Message from Michael -- May 5, 2008

MARCHSWEEPS

UNIVERSAL MCCANN

COCKTAIL CHATTER


We encourage people to pass on copies of Message from Michael. But if you would like to get your own copy, you can subscribe by sending an e-mail to Michael@MediaConsultant.tv with the word “subscribe-MM” in the subject line.

MARCH SWEEPS: No, that’s not a mis-type on my part. You probably have heard that Nielsen is moving its February, 2009, sweeps to March because of the DTV transition taking place February 17, 2009, and normally we don’t report ‘old’ news in MfM. But this is so indicative of the concern surrounding DTV that we thought it was worth repeating. As we said in last week’s MfM, the switchover is the Y2K of broadcasting. As newsletter Cynopsis put it, the Nielsen move was made to avoid the “potential mayhem” surrounding the switchover. According to the National Telecommunication and Information Administration, some 5.3 Million U.S. households have requested 10 million $40 coupons for the digital converter boxes.

Side Note: There are numerous sites devoted to the DTV transition. Let me share a few that you may want to look at: The FCC’s dtv.gov which says it will tell you “what you need to know” about DTV; dtvtransition.com which is sponsored by a group calling itself the digital television transition coalition made up of various ‘business, trade and industry groups’; coalition member NAB’s dtvanswers.com which also says it will tell you ‘what you need to know’ about the transition; digitaltvtrainer.com which bills itself as a service of ‘your local television broadcasters’ which is somewhat disturbing since repeated searches for local DTV information came back with ‘presently we have no information on stations in that state’ and then directs you to its national DTV site; Consumer Reports says it provides a “consumer voice for communications choice” through its website hearusnow.org site.

SOCIAL NETWORKING PHENOMENON: More evidence that social networking is taking over the Internet is the report that online giant Yahoo! has joined the list of other online giants such as MySpace, Facebook and Google in making over its website to make it “more social”, allowing its 500 Million users greater flexibility in customizing the website. Meanwhile research firm Hitwise reports that social networks and search engines account for an equal amount of referrals (28%) to online video sites, although that number is actually a decrease for social networks and an increase for search engines. Financial services company Morgan Stanley says social network is changing how people connect, accounting for 16% of all online time worldwide, which is pretty remarkable since, the report notes, the category of social network didn’t even exist three years ago. (And in case you’re wondering what Morgan Stanley is doing studying the Internet – which I also wondered about – the company is the financial advisor to Microsoft in its now-defunct bid to buy Yahoo!) The company, which seems to have a penchant for the word “presence” -- as in establishing a presence in Saudi Arabia, or India or China -- says social networking is a way for people to establish a “presence” because it combines the two most important sources of information – the Internet and Personal Sources. Advertising agency Universal McCann also notes the ‘sudden’ appearance of social networking, as noted by Morgan Stanley, with significant growth over the past three years. More than half of the Internet users surveyed by Universal McCann (57%) have joined a social network, making it the number one platform for creating and sharing content. The agency defines the key social platforms as blogging, micro blogging, RSS, Widgets, social networking, chat rooms, message boards, podcasts, video sharing and photo sharing. The company says ‘social media’ is a much better way to describe the changes in the Internet, than Web 2.0 which is says “was always a touch crude.”

The report which is Wave 3 of Internet studies by Universal McCann says blogs are now part of the ‘mainstream media’ worldwide and -- ‘as a collective’ -- rival traditional media and that people worldwide are becoming more active in social networking activities such as photo sharing and video watching. BUT the U.S. isn’t taking part in these trends as much as one would have thought, or at least not taking part to the same degree. For example, while three quarters (77%) of ‘active Internet users’ worldwide read blogs, less than two-thirds (60%) do so in the U.S. – a percentage has been pretty consistently the same for the past three years. Compare that to South Korea (92.1%), China (88.1%) and India (85%). The U.S. is also on the low end of the totem pole when it comes to creating blogs as well, with only a quarter (26.4%) doing so, compared to the global average of nearly half (44.8%). Again, compare that to South Korea (71.7%), Taiwan (70.9%), China (70.3%), Brazil (50.1%) and India (49%). And when it comes to creating a profile on a social network, the U.S. (at 42.5%) is far behind the global average (57.5%) of Internet users. When it comes to watching videos online, the grouping gets tighter with three-quarters (74.2%) of U.S. ‘active Internet users’ watching, which is only slightly below the global average (82.8%) The agency admonishes companies that social media impacts their brand’s reputation with a third (34%) of the Internet users posting opinions about products and brands on their blog and a third (36%) saying they think “more positively” about companies that have blogs. And it warns, “in a world of social media, honesty is the only policy.”

