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Tracking the Trends (Part 1)

Jeffery Cole
Tracking the Trends (Part 1) Jeffery Cole
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This Insight Presentation took place at February's iMedia Summit in Florida. You can view the PowerPoint of the presentation here.


Neil Perry: It is certainly my pleasure to introduce our next presenter, Dr. Jeffery Cole. Jeffery is going to be sharing with us today our Insight Presentation and he has entitled it, “An Essential Part of Everyday Life.”


Jeff is the director of the University of Southern California Annenberg School Center for the Digital Future. Prior to joining USC, Jeff was director for the UCLA Center for Communication Policy -- he's probably having some challenges with football allegiance.


Jeffery Cole: Not anymore.


Perry: Not anymore, is right. Jeff founded and directs the World Internet Project, which is a long-term longitudinal … we’ll skip that word … effects of computer and internet technology on all aspects of society. I’ve been up here a long time -- give me a break.


In today’s presentation, Jeff is going to describe the emerging internet trends within the following five areas: rise of broadband, changing media use, purchase and buying credibility, and the internet as the information and entertainment resource. 


Jeff is a fascinating lecturer and I know you’re going to enjoy hearing his insights. Ladies and gentleman, Jeffrey Cole.


Cole: Thank you Neil. It’s great to be here. Actually it’s great to be out of California until the Michael Jackson jury is chosen.  


I think some of you know a little bit about what we’ve been doing. And let me figure out … we’ve been, at UCLA and now at the Annenberg School, running this study of the internet that we think should have been conducted of television in the 1940s. We’ve been tracking 2,000 people for five years now; watching the same people as they’ve moved from nonusers of the internet, to modem users, to broadband users, to PDA users -- all of the changes, with 14 percent of them now owning their own websites, becoming bloggers. We’ve watched these changes. And we’re doing this work, not just in the United States, but in 23 other countries as well. But today I think I’m going to focus, mostly, on what’s happening in the United States. And I’ve been asked to look at some of the trends in some of the areas that are relevant to us at the conference, starting with broadband. 


As we look at broadband, the most compelling thing to us, five years ago when we started to look at broadband, was that 40 percent of the people who were ordering broadband at home were not aware they were getting an always-on or direct connection. They were ordering only for the speed. Speed is why people wanted broadband. Speed is the highest satisfaction issue with broadband. But what we found is the direct connection, the always-on, is what has totally changed the relationship to the internet.


As we look at how broadband changes everything -- and that’s not hyperbole; it changes the entire relationship to the internet -- I actually think there’s a bigger gap between modem users and broadband users than there is between nonusers and modem users. That’s how significantly broadband changes the internet experience.


Dial-up, as some of you know, is this very disruptive technology. When people tend to dial-up, they tend to be online two to three times a day, 20 to 30 minutes at a time. They go in another room in the house. We’re talking about home now. They go into a back room. They go into an office. They go into a den somewhere. Time is usually spent away from other people in the house, away from family conversation -- although the family can be with you -- and frequently time away from television, although television can be on as well. People perceive dialing-up as a big deal. They write down on the back of an envelope or a Post-it Note all the things they want to do when they dial-up. And if they log off forgetting to do some of those things, they get irritated, even though the act of dialing-up only takes 30 seconds. They perceive it as a big deal, or as we in the academic community call it “a BFD.”


On the other hand, broadband is an integrative activity. The average broadband user is on 20, 30, 40, 50 or more times a day for two, three minutes at a time. There are lots of exceptions. People can be on much longer, but the average broadband user is on in these very short spurts. And whereas dial-up displaces family conversation and television programming viewing, broadband occurs in between the rhythms of the day. It occurs in between conversations rather than displacing them. And very importantly, where television is concerned, whereas dial-up displaces television programming viewing, broadband displaces television advertising viewing. And I don’t have to speak to this audience to what’s happening to television advertising and how that’s changing.


What’s interesting, however, is that as people acquire and use broadband, after they’ve had it in their homes more than two years, they tend to move the PC or the internet access device out of the back bedroom, out of the den. They want it closer to where they are, to where they interact and inhabit the house with their family. We found three years ago a lot of people were moving it into the kitchen, moving it into the same room as the family, to the degree they watch television together, or did watch television together. They wanted the internet because of the always-on. And it was one of the things they did during the commercial, along with going to the kitchen and the bathroom. They wanted it where they were in the house.


WiFi has now really changed that. They want it not just in the kitchen, in the family room and in the garage, and in the back yard -- and some of you know our work has shown how they use it in the bathroom -- but they also want it in their pocket, they want it in their car. This always-on, the ability to reach out and grab broadband, is what has really caused people to want the internet fully integrated into their lives.


