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Attitudes to Internet and New Media Marketing - US - October 2009

With the influx of new media in recent years—from online video and social networking to smartphones—the advertising industry is facing the question of how to most effectively utilize a rapidly expanding set of tools to reach consumers. The economic recession and the adoption of disruptive technologies should make new media more attractive to advertisers, but there is still trepidation in terms of what works, what annoys, and even what offends consumers. In this report, Mintel looks at how the rules of the game are changing as marketers struggle to better reach their targets.

Analysis and insights include:

  • Reach and impact on consumers by demographic for search, video, banner, text, email, and more media

  • Evidence that marketers are under-using online video

  • Why young women are harder to reach than young men, counter to conventional wisdom

  • Which segments of new media advertising saw spend decline in 2009, and why

  • Which segments have seen spend more than double in two years, and which will keep growing

  • How marketers are aiming to increase reach

  • What are the barriers to more positive perceptions of advertising?

  • What is the impact of product placement?

  • How willing are respondents to seek out ads voluntarily? How interested are they in sharing online ads with friends?

  • Attitudes toward advertainment, branded content, and the role of advertising as part of social media and the Web 2.0 phenomenon

  • How race and Hispanic origin impact receptiveness to new media advertising

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • A growing market hits a rough patch
                      • Search the largest segment and still growing
                        • Smaller segments to offer high growth in upcoming years
                          • Search, online shopping, mobile web driving growth
                            • Email ads have the greatest reach
                              • Highest-income households dislike advertising the most
                                • Online video ads: disliked, but watched
                                  • Most click display ads at least sometimes
                                    • Search ads do not offend; invisible to most
                                      • New media an effective way to reach blacks, Hispanics of all ages
                                        • Families look to their favorite shows to see what products to use
                                          • The young engaged in social networking
                                            • Cell phone advertising has an uphill battle ahead
                                              • Advertainment can reach under-35s
                                                • Young people more likely to share, read others’ responses to ads
                                                • Insights and Opportunities

                                                  • Ahead of the crowd in moving branding online
                                                    • DVR ownership above four in 10 for most desirable consumer demographics
                                                      • Figure 1: DVR ownership, by age and household income, November 2008-June 2009
                                                    • In spite of rising DVR ownership, television spend gaining share
                                                      • Figure 2: Traditional and new media advertising, 2007 and 2009
                                                    • Sellers carrying over-55s should see growth
                                                      • Figure 3: U.S. population, by age, 2009 and 2014
                                                    • Paid ad blocking for 55-74s?
                                                      • Figure 4: Attitudes towards online banner advertisements, by age, June 2009
                                                    • One-click links from product placement in online video
                                                      • Paying for the attention of young adults and wealthy households
                                                      • Inspire Insights

                                                        • User-generated content = low-cost marketing
                                                          • The next media revolution: The physical joins the web
                                                            • Advertainment: Why it’s in your brand’s future
                                                            • Market Size and Forecast

                                                              • Broadband and DVRs create push from TV to online advertising
                                                                • Growth stalls in 2009
                                                                    • Figure 5: Total U.S. expenditures for new media marketing, at current prices, 2005-13
                                                                    • Figure 6: Total U.S. expenditures for new media marketing, at inflation-adjusted prices, 2005-13
                                                                • Competitive Context

                                                                    • Increased DVR penetration impacts TV ad reach
                                                                        • Figure 7: U.S. television advertising expenditures, 2008 and 2009
                                                                      • Print’s rapid decline
                                                                        • Figure 8: U.S. magazine advertising expenditures, 2008 and 2009
                                                                        • Figure 9: U.S. newspaper advertising expenditures, 2008 and 2009
                                                                        • Figure 10: Newspaper daily usage, 2003/04-2007/08
                                                                      • The long-term competitor: Below-the-line spend
                                                                      • Segment Performance and Trends

                                                                        • Search, display and classifieds account for 58% of spend
                                                                          • Search clear leader in spend and still gaining
                                                                            • Search gains at the expense of display
                                                                              • Classified spend dwindling rapidly
                                                                                • Online video a growth market as consumers turn to professional content
                                                                                  • Product placement/branded content rising
                                                                                    • Mobile advertising rides on uptake of smartphones
                                                                                      • Spend on social networking continues to offer opportunities in spite of rapid increases
                                                                                        • Video games provide advertisers their least-distracted audience
                                                                                          • Figure 11: U.S. new media marketing spend, by media type, 2007 and 2009
                                                                                      • Market Drivers