Other interesting factoids from the Universal McCann report: Countries with ‘high emigration’ lead the way in terms of social networking, ‘connecting people globally.’ Although MySpace and Facebook dominate the American market, globally the report says “it’s far from a two-horse race” with QQ, Cyworld and Mixi dominating in Asia, Baidu in China, and Orkut number one in Brazil. The report notes the emergence of niche social networks such as dogster.com for dog owners or doppir.com for frequent business travelers; do-it-yourself social networks such as ning.com or onsite.com; reputation management social networks such as wink.com or peekyou.com as people realize “the implications of having every drunken photo online for the world to see.”

Other interesting factoids from the Hitwise report: Time spent online at video websites has increased almost a full minute over the past year from 15 minutes and 14 seconds last year to 16 minutes and 12 seconds this year. The firm also reports that nearly half of the social network population (47%) is under the age of 35, but analyst Heather Dougherty adds that social networks are “no longer only the playground of the young.”

Other interesting factoids from the Morgan Stanley report: The amount of CONSUMER IP traffic is expected to surpass the amount of BUSINESS IP traffic worldwide for the first time this year. While only 13% of the Top 15 Online Retailers are what is called Internet Pure-Plays (meaning no stores), the biggest money maker in terms of growth is Amazon.com which had a 26% Y2Y growth rate. While North America has 16% of the world’s Internet users, it has only 8% of the world’s mobile users. In 1995, China had only one percent of the world’s Internet users; last year, in 2007, its Internet population represented 16% of the world Internet users.

IT’S A BRIC HOUSE: Okay, this is my own warped version of The Commodores hit song. All the references above to global trends reminded me of several references I’ve seen to the so-called BRIC economies. These are the four countries that are the fastest growing, emerging economies in the world – Brazil, Russia, India and China.

TWITTERPATED OVER TWITTER: When Bambi fell in love in the Disney classic movie, his friend Thumper said he’d become ‘twitterpated.’ Based on several recent postings I’ve read, marketers have become ‘twitterpated’ over Twitter, the social-network-website-instant-messaging service in which people tell each other what they’re doing minute by minute in great minutiae. It is what was referred to, above, as ‘micro-blogging’ which is blogging 140 characters. Let me emphasize that last point – CHARACTERS, 140 Characters, NOT words, which is less than this paragraph. Columnist Rob Pegoraro of Wahingtonpost.com noted the growth of Twittering. The campaign staff of presidential candidates Barack Obama and Hillary Clinton both ‘twitter.’ Website ReadWriteWeb argues that Twitter can be “wildly useful” for some writers penning larger pieces. WebProNews argues that Twitter with its stats on who is being followed and who is following is “one of the great democratizing forces.” And as noted before, Twitter was used to organize the protest march in San Francisco marking the fifth anniversary of the invasion of Iraq.

COCKTAIL CHATTER: Market research firm Unity Marketing, citing figures supplied by the U.S. Census Bureau, says ‘affluent households’ (defined as those with incomes over $100,000 a year) is the fastest growing segment in the U.S. economy, rising 13% from 19.7 Million in 2005 to 22.2 Million in 2006. One in 50 households in America (2%) report an adjusted gross income to the Internal Revenue Service of more than $250,000 a year, according to figures supplied to Factcheck.org by the Tax Policy Center. These folks will earn 24.1% of all income and will pay 43.6% of all personal income tax. According to BigResearch’s American Pulse Survey, two-thirds of Americans (61.7%) are dining out less while more than half (57.3%) are driving less and less than half (47.4%) are attending fewer movies. The survey also shows that more Americans are haggling over prices than before and that despite all this “honesty still prevails” with more than half (58.3%) of Americans saying they would return $100,000 if they found it on the street.

SUBSCRIPTIONS: If you wish to stop receiving this newsletter, e-mail Michael@MediaConsultant.tv with the word “unsubscribe-MM” in the subject line. Also, back issues of MfM are available at the website, media-consultant.blogspot.com. You can reach me directly at my website MediaConsultant.tv.