• by Ross Fadner , April 1, 2004

Advertisers must go where consumers are--and that's practically everywhere, according to a new Yankee Group report on the media consumption habits of consumers. The latest installment of the Yankee Group's ongoing Media and Entertainment Strategies series, "Consumer Entertainment: New Technologies Challenge Traditional Demand Dynamics," has found that consumers have grown accustomed to metabolizing information from an ever-growing multitude of media channels. The Yankee report reveals the extent to which advertisers' choices for distribution, device, and content are interrelated.

Increasingly, consumers are demanding to be in control of their media choices, and they like having options. The Yankee report, like similar reports in recent months, has found that the growing number of media channels presents advertisers with the problem of a disparate and fragmented consumer universe.

"In particular," notes Aditya Kishore, Senior Analyst, The Yankee Group, "broadband is a significant new channel that should not be ignored by advertisers." Kishore also adds that online gaming and Internet video-on-demand are avenues that advertisers have yet to exploit. Digital video recorders (DVRs), offline gaming, and video-on-demand (VOD) for cable are other technologies consumers are quickly adopting because they give users so much control. Kishore notes that advertisers must monitor the new technologies and develop methods to reach consumers through these new channels.

"Each [media] device used to be singular and unrelated," says Kishore, but now, between the PC, the TV, the DVR, and all the crossover multimedia devices now available to consumers, the household has effectively become a media network.

In the audio realm, the Yankee Group says that segment targeting needs to be repositioned to market toward a broader audience than the 18-24 demographic. Yankee notes that 25-to-49-year-olds are just as aware of licensed online music services, and they have greater disposable income. Seventy-seven percent of consumers are aware of paid licensed music programs, according to the study, and the number of licensed music downloads will continue to increase.

A mass marketing push is required to push DVR usage to critical mass, the report says, but an established advertising channel within the DVR realm has yet to find firm footing, despite the efforts of TiVo via its Advertising Showcases. Cable operators that currently offer DVR functions, such as Time Warner's Time Warner Cable, market to existing cable TV subscribers.

The report notes that gaming is firmly established in the lives of many Americans. Yankee reports that the average age of console gamers is 26, while online gaming attracts an older audience--including women, who are flocking to the medium. Currently, the average online gamer is a 32-year-old male.