TABLETS NOT SMARTPHONES

Video Viewers Embrace Tablets, Not Smartphones

By Mark Walsh

When it comes to viewing premium video, consumers have more options than ever, from TVs to PCs, tablets and game consoles. How are people dealing with all these choices? A new PwC study [http://www.pwc.com/us/en/industry/entertainment-media/publications/assets/PM-12-0011emc-consumer-research-11.pdf. ] finds that while traditional TV is still king, consumers are more receptive to new video platforms than they were a year ago, especially tablets.

But the willingness to embrace alternative screens does not appear to extend to mobile phones, whose small screens and slower network connections limit their appeal for watching TV shows and movies. The large screen of the home TV remains the favored way to watch video, with two-thirds of those surveyed indicating interest in tuning in the TV set.

Still, more than half (58%) said they spend more time now viewing movies and TV shows online than they did a year ago. "This was further validated in qualitative discussions, where consumers confirmed that they spend more time using their Internet-connected devices, especially iPads," stated the PwC report.

The study emphasized that people considered tablets a "wholly different mobile viewing experience" compared to smartphones, given screen size. Less than one-quarter (23%) had an interest in watching premium video on smartphones. PwC said the lack of enthusiasm for mobile video is consistent with research it has done over the last 18 months.

Nielsen estimates that about 10% of U.S. mobile users watch video on their handsets. Other data suggests this audience may be small but that viewing activity is growing. Mobile video ad network Rhythm NewMedia said video views of full-length TV shows increased 200% in the second quarter.

Among other platforms, the PwC study did not quantitatively measure video consumption through game consoles. But it noted some consumers mentioned them as a convenient alternative for watching video. "This choice was primarily influenced by which room the console was in when they decided to watch a movie. It was definitely not considered to be their primary platform for viewing movies," the report stated.

The research also noted growing interest from a year ago in cloud- based media storage offerings. The idea of a digital locker for music, shows, movies or other content especially appealed to more mature audiences, people in their late-30s to mid-40s, given their understanding of storage technology. Younger people were also intrigued, but had concerns about pricing.

Film studios including Warner Bros., Miramax and Universal this year have begun offering movie streaming through Facebook, while Facebook commerce (F-commerce) provider Milyoni's "social theater" platform allows people to interact while watching movies on the social-networking site.

The PwC study found social media was the channel people were least willing to pay extra for to obtain premium content, in part because there's typically no charge for using most social networks.

Two-thirds of survey participants said they wouldn't pay anything to watch movies and TV via social properties. But because distribution through social media is still nascent, the consulting firm suggested there is still an opportunity for Hollywood studios and TV networks to leverage Facebook and other social sites.

Overall, the report showed people would rather rent rather than buy when it comes to video-on-demand because they view it as less expensive and less of a burden on their computers' hard drive. Getting faster access to movies (within four weeks of the theatrical release) rated as the most appealing feature of VOD offerings, but most viewers were willing to pay only an extra $5 to do so on top of an existing price.

The PwC findings were based on a survey of 312 U.S. adults ages 18 to 59 conducted in spring 2011.

Interactive Marketing Spending 4 CAST

Interactive Marketing Spending to Hit $76.6 Billion in 2016

Forrester Predicts Huge Growth in Mobile, Search Along With Daily Deal Fatigue

By Cotton Delo, AdAge

A new report by Forrester Research forecasts that U.S. interactive marketing spending will reach $76.6 billion by 2016, equal to TV spending this year and comprising 35% of all advertising. That's a big jump considering that this year interactive will comprise 19% of all spending, according to Forrester.

Search and display will continue to be the biggest pieces of the interactive spending pie, comprising 44% and 36%, respectively, in 2016, though search will have lost share from 55% in 2011. Mobile paid advertising and search will experience astronomic growth and are surpassing email and social this year, according to the report.

"This is the first year we saw growth due to interactive tools really gaining legitimacy in the mix," said Forrester analyst Shar VanBoskirk, noting that search, display and email have become well-established lines in marketers' budgets.

The report, "U.S. Interactive Marketing Forecast, 2011 to 2016," projects the overall compound annual growth rate of interactive marketing spending at 17%, but the fastest-growing category is mobile at 38%, set to reach $8.2 billion in 2016. It attributes the surge to a push toward creating more targeted, dynamic mobile ads instead of so much repurposing of online ads; the rise of mobile commerce; and experimentation with new ad formats for tablets.

Search marketing will continue to be the biggest piece of the interactive spending pie -- rising from $18.8 billion to $33.3 billion between 2011 and 2016 -- but will actually lose share of all interactive spending in the same period, falling from 55% to 44%. Ms. VanBoskirk said the rise of biddable display media, the growth of mobile and investment in social networks and alternative search networks such as Facebook, YouTube and ratings and reviews sites such as Yelp will be factors in the drop-off of search's interactive market share.

