Gen Y Affluents:
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Gen Y Affluents:
Voir
S C O T T G A L LO W AY N Y U S t e r n
A Think TAnk DiGiTAL innOVATiOn
© L2 2010 L2TTa.com
Ge Y Affluets: Meda Survey
Decemer 16, 2010
Ge Y Affluets: Meda Survey
i n T R O D U C T i O n
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The End of the Beginning
Resapg Prestge Zeros ad Oes: Mlleals’ Meda Cosumpto ad its Effect o Brads
Generation Y—the future of prestige—has a strong preference for digital content and social interaction. The affluent slice of millennials we surveyed is brand conscious, educated, and upwardly mobile. They regularly engage with prestige brands through a variety of media, from newspapers to micro-blogs.
But digital is trouncing traditional channels with this critical cohort and is gaining momentum. Luxury brands continue to fight tanks with cavalry, devoting the bulk of their marketing dollars to print and analog. Brands that continue to under-invest in digital risk losing mind share of the largest U.S. consumer group— Generation Y.
Fortunately, brands are catching on; it’s the “end of the beginning” of a dramatic shift in ad spending from traditional formats to digital. Deft marketers are recognizing the value of investing in their own sites, social media platforms, and mobile apps. Those that don’t embrace the digital migration risk joining Blockbuster on the dust heap of great brands that hoped the Internet would just go away.
© L2 2010 L2TTa.com
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Ge Y Affluets: Meda Survey
i n T R O D U C T i O n
The Headlines FACEBOOk, hAnDS DOwn: 81% of millennials use Facebook every day—nearly twice as many as those who watch TV or read newspaper content. BLOGS SCALE ThE GATES OF ThE FOURTh ESTATE: Nearly 1/2 read blogs every day, as many as those reading newspaper content . nEwS BRAnDS ThRiVE—iT’S PAPER ThAT’S DYinG: 4 out of 5 of those who access newspaper content daily do so digitally. DiGiTAL kiLLED ThE TV SET: 42% watch TV shows online; 27% watch movies online. ThE UPwARDLY MOBiLE GO MOBiLE: 5% use mobile to access social media, and 1 in 8 2 watched a video on mobile in the past 24 hours. DiGiTAL SOCiAL BRAnDinG iS PARAMOUnT: 63% use social media to engage with brands, and more than 50% say that Facebook, blogs, and brand videos affect their opinions about products. wEBSiTES ARE FLAGShiPS, TOO: ebsites are as nfluential as physical W i stores in shaping Gen Y sentiment, second only to friends’ opinions. © L2 2010 L2TTa.com
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A B O U T T h E S U R V E Y
L2 surveyed nearly 1,000 high-achieving and high-earning Gen Y adults. Refined to a panel of 535, on average this sample set is on a trajectory to earn more than $100,000 in the short term and double their income within the next five years.
The Panel: The Questions: • 535 individuals; average age 27 • Respondents answered questions on modes of • 56% female; 44% male media consumption, frequency of use, devices used, and brand interaction within the various media • From 41 countries including the U.S. (76%), India (4%), China (3%), Canada (1%), Hong • Before scoring the brands, respondents were asked Kong (1%), Mexico (1%), South Korea (1%), unprompted for their five favorite prestige brands and Germany (1%) • Respondents scored sentiment for 100 iconic • 75% expect to make more than $80,000 per prestige brands year in the short term (next 24 months) • Ten industry categories: Auto, Beauty & Skincare, Department Store, E-tailer, Fashion Brand, Flash Site, Men’s Fashion Brand, Shoes & Leather Goods, Travel & Hospitality, Watches & Jewelry 40% + 20 – 40 0.6% % 11.7 10 – 20 0.4% 1.5% 5 – 10% 3.2% 0.7% 1– 5% 2.2% 0 – 1% 0%
.
3%
3
k E Y F i n D i n G S Facebook Is Fundamental With more than 550 million active users, Facebook dominates the social media landscape. In the past ten years, the number of page views recorded for the top ten websites in the U.S. increased from one third to three quarters of total page views on -line; as the Internet matures people are focusing on fewer sites. 1 This is especially true in the case of Facebook, whose share of the Internet continues to grow. The behemoth’s success comes at the expense of other portals as well as traditional channels that brands have relied on for marketing. Websites remain impor -tant, particularly for e-commerce, but brands will increasingly fol-low their customers, making their content available on Facebook.
