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Attitudes to Internet and New Media Marketing - US - October 2010

Online video, social networking and smartphones have already re-shaped how consumers communicate, entertain themselves and gather information. Now these media are re-shaping how consumers interact with brands and advertisements, as marketers struggle to better reach targets in an era where antagonism toward traditional push advertising is increasing. This report explores consumer relationships with advertising and marketing in online video, social media, on cell phones, and inside of games. Subjects covered in this exploration of how to follow consumers into their new media choices include:

  • How have sales of new media ad segments grown? How does new media advertising stack up against traditional advertising in terms of reach and impact?
  • What’s the future role of mobile advertising? What is its current impact? Are consumers really in greater opposition to it than other ad formats?
  • Which ads are effective and which offend consumers? Are consumers turning to the internet to avoid TV ads willing to tolerate online video ads?
  • How is internet use changing?
  • How does interactivity play into new media marketing?
  • How do brands fit into social networking?
  • Which new media advertising avenues are underutilized, and how can they be better employed?
  • Do banner ads brand, or are they only useful in pursuit of a purchase?
  • Are consumers losing interest in search? Which demographics are most likely to click and purchase? How do consumers select between search engines? Which demographics favor which engines?

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Table of contents

  1. Scope and Themes

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

                      • Market worth $37.6 billion, led by search ads
                        • Change to online lifestyle drives market
                          • Market gains as traditional ad sales slow
                            • Innovators focus on content, interactivity
                              • Decreasing penetration for clicking, buying
                                • Despite competitor marketing, Google still king of search
                                  • Professional video content wins in time spend
                                    • In-game ads still reach only a niche audience
                                      • Mobile ad sales stagnate, despite potential
                                        • Social media marketing underutilized
                                          • Blacks and Asians good targets for new media promotion
                                          • Insights and Opportunities

                                            • Links the new SEO
                                              • Figure 1: Trust in information on websites, May 2005-December 2009
                                              • Figure 2: Trust in information on websites, by age, July 2009-March 2010
                                              • Figure 3: Trust in information on websites, by age, July 2009-March 2010
                                            • Role of the web: Information above entertainment
                                              • Figure 4: Attitudes toward the changing role of the internet, May 2005-December 2009
                                            • Spending on pages, rather than ads
                                              • Cross platform opportunities via the mobile web
                                                • Using social shopping to create buzz
                                                • Inspire Insights

                                                    • Trend: Trust in Me
                                                    • Market Size

                                                      • Rapid growth returns after minor setback in 2009
                                                        • Figure 5: U.S. new media ad spend, at current sales, 2007-13
                                                        • Figure 6: U.S. new media ad spend, at inflation-adjusted sales, 2007-13
                                                    • Market Drivers

                                                      • Home internet
                                                        • Figure 7: Home internet usage in past week, trended, 2005-09
                                                      • Online ads to reach younger, higher-income demographics
                                                        • Figure 8: Home internet usage in past week, by age, April 2009-December 2009
                                                        • Figure 9: Home internet usage in past week, by household income, April 2009-December 2009
                                                      • Smartphone uptake higher with young, higher-income
                                                        • Figure 10: Smartphone penetration, by age, March 2010
                                                        • Figure 11: Smartphone penetration, by household income, March 2010
                                                      • Smartphones create opportunities in traditional campaigns
                                                        • Increase in streaming audio uptake slow but steady
                                                          • Figure 12: Radio/music listening, by age, June 2010
                                                        • Rise in online and portable video
                                                          • Figure 13: PC and phone video usage, by age, June 2010
                                                        • Men partake in portable and PC-based video
                                                          • Figure 14: PC and phone video usage, by gender, June 2010
                                                        • Nearly three in five online social networking
                                                            • Figure 15: Penetration for social networking profiles, by gender, age, and household income, January 2010
                                                          • Majority of SNS users visit sites daily
                                                            • Figure 16: Frequency of social networking site visits, by age, January 2010
                                                          • ROI worries
                                                          • Competitive Context

                                                            • Reach of traditional ads greater
                                                              • Figure 17: Types of ads seen in last week, by age, June-July 2010
                                                              • Figure 18: Types of ads seen in last week, by age, June-July 2010
                                                            • Impact of new media: more bang for buck
                                                              • Figure 19: Conscious impact of new media ads, by age, June-July 2010
                                                            • Questioning the value of the banner ad
                                                              • Figure 20: Reaction to banner ads on a PC, by age, June-July 2010
                                                            • Pot of gold still sitting in traditional media coffers
                                                              • Figure 21: U.S. traditional ad spend, by media type, 2008-10
                                                          • Segment Performance

