Power Users 2006 An Engaged Audience for Advertising and News

Power Users 2006

An Engaged Audience for Advertising and News

Federation Members Presentation

May 2006

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In this presentation… Overview

Online Audience & Habits

Online Interests

Local Online Marketshare

Online Advertising

Online Commerce

Online & Print Interplay

Recommendations

Note: Full written report can be downloaded at digitaledge.org

Power Users 2006

• The 2006 sitesThe 2006 sites

AZCentral.com Boston.com CJOnline.com Cleveland.com DelawareOnline.com KnoxNews.com MySanAntonio.com Sacbee.com TBO.com TwinCities.com

• Interviews 1,501: Phone Interviews

9,576: News sites

• Fielded in Dec. ’05 – Jan. ’06

• The 2006 sitesThe 2006 sites

AZCentral.com Boston.com CJOnline.com Cleveland.com DelawareOnline.com KnoxNews.com MySanAntonio.com Sacbee.com TBO.com TwinCities.com

• Interviews 1,501: Phone Interviews

9,576: News sites

• Fielded in Dec. ’05 – Jan. ’06

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Comparisons & Weighting

9,576

1,501

'06 NPsite users

'06Internetusers

Respondents Methodologies

– Online Newspaper Users Online pop-up survey 10 sites, chosen by NAA Average of 950 interviews per site Fielded Dec/Jan 2005-2006

– General Internet Users21-minute telephone surveyRandom-digit dialingUsed Internet during past month

Weighting– Online

Data balanced across markets and balanced by gender

– General/Phone Weighted to census estimates & a

recent national MORI study for age, gender, ethnicity & census zones

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Legend Key

“NP site”– Online pop-up survey on newspaper (NP)

sites; users on an “average day”

“Non-users”– Phone survey– Did not use a newspaper Web site in the

past 6 months (49% of general Internet users)

“Past 6 mo. users”– Phone survey– Used a newspaper Web site in the past 6

months (51% of general Internet users)

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Overview

Using a different analytical strategy than the 2002 and 2004 surveys, we mostly compare “average day” NP Web site users with non-users, defined as those who have not visited in the past 6 months.

Newspaper Web site users remain Power Users: Compared to non-visitors, they are younger, more affluent, and more engaged.

NP Web site audience continues to grow but at an uneven rate—“yesterday” visits growth accelerated since 2004, but past week or past 6 month growth slowed.

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Broadband connections increased both at work and at home, increasing the volume of Internet usage.

NP site visitors spend much more time online than non-visitors, and the morning hours remain prime time.

News is still the main driver to the Internet for NP Web site users but also a limiting factor: Non-users are much less interested in local news.

NP Web site users are more likely to participate in online activities, such as blogging, consumer reviews, banking, etc; they are more engaged online than non-users.

Overview (cont'd)

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Overview (cont'd)

NP Web site users are more likely to own portable electronic devices.

Internet users generally are more interested in receiving news alerts than advertising on electronic devices. NP Web site users are more interested than non-users in news alerts.

For local news and entertainment, NP Web sites are challenged on the local front by local TV station Web sites, even among their own users

Google continues to gain in local news, and information and entertainment, and Yahoo! and MSN also are strong competitors, especially among non-users.

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Overview (cont'd)

Usage of interactive services from NP Web sites is modest, especially for headlines to handhelds, RSS feeds or podcasts.

News content is the main driver to newspaper Web sites, but ads and interactive and multimedia features are also important to many users.

Print newspapers declined somewhat but remains the primary source of advertising for both groups; the Internet increased since 2004.

Online research, shopping and buying increased from 2004, especially among non-users of NP sites.

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Overview (cont'd)

NP sites remain a bit player as a destination among consumers who seek shopping and advertising information online. Store sites and search engines presently own this category.

Online private party selling increased since 2004. eBay dominates, followed by craigslist; NP sites are well behind.

The interplay of print and online newspapers is mixed: Readership by NP site visitors is unchanged but remains below that of non-users. Readership by non-users declined.

Overall, NP site users just as likely to be reading print newspapers more often as less often than before, but this varies by market. Other traditional media have lost audience.

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Overview (cont'd)

About 6 in 10 NP Web site users sometimes read the online version instead of the print, and 4 in 10 say they sometimes read the online version as well as the print version (many do both)

Reasons for reading the online version instead of the print include convenience, timeliness, and no cost.

The main reason cited for reading both versions is that each provides unique value to the user.

Online Audience & Habits

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Profile of a Power User

Who uses newspaper Web sites?– 91 percent recently shopped online

– 89 percent recently bought online

– 90 percent are employed

– 71 percent are online daily @ work

– 63 percent check news daily

– 70 percent frequently bank online

– 64 percent recently checked classifieds online

– 68 percent have home broadband

– 52 percent have college degrees

– Mean age: 39

– Income: $73,000

– Hours online/week: 19

Base: Online respondents

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Newspaper Web Site Visiting by Internet Users

Base: Telephone respondents

%

• Growth of NP Web site audience among past 6-month and past 7-day users has continued but at a slower pace.

