2012: A YeAr in reviewThe MAYAns ThoughT The world would end;

Teens jusT know iT’s chAnging fAsT

globAl focus reporT

TRU-INSIGHT.COM / @TRUINSIGHTTHE GLOBAL LEADER IN YOUTH RESEARCH + INSIGHTS

DECEMBER 2012

TRU VIEW

inTroducTionAs 2013 approaches, global teens continue to find themselves adapting to an evolving new-media landscape and a poten-tial global recession. In this TRU Global Focus Report, we’ll take a look at how teens’ vow to spend more in the coming year could potentially help forestall an anticipated economic downturn.

Additionally, TRU forecasts the future of Facebook. While we see no evidence that global teens are using the social-media giant any less, data from a recent U.S.-only TRU Study suggests it won’t be long before teens worldwide begin to think of it less as an aspirational part of their lives and more of an operational one. In other words: The thrill isn’t gone, but it’s going. What, if any, ramifications should this attitude shift have on brands’ social-media plans?

Finally, TRU analyzes changes in the ways teens consume new media. Today’s teens are on Facebook, Orkut, Renren, or Twitter, not the device that supplies them. That’s a sea change from a not-too-distant past, when youth allotted time in their day with the express purpose of “going online.”

reAd More AbouT iT …

DECEMBER 2012

TRU VIEW

insighT #1: Teen spending MAY help AssuAge looMing globAl recession. We’re often asked what 2013 holds in terms of global spending and the econ-omy. TRU boasts three decades of expe-rience with young people and a global reach, but—alas—we haven’t yet perfected the art of fortune-telling. Considering the old joke that economists have success-fully predicted 40 of the past five reces-sions, we’ll let them try to burnish—or re-form—that record themselves. In case you haven’t heard, the dismal scientists from The Wall Street Journal, Forbes, and the Organization for Economic Cooperation and Development are particularly down on the world’s near-term prospects. In fact, the OECD recently said that fore-casts for the global economy tendered in the spring are cloudy with a chance of thunderstorms, with U.S. budget woes and, in particular, high unemployment in the tumultuous 17-country Eurozone be-ing largely to blame.

But here’s the thing about economists’ labyrinthine algorithms and apocalyp-tic forecasts: teens could care less. This isn’t the first time teens have endured an economic spasm; in fact, for some teens it’s all they’ve ever known. They’re bored with it and, perhaps, even resentful of it. They viscerally want retail therapy whether it’s prudent or not. The plurality of teens (46%) tell TRU that they expect to spend more in the next year than they did in the previous one (a full 86% say they'll spend the same or more), while only 14% of 12- to 19-year-olds anticipate spending less. Furthermore, global youth, taken as a whole, are an optimistic lot. More often than not, they’ll see the glass half full even when all evidence suggests it’s drying on the dish rack. Grim prospects may dampen their parents’ spirits, but it’s doubtful teens will fully comprehend or even acknowledge the bad news. The

only way global teens are sharing WSJ or FT links on Facebook is if they’re looking to lose friends.

Fact is seven out of 10 global teens be-lieve their future standard of living will be better than their parents’, with a mere 4% predicting it’ll be worse. And, for teens, impatient for adulthood and in constant need of instant gratification, the future means tomorrow (almost literally). TRU’s not saying global youth can single-handedly counteract adults who seem to be poisoning the economic well, or even that they’ll make good on their promise to spend more. What TRU is saying is that they want to spend and, given the resources (e.g., parents’ money or access to credit cards), they very well may. If the largest generation in history decides to go shopping, the results might just sur-prise the experts.

iMplicATion #1: MAke sure pArenTAl ApprovAl is pArT of The equATion. It’s important to remember that four-fifths of global teens’ spending money comes from their parents on an as-needed basis.

Of course, parents’ and teens’ definitions of “need” can be quite different, so it’s incumbent upon brands to find common ground (when possible). While teens’ primary motivation may be impulse or even peer pressure, for parents it often boils down to value. “Will buying [insert product or service here] for my child just spoil him or her, or does it have residual benefit?” Such benefits could include a compelling value proposition compared to a future purchase, a fail-safe money-back guarantee, or tangible development promises such as improved educational productivity, fitness, or motor skills. Con-sider a recent Facebook campaign by the German retailer Bonprix: By leveraging information gleaned from users’ “likes” and interests, Bonprix was able to micro-target both teen girls and women their mothers’ age with “right-rail ads” offering discounts on apparel. The bottom line is that parents don’t want to feel grifted—either by their kids or brands. Targeted messaging that caters to Mom and Dad’s high standards or sense of thrift can be ef-fective, so long as it doesn’t work against what teens find attractive about the brand in the first place.

DECEMBER 2012

TRU VIEW

sTAndArd of living (%) GLOBAL TEENS

Mine will be better 70

Mine will be about the same 26

Mine will be worse 4question: As an adult, how do you think your standard of living (how much money you make, how nice your house and cars are, etc.) will compare to your parents?

spending ouTlook (%) GLOBAL TEENS

Spend more money 46

Spend about the same 40

Spend less money 14question: Do you think you are going to spend more money, about the same, or less money in the next 12 months as you did in the past 12 months?