= UsEs pLATFORM ONCE A DAY OR MORE
= MORE THAN 5 TiMEs A DAY = DAiLY = WEEKLY = MONTHLY = sEvERAL TiMEs A YEAR = NEvER
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0%
Facebook YouTube Twitter
Hulu Geo-Platform Flickr
S O C i A L M E D i A : F R E q U E n C Y O F U S E Respodets’ Usage by Platform
G E n Y M E D i A C O n S U M P T i O n % o access te follog meda daly
Facebook Blogs Newspapers TV Shows 81% 45% 45% 44%
100%
75%
50%
25%
Ge Y Affluets: Meda Survey
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Ge Y Affluets: Meda Survey
k E Y F i n D i n G S Blogs on Par with Newspapers If baby boomers are the TV generation, then Gen Y is the blog generation. Nearly half of Gen Y affluents read at least one blog daily, making blogs as popular as newspapers with this cohort. Blogs associated with such traditional media organiza -tions as The New York Times and ESPN are as popular as those focused on a niche. Millennials’ favorite specialty blogs include Mashable and The Sartorialist . Micro-blogging is even more pervasive; two thirds of affluent Gen Y’s use Twitter, with one in four checking their account in the past 24 hours. Newspaper Content Commands as Much Attention as TV On a daily basis, Gen Y affluents are as likely to read newspaper content as they are to watch TV, and they would rather have the content on a screen. In fact, four of five readers access news -papers digitally, and one in eight do so using a mobile device. Magazines Are Getting ‘Facebooked’ Facebook could do to magazines what Google did to newspa -pers, providing easier access to a vast array of content. Gen Y affluents are avid magazine readers, but magazines have not yet figured out the transition to digital . Nine in ten Gen Y affluents read at least one magazine per month, but only a quarter of them access magazines online, and almost none receive that content on an iPad e-reader, or , smartphone. The iPad has been a force for innovation, but so far magazine content repackaged for iPads is not compelling enough for this cohort.
© L2 2010 L2TaT.com
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M O D E S O F A C C E S S i n G C O n T E n T: n E w S PA P E R S % o access va te follog: 2% 2% 12% 19% 65%
M O D E S O F A C C E S S i n G C O n T E n T: M A G A Z i n E S % o access va te follog: 2% 1%2%
71%
24%
= TRADiTiONAL (prnt) = ONLiNE (Dekto or Lato Comuter) = pAD / E-READER (Kndle, Nook) = MObiLE (phone, pod) = i DON’T ACCEss THis sORT OF MEDiA
= TRADiTiONAL (prnt) = ONLiNE (Dekto or Lato Comuter) = pAD / E-READER (Kndle, Nook) = MObiLE (phone, pod) = i DON’T ACCEss THis sORT OF MEDiA
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Ge Y Affluets: Meda Survey
k E Y F i n D i n G S Renting Versus Owning Brands’ ability to establish direct relationships (en masse) could dramatically alter the media landscape. Power will shift as brands cultivate authentic relationships via Facebook, creating cohorts whose sizes dwarf media brands’ subscriber bases, along with an opening to circumvent the traditional publisher network. In sum, it’s a great time to be a digitally deft brand ... and a precarious time to be in ad-supported media . This graph illus-trates the relative sizes of the cohorts versus subscriber bases of iconic brands and media properties, respectively.