• The visited yesterday growth rate, however, has accelerated.• There remains enormous room to grow: 49% of Internet users have

not visited an NP site in the past 6 months, and 43% of past 6-month users have not visited in the past week.

NA

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Frequency Visit Newspaper Web Sites


2004 2006

Daily 9% 10%

2+ times/week 9% 11%

Once/week to once/month 12% 16%

Less than once/month 19% 14%

Not in 6 months 51% 49%

The frequency of visiting NP Web sites increased since 2004 among all Internet users.

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Demographics (Part 1)

Base: Online respondents; Telephone respondents who did not visit a NP Web site in the past 6 months

’06 NP site

’06 Non-users

Male 50% 50%

Female 50 50

18-34 40 36

35-54 49 39

55+ 11 25

<$50K 37 43

$50K-$99K 41 40

$100K+ 22 17

HS or less 15 31

Some college/v-tech 33 34

College grad+ 52 35

Gender

Age

HH Income

’06 Mean Age (NP site users): 39.1

’06 Mean Age (Non-users): 42.7

’06 Mean Income (NP site users): $73,200

’06 Mean Income (Non-users): $65,900

NP Web site users on average continue to be younger, more affluent, and more educated than other users of the Internet.

Education

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Demographics (Part 2)


’06 NP site ’06 Non-users

Own home 69% 77%

Rent/other 31 23

Employed 90 72

Executive/ Managerial 15 9

Professional 36 21

Technical and sales 11 7

Administrative support 14 5

Blue collar/ service/other 14 29

Married/partnered 64 64

Children in household 42 41

Hispanic 11 13

Non-White 15 19

Own or rent

Race/ Ethnicity

NP Web site users are much more likely to be employed and white-collar workers than other Internet users.

Employment/ Occupation*

Family status

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Internet Usage: Time Online

NP site visitors continue to spend twice as much time online as other Internet users. The average time online for both groups continues to grow very slowly.


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Internet Usage: Connections


• NP site visitors are much more likely than other Internet users to have broadband access at home and at work. Broadband has increased dramatically since 2004 for both groups.

• Broadband users are generally more active online. For example, home broadband users are more likely to use Internet services and to check nearly all of the content measured in this survey.

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Internet Usage: Where Go Online Most Often

NP Web site users are far more likely than non-users to cite work as the location where they go online most often.

NP Web site users access the Internet more frequently than other Internet users both at home & at work.


(*Note: Other locations not shown)

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Internet Usage: Dayparts

Respondents noted what times they are most likely to go online. NP Web site users continue to be especially active in the morning (from 8 a.m. to 11 a.m.). NP Web site users are going online a bit more frequently in the evening than recorded in 2004—perhaps due to greater access to broadband at home.


Online Interests

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News Content Accessed Several Times Monthly


NP site visitors use the Internet in general for various types of news far more often than non-users. News priorities are different for the two groups: For non-users, weather is easily the most important online topic, but local news is relatively much less important.

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News Content Accessed Daily


63

60

54

46

33

28

19

19

16

13

13

16

16

7

17

8

7

5

3

1

3

3

Breaking news

Nat'l or world news

Local news

Check weather

Sports scores & info

Coverage of politics

Biz, financial, investment info

Columnists, opinions, blogs

Lifestyle info

Medical, health, fitness info

Find archived stories

’06 NP site

’06 Non-users

For many NP site users, checking news is a daily habit.Only 7% of non-users check local news on a daily basis.

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Online Services Used Several Times Monthly


NP site users are becoming quite active with interactive online functions. Usage of podcasts/RSS feeds anywhere on the Internet is still modest, a limiting factor for their use from NP sites.

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Online Services Used Several Times Weekly


• Men are more likely than women to read blogs/visit chat rooms or forums, download podcasts/RSS feeds, read or post reviews, or trade stocks online.

• Users who access mostly from home are more likely to read blogs, post comments or post photos

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Online Services Used Daily


Interactive services for most users are things to do on an occasional basis rather than every day.

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Ever Access Entertainment Information Online


NP site users are far more likely than non-users to get leisure-related info online, especially event calendars, dining out/nightlife, and entertainment news. Interest in travel info confirms high demand for travel advertising space on many sites.

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Portable Device (PD) Ownership

NP Web site users are much more likely than other Internet users to own a portable electronic device. Among the items measured, the two groups are close only on gaming devices.


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Interest in Receiving Information & Ads on PDs

Both groups are more interested in receiving news than advertising on PDs such as laptops or mobile phones. NP site users are much more interested than non-users in news, but only marginally more in advertising.