Investment in display advertising will rise from $10.9 billion in 2011 to $27.6 billion in 2016, driven by greater than 20% compound annual growth rates in rich media, text listings and online video. The rise of biddable display media and improved online ad management tools are cited as key factors.

Email marketing is projected to have a growth rate of 10%, bringing it to $2.5 billion in 2016, but the total spending is kept down because of its low cost of reach 1,000 consumers, or CPM. And widespread adoption of social media will continue, reflected in a projected 26% growth rate, but total spending will reach only $5 billion in 2016 as it's also an inexpensive tool. (The report notes that listening platforms cost $5,000 to $10,000 per month, but a paid search budget can run up to $500,000 to $3 million per month.)

The report also predicts the rise of subsidized hardware from media giants such as Google and Yahoo, which would look to embed ads into the displays of smartphones, tablets and e-readers in return, creating the possibility of enhanced user targeting for advertisers. It also foresees the onset of daily deals fatigue.

"That will create consolidation and thin out the number of daily deal offers that are available," Ms. VanBoskirk said.

---

Interactive Marketing To Garner $77B By 2016

By Gavin O'Malley, Mediapost

By 2016, advertisers will spend $77 billion on interactive marketing -- or as much as they do on TV today, according to a new report from Forrester Research.

By then, search marketing, display advertising, mobile marketing, email marketing and social media will account for 35% of all ad spending.

"We expect this growth to help firms become adaptive, kill off daily deals, re-emphasize marketing's 'p's,' (product, price, place, and promotion) and turn consumer electronics into audience-targeting tools," says Forrester analyst and report author Shar VanBoskirk.

A number of key factors will enable this growth over the next five years, according to VanBoskirk, chief among them: larger interactive teams for marketers, publishers and service providers.

Over the last three years, for example, one unnamed financial services firm Forrester consulted grew its interactive team from 18 to 70 people. "Now, it is a top advertiser on many display networks, has tripled its email marketing volume, and has a social PR effort underway," VanBoskirk reports.

Along with sustained excitement about emerging media, Forrester also expects marketers to increasingly invest in interactive channels because they will generate better results over time. Furthermore, firms looking to differentiate in the age of the customer will invest to create customized experiences across their customers' preferred touchpoints, Forrester believes.

As a result, Forrester projects that by 2015, smartphone adoption will grow 150%, while 82 million consumers will own a tablet.

That said, digital's rising tide is not guaranteed to continue lifting all boats. For instance, while search will continue as the largest piece of the interactive marketing pie -- growing to more than $33 billion over the next five years -- it will lose share from 55% today to 44% of all interactive spend by 2016, Forrester predicts.

In place of search, marketers will increasingly focus their search marketing strategies on "getting found" by users -- through any medium -- not just search engines. Investment in paid search, search engine optimization agency fees and SEO technology will taper to a 12% compound annual growth rate, according to research.

Representing a boon for display advertising -- investment in contextual listings, static image ads and rich media ads (including pre-roll, mid-roll, and post-roll online video) will reach $27.6 billion by 2016.

All display categories -- except for static image ads -- will post greater than 20% CAGRs, which will boost display to 36% of interactive spend in five years, Forrester boldly predicts.

Also of great significance, spending on mobile paid advertising and search has surpassed email -- and social will rocket to a 38% CAGR or $8.2 billion by 2016. This will be driven by more relevant mobile advertising, increased tablet adoption and mobile commerce.

Forrester is predicting the end of daily deals, as "standing out above the clutter becomes harder for marketers as ad exposures grow."

Added VanBoskirk: "Consumers will grow so conditioned to micro-impulse offers they'll lose practice at considered decisions ... Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional."

SOCIAL MEDIA SPENDING

Date: Friday, September 2, 2011, 3:00am MST
Patrick O'Grady    Reporter - Phoenix Business Journal
            Social media in its various forms, from micro blogging to video posting, is growing. More marketing money is pouring into the sector.
            Google Inc.    is the dominant provider of video and social media traffic. Its products include YouTube as well as the recently launched Google+. But social media sites such as Facebook, Twitter and LinkedIn all rank among the 50 most-visited websites, garnering tens of millions of unique visitors per month.
            That leads to more ad spending, and Forrester research is anticipating that ad spending on online media will grow from about 19 percent this year to 35 percent of the total media buy in 2016.
Patrick O'Grady reports on technology, solar energy, utilities, manufacturing, aerospace, defense, sustainability, telecommunications, the Arizona Corporation Commission and other related topics.

Popular Apps

App Popularity: Gaming Or News?

By Gavin O'Malley

Gaming or news apps -- which are more engaging? It all depends on a user's mood, according to a new report from analytics firm Localytics.

IPad users spend the longest periods of time reading news, listening to music and accessing health and fitness apps, Localytics finds.

Based on data from apps subscribing to the firm's analytics platform, users spend over two-and-a-half times as much time on news apps than on apps in general.

