 2009538) is indicative of a wider global trend. In short, only the dedicated and profitable blogs remain. Some in this latter group are so popular theyve sold for large amounts, from the 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 news
533 534 535

http://blogs.forbes.com/jeffbercovici/2011/04/21/ny-times-says-paywalls-working-100k-subscribers-and-counting/ http://www.guardian.co.uk/media/pda/2011/nov/30/guardian-facebook-app "BlogPulse". The Nielsen Company. February 16, 2011. Retrieved 2011-02-17. 536 Technorati, http://technorati.com/blogging/state-of-the-blogosphere/ 537 http://technorati.com/blogging/article/who-bloggers-brands-and-consumers-day/#ixzz1Lme0oGYD 538 Digital Trends, April 2011, Mintel 539 http://blogs.seattleweekly.com/dailyweekly/2009/04/seattle_cheezburger_cats_conti.php

138

website and content aggregating blog, was sold to AOL for $315m in February 2011)540. What type of people blog demographics? Americans mostly, who have a 29.2% share. The Brits come second with 6.75%. 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 more affluent than the rest of the population. For 11% its their primary source of income, although mostly not their only one542. Sex differences are muddled here. Some sources report they are disproportionally (two thirds) male543 while others state parity (50.9% males; 49.1% female544). So blogging is either gender 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 a number of different categories. Leading by share are the hobbyists (65%) who blog for fun and measure success 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 to their blog (3 hours plus a week) to supplement their income, clocking up an average blog income of $6,333. Finally the corporates blog on behalf of another company, although only a quarter 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 cannot easily be made from corporate blogging546.
540 541 542

"The Huffington Post Media Group Makes Key Announcements". The Huffington Post. 2011-03-14. Inside Blog Demographics, Sysomos, June 2010 Inside Blog Demographics, Sysomos, June 2010 543 Inside Blog Demographics, Sysomos, June 2010 544 Inside Blog Demographics, Sysomos, June 2010 545 Inside Blog Demographics, Sysomos, June 2010 546 Inside Blog Demographics, Sysomos, June 2010

139

Mummy bloggers a deeper look Mummy bloggers are misunderstood. Theres a view that sees them as young, bored housewives. In fact 84% have had a career and 68% still do. Most identify as middle class (67%) and the biggest chunk fall in the 30-39 year age bracket (55%) with 30% 40-49 years old. Their social media activity outstrips their traditional media consumption by as much as three times, spending more than seven hours a week on social media (96% use Facebook and 81% use Twitter) versus the 2-3 hours they spend on newspapers, mags, radio and TV each week547. This has a lot of relevance for brands. A US study has found that 44% of mums used social media for recommendations on brands and products and used specialised content sites for information and counsel from fellow parents548.

547 548

The Britmums Blog, 11th April 2011 21st Century Moms report, cited by Promo magazine, 7th July 2009

140

Whats 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 for products and a third more would like to. More than half (55%) are interested in advertiser and sponsor relationships and a further 35% would consider it549. Whats everyone using to blog?

549

The Britmums Blog, 11th April 2011

141

Whos reading blogs? Most people. 80% of broadband users have visited a blog or forum 550 and the average number of views even hobbyists blogs get is moderate to high.

Brand implications Consumer opinions posted online have the same degree of trust as brand websites and are only second to advice from someone you actually know551. This means brands should invest heavily in making sure these consumer opinions are as favourable as your products and services allow, often through radical changes to the way their customer service is set up.