Base: Online respondents; Telephone respondents who did not visit a NP Web site in the past 6 mont(Very or somewhat interested)

News or Event Info Advertising & Product Offers

Local Online Marketshare

31

Used Internet in Past 6 Months For…


Non-users are about one-half as likely as non-users to go online for local news or entertainment information. Among non-users, usage of the Internet is up 13 points from 2004 for local news and 8 points for local entertainment.

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Sources Used for Local News & Info Past 6 Mos.

Base: Online respondents who got local news online in past 6 months; Telephone non-NP Web site users who got local news online in past 6 months

NA

– Google as local news source grew from 2004 among both NP site users and non-users. – Yahoo is stable among NP site users and up among non-users. – MSN is down slightly among NP site users and is up among non-users. – AOL is stable from 2004 among NP site users and down among non-users. – Non-users in 2006 use national sites more than local media sites for local news, though they are more likely to use local media sites than in 2004.

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Sources used for Local Entertainment and Things To Do

Base: Online respondents who got ent. info online in past 6 months; Telephone non-NP Web site users who got ent. info online in past 6 mos.

*Unaided response

NA

Google is up from 2004 as a source for local entertainment information among both groups; Yahoo is up slightly, but MSN and AOL are about the same as in 2004. Non-user visiting of local media sites doubled compared with 2004 data. Non-users are more likely than NP site users to visit national sites.

Other sites mentioned include:

NP site: Fandango, MovieFone, city sites, other venue/entertainer sites, ISP

homepages (e.g. Comcast)

Non-users: Other venue/entertainer sites

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NP Web Site Services Used in Past 6 Months

The potential appears greater than current usage of interactive services from NP sites. Interest scores for headlines and alerts on phones and PDA’s are about double the level of usage.

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Duration of NP Web Site Visit

Base: Online respondents who visited before today; Telephone respondents who visited a NP Web site in the past 6 months

Past 6 mo. users

Mean: 16.8Median: 11.6

NP Site

Mean: 16.4 Median: 12.1

There is little difference between frequent and occasional NP site visitors in the length of their visits. Almost half of each group’s visits typically are less than 10 minutes. This is not surprising: Users are selective in content checked, and they have to fit the visit into the rest of the day’s activities.

(Typical amount of time spend at site during each visit)

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Content Used When Visiting NP Web Sites


Interactive and multimedia services & features are almost as important as classified ad content. National or international news draw much less than local or community news.

Online Advertising

38

Use Internet for Shopping & Advertising Info


NP site users are much stronger users of the Internet in general for shopping and advertising.

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Use NP Web Site for Shopping & Advertising Info


– While many NP site users use the Internet for shopping and advertising information, usage of NP sites for this information lags. – The biggest gaps are with online purchasing, travel, comparison shopping, and checking store hours or locations. The smallest gaps are with homes or apartments and downloading coupons.

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Primary Source for Local Advertising


– Overall, print newspapers decreased while the Internet increased.– Among NP site users, local newspaper Web sites increased slightly from 2004; they are unchanged among non-users.

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Advertising That Influenced a Purchase in the Past Year

Base: Telephone respondents who visited a NP Web site yesterday; Telephone respondents who did not visit a NP Web site in the past 6 months

Three-fourths of NP Web site visitors were influenced by the Internet in their purchasing in the past year—a far higher level than among non-site visitors.

For technical reasons the results for newspaper Web site users are taken from the telephone survey rather than the pop-up survey.

Online Commerce

43

Researched or Shopped Online

Past 6 Months


NP site users research and shop online more than non-users, but the gap has narrowed. Researching and shopping among both groups have increased since 2004.

44

Made a Purchase OnlinePast 6 Months


The same trend holds for making purchases as for shopping and researching. NP site users are much more likely to make purchases online than non-users, but the gap has narrowed somewhat in 2006.

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Items Shopped for Online

Past 6 Months


– The biggest gaps between NP site visitors and other Internet users are with home supplies or furniture, DVD or videocassettes, travel arrangements, and phones.

– They are closest on vehicles, sporting goods, games or toys, and auto parts.

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Items Purchased After Shopping Online


Purchased Online Purchased OfflinePast 6 Months

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Online Sources Use Most Often for Shopping & Researching

Base: Shopped online: Telephone respondents who visited a NP Web site yesterday/today; Telephone respondents who did not visit a NP Web site in the past 6 mos.

A trend from 2004 continues: disintermediation. Shoppers are more likely to go directly to the source for product information (store Web sites, sites via Google). NP Web sites are struggling in the shopping arena.

For technical reasons the results for newspaper Web site users are taken from the telephone survey rather than the pop-up survey.

