Volume 1, No. 43 October 26 - November 3, 2006
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NAA: Visits To Online Newspapers Surge In Q3
Online travel Spending Rises 9%
DTT Households Expected to Surge and Enable Pay-DTT Opportunities
Direct Mail Drives Traffic Directly To Websites
Paid, Non-Paid Magazine Distribution Yields Similar Ad Response
Sponsored Video OK For 3/4 of Users
Seven In 10 Tweens Surf Web At Home

NAA: Visits To Online Newspapers Surge In Q3
By Bradley Barriteau

Online newspapers (including The Houston Insider) drew an average of 57 million visitors a month last quarter--marking a 24% increase from last year, according to a report issued Thursday by the Newspaper Association of America.

Web users also are viewing more pages and spending more time on newspapers' sites. Last quarter, people viewed an average of 47 pages a month--up from 40 last year--and they spent almost 42 minutes a month at online newspapers, up from around 37 minutes last year.

Randy Bennett, vice president of audience and new business development for the NAA, attributed the jumps in audience to more effective marketing as well as new services and applications, including blogs and platforms for user-generated content, on newspaper Web sites. "Publishers are realizing people are looking for more and different things from the newspaper," he said.

Newspapers still face challenges when it comes to monetizing online readers, however. Currently, an online reader isn't monetized at nearly the rate of a traditional print reader, with estimates for online revenue-per-reader varying from 3% to 33% of print advertising, according to research firm Outsell.

Bennett acknowledged that newspapers are still experimenting with ways to monetize online readership, pointing to bundling of print and online sales as a promising way to boost the value of online readers. He also said newspapers should develop a national network for online ad sales. "It really needs to become much easier to buy across multiple properties, if newspapers are to stay competitive with single sites with a national footprint," he said.

Online travel Spending Rises 9%
By Ralph Johnson

comScore Networks reported its US e-commerce sales estimates for the third quarter of 2006 and forecast for the entire year. In the third quarter, online non-travel ("retail") spending increased to 23.1 billion (up 23%), while travel spending - despite a slowing growth rate - nonetheless reached 18.2 billion (up 9%).

Overall, total online spending by consumers reached 41.3 billion in the third quarter, representing a 16% increase versus the same period in 2005. While total non-travel spending rose 23%, some retail categories far outperformed the average, including Consumer Electronics (excluding PC Peripherals), which rose 42% and Apparel & Accessories, up 32% versus the same quarter last year.

The Sport & Fitness and Computer Software (excluding PC games) categories rose 29% and 27%, respectively.

Through the first three quarters of 2006, total e-commerce spending rose 19% versus last year to 122.1 billion, buoyed by a 24% increase in non-travel spending to 69.1 billion.

Online travel spending increased 13% to 52.9 billion. Overall, comScore currently forecasts that total consumer online spending in 2006 should reach approximately 170 billion. Of that total, comScore estimates that non-travel e-commerce will break the 100 billion threshold for the first time.

"Online consumer spending at U.S. sites -- and particularly non-travel spending -- remains strong," noted Gian Fulgoni, chairman of comScore Networks. "With year-over-year growth rates in U.S. online non-travel spending at about 23% in the third quarter, the Web continues flexing its muscle as one of the important drivers of retail sales growth."

DTT Households Expected to Surge and Enable Pay-DTT Opportunities
By Ray Desjardin

Current forecasts from IMS Research predict that the worldwide digital terrestrial TV (DTT) market will grow significantly over the next five years, from an estimated 37 million households in 2006, to a forecast 131 million households by the end of 2011.

Primarily driven by DTT uptake in Western European countries, the Europe, Middle East and Africa (EMEA) region has experienced the most success in DTT adoption, and is expected to comprise nearly 62% of worldwide DTT households by 2011.

According to analyst Mark Meza of IMS Research, "The success of DTT in Europe is due in large part to government and industry initiatives, a growing selection of content, and increasingly affordable set-top boxes. This success has created an opportunity for value-added paid DTT services, such as Top Up TV in the UK. Paid DTT services have a distinct advantage in markets where a free DTT service has been successful."

Meza continues, "Standalone pay DTT services face greater challenges in establishing subscribers, often due to limited content offerings and pricing that is not competitive with other pay TV options. An example of this is the difficulty faced by USDTV, which recently filed for Chapter 7 bankruptcy after securing only about 10,000 subscribers in 3 years of operation, as well as early launches of pay-DTT in the UK." With the continued growth expected for DTT worldwide over the next five years, IMS Research predicts an accompanying rise in value-added pay-DTT offerings.

Direct Mail Drives Traffic Directly To Websites
By John Byrnes

Increasingly, the line between direct marketing and online marketing is blurring. "True 'relevance' lies in the content and context of a marketing message, not in the mere strategic placement of a recipient's name or other customer data in a marketing solicitation," Bruce Biegel of Winterberry Group told attendees at the DMA 2006 Conference in San Francisco. "If marketers expect results, they must tailor relevant messages by utilizing data and analytics programs that react to geo-, demo- and psychographic information to enhance behavioral targeting and measurement."

