MDAS 3 Screens Study Digital Media – consumer habits and trends 29 January 2008

1. MDAS 3 Screens StudyDigital Media – consumer habits and trends 29 January 2008

2. What is Sparkler? A background inadvertising account planning A consumer insight& brand consultancythat specialises inmedia brands A permanent team of 20 Based in Central London,but with globalcoverage An extended team of experts from video production to econometrics

3. Who we’ve been working with recently

4. Objective for the 3 Screens Study To understand the differing roles and value of video content across all 3 screens – and the opportunities for advertising within this

5. Methodology: qualitative research in five markets The bulk of the project involved research with consumers in markets selected specifically for being relatively progressive in terms of online viewing, but with very different media marketplaces overall 6 x 1.5hr research groups in each market(extensive media diary pre-tasks)

6. Two segments in each market PROGRESSIVE MAINSTREAM ADVANCED Ownership and usage of PVR, Internet, multimedia-enabled mobile devices View AV content online via a PC (NB: In Spain and Brazil respondentswere not screened for PVR ownership) Ownership and usage of PVR, Internet, multimedia-enabled mobile devices View AV content online more heavily View AV content on mobile devices, and share online/mobile AV content In researching mainstream behaviours we soughta realistic gauge for future global video consumption

7. Our Swedish sample Project management, recruitment & moderation by GfK Sverige Fieldwork took place in Stockholm 26-28 Nov 2007 All groups attended by Nick Davis Screen usage Gender Age Children in home M 40-55 Children 13-18in home Progressive Mainstream M 30-40 Children 5-11 in home F 30-40 Children 5-11in home F 18-24 Advanced No children in home M 25-34 No children in home F 25-34 No childrenin home

9. Presentation headlines 1 HOUSEHOLD DYNAMICSPLAY OUT ON SCREEN 2 CONTEXT, THE GREAT DICTATOR 3 THE CHALLENGE OFTHE IN-SCREEN CONTEXT 4 CONTENT AS COMMS 5 TOWARDS A NEW ADVERTISING MODEL

10. 1 HOUSEHOLD DYNAMICSPLAY OUT ON SCREEN 2 CONTEXT, THE GREAT DICTATOR 3 THE CHALLENGE OFTHE IN-SCREEN CONTEXT 4 CONTENT AS COMMS 5 TOWARDS A NEW ADVERTISING MODEL

11. An initial insight… Different householdsfeatured differentvideo behaviours Interpersonal householddynamics were played outin these 3 screen behaviours

12. Viewing habits differed according to household needs NEEDSolitude& Space NEEDTogetherness& Proximity Viewing most pulled apart Viewing most pulled together Teen familyhouseholds Young familyhouseholds Partnerhouseholds

13. This is reflected in where video is consumed in households Teens seek solitude/connectedness via useof laptop in bedrooms Teen familyhouseholds Partners watch new USdramas together onlaptop in the bedroom Partnerhouseholds Young familyhouseholds Mums use PC in studyas way to get somequality time alone

14. Different screens perform different roles at different times PCMums seek‘my moment’, useas surrogate screenfor TV programmes NEEDSolitude& Space NEEDTogetherness& Proximity PCTeens seek‘connectedness’,web 2.0 immersion TVMums seekfamily bonding &shared experiences TVTeens seektime alone, awayfrom familymembers Mums’ behaviour here the most ‘mainstream’example of progressive mainstream behaviour

15. 1 HOUSEHOLD DYNAMICSPLAY OUT ON SCREEN 2 CONTEXT, THE GREAT DICTATOR 3 THE CHALLENGE OFTHE IN-SCREEN CONTEXT 4 CONTENT AS COMMS 5 TOWARDS A NEW ADVERTISING MODEL

16. We sought to understand where primacy lay Q. When it comes to video, is it content or screenthat is the most important consideration for consumers? A. People’s video needs are not fixed and fluctuatedepending on the viewing context at any given time PRIMACY IS NOT A ZERO-SUM EQUATION

17. Context is a critical part of the video viewing experience Context (where quality is notso easily defined) THE VIDEO VIEWINGEXPERIENCE Content(where qualityis easily-defined) Quality context is equally as important as quality content to a given video viewing occasion, but harder to define and control