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Amount Spent OnlinePast 6 Months

Base: Made a purchase online: Online respondents; Telephone respondents who did not visit a NP Web site in the past 6 months

Non-users:

Mean: $1,280Median: $720

NP site:

Mean: $1,500Median: $1,060

More evidence of the attractiveness of NP Web site users: they spend more online than non-users.

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Amount Spent Offline After Researching Online

Past 6 Months

Base: Made a purchase online: Online respondents; Telephone respondents who did not visit a NP Web site in the past 6 months

’06 Non-users:

Mean: $1,910Median: $660

’06 NP site users:

Mean: $2,570Median: $1,640

NP site users also spend significant money in stores after shopping online.

50

Sold Anything Online

Past 6 Months


Though relatively few people sell items online, the numbers increased in 2004 and 2006, probably at the expense of print venues.

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Online Sites Used to Sell Items

Base: Sold something online: Online respondents; Telephone respondents who did not visit a NP Web site in the past 6 months

Other sites mentioned include:

NP site: Half.com, Other auto sites, personal/work sites, organization/specialty sites

Non-users: Half.com, Other auto sites, Personal sites

National sites challenge NP sites because they don’t constrain sellers (and buyers) to a single market.

*Small base

52

No65%

Yes35%

’06 Non-users

Checked Local Web Site for Classified Listings


No35%

Don't know/

refused1%

Yes64%

’06 NP site users

Classified verticals attract users on an occasional basis who are not much interested in editorial content.

Past 6 Months

Online & Print Interplay

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Local Print Newspaper Readership & Acquisition


’06 NP site

’06 Non-users

Weekday Paper

Yesterday 37 46

Past week 56 60

Sunday Paper

Last Sunday 52 55

Past month 69 64

Subscribe* 38 55

Weekday & Sunday readership changed little among NP site users, but down significantly among non-users compared to 2004. Subscriptions are up slightly from 2004 for NP site users & down among non-users.

(*Read weekday or Sunday paper)

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Interaction Between Print & Online Newspaper Usage


While over one-half of NP site users say they have gone online instead of reading the print version, many also say they go online and read the print newspaper.

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Reasons Use NP Site Instead of Print

Base: Online respondents (58% use Web site instead of print)

– NP site users access the online version instead of print primarily because online is convenient, free and more timely. – Groups that index higher than average are noted below

--Men

--Men, 18-34s

--18-34s

--Women, 18-34s

--18-34s, Men

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Reasons Use NP Site in Addition to Print

– NP site users access the online version as well as the print version because both offer convenience and provide intrinsic, platform-specific value.– Groups that index higher on these items are noted below.

Base: Online respondents (43% use Web site in addition to print)

--Home users

--18-34s

--Age 55+

--Men, 18-34s

--Men

58

Print & Online Duplication Trend

Past 7 Days


For the past 7 days, the proportion of dual users has increased while print exclusives have decreased.

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Media Usage Since Accessing Newspaper Sites

Base: Online respondents who visited before today; Telephone respondents who visited a NP Web site in past 6 months

’06 NP site’06 Past 6 mo. users

Local TV News

More often 8 9

Same 66 67

Less often 18 18

Radio

More often 6 8

Same 72 74

Less often 13 13

Local Newspaper*

More often 15 7

Same 54 63

Less often 16 25

Yellow Pages

More often 2 2

Same 44 55

Less often 30 30(*Asked about specific local market NP online) Note: Does not display “Don’t use” & “Don’t know”

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Recommendations

Newspaper Web sites’ strength is news, especially local news, and to some extent classifieds. Newspaper sites, however, are not a destination for retail shoppers. This is a major problem for the industry, and significant improvement will require study, experimentation and investment.

– To better compete with store Web sites and search engines, newspaper sites need a more functional local search--not only for shopping information, but for all things local.

– Newspaper sites need to develop more effective ways to display retail advertising.

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Recommendations

Local TV station Web sites are significant local competition, aided by constant promotion from newscasts. Newspaper Web site promotion is spotty in comparison.

Interactive services on newspaper sites have modest, but growing, audiences that merit further investment.

RSS feeds are poorly understood by consumers generally but offer great potential for solidifying audience relationships. Consider new ways of describing, promoting or even naming this function.

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Recommendations

eBay has nationalized classifieds, and Craigslist has changed the cost structure for local classifieds. Newspaper Web sites likely will have to experiment with free ad categories that can be upsold in order to compete long term.

Audio and video functionality appeals to a niche segment of the newspaper Web site audience—especially among young adults and those who log in at night. This is ample reason for further investment.

Finding ways to monetize editorial content remains an urgent industry problem, especially given the weakness in retail advertising revenue.

Brent StahlMORI [email protected]

Thank You!

Download the full written report at digitaledge.org

Documents

Power Users 2006 An Engaged Audience for Advertising and News