550 551

Digital Trends, April 2011, Mintel Nielsen Online Global Consumer Survey, cited in their blog, 7th July 2009

142

143

Gaming
Gaming is no longer the solace of spotty boys with no girlfriends. Gaming is now mainstream thanks to the family-friendly Wii, commuter-friendly iPhone, and perversely popular procrastinator-friendly bunch of social media games like Farmville. With the expansion of the market into new media the audience has expanded with it. Segregating an audience by genre or into casual gamers or hardcore gamers doesnt really apply any more. The hardcore are just as likely to enjoy playing Angry Birds on their iPhone as well as FIFA on their Xbox and World of Warcraft on their PC. The impressive gaming market A mainstream pastime Gaming is now so widespread that consoles, the devices needed to play many of them (including Xbox, PlayStation, Nintendo Wii, PSP, Nintendo DS etc), once the preserve of the hardcore, are owned by over 60% of internet users and nearly 80% of under 35s552. The market has been driven by innovation and iteration. Soon we will be arriving at the eighth generation of consoles. Add in casual gaming on social networks like Zyngas Farmville on Facebook (12 million global monthly active users, but falling down from a whopping 80 million global users in Feb 2010553), and mobile gaming like Rovios Angry Birds (over 500 million downloads at the close of 2011 and climbing554) and you can see that penetration of gaming is reaching epidemic proportions with 31 million or 78% of the UKs online population playing555.

552 553 554

Mintel Video Games and Consoles October 2010 http://uk.wireless.ign.com/articles/121/1211408p1.html 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

How much is the market worth? The global video games market was estimated at $74 billion556 in 2011, up $4 billion557 on the previous year and expected to grow to roughly to $87 billion by 2014558. The games industry outstrips most other entertainment properties by a country mile (the digital music industrys paltry $4.6 billion in 2011559). The chart below gives an idea of how large the market is and its growth rate.

556 557 558

http://www.guardian.co.uk/technology/gamesblog/2011/jul/06/gartner-global-game-spending Deloitte Market Study Dutch Games Industry, April 2011 Digi-Capital Global Video Games Investment Review, February 2011 559 IFPI Digital Music Report 2011

145

To prove how mainstream gaming is, take EAs mega franchise FIFA. With October 2010s annual launch of the 17th game in the series, FIFA 11 smashed every record standing in 2010. It became the fastest selling video game and at the time, it beat Avatar to become the biggest entertainment product in the world. FIFA 11 sold 2.6 million copies within the first week of launch ($150 million) and has sold over 100 million copies to date making $2.5 billion dollars in the process560. For comparisons sake, Avatar, the biggest and fastest grossing movie of all time, took $77 million at the US box office on the opening weekend and grossed $2.7 billion over its lifetime561. So there is no doubt that huge titles like FIFA fight for consumers attention with the big boys. A year later in November 2011, Call of Duty: Modern Warfare 3 blasted its way into new records, taking $400 million in the first 24 hours in the US and UK alone.

560 561

Internal EA figures http://boxofficemojo.com/movies/?id=avatar.htm

146

Why so negative about video games? Despite the news painting video games as the root cause of most of the worlds ills from teenagers murdering their fellow students562, to obesity in helpless Xbox addicted children563, the video games industry is doing well. The UK 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. The talent in the UK is highly respected, with a great many studios responsible for dozens of world famous games Grand Theft Auto566 and LittleBigPlanet567 among them. Today UK games studios employ over 9,000 games developers and are responsible for global sales of 1.7 billion and contributing 400 million to the GDP568. Yet video games are misunderstood, and often discussed (in the media especially) in sneeringly negative terms. Hence the government has always been disinterested and treated the video games industry with disapproving paternal distain. This neglect filtered through into poor policy decisions with the governments dogged refusal to offer UK studios any tax incentives. This resulted in a severe brain drain, a 9% drop in headcount and a fall in tax revenues by 55m569, seeing home grown talent moving abroad to countries with much more buoyant industries and supportive governments. In March of this year, with a new innovation rhetoric to live up to570, the government u-turned and finally introduced a minor tax break to studios 571. And an industry which spawned the ZX Spectrum and Lara Croft is finally and somewhat begrudgingly getting the recognition it deserves. Piracy Like most other entertainment industries, video games suffer from massive amounts of piracy with an estimated four pirated copies downloaded to every legitimate copy sold representing a loss of 1.45 billion in sales572. The level of piracy differs wildly between platform, with PC gaming (platform of choice for proper nerds) long been blighted by piracy. And where there is the internet, there will always be hackers demanding that their entertainment come for free and more fool any big company to try and stop them.
562