And broadband determines not only how often people log onto the internet, how long they stay on, what they do online, and where in the home they log online from, but it also has a large predictive behavior to purchasing. People who have been online two years or more and have broadband tend to purchase about twice as much as new users to the internet. Broadband also has great relationships to satisfaction levels with the internet. The biggest complaint among non-broadband users about the internet is the speed. The highest satisfaction level with the internet, among broadband users is the ability to use it at any time and any place.


Broadband users are on about 17.3 hours a week versus about 10.6 for dial-up. But interestingly, broadband is changing the importance of those numbers completely. When we started doing our work, and almost everybody was on with dial-up, it was important to look at how long people were on the internet, to compare internet time versus television time. But broadband is now making those numbers almost meaningless because we’re finding that as people are on more with broadband, they’re on in smaller pieces or fragments, as I touched on a minute ago.


Now with PDAs, people -- if someone’s five minutes late for lunch, he or she can answer two or three emails. When your plane lands, now that they’ve come to their senses and let you use your PDAs as you’re taxiing to the gate, you can answer a couple of emails before you even get to the gate. So now we’re finding that the amount of time people are on the internet isn’t as meaningful anymore. What’s more meaningful -- we need a better index -- is productivity or how many tasks you accomplish because we’re on so many times in shorter fragments that the bulk of our internet time, what it adds up to, may not even increase much in the future; but how much we accomplish and how we fit that into the little rhythms of our lives may change a lot.


We find also that broadband users do more of everything online, with only two exceptions. The only two tasks that modem users spend more time on are first looking at medical information -- something that now I’m used to, but really caught me off guard four years ago, when we found among newest users to the internet -- those who are most likely to be modem users, among newest users -- there was this insatiable hunger for looking up medical information. As soon as they got online they would ask questions about every disease they’ve ever had, think they might have or think they may get, searching out information about things that they wouldn’t ask their best friends, their parents or their physician about. There is this real hunger for learning about everything they wanted to know about their bodies and other people’s bodies. That’s still true. And still modem users spend more time doing that than broadband users. 


The other difference is distance learning. One of the reasons some people get an internet connection is to take a distance learning course. And they are still more likely to be modem users. We still see more distance learning on modems than we see on broadband. That won’t last much longer. And we’re not even going to be comparing internet and broadband users all that much longer. You’ve heard throughout this conference, and our data confirmed that as well, that among users at home broadband is over 50 percent.


Tomorrow: offline and online media usage, the internet as information source, and credibility.


Additional resources:


The iMedia Report "The Rise of Broadband and Implications to Marketers and Advertisers" is available now.


 

Ratings and reviews are an extension of brand CRM


"Consideration mode" is a mindset of inquiry. When a consumer is in this mode of thinking, they are investigating. Today, consumers communicate with friends, family, and strangers to get information about a product they are considering buying. Thanks to the internet, ratings and reviews have become the top ways that consumers research products. It's much harder for consumers to be led (or misled) by branded advertising these days. Ratings and reviews have made brands transparent, and although they are from strangers, people trust them. Customer reviews have more credibility than a brand’s marketing department.


Brands should be learning from this to improve customer relationship management techniques. This is where a good social strategy and social media manager will really shine. Look at the reviews your brand receives and respond to criticism in a professional and helpful way. If you are managing comments and feedback well, other consumers who are in consideration mode will see your efforts and it may help sway them toward a purchase.


Scott Bender continues our conversation by explaining why ratings and reviews management are vital for a brand hoping to influence consumers while they are investigating a brand.


3 greatest challenges to reaching consumers in "consideration mode"


Capturing a consumer's attention when they are considering a purchase is a huge challenge. Consumers are busy, and when they are researching products or services they generally don't want to be further marketed to by brands. Marketers need to be subtle and creative about the ways they decide to approach potential customers when they are making a decision.


Being informative but interfering with the consumer’s experience is another great challenge marketers need to overcome. Don't forget that while consumers are in consideration mode they are looking for information, not a sales pitch. Be sensitive to the fact that any purchase is a personal decision. Don't interrupt their experience with marketing techniques that are loud and tacky.


Lastly, there is only so much that a brand can do to market while consumers are in consideration mode, so you need to be creative in the way you talk to them and where you talk to them. A consumer who is in a store is in a much different mindset than one who is watching TV. Tailor your messaging in context to where a consumer will be, and you'll feel like a more natural voice in the purchase thought process.


Scott Bender ends our conversation by explaining the three biggest challenges of reaching consumers in a consideration mode of thinking and gives tips to overcome them.



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