DECEMBER 2012

TRU VIEW

insighT #2: globAl Teens Are sTill using fAcebook A loT, buT soon won’T like iT As Much. Facebook is the only website that more than half of global teens (55%) call their favorite; Google (33%) is a very distant second. In fact, Facebook is the favor-ite site in each of the seven regions measured for this report. Further, more global teens tell TRU that they visit social-networking sites like Facebook several times a day this year (37%) than last year (31%). (For full disclosure’s sake, last year TRU fielded in 40 countries, three more than this year). So, what’s the problem? Why is TRU even suggesting Facebook fatigue is coming when the per-centages indicate otherwise?

For one thing, Facebook is losing luster among U.S. teens—the very individuals who were first exposed to the soc-net site nearly nine years ago. They’re the first-responders and the undisputed guinea pigs in the Facebook experiment. We can use their archetypal ambivalent relation-ship with the premier social network as a global harbinger. When Facebook first ramped up, and for several years there-after, MySpace was the dominant social-media player in the U.S. Since then, it’s been all Facebook—primarily because no competitor (not Twitter, not Pinterest, not Instagram) has been able to usurp it. But that doesn’t mean U.S. teens remain rav-enous Facebook evangelists; they’re sim-ply without better alternatives. (In fact, Orkut, too, seemed indefatigable in Bra-zil until Facebook arrived, and now Orkut is fast playing second fiddle.) Therefore, U.S. teens, in particular, are more likely now than ever ready to abandon it for the “next big thing” should it come along.

Using data culled from The U.S. TRU Study 2013, we’ve learned that while fa-miliarity hasn’t quite bred contempt, U.S.

teens and Facebook are amidst a torrid like/dislike relationship, with fewer and fewer U.S Millennials leaning “like.” In other words, while they still use it a lot, many tell us they don’t like it as much. First, let’s explore the positive side of the equation: 46% of U.S. teens feel out of touch if they haven’t been on Facebook in a few days, and 37% call Facebook an important part of their lives. Now, for the negative side: Just 43% of U.S. teens call Facebook more popular now than it was six months ago; just 41% are more ac-tive on Facebook now than they were six months ago; and only 22% couldn’t live without Facebook.

True, these percentages only represent how one country’s teens feel about Face-book. But, if there’s one thing Facebook has taught us, it’s that young people are more similar than they are different in terms of how they behave and interact with the world around them.

iMplicATion #2:don’T give up on fAcebook Too soon.Consider it a case of “down, but not out.” All things considered, it’s more impor-tant that global teens are still using Face-book than that they’re no longer quite so

smitten with it. Eventually, everything will go the way of Obsolessence™—the TRU theme that forecasts inevitable ir-relevance—and Facebook is no different. Don’t let Facebook’s miserable IPO doom your social-media plans. Did people stop listening to music when musicians start-ed getting less money to make it? For now, stay the course. The fact is that more than half of global teens call Facebook their favorite website, and no other web-site (social media or otherwise) is even close to that percentage. So it’s important that marketers not jump off the band-wagon for the next big thing because it hasn’t rolled into the station yet. Rare ex-ceptions, of course, are in China, where Facebook is forbidden (and Renren is its equivalent), or in Russia, where V Kon-takte and Odnoklassniki duel with Face-book for supremacy. Furthermore, there’s great parity with regards to which web-site is riding Facebook’s coattails: In the U.S. and U.K., it’s Twitter; in Austria, Bel-gium, and Italy, it’s Badoo; and in Brazil and India it’s Orkut. In fact, in several ar-eas—including the Nordics, Canada, and Australia—LinkedIn is the second-most popular soc-net site, and while LinkedIn may be great for networking, there’s noth-ing youthful about it.

DECEMBER 2012

TRU VIEW

ATTiTudes TowArds fAcebook (Top-2 boX %) BASE: U.S. TEENS WITH FACEBOOK PROFILE Total Male Female

Facebook changes its format/layout too often 56 54 58

I feel out of touch if I have not been on Facebook in a few days 46 42 49

Facebook is more popular now than it was six months ago 43 47 40

I am more active on Facebook now than I was six months ago 41 45 36

I’m worried about my privacy on Facebook 41 39 42

I am getting tired of Facebook 40 41 40

I think Facebook takes up too much of my time 40 37 44

Facebook is an important part of my life 37 36 37

I couldn’t live without Facebook 22 22 22

bolding denotes significant difference. question: Thinking about how you spend time on Facebook, how much do you agree or disagree with the following statements?

Top-5 fAvoriTe websiTes (%) REGION

question: Please write in the names of the three websites where you spend the most time.

