Digital Design Blog

Digital Consumer Behavior Study

September 28th, 2007 by Garrick Schmitt
Tags: Digital Consumer Behavior

The majority of today’s consumers are actively personalizing their digital experiences and sampling niche content and video with increasing frequency. That was perhaps the key finding in our first annual Avenue A | Razorfish Digital Consumer Behavior Study.

Much has been said and written about how the Web 2.0 era has fundamentally changed the way consumers interact online. But to what degree is today’s digital consumer really changing her online behavior?

A quick look at ComScore or Nielsen tells one story: millions of people are logging on to Facebook, Flickr, YouTube and MySpace and the numbers are growing. We wanted to know if it was simply the technorati leading the way (and leading the hype), or has something more significant occurred?

Connected Consumers
In July 2007, Avenue A | Razorfish surveyed 475 U.S. consumers across all demographics and geographies to understand their desires, frustrations and digital consumption habits. Our design research team was most concerned with digital behavior rather then demographics. We wanted to know:

How the broad populace of connected consumers discover things?

How quickly do consumers adopt to emerging technologies and user interface conventions (tag clouds, social media, etc.)?

What drives consumers desire to purchase (or not) online?

How has video changed the digital landscape in recent years?

Are mobile services being widely used (or not)?

Personalization Hits the Mainstream
The answer, weï¿½ve found, is that the majority of consumers are increasingly personalizing their digital experiences and sampling a wide range of digital niche content. From recommendation engines, to blogs, to customized start pages, todayï¿½s connected consumer navigates a personal landscape that is much more niche than we ever expected.

Consumers Customize Start Pages

Our survey found that personalization has hit the mainstream. As illustrated in the graph above, the majority of consumers surveyed (60%) personalize their home/start pages. This far exceeds the smaller number of consumers that we previously believed to be such active participants.

Further, 56% use RSS (really simple syndication), a technology that enables users to subscribe to content feeds and read them via specialized readers or on their customized start pages. RSS enables consumers to keep up-to-date on news, sports or other information. Clearly this trend bodes well for the dominant portals and search engines such as Google (35%), Yahoo! (24%), AOL (10%) and MSN (9%) which account for the vast majority of consumersï¿½ start pages.

Frequency of subscriptions to RSS feeds

Media & Entertainment Habits Shift
The desire to personalize and sample niche content greatly impacts consumerï¿½s digital behavior across all industries and verticals. The effect on traditional media and entertainment consumption habits is stunning. According to our survey, nearly 70% of consumers read blogs on a routine basis, and 41% have their own blog or post frequently to blogs. In fact, 46% of consumers who responded to the survey read four or more blogs on a regular basis. All of that blog activity is significantly cutting into the reach of traditional media outlets (newspapers, TV, magazines, etc.).

How often do you read specific blogs

Do you write your own blog or post to other blogs

The trend toward niche content is similar for music and video consumption as well. 67% of consumers watch videos on YouTube or similar sites on a regular basis and 42% purchase music online. If anything, online video is not only becoming more pervasive but also affecting offline consumption in interesting ways. For example, 85% of consumers have watched a movie preview online before going to see the film at a theater. 58% of consumers have used a service to download (iTunes) or order (Netflix/Blockbuster) films online, and 71% have watched a TV show online.

Most tellingly, 91% of consumers rely on the Web to get current news or information, vastly eclipsing more traditional outlets such as television. No wonder why broadcasters and newspaper publishers are struggling to adapt in todayï¿½s digital realm.

Retailers Face New Challenges
Personalization has had a similar effect on digital and multi-channel retailers, as well. Consumers react positively to recommendation engines and personalized services with their pocketbooks: 62% have made a purchase based on personalized recommendations (e.g. Amazon.com) and 72% find such services helpful.

How do you customize your homepage with specific content feeds

However, our research indicates that the biggest shift for retailers is yet to come, as their relationship with consumers appears to be increasingly disintermediated. 54% of todayï¿½s connected consumers start their shopping experience at a general search engine, such as Google, versus 30% who either visit the Web site of an established retail store (e.g. Crate & Barrel) or a specific eCommerce site such as Amazon.com. Where would you likely begin your web search for this product?
More surprisingly, 38% of consumers say that price is the most important criteria in deciding where to purchase online although 38% of consumers also indicate that a Web site that is known or respected helps sway them. Only 17% of consumers seek out a multi-channel retailer, such as Best Buy, that has a prominent brick and mortar outpost.

Welcome to the Participation Era
The level at which todayï¿½s consumers interact socially online canï¿½t be overstated and is not confined to MySpace and Facebook. The desire to interact with others regularly is a fundamental shift that will affect all digital properties in the coming years.

More than 50% of respondents stated that social networking sites help them stay in touch with people. The second most common motivation for social networking was meeting new people. While neither of these statistics are too surprising, the desire to participate onlineï¿½whether as individuals or as part of a larger communityï¿½is clearly strong:

ï¿½ 49% have uploaded a video in the past 3 months.

ï¿½ 41% write or post to blogs

ï¿½ 53% share bookmarks with others through services like del.icio.us

ï¿½ 41% use photo-sharing sites such as Flickr

Research the web

The influence of peers flavors interactions across the Web. Most consumers prefer, or at least desire, the option to navigate sites through “wisdom of the crowd” features: 82% have read and/or browsed by “most popular” or “most-emailed” features. 35% have used tag clouds. Most significantly, 55% of users indicate that user generated reviews and ratings are the biggest factor in helping them make purchasing decisions.

Mobile Usage Still Nascent
While the adoption of Web 2.0 features has clearly entered the mainstream, the usage of mobile data services certainly has not. Our survey, released on the heels of Appleï¿½s iPhone launch, finds the U.S. mobile data services market still nascent.

Photography-related activities are the bright spot for mobile services. 53% of consumers have taken and/or shared photos via mobile phones.

When you research info

The outlook is not so bright, today, for other mobile multimedia usage. Only 32% have listened to music via their handset and 24% have watched videos. And 37% have used mobile web services to check weather, news or sports headlines.

What To Do Now
Given the sweeping changes in online consumer behavior, we recommend that marketers and publishers take the following steps to create exceptional experiences for todayï¿½s consumers:

1. Make Content Portable ï¿½ Ride the personalization wave by making your content portable. RSS offers a great means for users to subscribe to your content and get frequent updates. Widgets enable consumers to have deeper and richer experiences with a Web siteï¿½s features and functions anywhere.

2. Enable Consumer Ratings and Reviews ï¿½ Ensure that consumers can contribute and access peer reviews. Retailers should enable consumers to rate and review products. Publishers should allow “commenting” whenever possible.

3.Invest in Online Video ï¿½ Online video is the next great growth wave in the industry. Make sure all video assets become digitized and integrated with existing content and services. Look for near-term advances in video advertising to help monetize the effort.

4. Think Beyond the Web site ï¿½ Your Web site plays a much lesscentral role in todayï¿½s consumer Web experience. Think about how search, advertising, social media sites and the blogsphere are related to your digital marketing efforts and invest appropriately.

5. Take Small Steps with Mobile ï¿½ Mobile data usage is still nascent. Take a measured approach to investing and keep an eye on Appleï¿½s iPhonefor near-term breakthroughs.

For the full Avenue A | Razorfish Digital Consumer Behavior Study please go to http://www.avenuea-razorfish.com/reports/RegDDO2007.html to download the PDF.

by Benjamin Lerch, Malia Supe, Raphael Lopez, and Garrick Schmitt