http://www.nydailynews.com/lifestyle/health/2009/04/24/2009-0424_what_role_might_video_game_addiction_have_played_in_the_columbine_shootings.html 563 http://www.sciencedaily.com/releases/2004/03/040318073351.htm 564 Mintel Video Games and Consoles October 2010 565 http://www.digitalspy.co.uk/gaming/news/a358574/uk-games-revenue-down-13-percent-in-2011.html 566 http://en.wikipedia.org/wiki/DMA_Design 567 http://en.wikipedia.org/wiki/Media_Molecule 568 http://www.culture.gov.uk/what_we_do/creative_industries/3274.aspx 569 http://www.guardian.co.uk/technology/2011/jan/25/tiga-games-tax-relief 570 http://www.bbc.co.uk/news/uk-england-london-11689437 571 http://www.bbc.co.uk/news/technology-12829815 572 http://www.escapistmagazine.com/news/view/107255-Piracy-Outpacing-Sales-by-4-1-Says-U-K-Game-Body

147

Who is actually buying and playing these games? Overall, in 2010 UK consumers bought a total of 63 million videogames, more than one per person in the UK573. Consoles are still the gamers platform of choice with 62% of online population playing on them574. Yet gamers are spreading their budget across multiple platforms hence mobile and social gaming being the fastest growing mediums. Weve seen a 60% increase in people playing games on their smartphones from 2009 to 2010575 and enable everyone from your mum to the most hardened geek to get their gaming fix on the move and whilst procrastinating at work.

Consoles PC gaming is still the heartland of the hardcore, with consoles increasingly appealing more to both older consumers and to women. There is still a skew

573 574 575

http://www.ukie.info/content/ukie-releases-2010-year-end-figures-another-strong-year-video-games-and-interactive-entertai National Gamers Survey 2010 http://www.newzoo.com/press/NationalGamersSurvey2010_Summary_UK.pdf http://www.jackpotcity.com/blog/post/the-rise-of-mobile-games/

148

towards men and younger people (80% of under-25s own at least one kind of console), but the demographic is broadening576. The recent acceptance of gaming as a mainstream pastime has been largely driven by the success of Nintendos Wii. Launching with its revolutionary motion controller (instead of the standard button-based gamepad), the Wii was heavily marketed as a family-friendly console: something that is educational (Brain Training) and healthy (Wii Fit), to try and negate the perception that video games are evil brain-rotting devices. And they overwhelmingly succeeded with one third of UK households now owning 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-based activity games with kitsch customisable avatars (Miis) made for bowling, tennis, golf or driving Mario karts. Wiis have been a very popular gift at Christmas with many gamers buying them for their parents or girlfriends, hence the demographic for consoles broadening. Proper gaming Wiis 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 or PS3? is normally the first question gamers ask each other followed by a sharp intake of breath and a light ribbing about the other ones poor taste if the answer doesnt 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 of online gaming. PlayStation followed suit with its PS3 but over 18 months later, by which time Xbox was firmly established with a large catalogue of titles and its Xbox Live online gaming service. This head start from Xbox still affects PlayStation today, both in perception that it has fewer titles, and in total sales578. Although Wii smashes them both with 94.74 million579 sold globally. Online gaming One of the main drivers of console ownership is online gaming the ability to link up with your friends and random strangers and play against them over the
576 577 578

Mintel Video Games and Consoles October 2010 http://www.techwatch.co.uk/2010/10/04/one-in-three-uk-households-own-a-nintendo-wii/ http://www.scei.co.jp/corporate/release/110415_e.html 579 http://en.wikipedia.org/wiki/Wii