In the "What's in the Mailbox?" survey, meant to find how to stand apart in a crowded marketing landscape, researchers found that 21% of respondents visited a corresponding Web site within 30 days of receiving direct mail, up from 14% in 2003, reported eMarketer.

According to Internet Retailer, the results indicate that direct-mail-influenced Web traffic grew 50% over the past three years. Though that may be putting the case a little strongly, the trend is definitely up. Direct marketers are doing a number of things to make their mailings more effective.

Though over 80% of them only modify the salutation and a few basic content elements, the survey shows that 44% of marketers are now using some form of personalization in every e-mail campaign they send.

Paid, Non-Paid Magazine Distribution Yields Similar Ad Response
By Karl Ghross

The Value of Magazine Readership study, from the Magazine Publishers of America, suggests that many assumptions may not be accurate about the connection between consumers' reaction to magazine advertising and the price paid and circulation source for the magazines that they read. This report shows that:

Differences in the ways subscribers, newsstand buyers and public place readers respond to magazines and to the advertising in them are often insignificant.

Public place copies generate significant advertising exposure opportunities, often to readers with desirable demographic characteristics.

The analysis of MRI data by DJG Marketing, and, and Waiting Room Subscription Services shows that in 2006 approximately one-fourth of magazine reading is done in public places, up from 16% in 1996. Rick Jones, of DJG Marketing, notes that "Public place copies are individually addressed and strategically targeted to specific locations. They are third-party auditable copies with proven readership value for the advertiser."

Their research found that "Public place distribution can and frequently does enable advertisers to reach a larger body of readers who are involved, demographically qualified and responsive to their advertising message."

Factor (Public Place/Newsstand) is the multiple of readers per copy that public place copies offer as compared to newsstand copies. For example, among total readers in the titles studied, public place readers per copy are 7.5 times those of newsstand buyers, reports The Center for Media Research.

McPheters & Company conducted a study in which the subscriber base of multiple magazines was anonymously matched with the base of MRI respondents. According to Rebecca McPheters, who led the analysis, "The price paid by a subscriber for a particular magazine does not predict the quality of the reader nor is reader quality determined by the method by which a reader acquires a magazine. Quality is a function of reader characteristics..."

Sponsored Video OK For 3/4 of Users
By Richard Gagnon

According to a telephone poll by the AP and AOL, 71% of U.S. Internet users who watch online video prefer to watch and download videos for free, sponsored by pre-roll advertising, while only 23% said they would prefer to pay for ad-free content.

The poll also reports:
Users prefer shorter videos
20% of those surveyed had downloaded or watched a full-length movie or TV show
54% of U.S. Internet users consume video online
32% of respondents say they watch more video online than they did a year ago
80% say their TV viewing habits remain unchanged

AOL EVP, Kevin Conroy, said "... video usage is growing faster than most predicted... As more and more Web users adopt broadband, demand for online video of all types, including news, music videos and concerts, TV and movies, sports highlights, and user generated video mash-ups will continue to grow at a very fast pace."

The poll, conducted by Ipsos Public Affairs among 1,347 online video watchers in the U.S., found that the top video categories were News, at 72%, and TV or movie clips, at 59%, reported The Center for Media Research.

Seven In 10 Tweens Surf Web At Home
By James Hanson

Children between the ages of 8 and 11 are almost as likely to surf as they are to watch television, according to a new report by market research company Youth Trends.

Youth Trends reported that 81% of 8- to-11-year-olds have a computer at home--just slightly less than the 95% that have a TV at home. The vast majority--87%--of the tweens between 8 and 11 that have computers at home also access the Web from them, according to the report.

Overall, about 70% of children between the ages of 8 and 11 go online from home, according to Youth Trends. That figure appears to be similar to an estimate by research company eMarketer, which reported this month that 67% of U.S. children ages 8-11 are online.

Youth Trends reported that 60% of the tweens with Web access from home go online at least once a day. An additional 33% said they go online at least once a week.

What do they do online? More than one in three--37%--said they have used instant messaging in the last month, while 35% have played games, 31% have visited sites geared toward youngsters, 30% sent an e-greeting card, 23% posted photos, and 18% watched music or video clips. Also, they shop--or at least are beneficiaries of online purchases. Forty-six percent said their parents have bought something for them online.

Youth Trends also asked youngsters about their ad preferences. Thirty-seven percent expressed a preference for free samples, 24% said they liked catalogs sent via postal mail, and 22% chose movie theater ads. Just 15% counted TV commercials among their preferred forms of advertising, while a scant 11% said they liked online ads.

The report was based on interviews conducted in August with 900 youngsters ages 8-11.



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