                                                            • Search engines
                                                              • Branding entertainment across media channels
                                                                • Improved targeting gives boost to banners
                                                                  • Targeting improves through tracking web behavior
                                                                    • Web retailers rely on lead generation for traffic
                                                                        • Figure 22: U.S. new media advertising expenditures, by media type, 2008-10
                                                                        • Figure 23: Definitions of market segments
                                                                    • Innovation and Innovators

                                                                      • YouTube monetizes via Content ID
                                                                        • Hulu customizes ads
                                                                          • Old Spice and Burger King offer interactivity via social media
                                                                            • Long-form video
                                                                              • Lady Gaga’s Telephone makes product placement hip through irony
                                                                                • Pulling consumers in with webisodes
                                                                                  • Kmart’s First Day
                                                                                    • IKEA’s Easy to Assemble
                                                                                      • E-commerce as a marketing tool for entertainment brands
                                                                                        • Salon
                                                                                          • Lucky
                                                                                            • Online contests
                                                                                            • Clicking and Purchasing

                                                                                              • Pull advertising sells
                                                                                                • Figure 24: Clicking and purchasing on paid search and other internet links, by type of ad, July 2009-March 2010
                                                                                              • Search and weblinks becoming less effective?
                                                                                                • Figure 25: Clicking and purchasing on paid search and other internet ad links, trended: 2006 vs. 2009
                                                                                              • 25-34s lead in clicking
                                                                                                • Figure 26: Clicking on internet ads, type of ad, by age, July 2009-March 2010
                                                                                              • Online ads most effective in high-income households
                                                                                                • Figure 27: Clicking on internet ads, type of ad, by household income, July 2009-March 2010
                                                                                              • Internet ads commonly generate sales among 18-64s
                                                                                                • Figure 28: Internet advertising leading to purchase, type of ad, by age, July 2009-March 2010
                                                                                              • One fourth $100K+ HH income respondents purchase through from online ads
                                                                                                • Figure 29: Internet advertising leading to purchase, by household income, July 2009-March 2010
                                                                                            • Search

                                                                                              • Key points
                                                                                                • Ads for search engines
                                                                                                  • Figure 30: Search engine ad spend, 2008-09
                                                                                                • Bing
                                                                                                  • Figure 31: Bing “The Shining” television ad, 2010
                                                                                                  • Figure 32: Bing “Did you find a bar?” television ad, 2009
                                                                                                • Ask.com
                                                                                                  • Figure 33: Ask.com coffee television ad, 2009
                                                                                                  • Figure 34: Ask.com raining cats television ad, 2009
                                                                                                • Google
                                                                                                  • Bing/Yahoo!
                                                                                                    • Bing vs. Google
                                                                                                      • Figure 35: Comparison of frequency of search engine usage, June-July 2010
                                                                                                      • Figure 36: Most frequently used search engine used, by age, June-July 2010
                                                                                                    • Google’s stronghold
                                                                                                      • Figure 37: Search engines used ever, by age, June-July 2010
                                                                                                  • Online Video

                                                                                                    • Key points
                                                                                                      • Marketers leaving viewers at the screen on YouTube
                                                                                                        • Time spend with Netflix outpaces free video sites
                                                                                                          • YouTube
                                                                                                            • Hulu
                                                                                                              • Online video makes inroads against cable among 18-24s
                                                                                                                • Figure 38: Watching videos on YouTube and Hulu, by age, June-July 2010
                                                                                                              • Internet video vs. TV video
                                                                                                                • Figure 39: Online video vs. TV habits, June-July 2010
                                                                                                                • Figure 40: Online video vs. TV habits, by age, June-July 2010
                                                                                                              • Online video ads have widest reach among the young
                                                                                                                • Figure 41: Online video ad reach, by age, June-July 2010
                                                                                                              • Resistance to video ads low among online video viewers
                                                                                                                • Figure 42: Attitudes to online video ads, by age, June-July 2010
                                                                                                              • Embracing video advertainment
                                                                                                                • Mainstream brands embrace sponsored/branded webisodes
                                                                                                                  • Sponsored content fosters connections with viewers
                                                                                                                    • Figure 43: Viewing advertainment videos in the last week, by age, June-July 2010
                                                                                                                • In-Game Ads