149

internet. As unappealing as continually being killed by obnoxious American teenagers sounds for anyone who isnt male and under 25580, online gaming has grown exponentially and is now fairly ubiquitous. Nearly all new games nowadays have some form of online multiplayer almost as a hygiene factor. If it hasnt got the ability to play online, it better be an incredible game or publishers wont even touch it. Online gaming is powered through the various manufacturer networks the superior and 40-a-year Xbox Live (50 million subscribers, half of them Gold/paying members581), the recently-hacked-and-free PlayStation Network (60 million subscribers582), and the furthest behind (in quality) free Nintendo Wii network. As long as youve got the same game as your online friends, then you can join them in shooting, racing, and fighting with or against them in whatever manner the game allows. Games such as Activisions Call of Duty, and EAs Crysis 2 are built upon their multiplayer with the offline mode being only about 5-8 hours of gameplay and acting almost like a training module for the online world. Whos innovating? Most technology industries thrive by iterating and instilling a desire in gamers to upgrade to the latest gadget. A new phone could be top of the range for a good five quarters, now its more like two or at best three583. The console industry used to be like that. But now, very aware that bringing out a new console is equivalent of losing your entire consumer base and rebuilding from scratch, there is a desire in the industry to extend the lifecycle as much as possible of the current generation of consoles. This is evident with Microsoft declaring that Xbox 360 is half way through its life cycle and Xbox 720 wont be launching until 2015. Yet, the console market is far from static in terms of innovation. The Wii signaled a sea change into motion controlled gaming with its Wiimote where you control the game by waving your arm around holding what is essentially a magic wand instead of pushing buttons. The novelty of the Wiimote is one of the main drivers in the continued success of the console. Wiis success prompted Sony to launch (albeit three years later in June 2009) the PlayStation Move, which is essentially a copy of the Wiimote, a motionsensitive games controller. Microsoft went one step further and dispensed with the controller altogether with the launch of Kinect where you are the controller. Prancing about in your living room like a lunatic proved wildly popular
580 581 582

Mintel Video Games and Consoles October 2010 http://www.joystiq.com/2011/01/05/xbox-360-hits-50-million-worldwide-xbox-live-users-top-30-milli/ http://www.joystiq.com/2011/01/05/60-million-psn-accounts-created-to-date-says-sonys-stringer/ 583 Sony Ericsson internal

150

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 8 million in the first two months, its Kinect that is responsible for Microsoft being confident that the 360 will last another four years. Feeding the habit On average UK Xbox 360 gamers spend 64 a month on their hobby with 13% of gamers spending more than 100 on games each month 584. With 71% of gamers choosing to play at least three different genres and with them playing anywhere between five and 11 hours a week (in a week that only has 35-45 hours of free time)585 gaming for some is a full time hobby. Why game? A well-designed game is immersive, amusing, entertaining and downright joyful586. Games are played for a whole host of emotional reasons that comes from either overcoming obstacles in hard play or simply the sheer joy of escapism in easy play. These emotions are mostly to do with the feedback reward associated with a sense of accomplishment or fiero (personal triumph over adversity)587. There is nothing quite like the unadulterated adrenalin rush that comes with completing a 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 elitist community are playing for recognition and notoriety among their peers theyre all about looking bad and being badder. Segmenting gamers Gamers dont think about games in terms of genres instead they focus on different games for different experiences, depending on what they feel like. And so it makes sense for marketers to segment accordingly588. Game experiences are split roughly into four groups: competitive and action games, like the zombie apocalypse shooter Left for Dead or the Sci-Fi loveliness of the Halo series; escapism like the post-nuclear world of role playing game Fallout or 15th-century Italy in the beautifully designed world of Assassins Creed; strategy games like Zelda or Civilisation Revolution; and finally social games like Wii Sports or Mario Party.

