• Download a healthcare-focused whitepaper authored by Melissa Davies: Listening to Consumers 101, How Marketers Can Leverage Consumer-Generated Media

VIRGINIA: The ad race between Virginia gubernatorial candidates continues to be as tight as it was reported two weeks ago. Since September 21st Robert McDonnell(R) has out-placed Creigh Deeds (D) 6215 to 5718.

A breakdown of the Designated Market Areas (DMAs) within Virginia lends a better view of where the candidates are targeting their messages. McDonnell is dominating the airwaves in the Richmond and Norfolk markets, where his campaign has placed about 40% more ads than Deeds’s campaign since September 21st.  But Deeds, the Democratic candidate, is more of a presence on TVs in the rural Western part of the state, where he’s bought 16% more ads than the McDonnell campaign in the Roanoke-Lynchburg market and 19% more in the Tri-Cities market in the last month. In the Washington DC market, the two candidates are virtually tied, with each of the campaigns placing roughly 1700 ads from 9/21 to 10/19.

NEW JERSEY: In Nielsen’s last analysis of the governor’s race two weeks ago, incumbent Democrat John Corzine showed a big lead in ad buys over Republican challenger Chris Christie. And that lead hasn’t waivered, with Corzine’s campaign placing almost 2 1/2 times as many ads on New Jersey TVs as Christie’s, since September 21st through October 19th (4131 to 1786).

But ads placed by the campaigns alone do not tell the entire story in New Jersey.  The Republican Governors’ Association has chipped in with its own advertising on behalf of Christie. The RGA placed over 900 ads over the last month to help close the gap.

NEW YORK CITY: Incumbent Mike Bloomberg continues to dominate New York airwaves over his opponent Bill Thompson (D). Bloomberg’s 2,875 TV ads placed since September 21st, almost 1,300 more than the amount placed by Thompson over the same period.

FCC Chairman Julius Genachowski laid out his priorities for the wireless industry at the CTIA IT event last Wednesday. He wants to:

• Bring more spectrum to market to handle rapidly increasing demand for wireless data
• Remove red tape to allow wireless carriers to expand networks faster
• Conduct the regulatory process at the FCC more openly and on a fact-based, data-driven basis
• Codify and enforce net neutrality with special considerations to wireless

I am sure the wireless industry is welcoming the first three priorities of the new Chairman. They represent a welcome and overdue recognition of the situation we are in – more than 270 million American wireless subscribers and more than 42 million of them using smartphones to access the Internet. While the discussion continues about the need for the codification of net neutrality for wireless, it is very encouraging that Chairman Genachowski has recognized that wireless networks deserve special consideration.

Some examples:

1. Wireless data networks that are available to most Americans have only modest throughput.
   Today’s technology allows CDMA network operators (Verizon Wireless and Sprint) to provide a theoretical maximum throughput of 2.4 to 3.1 Mbit/sec and UMTS carriers (AT&T and T-Mobile) a combined theoretical maximum of 3.6 Mbit/sec. For simplicity sake, let’s assume the throughput of a particular cell site sector to be 3.6 Mbit/sec. This theoretical maximum is achievable if only one person uses the cell sector and is standing next to the antenna. The farther the person is from the tower or the more mitigating circumstances there are in between, ranging from interference from other sectors to mundane circumstances like leaves on trees, the less throughput available to an individual.
2. Wireless networks are a shared resource.
   The throughput is shared among all people actively using the network at any point in time.
3. Adding capacity is not always possible due to limited spectrum availability.
   Unlike wireline, where you can always put another fiber cable in the ground or light up another strand of fiber already laid, wireless service providers can’t manufacture more spectrum.

For most applications this does not pose insurmountable problems because a subscriber uses the bandwidth for only a short period of time, the duration of a call or while loading a web page. Such usage patterns are easily sustainable on current networks and are generally described as “bursty” traffic.

Complications start when we move from bursty traffic to streaming. With streaming, a constant amount of throughput is needed by the subscriber to maintain the connection and enjoy a satisfactory quality of service. The constant throughput cannot be used by anyone else. Streaming audio from an application like Pandora or Rhapsody typically uses about 40 kb/sec and can support around 90 concurrent users (a theoretical best case scenario of 3.6 Mbit/second divided by 40 kb/sec) in a cell sector. Wireless carriers allow and even sell streaming audio, which would indicate that there are significantly fewer than 90 concurrent listeners in a cell sector.