18. At any time there may be up to 3 viewing ‘contexts’ at play Cultural context Out-of-screen context In-screencontext It is a combination of these contexts that will inform whetherit is screen or content that assumes ‘primacy’ in a given scenario

19. Content connects the screens but context divides them Desktop Mobilephone Laptop iPod/PSP CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT TV CONTENT CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT “The content – good programmes, a decent film, interesting news clips – that’s what is interesting. Where you watch it is more and more uninteresting – it’s becoming irrelevant”(Male, Sweden)

20. Some content is more naturally cross-platform NEWS TV Desktop Mobilephone Laptop iPod/PSP SPORT CONTENT CONTENT DRAMA CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT

21. In future, context may become relatively less definitive CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT NEWS Laptop SPORT CONTENT CONTENT DRAMA CONTEXT CONTEXT CONTEXT CONTEXT CONTEXT This will perhaps be driven by new viewingbehaviours and narrative forms

22. Screen size helps define the context TV PC MobileDevice Private Social Personal One viewer Multiple viewers Few viewers

23. As such, TV has a ‘Sofa Effect’… SOFAEFFECT Familiarity Hub of the home Comfort,relaxation Cinematic Companionship Professional content “TV is like a room that you enter”(Male, Sweden) TV has evolved to become a space of its own TV is also a low commitment zone, easy to enter and experience TV IS THE BENCHMARK FOR VIDEO VIEWING EXPERIENCES

24. The laptop brings with it ‘Context Anarchy’ FIXED LOCATION WITH OTHERS ALONE ON THE MOVE

25. …because of this, laptops can generate a Sofa Effect too SOFAEFFECT CONTEXTANARCHY

26. 1 HOUSEHOLD DYNAMICSPLAY OUT ON SCREEN 2 CONTEXT, THE GREAT DICTATOR 3 THE CHALLENGE OFTHE IN-SCREEN CONTEXT 4 CONTENT AS COMMS 5 TOWARDS A NEW ADVERTISING MODEL

27. Video viewing on PC is a proactive and committed act TV PC (PC IS OFF) (TV IS ON) TURN PC ON,LOAD SOFTWARE SELECT VIDEOCONTENT SEARCH FORVIDEO CONTENT (BROWSECHANNELS) SELECT VIDEOCONTENT “When I watch something on the computer it feels like an active choice”(Male, Sweden) (NO BROWSEOPTION) Viewing of (long-form) video on PC can encompass a number ofsteps that suggest a commitment to view and imply a highlyfocused, and highly valued viewing occasion and experience

28. However, the value of TV video content is generally higher LARGE TV Typically…First time viewing Priority quality content HIGH MEDIUM PC Typically...Occasional viewingMid priority content MEDIUM PERCEIVED VALUE OF CONTENT WATCHED SIZE OF SCREEN SMALL Mobile devices Typically…Repeat viewingLow priority content LOW The perceived value of video content increases with screensize and screen quality – people seek high quality experiences

29. High quality content moving acrossthe screens can change this… LARGE TV Typically…First time viewing Priority content HIGH MEDIUM PC Latest high quality USdrama downloadedbefore release on TV HIGH PERCEIVED VALUE OF CONTENT WATCHED SIZE OF SCREEN MEDIUM/ HIGH Mobile devices Film viewed on PSP HIGH “If there is something special you really want to watch,then you watch it on the Internet” (Female, Sweden)

30. TV is thus the screen most likely to assume ‘primacy’ More likely to be screen primacyMore likely to be content primacy TV PC Mobile Device THE ‘MULTIFUNCTIONALITY EFFECT’ People are more likely to naturally gravitate towards TV for videowhereas PC and mobile devices’ multi-functionality meansthey are more likely to be used to satisfy a specific content need

31. Multi-functionality can lead to distracted viewing Video sole function Video primary function Video secondary function TV MobileDevice PC THE ‘MULTIFUNCTIONALITY EFFECT’ On PC especially, video has to compete with multiple otherfunctionalities, leading to a more distracted experience overall