                                                                                                                    • 25-34s most likely to have seen in-game ads
                                                                                                                      • Figure 44: Reach of in-game product placement, by age, June-July 2010
                                                                                                                  • In-Phone Advertising

                                                                                                                    • A growing market
                                                                                                                      • One in four online on cell phones
                                                                                                                        • Figure 45: Internet and video usage on a cell phone, by age, June-July 2010
                                                                                                                      • Cellular ads likely to reach higher-income groups
                                                                                                                        • Figure 46: Internet and video usage on a cell phone, by household income, June-July 2010
                                                                                                                      • Reach of ads
                                                                                                                        • Figure 47: Cellular ads seen in past week, by age, June-July 2010
                                                                                                                      • Attitudes toward mobile ads
                                                                                                                        • Figure 48: Types of ads received and desired on a cell phone, June-July 2010
                                                                                                                      • Youth corresponds with interest in phone ads
                                                                                                                        • Figure 49: Types of ads received and desired on a cell phone, by age, June-July 2010
                                                                                                                      • Attitudes to cellular banner ads mimic attitudes to PC banner ads
                                                                                                                        • Figure 50: Reaction to banner ads on a cell phone vs. PC/Tablet, June-July 2010
                                                                                                                        • Figure 51: Reaction to banner ads on a cell phone, by age, June-July 2010
                                                                                                                      • Reach of text ads greater among younger respondents
                                                                                                                        • Figure 52: Receipt of company text messaging other than from own carrier, by age, June-July 2010
                                                                                                                    • Internet Radio

                                                                                                                      • Solutions to an evolving, fragmented market
                                                                                                                        • Internet radio slowly encroaching on traditional radio
                                                                                                                          • Figure 53: Internet radio disruption of traditional radio, May 2005-December 2009
                                                                                                                        • Streaming/downloading most popular among under-25s
                                                                                                                          • Figure 54: Internet radio disruption of traditional radio, by age, July 2009-March 2010
                                                                                                                        • Advantage of a niche audience
                                                                                                                          • Figure 55: Penetration of internet radio ads in past last week, by age, June-July 2010
                                                                                                                      • Social Media

                                                                                                                        • Introduction
                                                                                                                          • Social media CRM becomes a de rigour part of doing business
                                                                                                                            • Blogging
                                                                                                                              • How sites are used by consumers
                                                                                                                                • Figure 56: How social networking sites function for the users, January 2010
                                                                                                                                • Figure 57: How social networking sites function for the users, by age, January 2010
                                                                                                                                • Figure 58: How social networking sites function for the users, by household income, January 2010
                                                                                                                              • Blogs skew young
                                                                                                                                • Figure 59: Following and participating on blogs, by age, January 2010
                                                                                                                            • Impact of Race/Hispanic Origin

                                                                                                                              • Blacks, Asians click
                                                                                                                                • Figure 60: Clicking on internet advertising, by race/Hispanic origin, July 2009-March 2010
                                                                                                                              • Asians, blacks buy
                                                                                                                                • Figure 61: Internet advertising leading to purchase, by race/Hispanic origin, July 2009-March 2010
                                                                                                                              • Internet video vs. TV video
                                                                                                                                • Figure 62: Watching video on TV vs. the internet, by race/Hispanic origin, June-July 2010
                                                                                                                            • Cluster Analysis

                                                                                                                                • PullMes
                                                                                                                                  • Demographics
                                                                                                                                    • Characteristics
                                                                                                                                      • Opportunity
                                                                                                                                        • MobileMes
                                                                                                                                          • Demographics
                                                                                                                                            • Characteristics
                                                                                                                                              • Opportunity
                                                                                                                                                • Adblivious
                                                                                                                                                  • Demographics
                                                                                                                                                    • Characteristics
                                                                                                                                                      • Opportunity
                                                                                                                                                        • Cluster characteristics
                                                                                                                                                          • Figure 63: Attitudes toward new media advertising clusters, July 2010
                                                                                                                                                          • Figure 64: Attitudes and action toward paid search listings, by clusters, July 2010
                                                                                                                                                          • Figure 65: Engagement in “pull” marketing, by clusters, July 2010
                                                                                                                                                          • Figure 66: Reaction to banner ads on a PC or cell phone, by clusters, July 2010
                                                                                                                                                          • Figure 67: Engagement with cell phone advertising, by clusters, July 2010
                                                                                                                                                          • Figure 68: Video viewing on TV vs. PC/Cell, by clusters, July 2010
                                                                                                                                                        • Cluster demographics
                                                                                                                                                          • Figure 69: Attitudes toward advertising clusters, by gender, July 2010
                                                                                                                                                          • Figure 70: Attitudes toward advertising clusters, by age group, July 2010
                                                                                                                                                          • Figure 71: Attitudes toward advertising clusters, by household income group, July 2010
                                                                                                                                                          • Figure 72: Attitudes toward advertising clusters, by race, July 2010
                                                                                                                                                          • Figure 73: Attitudes toward advertising clusters, by Hispanic origin, July 2010
                                                                                                                                                        • Cluster methodology
                                                                                                                                                        • Appendix: Additional Useful Tables