It gets difficult when the mobile subscriber uses streaming video in general and with an uncapped video frame rate in particular. Take the Slingbox, a popular device that lets people watch their home television service away from home on a laptop or mobile device. The quality of the picture depends on the uplink speed from their home Internet provider (between 384 kb/second and up to 10Mb/second) and on the download speed of their wireless carrier., In the best case scenario nine people (3.6Mbit/second divided by 384kbit/second) can watch TV concurrently via their Slingbox, effectively preventing any other activity. Without the ability to manage the amount of throughput allocated to these nine individuals, other mobile users in the sector will be out of luck. Currently, wireless network operators do not throttle data throughput, but this exposes them and consumers to a negatively impacted user experience caused by only a few heavy users. Traffic shaping could safe guard against the general slowdown of the data throughput in a cell sector for every consumer, but negatively impacting the viewing pleasure of nine subscribers to enable all users in the sector to receive service. This dynamic, real-time dance of RF engineering would be a forbidden under a purist net neutrality approach.

Another implication of a purist net neutrality rule that would negatively impact wireless subscribers’ service is if one person uses their wireless modem to power their web server – and yes it has happened.

How big is a cell sector? Anywhere from the size of the city block that houses Madison Square Garden in Manhattan, to the size of Capitol Hill in Washington DC to several square miles of corn fields in rural Nebraska.

Considering the relatively fragile nature of RF networks and the reasonable expectation of a majority of subscribers that they can make and receive calls and download the applications they are paying for, it is only a matter of fairness to the majority of wireless consumers that carriers be permitted to allocate network throughput in a fair and equitable manner among all customers.

NEW YORK CITY: Incumbent Mayor Mike Bloomberg is dominating his competition in the ad buying race. Between June 1^st and September 20^th, Bloomberg purchased 4,706 TV ads in the New York market – no small feat considering New York is one of the most expensive markets in the country. The figure dwarfs the number of ads bought by Democratic challenger Bill Thompson, whose campaign bought just 14 TV ads over the same period – all of which ran on or after September 18^th.

NEW JERSEY: Recent polls show a slim lead for former prosecutor Chris Christie over incumbent Governor John Corzine. But since Christie was tapped as the Republican nominee back in June, the ad race has been much more lopsided in favor of his Democratic rival. Gov. Corzine has placed 3 ½ times more TV ads from June 3^rd to September 20^th, outscoring Christie 4,806 to 1,393 in the New York City and Philadelphia markets combined.

VIRGINIA: In the Old Dominion governor’s race, Republican Robert McDonnell hopes that history repeats itself as he takes on a Democratic opponent in Creigh Deeds whom he narrowly beat out for the attorney general seat four years ago. Since the Virginia primary ended in June, McDonnell has placed more ads across Virginia’s multiple TV markets with a score of 4,382 to 3,986 through September 20^th. But more recently, Deeds has been a bigger presence on Virginans’ TV sets with 3,028 ads in the first three weeks of September alone compared to 2,753 ad buys for McDonnell.

Panel confidence before and after speech

During the speech, the panel also indicated their positive and negative reactions using dial meters, which showed the health care debate is still sharply divided among party lines.

Discussing the impact of the bailouts and stimulus, the President noted efforts earlier in the year had “pulled the economy back from the brink,” driving Democratic support high, and sending the Independent and Republican meters downward. Similarly, when the President brought up the costs of the Bush administration tax cuts and the cost of the Iraq war, Democrats responded enthusiastically as Independents and Republicans headed in the other direction.

Online Reaction

Outside the focus group, internet chatter related to the President’s two speeches this week, the address, and a speech to school children the day before, online sentiment for the speech was generally positive according to Nielsen Buzzmetrics. However, the school speech drew much more attention based on controversy surrounding parental and school concerns about the scope and potential partisan nature of the President speaking to school children to promote his agenda.

Viewership to last night’s address was down 38.6% from President Obama’s first address to a joint session of Congress on February 24, which aired from approximately 9:00PM to 10:30PM.

