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What Digital Adopters Want, How to Reach Them, and Why Every aa_20100315wp.qxp 3/15/2010 2:31 PM Page 1 WHITE PAPER Sponsored by March 15, 2010 SHINY NEW THINGS What Digital Adopters Want,How to Reach Them, and Why Every Marketer Should Pay Attention Project2:Layout 1 3/3/10 12:35 PM Page 1 aa_20100315wp.qxp 3/2/2010 3:11 PM Page 3 Sponsored by CHART 1: EARLY ADOPTERS Everett Rogers’ now-famous curve TABLE OF CONTENTS 50% INTRODUCTION 3 100% MARKET SHARE Early adopters -EVERETT ROGERS, SOCIAL SCIENTIST, sway the early ‘DIFFUSION OF INNOVATIONS’ majority, and INFLUENCE OF EARLY ADOPTERS 4 those groups -HOW APPLE COURSE-CORRECTED AFTER A MISSTEP can account -YOUTUBE RIDES THE WAVE for half of a -GOOGLE GETS IT WRONG 50 new product’s sales PROFILES OF DIGITAL ADOPTERS 7 -WHAT DRIVES THEM -THREE WHO INFLUENCE OTHERS DIGITAL ADOPTER BEHAVIOR 10 -MEDIA HABITS 0 -DEMOGRAPHICS Innovators Early Early Late Laggards -EXPECTATIONS 2.5% adopters majority majority 16% -SPENDING HABITS 13.5% 34% 34% Source: ChangeWave Research MARKETING TO DIGITAL ADOPTERS 16 -THE ERA OF BETA -WHY DIGITAL ADOPTERS CAN’T BE BOUGHT Introduction CONCLUSION 18 REFERENCES 19 BY LAURA RICH [email protected] then a “late majority,” then “laggards,” and eventually by all farmers, leading to bona fide CHARTS from its very beginnings, Google has relied market saturation. 1) ‘DIFFUSION OF INNOVATIONS,’ EVERETT ROGERS 3 on the early adopter—evident from its trade- Rogers’ model has endured. His book, 2) YOUTUBE, WEB 2.0 AND EARLY 5 mark “beta” stamp on new products. The com- “Diffusion of Innovations,” became the second- ADOPTERS, HITWISE pany’s test-mode approach has generally most-cited work of social scientists in the mid- 3) GOOGLE ANDROID EXPECTATIONS, 6 endeared early adopters who sought to be 2000s, in fact. And the early adopters studied by CHANGEWAVE RESEARCH included in a launch, while also providing cover Rogers are every bit as key to the marketing 4) GOOGLE NEXUS ONE SALES DISAPPOINT, 6 for missteps and abandoned products. Until, that cycle today as they were half a century ago, most FLURRY is, the company’s foray into telephony. Nexus notably when it comes to digital products. 5) HOURS SPENT WITH LIVE TV/DVR/ONLINE, 10 One was rebuked by so many early adopters Research firms such as ChangeWave boast NIELSEN that Google moved quickly to cut its upgrade 1,000-strong panels of early adopters, tapped for fee. And users of Google Voice owe a debt to their attitudes on new products and concepts in 6) TOP WEBSITES, NIELSEN 11 early adopters, whose loud grumbling forced the an effort to predict market success. Metafacts, 7) TRADITIONAL INTERNET ACCESS/ 11 company to improve service. But Google must another research company,surveys 31,000 users WIRELESS/HANDHELD ACCESS, be doing something right, because its mobile of technology every year, unearthing data that PEW INTERNET & AMERICAN LIFE PROJECT operating system, Android, has given Google a reveals precisely who the early adopters are and 8) INDEX OF DIGITAL ACTIVITIES , 11 21% share of the smartphone market, from less what makes them tick. Everyone from Forrester PEW INTERNET & AMERICAN LIFE PROJECT than zero at the beginning of 2009—putting it Research to Gartner is exploring the market 9) ATTITUDES AND AGE BREAKDOWN OF 12 in serious competition with Apple, whose dynamics and psychology of early adopters. EARLY ADOPTERS, SERENA SOFTWARE iPhone has 28% of the market. That is great news for marketers, for whom 10) TECHNOLOGY EXPECTATIONS, BRAND KEYS 13 The influence of early adopters over new Rogers’ curve now often spans a short period of 11) DIGITAL ADOPTER BEHAVIOR, FORRESTER 14 products and the cultural embrace of new inno- time. With so many sources of data available, vation are by now well known in the realm of it’s fairly easy to root out early adopters. market research. The behavior of these all- However, as Dr. Taly Weiss from powerful individuals was first studied by social Trendsspotting.com Research points out, MORE ON ADAGE.COM scientist Everett Rogers in 1962. At the time, finding early adopters isn’t at issue—it’s This is one in a series of white Rogers sought to understand what drove farm- understanding the role they play and how papers published by Advertising ers to adopt new products like hybrid corn they are to be approached. Getting it wrong Age. To see other Ad Age white seeds. What he found was that seeding prod- can cost companies revenue. But getting it papers and to obtain additional ucts that gained the approval of early adopters right can propel a product or brand to the copies of this white paper, go to went on to be accepted by an “early majority,” front