U.S. consumers face a dizzying array of choices in how to spend their media and entertainment dollar. At the same time, the current economic climate has put even more pressure on how households make decisions. A baseline for thinking about entertainment spending is the notion of “share of wallet,” defined here as the percentage of monthly spending for all entertainment options by a household. At a macro level, the video game category represents 5% of total U.S. households’ entertainment spending. Among households that are active buyers in the video game category, this figure is nearly double, with over 9% of total entertainment spend attributed to game-related content, according to a study Nielsen Games.

Before jumping further into the analysis, there is one important point to keep in mind. Put simply, shares do not equal dollars. Individual households spend different amounts in total on entertainment, which may deflate or inflate shares for a given category. In addition, these results are a reflection of consumer claims that are useful directionally in understanding how consumers perceive their allocations of money.
Video game category buyers (those spending at least $1 per month on game-related content) comprise 24% of U.S. households, and their share of wallet profiles paint a picture of valuable, tech-savvy entertainment consumers. Besides video games, they over-index substantially on DVD/Blu-ray, music, online entertainment, and VOD share of spending. They are also higher in share for movie-going, sports activities, and live events. These higher shares come at the expense of more established media options like basic cable and print media, where video game category buyers under-index notably.
Given the 24% buyer base, the video game category is notable for what other forms of entertainment it surpasses in share of spending for the average US home: all print media (4.2%), premium TV packages (4.1%), DVD/Blu-ray purchases and rentals (3.5%) and music in all its forms (2.8%).

Americans are spending an average of 2.7 hours on the mobile Internet, connecting socially, managing their personal finances, and even as a means for advocacy. 91% of mobile phone users go online to socialize compared to only 79% of traditional desktop users. Mobile phone users are 1.6 times more likely to manage finances compared to traditional desktop users. Mobile phone users are 1.4 times more likely than traditional desktop users to rally support for a cause, according to a new survey by Ruder Finn.
Mobile phone users do not access the mobile Internet for educational purposes or for creative expression, as the transitory nature of mobile intent goes against spending time to engage in discussions about personal issues. Usage by gender and age differ, with men accessing the mobile Internet ‘to escape,’ and women to entertain others.
Mobile phone use goes beyond instant gratification, people use their mobile phones for instant access to conduct business with the most recent information or advocate on the spot on issues of pressing concern and breaking news. Consumers are taking advantage of (mobile technology) to do their core work while using desktops to navigate longer format and higher bandwidth content and tools resulting in huge opportunities across industries making mobile an essential channel in keeping businesses competitive.
Mobile phones are a social connector, says the report. 91% of mobile users go online to socialize, compared to only 79% of traditional users. The top socialize intents are:
- Instant message (62%)
- Forward e-mails (58%), content (40%) and photos (38%)
- Post comments on social networking sites (45%)
- Connect to people on social networking sites (43%)
Mobile phone users are more likely to go online to do business compared to traditional users, and are 1.6 times more likely to manage finances. Mobile phones offer users the chance to conduct business in real time, and this is the major reason that business-related intents are so high. The top business intents are:
- Online banking - 46%
- Check bill/credit card status - 40%
- Read business blogs - 33%
Nearly half of mobile users go online to advocate compared to only 41% of traditional users. Mobile phones offer users the chance to immediately respond to breaking news, whether it is a new piece of legislation or the latest ongoing development of a corporation or politician under siege. The top advocacy intents are:
- Activate support for a cause or position - 67%
- Post opinions on social networking sites - 45%
- Forward content on a cause - 40%
Mobile users are much less likely than all users to go online to learn. Learning requires time and patience, something mobile phone users are in short supply of.
- They are 1.5 times less likely than the traditional user to go online to educate themselves
- They are 1.4 times less likely than the traditional user to go online to research
- They are more likely than the traditional user to go online to keep informed
Mobile users are 1.3 times less likely to personally express themselves online compared to traditional users. The transitory nature of their intents speaks against spending the time to engage in discussions about personal issues while using their mobile phones.
- They are 1.7 times less likely than the traditional user to go online to opine
- They are 1.8 times less likely than the traditional user to go online to be creative
Additionally, gender and age influence the Intent of mobile phone users according to the study:
- Men (79%) are much more likely than women (61%) to use their mobile phone to simply “escape”
- Many more women (70%) than men (58%) go online using their mobile devices to entertain others
- Youth (44%) are more likely to shop over their mobile phones than the average mobile user (35%)
- Seniors (82%) are much more likely than the traditional user (64%) to use their mobile phones to educate themselves

While Q3 2009 data showed e-mail on top for content-sharing, February 2010 information from social optimization platform Gigya points to Facebook as the Web’s top social sharing hub.
Almost one-half of article links, videos, photos and other content shared via Gigya’s widgets are posted to Facebook, with another 29% broadcast through tweets.