584 585 586

http://www.mcvuk.com/news/43330/UK-Xbox-gamers-spend-64-a-month EA segmentation September 2010 http://www.youtube.com/watch?v=sIb8JdoWF00 587 http://www.xeodesign.com/xeodesign_whyweplaygames.pdf 588 EA segmentation September 2010

151

The rise of social gaming What are they and whos playing them? Casual games are defined as those that can be played on social networks or online in short bursts, such as Farmville, Mafia Wars or Bejeweled Blitz589. Social and casual games are responsible for the expansion of the demographic of gamers with the majority or 25% of the 28 million British social gamers being in their 30s590 and 58% are female.591

How big is the market? UK gamers spent 555 million on casual games, 15% of total game spend in 2010 and up $4-6% by 2011592. These numbers are only set to rise given Googles recent investment in Zynga, Disneys $763.2 million acquisition of developer Playdom, and the $300 million purchase of Playfish by Electronic Arts. The size of the buyouts and those doing the buying should be another signal, if more were needed, that gaming is truly heavyweight on the entertainment and business stage.
589 590 591

National Gamers Survey 2010 http://www.newzoo.com/press/NationalGamersSurvey2010_Summary_UK.pdf http://www.jackpotcity.com/blog/post/the-rise-of-mobile-games/ Popcap, February 2010 592 http://www.newzoo.com/ENG/1504-Detail.html&id=82

152

A different type of gaming Social games arent as immersive as console games and are designed for the gamer to dip in and out. Nevertheless gamers are a little more obsessive than average and have an incredible ability to fritter away hours and hours playing what appear to be the most mundane of games. The rise of mobile gaming Apple taking mobile gaming forward Since Nokia put the hugely addictive Snake on their phones in the 90s, it has always been that mobile phones come with games. But with the launch of the iPhone with the accelerometer and touch screen making for a perfect gaming device mobile gaming has taken off in a big way. Games are the most popular app on Apples App Store making up between 70-80% of all apps, with nearly 100,000 games currently available593. 70% of these are free and the remaining 30% have undercut594 those of the Nintendo DS, the most popular portable gaming device with 151 million worldwide sales by 2012, which sells games for around $15595. Total game application downloads were at 340k in 2010, 423k in 2011 and are estimated to be 567k in 2012, representing 34% growth596. In total, 37% of connected Brits have played casual games on a smartphone (versus 9% on a portable games console)597. The App Store from Apple and Google Play on Android lead the way in providing these games. With tablets seeing 300% growth (now at 9% penetration in the UK598) and gaming being even better on them due to higher screen sizes and more processing power, mobile gaming is going to take off in a big way. 10% of connected Brits have played a game on their tablet599, especially popular among the 25 to 34-year-old age bracket600. Financially, while half of people say they will only download free games, theres a juicy market there for developers too, with half (obviously) coughing up601. Early indications of the size of the coming market come from successes like the game Infinity Blade, which grossed $30 million in its first 12 months up to December 2011602. Combine this with the coming upgrade to the
593 www.apple.com/ipodtouch/from-the-app-store 594 http://148apps.biz/app-store-metrics/ 595 http://en.wikipedia.org/wiki/Nintendo_DS_sales 596 Mobile Application Gaming, Mintel, February 2012 597 Mobile Application Gaming, Mintel, February 2012 598 Mintel, Digital Trends Winter, Uk, December 2011 599 Mobile Application Gaming, Mintel, February 2012 600 Mobile Application Gaming, Mintel, February 2012 601 Mobile Application Gaming, Mintel, February 2012 602 Mobile Application Gaming, Mintel, February 2012

