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Archive for March, 2012

  • Mar
  • 20

The Increasing Influence of Tablets

The_Increasing_Influence_of_TabletsTwo weeks after the launch of the iPad 3, dubbed ‘the new iPad’, seems like a good time to reflect on the growing influence of tablets in premium and luxury markets.

Tablet adoption, although well below the 50%+ penetration levels enjoyed by smartphones, is still growing rapidly. Deloittes recently reported 3m device owners, approximately 6% of the UK adult population – more than double the penetration in 2010.

But despite lagging well behind smartphones in numbers, the tablet is punching well above its weight when it comes to its influence on online advertising and ecommerce.

In terms of responsiveness to advertising, tablet owners are well ahead of their smartphone equivalents. A Nielsen study found that ad recall was higher than on smartphones - 72% had recalled seeing an ad on their tablet vs. 62% on their smartphone - and more users reached for their tablet (28%) than their smartphone (18%) to look up  a product after a seeing a TV ad.

In terms of ecommerce, a study by Logan Tod & Co., found tablets rivalling smartphones for their influence on ecommerce, with 14% of their survey having used a tablet to make a purchase for Christmas 2011 compared with 15% who had used their smartphone. In addition, an Adobe study found that tablet owners spent more on their devices than did smartphone (+54%) or PC users (+21%).

And with the iPad 3, and other developments in the tablet market in 2012, the influence of the tablet is set to grow.

The iPad 3’s HD screen, with 1m pixels more than a standard HD TV screen and a colour palette of 3m pixels, offers additional scope for premium and luxury advertisers to better showcase their wares, including via HD quality video. It’s 4G connectivity will offer increasing scope for fast, convenient shopping on the go when the UK’s mobile networks catch up with its technical spec – hopefully sometime next year. And the very fact it’s out in the market will drive down the price of the iPad 2, hence widening adoption in the tablet market.

The other significant development will be the launch of the UK version of the more accessibly priced Kindle Fire at a date yet to be confirmed this year, which will further deepen penetration of these devices within the UK market.

Our advice to premium and luxury marketers would be to pay close attention to their web stats – what proportion of their traffic is coming from tablets and what are those tablet users doing in the site should be the starting point for deciding whether a tablet optimised site is appropriate. If traffic is significant and the site has been optimised, there’s probably a case for some trials of iPad advertising or for developing iPad specific apps.

Even those for whom the stats don’t make a compelling case as yet should keep things monitored – tablets are far from killing the PC yet but the obituary is beginning to be written.

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By: Graham Painter

  • Mar
  • 20

Why Online Video Is the Future of Luxury Marketing

Why_Online_Video_is_the_Future_of_Luxury_MarketingOnline video is going to be crucial to the success of luxury brand marketing going forward.  How can we be so sure?  Well, there are 3 key factors that are fueling its growing adoption:

Video Consumption Online is Growing

According to ComScore, 33m unique viewers in the UK consumed online video content in January – that’s over 1/2 the UK population.  22 million, about 1/3 of the population, consumed video ads in the same month. Video consumption is popular, and on the rise.

What’s driving the growth?  The popularity of catch up and other video-on-demand services are certainly playing their part, driving an increasing convergence between the PC and the TV.  And with 50% of households able to connect their TV to the internet – either because they have a games console or an internet ready TV - this popularity is only going to grow. In fact, forecasts predict that by 2019 on-demand video viewing will have overtaken live TV viewing, with only  TV blockbusters such as The X-Factor and major sporting events attracting significant live audiences.

This ‘hyper fragmentation’ of the traditional TV audience and their migration online suddenly makes them much more accessible and targetable by luxury advertisers who may not have been able to afford to play in the ‘TV’ market before.

And research indicates that the online video advertising audience is an attractive one for premium and luxury brands. ComScores stats show that there were almost as many video ad consumers aged 45+ (7.4m) as there were aged 15-34 (8.8m) in January. Earlier studies have shown that consumers of online video are better educated and have a higher level of household income than average too.

Online Video Ads are Highly Effective

Online videos ads are the most effective form of online display advertising.

Figures from online ad server MediaMind show that video ads are up to twice as effective in terms of engagment than traditional banner ads, and audiences are engaged with them for up to 39% longer.