Social sharing widget AddThis also distributed the most content on Facebook (33%), followed by a long tail of other options. Similar results were posted in summer 2009 by the AddToAny sharing widget; Facebook, with 24% of shares, took the top spot.
In addition to sharing content with contacts, social site logins are often chosen as a method of user authentication on third-party sites. Facebook was No. 1 for this purpose as well, but usage was dependent on content type, indicating that Facebook users may be most concerned with sharing fun, entertaining content on the network.

The social giant’s 52% share of authentications on entertainment sites dropped to just 31% on news sites, where Google made a close second place showing with 30% of logins. Yahoo! also boosted its share to one-quarter of news site authentications.

Pull marketing tactics such as search, blog and social media generate cheaper leads than more traditional outbound efforts, according to data from inbound online marketing platform HubSpot.
The “2010 State of Inbound Marketing” report indicates that spending on lead generation is 60% less among companies that devote at least one-half of their budget to inbound marketing, compared with companies spending at least one-half of lead generation dollars on outbound tactics.
The average cost per lead from inbound marketing was also significantly less.

In both 2009 and 2010, companies in North America tended to rate all the inbound tactics studied as below average in cost per lead. Respondents rated direct mail most cost-effective among outbound strategies.

Still, only 37% said it generated leads for less than average.

The gap in cost-effectiveness is leading to a gap in spending, the report said. Inbound tactics are seeing a slight increase in share of lead generation budgets, while outbound tactics are decreasing. Usage of mixed tactics such as e-mail—which can be used for both push and pull marketing—is also on the rise. And businesses rated every inbound channel more important than any outbound channel for their lead generation efforts.
HubSpot also noted that more than two-fifths of companies using various social media marketing channels had acquired a customer from those channels.

Unsurprisingly, for business-to-business firms, LinkedIn was most effective for customer acquisition. Business-to-consumer companies did better on each of the other sites, with the best results coming from Facebook, where nearly seven in 10 had found a new customer.

If you aren’t one of the 24% of US and UK Internet users playing social games at least weekly, you may have seen the traces of those players and their FarmVille or Scrabble exploits in your Facebook newsfeed. PopCap Games, maker of several popular titles, explored the demographics of the group in its “2010 Social Gaming Research” report.

More than one-half of players are female, and the average US player is 48 years old. Relatively few US weekly gamers are under 30, while nearly one-half are over 50.

Most players are not college graduates, and, in the US, just over one-half report a household income under $50,000. Two-thirds of US social gamers also play other video games, but the bulk of their gaming time is with social rather than casual or “hardcore” options.
More than one-third of weekly social gamers play the games several times a day, with a further 30% playing daily. The time adds up: A plurality of sessions last 30 to 60 minutes, leading nearly four gamers in 10 to participate in social gaming for 1 to 5 hours weekly.
Facebook overwhelmingly dominated as the top social gaming destination, with 83% of weekly gamers playing on the site. Just under one-quarter used MySpace. Many considered game play their main reason to use such sites, and PopCap reported that about one-half of the time players log in to social sites is to play.

Social gamers are mostly interested in connecting with friends and exercising their competitive instincts, but the activity makes them a prime target of social network marketing, including virtual currency, virtual gifts and ads.
Slightly under one-third told PopCap they had spent real-world money on either virtual currency or a virtual gift before. And one-quarter claimed they had been “misled” at some point by an ad or special offer related to a social networking game.
A Q Interactive study of female social gamers found that nearly three-quarters would not pay to play, but most felt happy about receiving virtual gifts. About one-half noticed brand presences in their virtual games, such as through sweepstakes, offers and surveys.