                                                                                        • Search still on the rise
                                                                                          • Targeting evolves
                                                                                            • Time spent online
                                                                                              • Online shopping
                                                                                                • Smart shoppers drawn by online coupons
                                                                                                  • Smartphones
                                                                                                    • 4G
                                                                                                      • Figure 12: Interest in television viewing on cell phones, by age, June 2009
                                                                                                    • Online video: Relative to other video sources still a drop in the bucket
                                                                                                      • Consumers losing interest in ads in general
                                                                                                          • Figure 13: Attitudes toward advertising, 2004/05 and 2008/09
                                                                                                        • Display has its own “DVR” problem
                                                                                                        • Innovation and Innovators

                                                                                                          • Video
                                                                                                            • Chanel integrates film, advertising, and documentary
                                                                                                              • “Commercial Free” advertising
                                                                                                                • Social networking
                                                                                                                  • Using Facebook
                                                                                                                    • Gaming
                                                                                                                      • Chevron
                                                                                                                        • Product placement
                                                                                                                          • Online retailer SeenON! sells products placed on programming
                                                                                                                            • Mobile advertising
                                                                                                                              • Danoo offers venue-based content
                                                                                                                                • Print gets creative with apps
                                                                                                                                • Reach and Impact

                                                                                                                                  • How new media compare with traditional media
                                                                                                                                    • Email and search lead the pack
                                                                                                                                      • Figure 14: Impact of new media ads, by type of response and type of media, June 2009
                                                                                                                                    • Comparison of reach with traditional media
                                                                                                                                      • Figure 15: Reach and impact of ads, by media segment, June 2009
                                                                                                                                    • Uphill battle for video, mobile advertising
                                                                                                                                      • Figure 16: Reach and impact of ads, by media segment, June 2009
                                                                                                                                    • Under-35s easiest to reach for cell and online video campaigns
                                                                                                                                      • Figure 17: Reach of ads, by age, June 2009
                                                                                                                                    • Younger consumers more impacted by what they see
                                                                                                                                      • Figure 18: Impact of ads, by age, June 2009
                                                                                                                                      • Figure 19: Impact of traditional advertising media, by age, June 2009
                                                                                                                                    • Let wealthy consumers ask for ads
                                                                                                                                      • Figure 20: Impact of ads, by household income, June 2009
                                                                                                                                  • Attitudes toward Product Placement

                                                                                                                                    • Product placement on the rise
                                                                                                                                      • Figure 21: Brand appearances in network TV programming, 2006-08
                                                                                                                                    • Attitudes toward product placement
                                                                                                                                      • Family-aged viewers best potential placement target
                                                                                                                                        • Figure 22: Attitudes towards product placement on television, by age, November 2008-June 2009
                                                                                                                                      • Less positive reception to brand use in movies than television
                                                                                                                                        • Figure 23: Attitudes towards product placement in movies, by age, November 2008-June 2009
                                                                                                                                      • Young people play video games, notice ads
                                                                                                                                        • Figure 24: Attitudes towards product placement in video games, by age, November 2008-June 2009
                                                                                                                                    • Attitudes toward Online Video Ads

                                                                                                                                      • Consumers will watch ads in videos online, like it or not
                                                                                                                                          • Figure 25: Attitudes towards seeing ads when watching video online, June 2009
                                                                                                                                        • 18-24 year olds don’t mind upfront commercials
                                                                                                                                          • Figure 26: Attitudes towards online video ads, by age, June 2009
                                                                                                                                      • Attitudes toward Advertainment

                                                                                                                                        • Multiple stones unturned
                                                                                                                                          • Figure 27: Voluntary ad viewership online, June 2009
                                                                                                                                        • Young people want to watch funny ads online
                                                                                                                                          • Figure 28: Voluntary ad viewership online, by age, June 2009
                                                                                                                                        • Higher-income households behind branded short movies
                                                                                                                                          • Figure 29: Voluntary ad viewership online, by household income, June 2009
                                                                                                                                      • Attitudes toward Cell Phone Advertising

                                                                                                                                        • Mostly, people aren’t interested
                                                                                                                                          • Figure 30: Attitudes towards cell phone advertisement, June 2009
                                                                                                                                        • Mobile ad trades appeal to the young…
                                                                                                                                          • Figure 31: Attitudes towards cell phone advertisement, by age, June 2009
                                                                                                                                        • …and the affluent
                                                                                                                                          • Figure 32: Attitudes towards cell phone advertisement, by household income, June 2009
                                                                                                                                      • Attitudes toward Display Ads

                                                                                                                                        • The majority sometimes click on ads
                                                                                                                                          • Figure 33: Attitudes towards online banner advertisements, June 2009
                                                                                                                                        • Clicking on the decline
                                                                                                                                        • Branding via Social Networking