In July, President Obama held a press conference focused on health care that drew nearly 25 million viewers.

This demographic—those aged 25-34 who are making over $100,000 annually—is also prevalent in the high-density areas of San Francisco, New York City and Chicago.

The study reflects the subtle but significant shift of the demographic to the larger metropolitan areas as well as a slight shift to the East.

“In 1990 you had a lot more concentration of this demographic in the heartland and in Texas, likely driven by the oil economy, and some of the agribusiness,” said Michael Mancini, vice president of data product management for The Nielsen Company. “But now, there’s a densification of young money into the major metros.”

Over the last two decades, the D.C. area has surged in popularity with the young and moneyed. Back in 1990, top-ranked Loudon County was in 24th position. By 2000, it had moved up to fourth place. Arlington, now second, was eighth in 1990 and third in 2000.

Arlington’s reputation as a place for rich young professionals has even inspired a recent mock-rap video on YouTube.

While D.C.’s rise has pushed San Francisco County from the top position it held in 2000, the percentage of young and wealthy households in San Francisco has increased, from 7 percent of the total in 2000 to 7.83 percent in 2009. In 1990, the young and wealthy accounted for only 1.29 percent of San Francisco’s total households.

In fact, there has been a significant increase in the concentration of the young and wealthy across the board in the top counties. While in 2009 Loudon County boasts 10.06 percent of its households are in the young and wealthy demographic, back in 1990, the top county only had 3.22 percent of its population in that bracket, which would not have even landed them in the top-50 this year).

Quick Facts

• Young and wealthy households make up only 2.15 percent of the total U.S. population.
• Only 15.9 percent of households are headed by persons aged 25-34, and only 13.48 percent of those in that age group make over $100K.
• The median household income of that age group is $49,750.

Over the past few months, the government’s interest in the practice of handset exclusivity has intensified. On the heels of Congressional hearings in July, Verizon Wireless agreed to dial back its exclusive deals with cell phone manufacturers to accommodate smaller carriers. This week the FCC, which has already begun a review of handset agreements, has made the issue a focus of its regular monthly meeting. But no matter what the setting or circumstances, whenever U.S. lawmakers and regulators discuss competition in the wireless industry, the elephant in the room these days is almost always the iPhone.

Since Apple first gave AT&T exclusive rights to carry its groundbreaking device in the United States, concerns about unfair competitive advantages have become a hot-button issue. Apprehensions increased as AT&T sought to extend the deal beyond the 2009 deadline, and reached a fever pitch when Apple rejected a Google Voice application earlier this summer.

Nonetheless, many both inside and outside the industry question the need for more government intervention.

Indeed, before the iPhone came along, far fewer consumers (or lawmakers and regulators for that matter) cared a great deal about handset exclusivity, because most cell phones were utilitarian at best. According to Nielsen’s Mobile Insights report, which surveys 300,000 wireless users every year about their opinions and behaviors, in Q3 2006 – a full year before the iPhone launched – “device” was only the seventh most important factor in choosing a wireless carrier. The percentage of respondents on device has since increased from 2.9% to 6.4% in Q1 2009, yet the category remains in seventh place.

There is no doubt AT&T has benefited from the arrangement. New subscribers between the first quarters of 2008 and 2009 who signed up for “a phone not offered by my carrier” (i.e., the iPhone) jumped from 11% to 23%, and the company has reported that 40% of its iPhone customers switched from other services.
Still, the mobile industry is home to many operators who sell a wide variety of handsets. Currently, there are more than 100 different phones offered by the nation’s “Big 4″ service providers in their retail store, plus hundreds more from the large carrier’s websites and the more than 100 smaller carriers that are operating in the United States.

Even if every handset were required to be accessible across all four networks, only the largest of manufacturers could invest in the infrastructure necessary to produce identical products with different technologies. Neither legislation nor regulation could nor should be expected to change that situation.

It can be argued that exclusivity actually enhances innovation and creates more choice. If, for example, Apple’s iPhone or Motorola’s RAZR were initially available on all U.S. carriers, there would have been minimal incentive for handset manufacturers to create rival products. Though competition would exist, the options would be considerably less diverse.