153

communications network (see 4G in first chapter) and mobile gaming is going to get truly formidable. How big is the market? iPhone users spend nearly $60 a year on downloading games603. This, along with competitors, has pushed the market to $5.6 billion in size, growing at a rate of 19% annually604. Games houses take mobile gaming so seriously they are 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 Nintendos Gameboy, more recently Sonys PlayStation Portable and the Nintendo DS and most recently the PlayStation Vita. But they have always tended to replicate the console experience and somewhat missed the point of how gamers like to play when on the go. Mobile gaming is about dipping in and out, catching five minutes here and there when on the way to somewhere, which is what iPhone and now Android games developers have really nailed. For example, iPhone users spend an average of 12 minutes a day on their gaming apps605. A market set to grow With smartphone ownership growing at 70% a year606, set to grow to 82% penetration in Europe within three years607, we will only see mobile gaming growing with it. Whats coming? Augmented reality and 3D New technology is opening up new ways to game and games manufacturers have begun to embrace innovations like 3D and augmented reality (AR). Nintendo, known for pushing boundaries, launched their new portable Nintendo 3DS in 2011, which does both 3D (without glasses) and AR. So you can now play archery on your coffee table and hold your Nintendo in the palm of your hand. And were sure it wont be long before we see AR iPhone games along with a 3D iPhone screen thrown in for good measure (although you can be sure 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=455555 605 http://www.ismashphone.com/2011/01/infographic-shows-that-the-average-iphone-user-spends-84-minutes-using-apps.html 606 Comscore as cited by Cellular News, March 2010 607 Carphone Warehouse/Gartner, February 2010

154

Mind Control Brain computer interfaces like Neurosky608 that use electrodes to read brain signals have allowed games companies to develop games like Mattels Mindflex609 where you control the game by simply thinking. Much like 3D, these brain-computer interfaces havent yet taken off due to the apparatus you need for it to work (dorky glasses for 3D and a clunky headset for mind control). But once they make the headset less like an air-traffic controllers, and the games less primitive, it may see an increase in popularity. Whatever the technology enables us to do in the future, good gaming will always be a combination of great storytelling, challenge and exploration. Some things will never change. Brands and gaming Gaming, if done right, is an effective way to either reach people or to get people to engage with brands. Creating apps Brands have been successful creating their own games to drive engagement, like Dares Barclaycard Waterslide game the most successful branded free game to hit the App Store with 14 million downloads610. However, to create a game for a product or campaign, there has to be some tangible reason why, rather than to just drive engagement just because people like playing games. With Waterslide, and its successor Rollercoaster, they were a natural extension of the ATL campaign. Or take the hugely popular, simple and well designed Audi driving game. But these well designed branded games are few and far between because most of them are designed by marketers, who make pretty bad games designers. Applying game theory Brands are experimenting in gaming in a looser sense recently too with a rash of playful campaigns popping up. One of the best being VWs Fun Theory proving that you can change peoples behavior by making things more fun and executed with the incredibly charming Piano Stairs611. VW has done a whole host of different varieties of their fun theory and doesnt seem to be running out of ideas from Arcade Bottle Bank to Speed Camera Lottery.
608 609 610

http://www.neurosky.com http://www.mindflexgames.com/what_is_mindflex.php Dare casestudy 611 http://www.thefuntheory.com/piano-staircase

155

Trying to create gaming campaigns doesnt always work see Cadburys London 2012 campaign Spots and Stripes for an example of what not to do. A feat in integration yes, but the result is a confusing fog of messaging and an exercise in social media box-ticking wrapped up in a loose idea of getting Britain to play games (for a further dissection see footnote612). Other brands have fared slightly better. Orange campaigns have always embraced technology and have judged what customers will engage with. The multiple-award winning Spot the Bull for Glastonbury was very popular primarily as the barrier to entry was low and the prize Glastonbury tickets was within reach and sought after; Balloonacy, while an innovative use of technology, was more involved and the prize wasnt obtainable for most entrants leaving most people trying it once and not bothering after. Entering the gaming culture Brands dont have to create games to tap into gaming: there is an increasing number of in-game advertising options for brands to exploit. From product placement within the game; in-game streetside billboard advertising; branded items available in casual games like Farmville; to banner advertising in mobile games, the opportunities are plentiful and many brands have already seen successes. Take the promotion in Farmville of offering McDonalds branded goods for people to include in their farms. Bizarre as it sounds from advertising using virtual goods in a virtual world, McDonalds understood the collaborative nature of Farmville and instead of placing banner ads around the game, they added value to the gameplay and as a result have achieved a permanent presence in it. Activity such as this is only set to increase with in-game advertising estimated to be worth $1 billion by 2014613. Gamification Weve seen how brands have cottoned onto how popular games are, yet aside from 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 a blog, or for watching a TV show614. Health miles courtesy of Virgin Health615, or perhaps the most bizarre of all, Mindblooms Life Game616 earning points for achieving life goals. So to avoid jumping on the gamification bandwagon, here are some basic things about gaming that everyone should bear in mind617:
612 613 614

