January 30, 2007
THE CONSUMER ON-THE-RUN MARKET
Elizabeth Chaney
VP, Consumer Experience Services
iO™ global
On-the-Run Lifestyles: The Convergence of Choice and Control
Individuals with on-the-go lifestyles are not a new phenomena. The first opportunity to measure and track it came with the banks’ introduction in the 1970’s. This simple self-service technology re-defined the banks’ relationship with their customers. The lifestyle adoption of automated tellers was first the opening of the network, so that money could be accessed from any bank, at any time, anywhere in the world. For example, when the U.S. Supreme Court allowed interstate EFT networks to develop in 1985, total annual transactions began a growth curve at an average of approximately 11% per year for the next 10 years.[1] When ATM terminals were not restricted to just bank premises, this slope of this transaction growth curve increased even more sharply.
The consumer was no longer operating under the control of the bank and his/her choice of time and location for fulfillment of cash demands became only as limited as the number of ATM machines available.
Internet networks today represent a supernova of that same open infrastructure, interconnecting devices of all types -- televisions to trains; automobiles to airplanes; phones to home entertainment systems; applications to content to brands that make them useful; parents to children to friends and whole communities. The mobile device is the individual’s remote control for this infrastructure and this “hyperchoice” environment. Just as banks have learned from their intial days in the on-the-run market, marketers of all types will learn that propositions must converge under an individual’s control and choice, not the other way around.
Sizing the On-the-Run Lifestyle <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Opportunity
As we learned with the early successful web-based businesses, the market is defined by what individuals are doing in their life, rather than solely on what they are buying. This activity-centric view provides the context required to sustain an ever growing revenue relationship with that individual.
Because iO™ global enables its customer constituencies to serve consumers on the run, it embarked on the task of sizing the activity-centric on-the-run opportunity to provide a foundation for service and business model innovation for its customers.
To initially create the on-the-run model, iO™ focused on the U.S. market. Using data available from the U.S. Bureau of Labor Statistics[2], iO™ has aggregated and analyzed time-based activity input from 13,068 consumers’ 24-hour activity journals. Individuals spend an average of almost 3 hours per day on the run. This scatter plot illustrates the average number of stolen moments per individual by age group.
The opportunity for consumption of content and media for enjoyment or accomplishment during these stolen moments amounts to a total available market of approximately $180 billion in the U.S. for 2005.
Variance and regression analysis of the study respondents’ on-the-run time, provided a number of directional insights for on-the-run services targeting and propositon development. iO™ found that higher income levels, hours worked per week, and the age of children in the household impacted on-the-run time differently for different age segments. The variance in on-the-run activities, as well as the time and location context for those activities, will significantly impact a mobile marketer’s ability to capture a share of the on-the-run experience for any specific group.
The On-the-Run Influence Factor
On-the-run lifestyles and, most importantly the technology that enables them to be enjoyable and productive, influence other areas of individuals’ lives. The opportunity and urgency for service and content providers of all types to participate in a share of the individual’s on-the-run lifestyle increases as a result.
· Multi-Medium, Multi-Tasking, Multi-Device. Studies tell us that 70% of media users consume more than one medium at a time. Of those who listen to radio, 53.7% are online at the same time, 46.9% are reading a newspaper and 17.7% are watching TV. Of those watching TV, 66.2% are online amd 74.2% are reading a newspaper.[3] As personal mobile devices become ever more capable and as on-the-run time shifts to prime “do it” time, on-the-run styles and devices will start to influence the way individuals do things while at home or work. Taken from this perspective, look for the on-the-run market opportunity to grow even larger.
This 70% overlap in media consumption would suggest a relationship between an individual’s time on the run and their relaxation and leisure time. The individual activity analysis for the on-the-run model also totaled relaxation and leisure time by age groups. The mean time by age is represented in the scatter plot. 
The combination of relaxation and leisure and time on-the-run represents for some ages almost half of their waking lives. This is a significant opportunity for service providers and content producers alike.
· On-the-run activities influence traditional purchases. Approximately 4% of offline purchases were influenced by the internet in 2005.[4] Many experts predict that the internet will influence up to 50% of purchases by 2010. If the same influence factor holds true, and as service providers begin to understand wallet sharing business models with other ecosystem constituents, on-the-run entertainment and information access will potentially be the lever to a larger proportion of consumer discretionary income.
· Capturing the impulse buy. Impulse buying represents almost 40% in the online world[5] and it can account for up to 80% of all purchase in certain product categories[6]. On-the-run time and associated activities are fragmented into a number of small moments, or individual “impulse opportunities”, as the individual is seeking to enjoy or accomplish something during that moment. Service providers, content producers and advertisers alike should seek to eliminate all of the intrusive steps normally required for purchase (i.e. finding, comparing, viewing, etc.), thereby streamlining and personalizing options to individual preferences for individual on-the-run activities.
Tapping into the On-the-Run Market Opportunity
There are some simple truths all ecosystem constituents should follow to tap into this significant on-the-run market opportunity.
1. A service orientation is required to be successful.
2. Openness and inclusiveness across the ecosystem of participating constituents will yield greater revenues and relationships for each individual constituent.
3. Value is accrued through facilitating what the individual is trying to do (i.e. their activity).
4. Sustainably facilitating an individual’s activities means occupying a more dominant share of their on-the-run life experience. This is of significant value to any service provider, advertiser, or content producer as they wish to monetize their brands.
For more information on iO™ global, visit www.io-me.com. In addition, to learn more about how to capture an ever greater share of an individual’s on-the-run wallet, contact Elizabeth Chaney at [email protected]
[1] EFT Network Data Book (various years)
[2] Bureau of Labor Statistics, American Time Use Survey (ATUS), 2005
[3] Center for Media Research
[4] Deringer Research; U.S. Census Bureau 2005 Monthly Retail Trade Survey
[5] User Interface Engineering, E-Commerce Whitepaper, “What Causes Customers to Buy on Impulse”
[6] Abrahams, Ben. (1997). It’s all in the mind. Marketing, March 27, 31-33, Smith, Don. (1996, February). The joy of candy. National Petroleum News Supplement, S2
