Digital American Newsletter

According to a recent UK study, 10% of consumers say they will abandon social media in 2017 versus 8% who plan to give up smoking. I bet the trend is similar in the US.

Consumers are moving away from social media for a variety of reasons. Many are disgusted by what happened on social media during the election. They are turned off by the spread of fake news and the prevalence of bullying. People have given up friends because they were so distressed by their posts.

Some have realized that social media takes up too much time. They are trying digital detoxes—time limits on their daily usage, one day a week without social, or going completely cold turkey.

Still others have personally experienced what multiple scientific studies show—moderate to high levels of social media engagement are correlated with negative emotions including anxiety, unhappiness and depression. In a quest to be happier in 2017, they are focusing on real life.

Finally, celebrities are leading the social exodus. A number of high-profile entertainers—including Mariah Carey, Azealia Banks, and Selena Gomez—have taken breaks from social media or left for good.

Sources: Bidvine 2017, Digiday 2017, Life Advancer 2017, NPR 2016, Reuters 2016

At the end of 2016, streaming become the most popular way to listen to music. On demand streaming now accounts for 38% of music “consumed.”(Don’t you love industry jargon?) Meanwhile, digital downloads and physical album sales declined by 25% and 12% respectively last year. Americans now stream more songs in one day than they download annually. Yes, annually.

This sea change is partially driven by Hip Hop/Rap—a category that significantly over indexes for streaming. Drake was the #1 artist of 2016—-with over 5.4 billion streams of his music played last year.

While all types of streaming are growing, on demand subscription-based increased over 100% last year, while on demand ad-supported was up 14%. Subscriptions now represent 76% of all streaming.

Among paid streaming services, Amazon Prime Music is the largest, with Spotify Premium, Pandora Plus, and Apple Music rounding out the top four. New services are launching rapidly, each with a slightly different subscription model, advertising approach, and set of features.

While streaming services are growing at double and triple digit rates, YouTube remains the king of music. Every month, more people stream music on YouTube than via any dedicated music service.

Sources: BuzzAngle Music 2017, Infinite Dial 2016, Nielsen 2017, Parks Associates 2016

Esports (short for electronic sports) is professional teams competing in multi-player video game tournaments for huge prize purses in front of millions of fans. It’s a huge marketing opportunity that has managed to slip under the radar of most CPG brands.

Here’s what you need to know.

• Over 36 million people watched last year’s League of Legends Championship. For comparison, the NBA 2016 Finals had 31 million viewers.
• The International Dota 2016 Championships had a prize pool of $20 million—-that’s twice as big as the 2016 Master’s Golf purse.
• The Philadelphia 76ers just purchased two esports teams for their franchise. Shaq and Jeremy Lin have also invested in teams.
• TBS and ESPN2 broadcast key esports events in 2016.
• The International Esports Federation petitioned the IOC for esports to become an Olympic sport.
• The largest segment of esports viewers are hard-to-reach Millennial men with high disposable incomes. They tend to be primary grocery shoppers and plan big-ticket purchases in the near future.
• Only a handful of CPG brands—Coke, Doritos and Red Bull—are focused on esports. All the sports’ other big supporters are technology companies.
• All kinds of marketing opportunities are available: event or team sponsorships, player endorsements, ads in video streams, etc.

Sources: Esports earnings.com 2016, Forbes 2016, Kotaku.com 2016, Mashable 2016, Smart Launch 2015

Consumers react strongly when their favorite company’s ad shows up next to inflammatory political content or fake news. Recently, brands from Dodge Ram to Bose have suffered due to unfortunate ad placement.

Many marketers feel blindsided by this issue. The majority of digital ads are placed via automated buying in real-time—no human involved. The technology blocks ads from appearing near pornography or graphic violence, but, it turns out, not much more.

What’s a brand to do?

Some companies have tried white listing or black listing sites. But, half of marketers admit that they cannot keep current.

Others recommend reviewing all sites where a brand’s ads were shown. However, that is a “try to un-ring the bell” approach.

Facebook recently announced they will restrict ad serving to sites with hate speech or extreme points-of-view. Some experts are skeptical because they calculate nearly 50% of Facebook ad revenue at times comes from questionable sites.

The best solution may rest with the big ad tech companies. They are frantically rolling out new features that block ads from appearing on fake news and unreliable sites. The beauty of this approach is that if they effectively stop ads from flowing to fake news sites, those companies will lose their life-blood of ad revenue and disappear.

Sources: Ad Exchanger 2016, Emarketer 2016 Marketing Dive 2016, Wired 2016

The holidays are the best time of year to get new high value customers who make repeat online purchases throughout the year. Surprised? Here are the fast facts.

• The average business acquires 24% of its new online customers during the holidays. That number is fairly consistent between popular gifting categories (think electronics, apparel) and others (food, beauty, etc.)
• Roughly the same percentage of customers become repeat buyers, regardless of whether their first purchase occurred during the holidays or at another time of year.
• 39% of new customers who buy during the holidays and buy again, repurchase within 30 days. That means many first time holiday shoppers buy twice before the end of the year.
• The next most common time for holiday customers to buy again is early the next calendar year.
• Very, very few new holiday purchasers become “holiday only” buyers, returning every November/December.
• While holiday shoppers may be attracted by discounts and free shipping, their average order value is within striking distance of all other customers’.
• The lifetime value of first-time holiday purchasers is just 13% below customers acquired at other times of the year.

Sources: Magenta 2016