                                                                                                                                                            • Figure 74: Internet radio disruption of traditional radio, by household income, July 2009-March 2010
                                                                                                                                                            • Figure 75: Types of ads received and desired on a cell phone, by age, June-July 2010
                                                                                                                                                        • Appendix: Television Ad Avoidance

                                                                                                                                                          • Key points
                                                                                                                                                            • DVR penetration more than doubles to 35%
                                                                                                                                                              • Figure 76: Incidence of DVRs in household, 2005-09
                                                                                                                                                            • Roughly half of 25-44s who own DVRs rarely watch live programming
                                                                                                                                                              • Figure 77: Watching video on TV at broadcast time vs. DVR, by age, July 2010
                                                                                                                                                            • Eight in 10 DVR owners typically skip commercials…
                                                                                                                                                              • Figure 78: Fast forwarding through commercials on a DVR, by age, July 2010
                                                                                                                                                            • … but majority of TV watchers use low-tech methods to avoid ads
                                                                                                                                                              • Figure 79: Skipping commercials without DVR usage, by age, July 2010
                                                                                                                                                            • Reasons for TV ad avoidance: Oversaturation
                                                                                                                                                              • Figure 80: Attitudes toward TV and TV ads, May 2005-December 2009
                                                                                                                                                            • Reasons for TV ad avoidance: Excessive repetition of identical ads
                                                                                                                                                              • Figure 81: Oversaturation with television advertisement, by age, July 2010
                                                                                                                                                            • Reasons for TV ad avoidance: Relevancy of product advertised limited
                                                                                                                                                              • Figure 82: Lack of relevancy in television ads, by age, July 2010
                                                                                                                                                            • Reasons for TV ad avoidance: Lack of trust
                                                                                                                                                              • Figure 83: Lack of trust in television ad information, by age, July 2010
                                                                                                                                                          • Appendix: Trade Associations

                                                                                                                                                            Companies Covered

                                                                                                                                                            • Advertising Research Foundation
                                                                                                                                                            • American Advertising Federation
                                                                                                                                                            • American Association of Advertising Agencies (AAAA)
                                                                                                                                                            • American Marketing Association (AMA)
                                                                                                                                                            • AOL
                                                                                                                                                            • Association of National Advertisers (ANA)
                                                                                                                                                            • AT&T Inc.
                                                                                                                                                            • BMW of North America, LLC
                                                                                                                                                            • Burger King Corporation
                                                                                                                                                            • Cablevision Systems Corporation
                                                                                                                                                            • Comcast Corporation
                                                                                                                                                            • Consumer Electronics Association
                                                                                                                                                            • Digital Media Association (DiMA)
                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                            • Google, Inc.
                                                                                                                                                            • IKEA USA
                                                                                                                                                            • Interactive Advertising Bureau (US)
                                                                                                                                                            • International Advertising Association (IAA)
                                                                                                                                                            • Kmart Corporation
                                                                                                                                                            • Kraft Foods Inc. (U.S.A.)
                                                                                                                                                            • Macy's, Inc.
                                                                                                                                                            • Mercedes-Benz USA
                                                                                                                                                            • Microsoft USA
                                                                                                                                                            • MySpace.com
                                                                                                                                                            • National Broadcasting Company, Inc. (NBC)
                                                                                                                                                            • Netflix, Inc.
                                                                                                                                                            • Nike
                                                                                                                                                            • Procter & Gamble USA
                                                                                                                                                            • Research In Motion (USA)
                                                                                                                                                            • Samsung Electronics (USA)
                                                                                                                                                            • Starbucks Corporation
                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                            • U.S. Bureau of Labor Statistics
                                                                                                                                                            • Volkswagen of America, Inc.
                                                                                                                                                            • Yahoo! Inc
                                                                                                                                                            • YouTube, Inc.

                                                                                                                                                            Attitudes to Internet and New Media Marketing - US - October 2010

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