Yet Localytics also looked at data on sessions per app per month -- separated by app verticals -- to see which type of app receives the largest number of user interactions per month.

While news apps still rank near the top of the average sessions list, games apps dominate in an impressive fashion. With games, news and music apps rounding out the top of the frequency engagement list, another view of the most engaging apps appears.

Compared with the overall average session length for iPad users, apps in the "news" category clocked in with sessions two-and-a-half times longer, followed by music apps, 228% of the average; health and fitness apps, 210%; and reference apps, 162%.

However, it appears that iPad users spend shorter-than-expected periods of time playing games and interacting with their entertainment apps.

According to Localytics, getting a news app onto an iPad user's device seems to generate extremely long interactions between app and user, while iPad users play short, more casual games, rather than in-depth time-consuming ones.

Sports apps, meanwhile, may be used more to check scores than to truly delve into sports stories and news, while iPads and tablets seem conducive to deeper, more information-packed experiences, such as reference and health apps.

"These levels of interaction do have an important message to app marketers: Know your audience, and pick the right type of app to generate the most engagement possible," Localytics suggests.

"While a business tool may be a very useful app to create for your clients, an engaging news app can generate up to three times the engagement per session," it adds.

To determine time spent on apps, Localytics analyzed the average session length -- that is, the average time a user spends between opening an app and finishing and closing it -- and compared it across categories.

MOST POPULAR YOUTUBE CHANNEL

What's the Most Popular Channel on YouTube?

ComScore Measures Largest Channels; Music Brands Top the List

By Edmund Lee

Viewers pining for MTV's early era of three-minute lip-synched dramatizations have long known to turn to that grand repository of all video: YouTube. But what they may not know is just how many video-crazed citizens congregate regularly around the video-sharing site.

According to ComScore, which will start publishing data on YouTube's channel partners tomorrow, 40% of YouTube's audience clicked over in July to watch music videos, more than any other category. Vevo accounted for 38% of YouTube's entire monthly viewers, easily the most-watched channel within the video-sharing site, and second-place Warner Music accounted for 20% of all viewers in July. Vevo is a joint venture between Sony Music Entertainment, Universal Music Group and Abu Dhabi Media, and it licenses music videos from EMI. (See chart below for full ranking.)

The new measurement data may be a boon to YouTube and its channel partners as the company hopes to entice bigger advertisers with the third-party validation of its audience, much the way that Neilsen has counted TV for decades. ComScore also cuts the data by age group and "gross ratings points," a TV measurement that shows how many people saw an ad and how often.

At the same time, online video hardly has the same depth or reach of TV, where audiences tune in for hours at a time. ComScore's data reveals that of the top 20 measured channels on YouTube, viewers on average are watching a total of 22.5 minutes a month.

Allen Debevoise, CEO of third-ranked YouTube channel Machinima, said a more accurate analogy pits YouTube as a cable provider and content partners such as Machinima as network programmers. "Machinima is a network in the same way that MTV Network is on Comcast with a broad array of channels," he explained.

Machinima,with an audience of 16.9 million, produces and buys various programs related to gaming, mostly clips that show people how to master video games. Mr. Debevoise said Machinima, which splits part of its ad revenue with YouTube, can sell advertising into a broader category, such as gaming and movies based on ComScore's new data. He pointed out the measurement data does not include mobile viewing, a fast-growing area for his company.

Earlier this year, YouTube reached out to a select group of its most popular content partners to participate in ComScore's initial measurement program, and while most partners agreed, some didn't respond or did not wish to be part of ComScore's analysis, according to people familiar with the matter. ComScore's inaugural ranking therefore does not include every single YouTube creator but the measurement firm said the list reflects most of the top content creators. The top three ranked channels would still remain in their positions in a comprehensive list.

The Google-owned YouTube insists this initiative differs from its pending channel strategy, a deal that includes a $100 million fund that YouTube will tap to pay partners to create higher-quality video clips that would appeal to major advertisers.

"This was really part of our strategy to provide flexibility to our partners," YouTube Senior Product Manager Baljeet Singh said. YouTube's new channel initiative will include ComScore data as well, Mr. Singh said.

Other top channels on YouTube include Demand Media studios, which publishes a wealth of how-to content in the form of short videos, with 15.2 million July viewers. Major media companies listed include Associated Press, with 6.6 million viewers, and Hearst Television, which owns 29 local TV stations, with 3.1 million watchers. BBC Worldwide had a YouTube audience of 2 million.

Amidst the lineup of startups and corporate-backed producers sit a few YouTube stars, small operators with no more than a handful of people. Philip DeFranco's "DeFranco Update," Ryan Higa's "Nigahiga" and comedy duo Ian Hecox and Anthony Padilla's "Smosh" channel all cracked the top 20, but other small-time YouTube stars would have leap-frogged this group had they agreed to be measured, according to ComScore.