A deeper recession than expected in 2009, along with rapid structural changes to the local ad market, has caused BIA/Kelsey to lower expectations for local advertising spending, pushing the recovery curve out one year further than previously forecast.
Last year, according to the firm’s “Annual US Local Media Forecast,” US local ad spending reached $130.2 billion, or 55.3% of the total. That was lower than the $141.3 billion BIA/Kelsey projected in February 2009 and a significant drop from the $156.3 billion spend on local advertising in 2008.

BIA/Kelsey reported significant declines in almost every medium studied, and lower than expected growth in the interactive sector.
Total local advertising spending will continue to stagnate through 2011, while 2012 will bring “meaningful recovery.”

Online will continue to get a larger share of the local ad spending pie, increasing from 12% in 2009 to a projected 14% this year. By 2014, BIA/Kelsey expects one-quarter of all local advertising spending to be online.
In January, Barclays Capital also reported 2009 local ad spending down significantly from the year before, by about 22%. Barclays similarly expects a flat local ad market through 2011.

A difficult economy has helped spur small businesses to adopt social media marketing in greater numbers, according to “The State of Small Business Report” from Network Solutions and the Center for Excellence in Service at the University of Maryland Robert H. Smith School of Business. Social media usage increased to 24%, from 12% the year before.
The most common usage of social media among small business was a company page on a social networking site, followed by posting status updates.

Small businesses’ expectations of social media seem roughly to be in line with their experiences, although they are not quite as successful as they had hoped. Respondents’ top accomplishments were customer acquisition and placing their own businesses within the market, but did not meet expectations fully. Social media’s capabilities for staying engaged with consumers and collaborating with other businesses, however, were more in line with businesses’ expectations.

Most small businesses say they are just breaking even with their current usage of social media, but a solid one-fifth find it profitable already. Businesses are positive about the potential as well: Nearly one-half believe it will make them money in the next 12 months, and another 39% think they will break even on it. Just 9% think social marketing will continue to be a losing proposition.

Overall, 58% of respondents felt social media lived up to their expectations. One-half felt it took up more time than they realized, but only 6% claimed negative comments on social media had hurt their business.
“Social media levels the playing field for small businesses by helping them deliver customer service,” said Janet Wagner, director of the Center for Excellence in Service, in a statement. “Time spent on Twitter, Facebook and blogs is an investment in making it easier for small businesses to compete.”
Previous research on small businesses and social media use revealed a somewhat rocky relationship. A Citibank study indicated social media was not working well for small businesses’ lead gen efforts, but other data showed small companies would be upping spending in the channel.

By: Jon Erdahl,  VP/Digital Strategy, McVay New Media

I don’t know about you but last year seemed like the year for new and innovative ways to re-structure the way in which we compensate our top performing account executives.  The mantra seemed to be (in every group I worked with at any rate) cost of sales were off, budgets were out of whack, and we needed to change our incentive programs to reward the kinds of sales behaviors that we wanted to achieve.  That made for a difficult, often confusing, set of dynamics since the environment was changing daily.  In the face of all that change and innovation on the sales side of things, a glaring problem surfaced for me that served to underscore the need for us, as an industry, to re-think how we compensate our programming teams.

It has always bothered me that we judge programming performance almost solely on the monthly ratings game; that’s how we are paid after all right?  We tend to get so myopic that we lose focus on other key components of our brand such as online.  Companies simply add the online tasks to the PD’s plate…and move on. We claim to be in the online space when in fact we are mostly paying lip-service.

Recently, I was involved with a broadcasting group that wanted to change the model but was struggling for a solution to judge a Program Directors performance.  Several key PD’s had experienced flat books (typical sample issues) and management knew the on-air products were solid.  However, the online component year to year, was stagnant and online sales were flat to down.  When the group launched their web program a few years ago, programming was fully engaged and online was part of every client pitch.  However, along the way, something was lost….engagement.  Once the systems were up, the team went on to other corporate initiatives; the web became wall-paper.  No one was watching day to day.  After a team meeting, we realized we needed to change the compensation model if we were going to get serious about online growth expectations.  Here’s how the plan worked:

• Programming bonus compensation split into 3 segments:

- 1/3 Online
- 1/3 Ratings
- 1/3 Online Sales Growth

• A Metrics Dashboard shot taken in November to line up with the budget process (adapt to your budget needs).

