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Tuesday, October 18, 2011

Digital Explosion and Small Business

Small businesses have never had so many options available for communicating with and contacting existing and potential customers. The broadband-digital revolution has made sure of that.

It's become faster and cheaper to spread the word and deliver various products. At the same time, the dynamic, fast-changing digital marketplace means that entrepreneurs need to be aware of new opportunities that they simply cannot afford to miss or ignore.

This reality is driven home in a new report from comScore, Inc, a global firm that measures and analyzes the digital world. In "Digital Omnivores: How Tablets, Smartphones and Connected Devices are Changing U.S. Digital Media Consumption Habits," comScore looks at a variety of important and interesting questions, changes and trends.

The report opens with the following observation:

"Today's digital media environment is rapidly evolving, driven by the proliferation of devices people use to consume content both at home, at work and on the go... Cross-platform consumption has created a vastly different digital landscape, and it is one that requires insight into both the individual usage of devices as well as the nature of their complementary use. As consumers move toward an increasingly fragmented device diet, stakeholders across the industry are confronted with a growing number of questions, challenges and opportunities. What is the extent to which these devices have penetrated and are changing consumers' media consumption habits? How does one efficiently and effectively reach these digital omnivores in a meaningful way?"

Consider a few key findings:

• "The share of non-computer traffic for the U.S. stood at 6.8 percent in August 2011, with two-thirds of that traffic coming from mobile phones and tablets accounting for much of the remainder."

• "The mobile media user population (those who browse the mobile web, access applications, or download content) grew 19 percent in the past year to more than 116 million people at the end of August 2011."

• "In the U.S., smartphone adoption has grown more than 50 percent in the past year, with 36.1 percent of Americans age 13 and older now using smartphones."

• "In the U.S., tablet users display the characteristics of early technology adopters: young males in upper income brackets. In August, 54.7 percent of all tablet owners were male and nearly 30 percent were age 25-34. Nearly half (45.9 percent) of tablet owners belonged to households earning $100K and more."

• In September, 58% of tablet users accessed news (25% on a near-daily basis); 60% took part in social networking; and nearly half made or completed a purchase.

What does this mean for small businesses?

While the comScore analysis offers additional information of value, three important takeaways need to be kept in mind:

First, do not underestimate the opportunities at hand: "The incremental reach through mobile and connected devices should not be underestimated. In the case of a publisher like Pandora, the incremental reach of additional channels, such as connected devices, is significant. In August 2011, the additional mobile and connected device audience for Pandora accounted for more than half of its total audience."

Second, the potential growth of and commensurate opportunities with tablets are significant: "Tablets now drive nearly 2 percent of all digital traffic in the U.S. which, given the fact that the iPad was only introduced a year and a half ago (April 2010), is rather impressive. Even more impressive is the fact that iPads now account for a higher share of Internet traffic than iPhones (46.8 percent vs. 42.6 percent of iOS traffic) demonstrating the very real impact these devices have had in a relatively short time."

Third, it's important to gain a more complete understanding of how consumers are using and will be using each of the devices in their digital arsenal: "With the plethora of device options available to consumers, it is more important than ever to take a holistic look at consumer behavior across devices. Understanding how people consume content on separate devices, the complementary effect these devices have on one another, and how consumer consumption habits are changing in response to all these technological shifts will be important in understanding digital media fragmentation."

Finally, the comScore report does not get into how businesses are using non-computer devices. For the business owner, it's not only critical to assess how customers are using and will be using tablets, but also how the firm's use of such devices might improve operations, improve productivity, and boost the bottom line.

The digital arena continues to be a tremendous source of opportunity for entrepreneurs, small businesses and their employees.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

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