A further study by Nielsen found that online ads delivered high levels of overall recall (65% vs. 46% for TV) and message recall, and had a marked impact on brand metrics such as brand preference and purchase intent.

So not only does online video make attractive audiences accessible to premium and luxury brands, it also offers a highly effective way to engage and persuade them to purchase products.

Video Commerce Works

The burgeoning area of video ecommerce seems to have huge potential too, according to the results of a recent initiative by Jaegar.

Three full length catwalk videos from London Fashion Week were encoded on Jaegar’s site to allow visitors to ’shop the catwalk’.  In these videos, products were highlighted by a subtle greyed out box as the model moved down the runway – each of these highlighted products was clickable to purchase.

Jaegar observed a 27% engagment rate across all the videos, an overall click thru rate of 13% and, most remarkable, an increase in basket size of over 300% from those who purchased via the video.

 

So online video can deliver relevant and accessible audiences, can render online advertising more effective and can swell average basket size when used to support ecommerce. Combine this with its undoubted ability to effectively convey luxury brand offerings in a high quality way and you have a compelling case for investment.

Combine some of these factors -  for example, delivering video commerce within online advertising so consumers can purchase products without having to leave your ad – and things really start to get interesting.  

Now can you see why we were so sure that online video is the future?

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By: Lucy Jennings

  • Mar
  • 20

5 Must Know Media Consumption Trends

5_Must_Know_Media_Consumption_Trends‘Tablet computers are now as likely to be found in the hands of over 55s as they are among the under 24s.’

That’s just one of the findings from the 6th annual ‘State of the Media Democracy Survey’, released by Deloitte this week.

The survey, which is as eagerly awaited in the Cream offices as the annual Ofcom Communications Report in August, is packed full of useful facts for marketers trying to pin down stats such as the level of smartphone adoption or the usage of tablet computers in the UK.

The survey is conducted each December (in this case December 2011) with a sample of just over 2000 respondents.  We’ve shared the most interesting of Deloitte’s findings with you below:

1. There are nearly 3m tablet owners in the UK, up from 1.3m in December 2010 - this would equate to c6% of the UK adult population.  As stated above, tablet adoption breaks the tradition that technology is first adopted by the young and then filters through to older age groups.  Perhaps the price point is a barrier in this case. Whatever the reason, tablet adoption is pretty evenly spread amongst age cohorts, with the 35-44 age groups showing the highest penetration at c20% – professionals at their earning peak, the same group that has most enthusiastically adopted Twitter.

2. Smartphone adoption is nearing 50% – smartphone adoption rates differ from survey to survey, mainly dependent on whether the survey uses a consumer definition of  a smartphone (as Deloitte do) or an industry one.  Here, the norm that the young are the early adopters is borne out by the figures – 60%+ of 14-34 year olds own one, compared to 58% of 35-44s, over 40% of 45-54s but less than 30% of 55+s. For both tablets and smartphones, men are more likely than women to own one, although women have caught up in the past 12 months and the figures are now fairly even.

In terms of how smartphones are being used in the purchase process, the Deloitte survey does shed a little light.  17% of the respondents had used their phone to ‘comparison shop’ whilst in-store and 18% had read product reviews, with both activities being regular (at least weekly) behaviours for those that had adopted them.

3. For magazines at least, print still has a future -  despite rising tablet ownership, magazine readers overwhelmingly prefer print, and this preference has been unwavering in the past 12 months. Perhaps surprisingly, given how many tablets that have been sold in the past 12 months, online magazine subscribers were flat at 2% of respondents. 88% of the survey still prefered to read their magazine content in printed hard copy, the same proportion as in 2010.  There are many reasons behind the decline in print magazine circulations, but migration to mobile device versions doesn’t seem to be one of them.

4. Despite the growth of alternative media sources, broadcast TV remains consumers favourite type of media – and this was observed across all age cohorts, including the 18-24s.  It would appear our attachment to the TV is enduring. However, our methods of consuming broadcast TV are changing with 12.5% less live viewing in 2011 vs 2010, mainly driven by an increase in consumption via PVRs. And the number one reason to record live TV? To fast forward through the commercials.