• Programming growth goals based on Uniques and Page View increases (YOY).  Your goals may vary. Everything is measurable.

• Sales goals based on aggressive, but realistic, budgets with each AE having a monthly goal; tracked in weekly one-on-ones.

• Additional Online commission kicker (5%) if AE’s hit monthly/quarterly targets.  Separate kicker for rate increases (critical).

• Launched new initiatives in a group party and formed teams to track results throughout each month/quarter.  Prizes awarded weekly.

• PD’s attend weekly Sales meetings and Online meeting; reinforcing the PD as a vital resource in the success of the program.

Of course two of the critical challenges we faced were being able to launch this mid-year (after compensation models were already in place) and to put this new performance incentive program in place without changing our overall opex budgets for the year.  As you can plainly see, the changes were made easily AND welcomed by the team.  By simply shifting money out of the ratings line in the budget (the only metric that PD’s were compensated under the older plans), we were able to spread that original budget across two other performance areas (online and sales) without adding one dime to the pre-approved budgets.  Plus, since some of the markets had recently had flat books, the PD’s were more than happy to have a chance at achieving some of that budget money that they would have already lost IF they were only being paid on ratings performance.

By outlining clear expectations and changing the compensation model, these programmers were judged on performance in a number of areas that added to the success of the cluster.  The result was that they hit their market goals in all metrics AND made more money based on behavior that was going to move the needle. Oh, and the ratings piece for that year…two up and two flat books with the usual In-Tab/Sample issues.  Imagine what would have happened if nothing changed?

For the first time ever, smart phones with touch screens accounted for more than half of all smart phone shipments globally in Q4 2009, taking 55% of the market. Touch-screen smart phone shipments were up 138% year on year in Q4, reaching almost 30 million units, in a quarter where overall smart phone market growth stood at 41%. The total touch-screen smart phone shipments for the year at over 75 million, more than double the 2008 figure. Total smart phone shipments in 2009 hit a new peak of 166 million units, according to a new study by Canalys.

Android Has 4-Digit Growth
Although the Google Android OS only shipped 7.8 million units in 2009, this represented 1073.5% growth from 663,500 units in 2008. Global market share grew from 0.5% to 4.7%.

Microsoft Loses Ground
Microsoft, the third-most popular smartphone OS by global shipment volume in 2008, lost 26.4% of its volume in 2009, dropping from 19.9 million units to 14.7 million units. Market share declined from 13.9% to 8.8%, and Microsoft slipped to fourth place in smartphone global shipment volume.

Apple Gains Popularity
Apple, the fourth-most popular smartphone OS by global shipment volume in 2008, traded places with Microsoft to become third-most-popular in 2009. Apple OS shipped 25.1 million units globally last year, up 82.9% from 13.7 million units in 2008. Market share grew from 9.6% to 15.1%. Strong performance in the touchscreen smartphone segment (see below) fueled Apple’s growth.

Other OS Volume Findings

* RIM retained its number two global shipment volume ranking while increasing its number of units shipped 46.6%, from 23.6 million to 34.5 million. RIM’s market share grew from 16.5% to 20.8%.

* Other smartphone OS vendors lost 44.9% of their global shipment volume in 2009, dropping from 10.2 million units to 5.6 million units. Combined market share dropped from 7.2% to 3.4%.

* Total global smartphone shipment volume increased 16.2% in 2009, from 143.1 million units to 166.3 million units.

Most Smartphones Have Touchscreens
For the first time in 2009, smartphones with touchscreens accounted for more than half of global shipment volume. A total of 75.8 million touchscreen smartphones shipped globally in 2009, 108.9% more than the 36.3 million units shipped globally in 2008. This also represents 55% of the 166.3 million smartphones shipped globally in 2009.

Apple Leads Touchscreen Market
Apple’s touchscreen smartphone market share dipped from 37.8% in 2008 to 33.1% in 2009. However, Apple’s shipment volume grew 82.9%, from 13.7 million to 25.1 million. All Apple smartphones feature touchscreen capabilities.