                                                                                                                                          • Social networking profiles
                                                                                                                                            • The young more engaged
                                                                                                                                              • Figure 34: Use of social networking sites, by age, June 2009
                                                                                                                                            • Brand-related activity via social networking sites
                                                                                                                                              • Figure 35: Interacting with social networking ads, by age, June 2009
                                                                                                                                            • Wealthy receptive to social network branding
                                                                                                                                              • Figure 36: Attitudes towards social networking ads, by household income, June 2009
                                                                                                                                          • Attitudes toward Search Ads

                                                                                                                                            • Paid search: The unobvious choice
                                                                                                                                                • Figure 37: Attitudes towards internet search advertisements, June 2009
                                                                                                                                              • Younger respondents want natural, not paid listings
                                                                                                                                                • Figure 38: Attitudes towards internet search advertisements, by age, June 2009
                                                                                                                                              • Higher earners wary of search engine ads
                                                                                                                                                • Figure 39: Attitudes towards internet search advertisements, by household income, June 2009
                                                                                                                                            • Web 2.0: The Voice of the Consumer in internet Ads

                                                                                                                                                  • Figure 40: Interactivity with online ads, June 2009
                                                                                                                                                • Participation in spreading ads age-based
                                                                                                                                                  • Figure 41: Interactivity with online ads, by age, June 2009
                                                                                                                                              • Race and Hispanic Origin

                                                                                                                                                • Introduction
                                                                                                                                                  • Figure 42: Population, by race and Hispanic origin, 2009 and 2014
                                                                                                                                                • Minority responses to new media marketing less age-driven
                                                                                                                                                  • Tables by race/Hispanic origin and age
                                                                                                                                                    • Figure 43: Reach of ads, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 44: Impact of ads, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 45: Attitudes towards seeing ads when watching video online, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 46: Voluntarily watching video advertisements online, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 47: Attitudes towards cell phone advertisement, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 48: Attitudes towards online banner advertisements, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 49: Attitudes towards internet ads, by race/Hispanic origin and age, June 2009
                                                                                                                                                    • Figure 50: Attitudes towards internet ads, by race/Hispanic origin and age, June 2009
                                                                                                                                                • Cluster Analysis

                                                                                                                                                    • Traditionalists
                                                                                                                                                      • Anti-pushers
                                                                                                                                                        • Advertising activists
                                                                                                                                                          • Opportunity
                                                                                                                                                            • Characteristic tables
                                                                                                                                                              • Figure 51: New media clusters, June 2009
                                                                                                                                                              • Figure 52: Attitudes toward online video ads, by new media clusters, June 2009
                                                                                                                                                              • Figure 53: Attitudes toward advertainment, by new media clusters, June 2009
                                                                                                                                                              • Figure 54: Attitudes toward cell phone advertising, by new media clusters, June 2009
                                                                                                                                                              • Figure 55: Attitudes toward banner ads, by new media clusters, June 2009
                                                                                                                                                              • Figure 56: Attitudes toward ad interactivity and social network marketing, by new media clusters, June 2009
                                                                                                                                                              • Figure 57: Attitudes toward search ads, by new media clusters, June 2009
                                                                                                                                                            • Demographic tables:
                                                                                                                                                              • Figure 58: New media clusters, by gender, June 2009
                                                                                                                                                              • Figure 59: New media clusters, by age, June 2009
                                                                                                                                                              • Figure 60: New media clusters, by household income, June 2009
                                                                                                                                                              • Figure 61: New media clusters, by race/Hispanic origin, June 2009
                                                                                                                                                            • Cluster methodology
                                                                                                                                                            • Custom Consumer Groups

                                                                                                                                                              • Young women, not young men hardest to reach
                                                                                                                                                                • Young men most responsive to new media advertising
                                                                                                                                                                  • Reach by gender and age
                                                                                                                                                                    • Figure 62: Reach of ads, by gender and age, June 2009
                                                                                                                                                                  • Impact by gender and age
                                                                                                                                                                    • Figure 63: Impact of ads, by gender and age, June 2009
                                                                                                                                                                  • Young men, sometimes women, receptive to video ads
                                                                                                                                                                    • Figure 64: Attitudes towards seeing ads when watching video online, by gender and age, June 2009
                                                                                                                                                                  • Voluntarily watching video ads online highest among young men
                                                                                                                                                                    • Figure 65: Voluntarily watching video advertisements online, by gender and age, June 2009
                                                                                                                                                                  • Cell phone ads reach under-55 men
                                                                                                                                                                    • Figure 66: Attitudes towards cell phone advertisement, by gender and age, June 2009
                                                                                                                                                                  • Young men want clever banner ads
                                                                                                                                                                    • Figure 67: Attitudes towards online banner advertisements, by gender and age, June 2009
                                                                                                                                                                  • Virtual gifts most popular among 18-34 year old females
                                                                                                                                                                    • Figure 68: Attitudes towards internet ads, by gender and age, June 2009
                                                                                                                                                                  • Young men, women like social aspect of ads online
                                                                                                                                                                    • Figure 69: Attitudes towards internet ads, by gender and age, June 2009
                                                                                                                                                                • Appendix: Attitudes toward Google for Search