5. Traditional media channels still remain highly influential – 64% said they visited websites as a result of seeing them on TV, an action which was as common for 14-17 year olds as for 45-54 year olds. Magazine and newspaper ads were almost as influential (c60%) and more so than ads seen on other websites (c50%) and ads on social media (less than 30%). However, the gaps between digital and traditional media were narrow and the 2 most influential media in terms of driving traffic to websites were search and online recommendations – the latter mainly driven by online reviews rather than social media. 

In fact, online reviews seemed to be becoming even more influential, with 30% more stating they’d made online recommendations in 2011 vs 2010, with the sharpest growth in online recommendations amongst the 55+s.

 

The survey paints of picture of UK consumers being passionate adopters of new technology – more in line with their US counterparts rather than their European cousins – but using this media to complement their existing media choices and consume more media, rather than cannibalising their existing activities.

For marketers, the lessons are that they need to reflect changing trends in their marketing strategies – such as the increasing use of smartphones to support the in-store experience. However, despite the inexorable rise of digital media, UK consumers still remain attached to traditional channels too, and these traditional channels still have a role to play in the marketing mix.

 

 

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By: Graham Painter

  • Mar
  • 6

Latest ABC Figures: Women’s, Men’s, Bridal, Home Interest and Travel Magazines

Last week, we profiled the state of the women’s, men’s and home interest magazine sectors.

Below are the full July to December 2011 ABC results for all key women’s, men’s, bridal, home interest and travel magazines. Enjoy!

(if you’re struggling to read these, you can download them here ABC Figures Jul- Dec 2011).

Women’s Lifestyle Magazines

H2_2011_ABCs_Womens_Lifestyle_Magazines

Men’s Lifestyle Magazines

H2_2011_ABCs_Mens_Lifestyle_Magazines

Bridal Magazines

H2_2011_ABCs_Bridal_Magazines

Home Interest Magazines

H2_2011_ABCs_Home _Interest_Magazines

Travel Magazines

H2_2011_ABCs_Travel_Magazines

Weekly Magazines

H2_2011_ABCs_Weekly_Magazines

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By: Karen Stephenson

  • Mar
  • 6

Gen Y-ers Showing an Increasing Appetite for Luxury

USA-RETAIL/BLACKFRIDAYThe latest research from American Express Business Insights in the US reveals an interesting phenomenon – the fastest growth in spending on full price luxury goods in 2011 came from the 18-34 age group, commonly know as Generation Y.

Their spend on full priced luxury goods increased by 31% in 2011 over the previous year. Generation X’s (c35-48) full price luxury good spend increased too, but less sharply (23%). The spend of Baby Boomers (c48-65) increased by 19% but that of Seniors (65+) by only 6%.

So what was behind this marked increase in spend from the youngest of the 4 generations?

Well, the first simple explanation is that they have a year’s more seniority in their careers and a year’s more buying power in their wallets – although this factor alone wouldn’t explain such a marked rise.

It’s also true that luxury brands, and luxury fashion brands in particular, are increasingly getting their ‘act together’ online.  Digital savvy Gen Y-ers are more likely to be checking out brand websites (rather than bricks and mortar stores), product reviews, social media and mobile sites – and luxury brands are clearly rising to the challenge.

But the most interesting explanation is the rise of flash sales sites in the US.  Gen Y-ers were early adopters of these high discount, time-limited offer sites and their spend in this channel continues to increase markedly – up by 19% in 2011 when compared to 2010.

Now flash sales sites represent heavily discounted luxury goods sales but the belief of researchers at American Express Business Insights is that they’re creating a taste for luxury goods amongst younger consumers – hence discounted sales via flash sales sites are leading to full price sales direct from brands.

It’s an interesting insight which has ramifications for luxury brands in the UK. If the trend were followed it would make sense for them to partner with sites such as Vente-Privee, ACHICA and Secret Sales because participation seems to act as a particularly effective form of sampling for younger consumers in particular.

One note of caution, however. In the US in particular, flash sale sites are becoming increasingly popular with seniors – spend between 2010 and 2011 by this group grew by 28%. Considering full price luxury sales for this group in the same period grew by only 6%, the suggestion might be that private sale sites are cannibalising full price sales to a degree. Luxury brands with older followings might be well advised to steer clear.

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By: Graham Painter