Nokia Touchscreens Have Explosive Growth
Nokia’s touchscreen smartphone shipment volume skyrocketed 4070.8%, from 536,210 units to 22.4 million units. Market share increased from 1.5% to 29.5%. Nokia was the leading vendor of touchscreen smartphones by shipment volume in Q4 2009.

Samsung Doubles Volume
Although Samsung’s touchscreen smartphone market share only grew from 6.3% to 6.4%, its shipment volume grew 111.4%, from 2.3 million to 4.8 million.

Other Touchscreen Findings
* HTC increased shipment volume 6.3%, from 7.3 million units to 7.7 million units. However, HTC’s market share significantly dropped from 20% to 10.2%.

* Other touchscreen vendors grew their combined shipment volume 26.7%, from 12.5 million units to 15.8 million units. Combined market share dropped from 34.4% to 20.9%.

Android Growth Benefits Motorola
Among current smartphone owners, usage of the Android OS increased 200%, from 1% to 4%, between September and December 2009, according to a December 2009 consumer survey by ChangeWave Research. In addition, among respondents planning to buy a new smartphone in the next 90 days, 21% would prefer to purchase a phone running Android. This is a 250% increase from the 6% of respondents expressing the same preference in September 2009.

Cellphone manufacturer Motorola saw its December 2009 popularity among consumers planning to buy a smartphone in the next 90 days rise even more dramatically than that of Android. While only 1% of respondents in this category said they planned to buy a Motorola phone in September 2009; that percentage jumped to 13% in December 2009. Motorola offers a version of the Droid smartphone, which runs on Android.

Social networking continued to gain momentum in 2009 with nearly 4 out of 5 Internet users visiting a social networking site in December 2009. The activity now accounts for 11% of all time spent online in the U.S., making it one of the most engaging activities across the Web, according to a new study by comScore.

2009 proved to be a landmark year in the U.S. social networking market, as category leader Facebook and upstart network Twitter both posted triple-digit growth. Facebook surged to the #1 position among social networks for the first time in May and continued its strong growth trajectory throughout the year, finishing with 112 million visitors in December 2009, up 105% during the year. Twitter finished the year with nearly 20 million visitors to its website, up from just 2 million visitors from the previous year. Much of Twitter’s extraordinary audience growth occurred during the first few months of 2009, at one point jumping from 4 million visitors to 17 million visitors between February and April. Meanwhile, 2008 category leader MySpace has experienced some softening in its audience; however, a new strategic focus on entertainment content is exhibiting signs of success with MySpace Music having grown 92% in the past year.

In addition to its surging population of users, Facebook grew substantially across nearly every performance metric in 2009. Unique visitors, page views, and total time spent all increased by a factor of two or more. Frequency metrics such as average minutes per usage day (up 6%) and average usage days per visitors (up 37%) also saw gains. As more people use Facebook more frequently, the site has grown to account for three times as much total time spent online as it did last year. The only metric by which Facebook decreased was the average minutes per visit (down 11%), which can likely be attributed to the increasing frequency with which people are visiting the site.

An analysis of demographic composition of Facebook, MySpace and Twitter users revealed important differences that reflect their appeal to various audiences. MySpace saw its user composition shift toward younger audience segments in 2009, with people age 24 and younger now comprising 44.4% of the site’s audience, up more than 7% points from the previous year. Facebook’s audience, by contrast, was evenly split between those younger and older than 35 years of age. The most noticeable demographic shift on Facebook during the year occurred with 25-34 year olds, who now account for 23& of the audience, up from 18.8% last year.

As Twitter’s audience grew in 2009, the site experienced interesting shifts in its demographic composition. All demographic segments achieved substantial gains in visitors, but certain segments grew more rapidly than others to gain in terms of their share of audience. The initial success of Twitter was largely driven by users in the 25-54 year old age segment, which made up 65% of all visitors to the site in December 2008, with 18-24 year olds accounting for just 9% of visitors. This older age skew varied dramatically from the traditional social media early adopter model, in which younger users tend to drive the lion’s share of usage. Despite Twitter’s initially older skew, as it gained widespread popularity with the help of celebrity Tweeters and mainstream media coverage, younger users flooded to the site in large numbers, with those under age 18 (up 6.2 percentage points) and 18-24 year olds (up 7.9 percentage points) representing the fastest growing demographic segments.