http://feed.thisisdare.com/2010/11/spots-v-stripes/ In-Game Advertising: Market Assessment and Forecasts to 2014 Screen Digest as cited by MMO news http://blogs.telegraph.co.uk/technology/shanerichmond/100005500/check-in-apps-for-couch-potatoes/ 615 http://us.virginhealthmiles.com/pages/home.aspx 616 http://www.mindbloom.com/the-life-game/ 617 http://www.slideshare.net/dings/pawned-gamification-and-its-discontents?from=ss_embed

156

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. Summary Gaming carries with it a lot of baggage: that it is niche, that it is for a certain type 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 as likely to game as a teen and the more violent games are only one part of a huge and varied market that is finding a new audience with its increasingly mobile and social identity. Gaming is set only to get more popular and more accepted. For brands grasping the opportunity, and grasping it correctly, gaming could well be very rewarding.

618 619 620

http://www.metascores.net/games/platforms/ps2/littlebritainthevideogame http://www.squidoo.com/VideoGamesWomenLike http://feed.daredigital.com/2010/08/clear-thinking/

157

158

159

All together now

We look at media and devices separately because theyre discrete and it feels overwhelming to try and look at them collectively. But we must because they are 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 back and forth. In the last few sections, the story has been how many behaviours are flowing into new devices. Where all the new devices come together is where the new behaviours are emerging and arguably where some of the most important insights about the way people live through technology are today important because no ones looking at them in great detail and because understanding them can surely unlock large commercial advantage. What is media meshing? No consensus has been reached on the vocabulary. Theres meshing, stacking, dual screen and other things. While the metaphors differ, what theyre describing doesnt. Media meshing is the use of more than one medium at a time. Its using a phone while watching TV. Its surfing the internet while listening to the radio. Its sitting in bed with an iPad browsing TopShop deals while watching an iPlayer show through your bedroom TV. TV and internet meshing How much meshing is going on? 70% of Europeans are doing it. 66% once a week, 56% several times a week and for 40% its 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 the average. When is TV and internet meshing is going on? Weekends. While 23% mesh during the working week, 47% pile up the internet and TV on the weekends622. What are they doing while watching TV? Theyre communicating through various channels email, IM, text and social networks as well as doing some general surfing. The usual sex differences

621 622

Meet Europes media multi-taskers, Microsoft Advertising Meet Europes media multi-taskers, Microsoft Advertising

160

emerge too: the girls are communicating more, while the men are entertaining themselves with video and other content623.

How are tablets affecting this? Theyre stealing share of multitasking, essentially. Tablets are used 70% of the time in front of the TV624, opening up some intriguing cross-media possibilities.

623 624

Meet Europes media multi-taskers, Microsoft Advertising http://www.independent.co.uk/life-style/gadgets-and-tech/connected-consumers-are-in-bed-with-ereaders-sharing-the-tv-screen-with-their-tablet2286915.html

161

What do people do when the ads come on? 39% switch channels. 37% say they use the internet625. Given how high this number is theres certainly scope for much more integrated marketing between TV and internet beyond simply serving up the URL. Who knows what they are but the story-telling possibilities between the two are exciting, especially as communication is the top meshing activity.

625

Meet Europes media multi-taskers, Microsoft Advertising

162

Early explorers have experimented. For example, while people were watching Skins, a gritty teen drama, Windows Live Messenger added functionality that allowed people to interact with elements of the show and get additional content. This drove double the targeted conversations and triple the anticipated reach626. Honda has also innovated here using screen hopping, a technique which allows sound from the TV to be recognised by a phone app. This allowed people to literally capture characters on the TV screen to their phone, where they could interact with them627. The idea is pretty weak but its the possibility thats 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 its much more of young persons activity. 66% of young people (16-24) do this, although a still-respectable 35% of 45 to 55year-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 like Amazon, eBay, comparison sites and the brands own website.