                                                                                                                                                                    • Figure 70: Attitudes towards Google search, June 2009
                                                                                                                                                                    • Figure 71: Attitudes towards Google search, by age, June 2009
                                                                                                                                                                    • Figure 72: Attitudes towards Google search, by household income, June 2009
                                                                                                                                                                • Appendix: Additional Consumer Tables

                                                                                                                                                                  • Income doesn’t impact reach
                                                                                                                                                                    • Figure 73: Reach of ads, by household income, June 2009
                                                                                                                                                                • Appendix: Historical Online Video Consumption Data

                                                                                                                                                                    • Changes in video consumption by medium
                                                                                                                                                                      • Figure 74: Media consumption (video) based on hours per person, 2003-07
                                                                                                                                                                      • Figure 75: Media consumption (other) based on hours per person, 2003-07
                                                                                                                                                                    • 18-34s heaviest users of online video, but 25-44s on top of DVR usage
                                                                                                                                                                      • Figure 76: Weekly hours spent watching video content, by age, November 2008
                                                                                                                                                                  • Appendix: Trade Associations

                                                                                                                                                                    Companies Covered

                                                                                                                                                                    • ABC, Inc.
                                                                                                                                                                    • Advertising Research Foundation
                                                                                                                                                                    • American Advertising Federation
                                                                                                                                                                    • American Association of Advertising Agencies (AAAA)
                                                                                                                                                                    • American Marketing Association (AMA)
                                                                                                                                                                    • AMR Corporation (American Airlines)
                                                                                                                                                                    • Apple, Inc
                                                                                                                                                                    • Association of Hispanic Advertising Agencies
                                                                                                                                                                    • Association of National Advertisers (ANA)
                                                                                                                                                                    • BMW of North America, LLC
                                                                                                                                                                    • Bose Corporation
                                                                                                                                                                    • Burger King Corporation
                                                                                                                                                                    • Cabela's Inc
                                                                                                                                                                    • CBS Corporation
                                                                                                                                                                    • Chanel USA
                                                                                                                                                                    • Coca-Cola Company (The) (USA)
                                                                                                                                                                    • Consumer Electronics Association
                                                                                                                                                                    • CoolBrands International Inc.
                                                                                                                                                                    • Craigslist
                                                                                                                                                                    • Digital Media Association (DiMA)
                                                                                                                                                                    • Discovery Channel
                                                                                                                                                                    • DreamWorks Animation SKG Inc.
                                                                                                                                                                    • Dunkin' Brands
                                                                                                                                                                    • Economist Group Limited (The)
                                                                                                                                                                    • Facebook, Inc.
                                                                                                                                                                    • Friendster Inc
                                                                                                                                                                    • General Motors Corporation
                                                                                                                                                                    • Google, Inc.
                                                                                                                                                                    • Greenfield Online
                                                                                                                                                                    • Interactive Advertising Bureau (US)
                                                                                                                                                                    • International Advertising Association (IAA)
                                                                                                                                                                    • JCPenney (department stores and catalog)
                                                                                                                                                                    • Johnson & Johnson
                                                                                                                                                                    • Kraft Foods Inc. (U.S.A.)
                                                                                                                                                                    • LinkedIn
                                                                                                                                                                    • Motion Picture Association of America
                                                                                                                                                                    • MTV Networks
                                                                                                                                                                    • MySpace.com
                                                                                                                                                                    • National Broadcasting Company, Inc. (NBC)
                                                                                                                                                                    • Nike
                                                                                                                                                                    • Sprint Nextel Corporation
                                                                                                                                                                    • The New York Times Company
                                                                                                                                                                    • Twentieth Century Fox Film Corporation
                                                                                                                                                                    • Twitter, Inc.
                                                                                                                                                                    • U.S. Bureau of Labor Statistics
                                                                                                                                                                    • U.S. Bureau of the Census
                                                                                                                                                                    • Verizon Wireless (Cellco)
                                                                                                                                                                    • Visa U.S.A. Inc.
                                                                                                                                                                    • World Federation of Advertisers (WFA)
                                                                                                                                                                    • Yahoo! Inc
                                                                                                                                                                    • YouTube, Inc.

                                                                                                                                                                    Attitudes to Internet and New Media Marketing - US - October 2009

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