of the pack. AdAge.com/whitepapers Shiny New Things | March 15, 2010 | 3 aa_20100315wp.qxp 3/2/2010 3:11 PM Page 4 WHITE PAPER The Influence of Early Adopters ONLINE VOICES You don’t want to mess with early adopters $399 Early adopters can be your greatest fans or biggest foes: a new price point for the iPhone led to howls HOW APPLE COURSE-CORRECTED $399, and that now is the right time to do it.... This is life in the technology lane. If you always wait AFTER A MISSTEP for the next price cut or to buy the new improved it is a rare thing when a CEO as self-assured as Steve model, you’ll never buy any technology product Jobs abandons his strategy for a product as strategically because there is always something better and less important as the iPhone. But just two months after the expensive on the horizon.... game-changing device was released back in 2007, Jobs Even though we are making the right decision to encountered such vocal grumbling from early adopters lower the price of iPhone, and even though the technol- that he had no choice. Their complaint? That they’d ogy road is bumpy, we need to do a better job taking been taken as fools, paying $599 for a product whose care of our early iPhone customers as we aggressively price suddenly dropped to $399. Early adopters (or go after new ones with a lower price.... “fanboys,” as some Apple followers call themselves) felt We want to do the right thing for our valued iPhone sucker punched, especially since many had waited in customers. We apologize for disappointing some of days-long lines to be the first to get their hands on the you, and we are doing our best to live up to your high IPHONE: must-have gadget of the moment. expectations of Apple.” Apple’s mobile “The cuts penalized the fanboys (including yours If there’s anything Apple knows better than any phone made truly) for being early adopters, and prompted iPhone player in the technology space, it is designing products fanboys drool, but owners to express their outrage across the web and and marketing them to a broad, diverse customer base. then they felt beyond,” wrote blogger Om Malik at GigaOm. But even Apple found how easy it is to get tripped up sucker-punched Noise from early adopters reached a fever pitch by that most important segment: early adopters. after a price drop when headlines began to pop up in mainstream media Defined as the first consumers to use or buy a prod- like The New York Times. Backed into a corner, Jobs uct, they can be an elusive and mercurial group, prone made amends, issuing a $100 rebate and an apology: to sudden shifts in opinion, possessing the weighty abil- “I have received hundreds of e-mails from iPhone ity to make their views well known and to put tremen- customers who are upset about Apple dropping the dous pressure on a company, even one as mighty as price of iPhone by $200 two months after it went on Apple. The influence of early adopters stems from their sale. After reading every one of these e-mails, I have first-look status and their place in the adoption cycle. some observations and conclusions.... And their impact can be positive, as well, as they have First, I am sure that we are making the correct deci- the power to help a product or service gain traction and sion to lower the price of the 8GB iPhone from $599 to find widespread adoption in the mainstream. 4 | March 15, 2010 | Shiny New Things aa_20100315wp.qxp 3/2/2010 3:11 PM Page 5 Sponsored by CHART 2: OF YOUTUBE, WEB 2.0 AND EARLY ADOPTERS Share of visits to YouTube based on all internet visits in the U.S. .40% .27% Thanks to ‘Lazy Sunday’ on NBC’s ‘Saturday .30% Night Live,’ web users in 2005 found YouTube .20% .10% .00% 2005 January 2006 July Source: Experian’s Hitwise Sociologist Everett Rogers, an agriculture student YOUTUBE RIDES THE WAVE at Iowa State University in the ‘60s, spent 12 years studying the adoption of hybrid corn seeds. He identi- In the digital realm, early adopters have played a crucial fied five types of customer segments: the innovators, role in product launches, from Google’s Wave collabora- the early adopters, the early majority, the late majori- tion application to YouTube, Facebook and Tweetdeck. ty and the laggards. They play several roles, in varying degrees, depending on ‘LAZY SUNDAY’: Rogers asserted that early adopters played a cru- the product and the early adopter: test user, thought Widened the cial role because they tended to be “opinion leaders” leader, feedback loop—or all three. audience for ‘SNL,’ with a greater social status, a higher level of education “The reason you need to care about early adopters, and lit a fire under and, frequently, a higher income.
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