© L2 2010 L2TTa.com
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R E L A T i V E A U D i E n C E : R E A C h V i A FA C E B O O k & C i R C U L A T i O n Apple Tues & Burberry vs. wall Street Joural & Te ne Yor Tmes (Noemer 19, 2010) Apple Tues Faceboo Les: 8,525,195
Te ne Yor Tmes Crculato: 876,638
Faceboo Les: 930,138
Burberry Faceboo Les: 3,050,057
wSJ Crculato: 2,061,142
Faceboo Les: 165,720
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Ge Y Affluets: Meda Survey
k E Y F i n D i n G S Digital Video Rising Millennials love TV programs and movies, though affection for television sets and theaters is waning. Instead, affluents are watching online and on mobile devices. Indeed, one in eight re-ports watching a video on a mobile device in the past 24 hours. Geo-Local: The Mouse That Roars Location-based services garner major buzz, though we have yet to see what this technology can really offer. About one in five Gen Y affluents report using Foursquare in the past 24 hours, though a recent Pew study indicated that adult use of location-based services declined slightly between May and September of 2010. 2 Usage could increase dramatically, how -ever, as new platforms such as Facebook Places and Google Hotpot launch with built-in potential user bases. Smart, Smarter, Smartest The mobile content-delivery revolution is underway. One in four Gen Y affluents access Facebook using a mobile device, and one in five read newspapers using mobile . Not surprisingly, the “fruit” brands dominate the smartphone market. About one third own a BlackBerry and slightly more own an iPhone. Meanwhile, a whopping 71 percent say they expect to own an iPhone in the future.
2. Pew Research Center’s Internet & American Life Project, “4% of online Americans use location-based services” < http://www.pewinternet.org/Reports/2010/ Location-based-services.aspx > © L2 2010 L2TTa.com
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56% Dgtal vdeo
T R A D i T i O n A L T V V S . D i G i T A L V i D E O i te last 24 ours, i atced: More than one hour of TV 60% Tradtonal Tv i te last 24 ours, i atced a vdeo va: YouTube Online (other than Hulu, YouTube) 21% Hulu 19% Mobile Device 13% 0% 25% 50% 75% 100% P h O n E V S . B L A C k B E R R Y Curret ad Expected Oersp = CURRENTLY OWN = EXpECT TO OWN = CURRENTLY OWN = EXpECT TO OWN
1 con = 1%:
iPhone
Blackberry
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Ge Y Affluets: Meda Survey
k E Y F i n D i n G S Big on Brands Gen Ys are both brand aware and eager to interact. Three quarters of respondents have an affinity for brands and one in eight are self-proclaimed brand “devotees.” Early adopters—those who use mobile devices and e-readers to access media—may be particularly valuable to luxury brands. Seventy-nine percent of these technophiles expect to make $100,000 per year or more in the near term. In other words, cutting-edge innovation is important to the most affluent among Gen Ys . This wealthier bunch also skews slightly higher on brand awareness. Social Media and the Brand Funnel The majority of Gen Y affluents use social media to connect with brands. Many do so to receive promotions or offers and one quarter engages because they have an affinity for a brand. Nearly one in eight simply like the content brands provide.
© L2 2010 L2TaT.com
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w c o f t e f o l l o g b e s t d e s c r b e s y o u r l e v e l o f B R A n D A w A R E n E S S ? 1% 12% = i FOLLOW A FEW GOOD bRANDs = i GET THE OCCAsiONAL 12% bRAND CRUsH 43% = i’M A bRAND DEvOTEE = i’M bRAND AGNOsTiC (i can take them or leae them) 32% = i DON’T bELiEvE iN LAbELs
w c s t a t e m e t s b e s t d e s c r b e y y o u e g a g e t b r a d s o r p r o d u c t s u s g S O C i A L M E D i A ?
24%
10% 37%
28%
15% 26%
20% 38%
= i DON’T UsUALLY ENGAGE WiTH bRANDs OR pRODUCTs UsiNG sOCiAL MEDiA = i HAvE AN AFFiNiTY FOR THE bRAND OR pRODUCT = i LiKE THE CONTENT THE bRAND pROviDEs = i WANT TO RECEivE pROMOTiONs AND OFFERs
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Ge Y Affluets: Meda Survey
k E Y F i n D i n G S
Building on Brick-and-Mortar The majority of respondents are likely to purchase prestige brands in-store, though nearly half anticipate making pur -chases through a brand’s website. In a given 24-hour period, however, more respondents visit a website than a physical store. As investments follow the consumer, there’s likely to be a massive increase in the allocation of capital to brands’ online stores from their terrestrial counterparts . Vis-à-Vis Facebook With the majority of Gen Y opting in to brand newsletters and updates, email remains a powerful tool for interaction. But Facebook is becoming the new word of mouth. More than half of respondents have “liked” a brand in the past month, and about one third have “shared” brands with their networks . Brand Websites Are as Influential as Newspapers and Glossies Word of mouth is still the most important force shaping Gen Y brand perceptions, but websites tie for second place with news-papers and magazines—brands’ traditional marketing weapons of choice. Three quarters of Gen Y affluents visited brand sites in the past 24 hours, though most firms still allocate a dispro-portionate percentage of their marketing budgets to analog channels. Digital media receives only a fraction of the dollars that consumers’ behavior suggests they should.
