• by Joe Mandese  @mp_joemandese, November 17, 2008

The rate of growth of most forms of digital content services - especially social networks and online video - has more than doubled vs. a year ago, according to the results of a new study released this morning by the IBM Institute for Business Value. The study, an online survey conducted during the third quarter of 2008 among more than 2,800 people in six countries, found that social networking penetration now stands at 60% of respondents, while 40% have Internet data plans on their mobile services. Equally significantly, the IBM study also found that respondents prefer ad-supported models for accessing digital content services at a rate of "three-to-one" vs. consumer-paid models, presenting a distinct opportunity for advertisers.

"Last year's study showed the decline of TV as the primary media device. This year's study found large scale adoption and usage of digital content services accessed via the PC and mobile phone," the IBM report noted, though it also found that, "while digital content services adoption is widespread, interactivity through features such as user ratings tools and video uploads is primarily concentrated among the more digital savvy consumers."

The study also found that consumers are growing more accustomed to accessing digital content via both wired and wireless services. More than three-quarters (76%) of consumers surveyed have already watched video on their PC, up 27% from last year, while 32% indicated they have viewed video on a portable device or mobile phone, up 45% from last year. Interest in mobile video content has more than doubled since last year to 55%.

"With the rise of Web 2.0, millions of people can instantly create, publish and consume content. In order to survive, advertisers must understand how to reach their target audiences across multiple devices," stated Dick Anderson, general manager, IBM Media & Entertainment. "Knowing distinct consumer segment preferences and delivering consistent content and messaging are essential for long-term success."

More than 70% of respondents indicated they prefer advertising-supported models as opposed to consumer-paid models, representing a huge growth opportunity for the industry. Preference for ad-supported models ranged from 62% to more than 80% by country, with Japan having the highest preference for ad-supported on both devices.

The study found that most consumers also are beginning to move beyond the "trial stage" of watching online video. Of those who have watched videos on their PC, 45% are doing so regularly -- at least a few times per month. The shift is beginning to have an apparent impact on the consumer of television, the study found, with more than half of respondents who have watched online video claiming they watch slightly less (15%) to significantly less (36%) television.

Asked how they prefer to view advertising associated with online videos, the majority of respondents said they prefer to see it before or after a video, suggesting that pre-roll and post-roll video will likely remain the dominant online video advertising format for the foreseeable future. Respondents from all six countries polled protested traditional television models such as interruption advertisements during the video or the use of product placements within programs.