MenA (%)

Facebook 64

Google 45

YouTube 36

Yahoo (net) 26

Hotmail 15

norTh AMericA (%)

Facebook 67

YouTube 35

Google 21

Hotmail 12

Yahoo (net) 11

sub-sAhArAn AfricA (%)

Facebook 70

Yahoo (net) 40

Google (net) 35

Mxit.co.za 13

Twitter 11

AsiA pAcific (%)

Facebook 52

Google 40

Yahoo (net) 28

YouTube 21

Naver 10

europe (%)

Facebook 52

YouTube (net) 27

Google (net) 23

Vkontakte.ru 17

Mail.ru 6

AusTrAliA (%)

Facebook 67

Google 39

YouTube 32

Hotmail 14

eBay 11

lATin AMericA (%)

Facebook 50

YouTube 40

Google 37

Orkut 34

MSN (net) 20

DECEMBER 2012

TRU VIEW

insighT #3: in An increAsinglY App-bAsed world, globAl Teens Are coMpuTing, buT less And less AT A coMpuTer. Increasingly, being online is analogous to simply being. It’s rarely about seek-ing out and parking oneself in front of computer hardware: Desktops are well on their way to Obsolessence, while newer solutions such as smartphones and tab-lets are designed to be even more mobile than laptops.

Today, it’s about the online experience, not the process. Global teens are on Face-book, Orkut, or Renren, and how they got there is, for them, immaterial. The em-phasis is on computing, not the comput-er. Who cares if the message went out via email, text, IM, Skype, or call to confirm a meet time? Who can recall if a Facebook update was issued on a laptop, an iPad, or a Galaxy S III? The important thing is the message, not the method.

True, smartphones (36% ownership worldwide) aren’t yet the norm, and tab-lets (11% ownership) remain an indulgent extravagance for most, but it’s clear what road we’re headed down. Purchase intent of desktop computers—the only online-compatible device that more than half of global teens currently own—is lower than that of laptops, smartphones, tablets, and even e-readers.

Mobility and ever-present online access is increasingly vital to teens who’ve cho-sen to join the online conversation. After all, their profiles make it inevitable that they’ll be part of the discussion, whether they’re there to react or not. The only way to monitor and curate their social media presence—whether they’re being tagged in a photo, referenced in a tweet, or included in upcoming plans—is to be online, all the time and from everywhere.

iMplicATion #3: be “sMArT” AbouT how You TreAT globAl Teens, now And forever.Granted, the majority of global teens don’t own smartphones or tablets. But that’s where they were, not where they’re going. If you see a striker streaking across the center circle, you pass the ball in front of him (not to or behind him), because that’s where momentum is carrying him and that’s his best chance to score. The same goes for mobile marketing. If you’re a brand, don’t concern yourself with per-centages when it comes to smartphone or tablet ownership. Just know this: it’s growing rapidly worldwide. In fact, the market intelligence firm HIS iSuppli forecasts that 2013 will mark the first year that smartphones will account for more than half of all cellphone shipments (54%, up from 46% in 2012, and 35% in 2011). So even if it’s global teens’ parents who are

accounting for most of the growth, youth aren’t shy about making the family’s tech-nology their own (they’ve been doing it with TVs and desktops for years!). And when they’re finally able to trade in their starter phone for one of the “smart” va-riety, they’ll be that much more able to navigate it.

Brands need to think less about where they’re appearing (e.g., Facebook or Twitter), and more about why a consumer should need them. What utility or enter-tainment value does a brand provide? Global teens have no end of new-media-related stimuli to digest, so asking a teen to divide his or her time between watch-ing TV, texting, browsing, and being amongst friends, demands a “what’s-in-it-for-me” return on investment. Treating global teens less like K-I-D-S and more like V-I-P-S—with arsenals of discounts, deals, and front-of-the-line access— is paramount.

DECEMBER 2012

TRU VIEW

durAble iTeMs: purchAse inTenT (%) TOTAL Asia Latin North Sub-Saharan Region GLOBAL Pacific Australia Europe America MENA America Africa

Smartphone 21 22 22 23 20 18 18 18

Laptop computer 20 21 12 16 24 24 16 21

Mobile phone 16 15 10 11 20 29 7 22

Tablet computer 15 11 30 27 10 17 12 8

E-book reader 12 7 26 23 2 14 9 7

Desktop computer 9 10 7 8 8 9 4 12

bolding denotes significant difference. question: Which of the following do you plan to buy in the next 12 months?

durAble iTeMs: ToTAl ownership (%) TOTAL Asia Latin North Sub-Saharan Region GLOBAL Pacific Australia Europe America MENA America Africa

Mobile phone 80 78 77 79 86 92 77 77

Smartphone 36 27 62 49 27 50 57 22

Desktop computer 56 46 83 76 61 79 83 15

Laptop computer 50 37 87 73 46 58 84 17

Tablet computer 11 7 27 15 7 23 18 2

E-book reader 10 11 15 13 3 13 18 1

bolding denotes significant difference. questions: Which of the following do you personally own? Which of the following does your family own?

DECEMBER 2012