626 627

http://skins.wikia.com/wiki/Skins_(UK)#cite_note-16 http://www.youtube.com/watch?feature=player_embedded&v=UbDYdjhnfEg

163

628

Mobile meshing overall Nearly half (49%) of people with mobile web do it while watching TV. 30% are simultaneously listening to the radio, 17% are using computers, 14% are reading newspapers and 13% are reading magazines629. Mobile and TV meshing How 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.

628 629

Meet Europes media multi-taskers, Microsoft Advertising http://econsultancy.com/uk/blog/7466-how-europeans-are-media-meshing-with-mobile-internet-4

164

What are they doing on their phones while watching TV?

630

How 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 meshing The interaction between advertising and mobile phones is established but rarely applied. 71% search on their phones as a direct result of exposure from traditional 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 are currently woefully siloed to specific media, even though this does not reflect the realities of media use. Advertising drives leads and purchases Eight 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 a website (35%), making a purchase (49%) or recommending a brand or product to others (24%)634.

630 631 632

US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 633 http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html 634 US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html

165

And those ads with the highest click-through rate are those that blend with the phones functionality best. For example, Google mobile ads with the click to call feature, which makes a number immediately callable, have a 6-8% higher click-through rate than those without this feature635. Closing the gap to purchase

636

The phone is an untapped force in the world of commerce. 90% of people have used their mobile in a shop, 50% directly for the purpose of helping with their shopping. For example 48% send their friends and families a picture to check. 51% said they make a purchase after consulting their mobile637. 10% of people had used their phone to access a review, voucher or price comparison site, with 9% of people actually downloading app to visit again. A further 17% said this would be something they would like to do if only they knew how638. Brand implications Make sure you can be found through mobile search. If not, work on optimisation and, in the interim, pay to appear. Then exploit location-based behaviours. At the simplest your stores should appear to people in maps results and have all the correct information. At its most advanced this involves creating a cross-channel strategy for both your products and your services, as well as your marketing, because people use their phones in store, online, offline and while consuming other media.
635 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues 636 US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html 637 US base http://advertising.yahoo.com/industry-knowledge/mobile-shopping-insight.html 638 Researching Purchases Online UK April 2011, Mintel

166

167

Conclusion
TV is dying. No ones reading anymore. Men rule the web. Gamings for geeks. Women arent interested in tech. iTunes is the most popular music player. Those with the most followers on Twitter have the most influence. The iPad is mostly used on the go. Remember those statements? Well, TV and reading are alive and well, just finding new homes and forms. Men may rule some very small parts of the web but its the women doing most of the core internet activity: talking and shopping. Gaming is just as much something a middle-aged woman might be doing as a spotty lad. Women are visiting tech sites just as much as men. Most people watch their music, through sites like YouTube; iTunes is a distant second. Twitter influence is actually very much in the court of Old World media brands, not those with the most followers. The iPad is used overwhelmingly at home on weekday evenings. These are only a few examples of the received wisdom for which there are more complex, subtler truths. Hopefully this report has addressed many of them as well as fleshing out our understanding of how people talk, watch, listen, read, play games, socialise, research and buy in todays increasingly digital world. The internet is becoming flatter, deeper and quicker. Its reaching more people, on more occasions, on more devices, more speedily. Brands need to prepare for that future. Specifically, they need to ready themselves for an internet that no longer lives on a desk and that is no longer run by institutions. Prepare for people and places. Given the scope of its ambition, this report is necessarily incomplete. Over time, as the evidence comes in, we can grow and refine our understanding. So, this isnt an ending, this is the start. Thanks for reading.

168

Thank you
Pulling together a book of this scale is no mean feat. Thank you to the team at Dare 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 this has not been done, please notify Dare London.

169