What is more, the iPhone’s significant technological lead over virtually every other smart phone would probably have virtually destroyed the market for the other handset manufacturers. T-Mobile, like several other carriers, would have had less reason to invest in the development Android-based devices. Palm would not have been able to build the Pre and sell as many as it did in the first few weeks without the support of Sprint. In fact, Palm would have likely died without the Centro, which was custom built for Sprint under an exclusive pact that has since expired.

Beyond the iPhone’s distinct technological advantages, AT&T’s infrastructure would almost certainly limit competition as well. Early on Apple had decided to build its phone on a GSM technology path, the most popular standard for mobile phones in the world. But in the United States there are but two GSM networks – AT&T and T-Mobile. Were the iPhone originally available on both, consumers would pick their carrier based largely on price and coverage. Since pricing can be easily matched, T-Mobile’s nascent footprint would have a hard time going up against AT&T’s more built-out network.

In time – perhaps as early as next year – Apple will likely drop its AT&T exclusivity and build an iPhone in the U.S. that can be used across other wireless technologies. That is about to happen in Europe, where the company is reportedly moving away from exclusive deals because it can now derive greater profitability by not having restricted relationships with only single providers. At that point, new and current iPhone users will migrate to carriers that makes that the most sense for them – still driven by the factors other than “device.”

A version of this article also appeared at FierceWireless.com.

When Sen. Edward Kennedy died late on Tuesday Aug. 25, a year after his 2008 appearance at the Democratic National Convention in Denver, news coverage and online discussion began in earnest as soon as the Kennedy family made the announcement.

By the end of Wednesday (Aug. 26) Kennedy attracted nearly 1% of all blog buzz, according to Nielsen’s BlogPulse search engine, and by Thursday morning (Aug. 27), he was the most-discussed person in the blogosphere. His New York Times obituary was also the most-cited news story among bloggers and the phrase “Ted Kennedy dies” was the phrase used most by bloggers Aug. 26-27.

Consumers posted comments about Kennedy, not only on political and news blogs, but on celebrity blogs as well. Key political blogs where discussion took place included liberal-leaning sites the Huffington Post and Crooks & Liars as well as conservative-leaning sites Michelle Malkin and Hot Air, and differences in opinion were obvious. Comments on liberal-leaning blogs recounted Kennedy’s accomplishments as a champion for labor, the poor and for universal health care, which he called the “cause of my life.” Comments on conservative blogs were much harsher and critical of Kennedy, not only for his politics but also for his personal life.

The month prior to his death, the Senator was increasingly mentioned in conversations surrounding the passage of a health care bill as was his wish to have a successor named quickly upon his passing.

Negative Buzz Increases Post Launch of “Cash for Clunkers”

In the two months prior to the official launch of the CARS (Car Allowance Rebate System) program, 10.5 percent of all discussions were positive, while an additional 10.7 percent of the discussion focused on actual intent to purchase a car through the Clunkers program. On the other side of the argument, 7.9 percent of the discussions were negative, containing sentiments like this New York Times blog comment:

“The worst part about this program is that the government is encouraging people to take on more debt. Those clunkers are mostly PAID FOR. Why on earth are we telling U.S. citizens to go and take out another big loan on a depreciating asset? It’s absolutely ridiculous.”

While positive sentiment around the U.S. government’s program outweighed the negative in the weeks prior to the launch of the program, bloggers began to shift their opinions in the week following the official launch, with negative buzz increasing to 10.1 percent of all discussions and conversations that focused on purchase intent fell to 7.1 percent. As the program quickly ran out of money, negative buzz again increased, growing to 11.4 percent while intent to buy continued its downward trajectory, this time falling to 6.1 percent of all CARS discussions online.

CARS.gov Attracts the Wealthy

Online visitors were also heading over to the government Web site created specifically for the program, www.cars.gov. Month-over-month, unique visitors to the site increased 733 percent, from 287,000 unique visitors in June 2009 to 2.4 million in July. Unique visitors between the ages of 35 and 49 were 35 percent more likely than the average Internet user to visit cars.gov. Contrary to what many may assume, visitors to the site also over-indexed among the wealthy. People who make between $100k and $149k were 33 percent more likely to visit the site, and visitors who earned over $150k were 36 percent more likely to visit the site in July.

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