© L2 2100 L2TaT.com
75% 50% 25%
0%
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FA C E B O O k i n T E R A C T i O n Freuecy of Sarg, Commets, ad Les
30%
Facebook “SHARE”
38%
Facebook “COMMENT”
54%
Facebook “LIKE”
B R A n D w E B S i T E S A L M O S T A S P O P U L A R A S B F F s % of respodets o ave teracted t brads te past 24 ours
In-person discussion with friends Brand website visit Brick-and-mortar store visit
83% 76% 73% 0% 25% 50% 75% 100%
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Ge Y Affluets: Meda Survey
C A S E S T U D i E S
WIRED : Unplugged Wired is head of the pack when it comes to offering a compelling format for magazine content on the iPad. The Wired app was downloaded an impressive 100,000 times in June, its first month. Not surprisingly, downloads dropped more than a third in each successive month through September after its core readership signed on. It’s too early to tell if the honeymoon is already over or if the real marriage of magazines and apps is forthcoming. iPads still aren’t commonplace, despite their remarkable growth. But the real bottleneck for magazines is design. Wired ’s app is among the best, but no magazine has really tapped the social and interactive potential of the tablet format . Most magazine apps could still pass for PDFs of the print version. As such, accessing magazine content on an iPad may seem more like heavy petting than anything else in the near term.
© L2 2010 L2TTa.com
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Wired magaze’s Poe app
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Ge Y Affluets: Meda Survey
C A S E S T U D i E S
FACEBOOK: Media’s Walmart Facebook is growing at a blistering rate, doubling its U.S. user base in the 12 months through October. The ubiquitous platform is quickly becoming the Walmart of media, able to vanquish competition by replicating its services at scale. This year saw the launch of Facebook Places and Facebook Deals in the geo-local space, as well as Facebook Messages, which aims to integrate email, text, and chat. Facebook also officially broke out of social networking in 2010 to become one of the most powerful media companies in the world, surpassing Google News in referral traffic to news and media sites. In July, Facebook launched its “Facebook + Media” page, engaging media companies directly to identify ways to drive more traffic to their sites.
FA C E B O O k U n i q U E U S E R S : U . S . (Octoer 2009 - Octoer 2010) 150 151.13 An increase of 55% over the last year 100 97.37 50
0 2009
© L2 2010 L2TTa.com
2010
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FA C E B O O k FA C T S Facebook boasts 550 million users, roughly 1 out of 12 people on the planet. People spend more than 700 billion minutes per month on Facebook—that’s more than 13,000 years , roughly the amount of time between the present day and the glacial ice age. Facebook accounts for 2 5 % of all U.S. page views; in the second week in November the platform enjoyed 5x more page views than Google.com. 200 million users are accessing Facebook using mobile, which is 3x the number of people who voted for President Obama in the 2008 election. The average user is connected to 80 community pages, groups, and events. Users share more than 30 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) each month. 2/3 of comScore’s U.S. Top 100 websites and half of comScore’s Global Top 100 websites have integrated with Facebook.
3. Glaciation of Wisconsin, Lee Clayton, John W. Attig, David M. Mickelson, Mark D. Johnson, and Kent M. Syverson, University of Wisconsin, Department of Geology. 4. “Facebook Accounts for 25% of All U.S. Pageviews,” Jolie O’Dell, Mashable, November 19, 2010, < http://mashable.com/ 2010/11/19/facebook-traffic-stats/ >. 5. “President,” CNN.com’s Election Center 2008, November 17, 2008, < http://www.cnn.com/ELECTION/2008/results/president/ >. 11