32. On PC, the biggest distractions are within the screen TV and PC feature similar distraction levels in terms of the environmentalcontext Out-of-screen context In-screencontext PC distraction levels far higher due to multiple internal functionalities of the screen For laptops the ‘multi-functionality’ effect of the in-screencontext can often sit alongside external distractions too

33. 1 HOUSEHOLD DYNAMICSPLAY OUT ON SCREEN 2 CONTEXT, THE GREAT DICTATOR 3 THE CHALLENGE OFTHE IN-SCREEN CONTEXT 4 CONTENT AS COMMS 5 TOWARDS A NEW ADVERTISING MODEL

34. People predominantly share video content in two ways TV Sharing content PC Sharing contentviewing experiences Both are social, but in different ways

35. With ‘Networked Sociability’, content becomes comms TV Content as content Networked Sociability PC Sociability Content as comms

36. This has implications for the user and the content itself USER Gains a sense of ‘connectedness’ to others and a feeling that they are to some degree the producer of the content they are sharing Networked Sociability PC CONTENT Immediate, in that it can be shared at a specific moment in time, yet also gains a potentially greater lifespan in that it can be stored for later reference Content as comms

37. Within this type of behaviour, UGC varies in its value UGC Communicator LEVEL 3: sense of networked sociabilitythrough content delivered as commsby a trusted and personal source Creator LEVEL 2: sense of ‘connectedness’ andaffinity with those who created the content VALUE Content LEVEL 1: some value may be derived though low quality production a feature The ideal UGC value here suggests clear opportunities for networked professional content

38. In laptop usage, we saw a ‘Communion Device’ for video Any context Any context Any context Any context This comes from the combination of ‘Context Anarchy’ and ‘NetworkedSociability’ together with notions of personalisation and control

39. 1 HOUSEHOLD DYNAMICSPLAY OUT ON SCREEN 2 CONTEXT, THE GREAT DICTATOR 3 THE CHALLENGE OFTHE IN-SCREEN CONTEXT 4 CONTENT AS COMMS 5 TOWARDS A NEW ADVERTISING MODEL

40. The big challenges for online ads are in-screen Cultural context Out-of-screen context In-screencontext A number of defining idiosyncrasies of the in-screen context on PClead to low tolerance of advertising on this screen (especially laptop)

41. Expectations of platform control also impact on tolerance USER CONTROL Lower(more push) Higher(more pull) AD TOLERANCE Higher Lower In the highly active platform context of PC where control mechanism are abundant, advertising adds an uncontrollable element It could even be seen that advertising contradicts the medium

42. The world of online video demands a different approach TV Laptop Mixture of short- and long-form content Long-form ‘lean back’ content Active, content pushed and pulled Passive, with pushed content Personal screen Mass media/shared screen Complex in-screen context(no established advertising breaks) Simple in-screen context(with established advertising breaks) ? Strategy: DISRUPTION

43. Integration is more appropriate online Laptop Mixture of short- and long-form content Advertising needs to complement itsenvironment – which is increasinglypersonalised, user-controlled,interactive and complex, withvarious types of videocontent viewed in different ways The aim should be to be relevant,in the most appropriate manner Active, content pushed and pulled Personal screen Complex in-screen context(no established advertising breaks) Strategy: INTEGRATION “On the computer it’s all about your interests so advertising has to be relevant” (Female, Sweden)

44. Ads could become ever more subtle and ‘woven in’ DISRUPTION Eg Traditional ‘spots’ INTEGRATION Eg Ad-funded Content Advertising createdas a self-consciousstandalone ‘piece’ Advertising createdto blend in to itsenvironment Target bydemographic Target byjourney Indirect valueto end user Direct valueto end user

45. Some early thoughts on how value can be added Laptop ONLINEADS ADAPTABLE FORMS Mixture of short- and long-form content CONTROLLABLE(WITHIN NETWORKS) Active, content pushed and pulled INTEGRATED; RELEVANTTO VIEWER JOURNEY Personal screen SIMPLER NARRATIVES;OPTIMISED SEGMENTATIONAND TARGETING Complex in-screen context(no established advertising breaks)

46. Contact Details 58-60 Berners Street London W1T 3NQ t: +44 00 20 707 99 555 e: nick@sparkler.co.uk