Early in her presentation at Consumer 360, BET Networks CEO Debra Lee quoted Theodore Levitt who noted: “Creativity is thinking up new things. Innovation is doing new things.” This resonated with Lee particularly because several years ago, BET knew they weren’t quite hitting the mark with their consumers. “Making that realization was the easy part,” she said. “Doing the rebranding work was hard.” That hard work took the form of a comprehensive study of their audience, and also a new brand strategy that examined “who we are, what we do and how we do it,” noted Lee. The study, African Americans Revealed, touched on every piece of content, on air, on line and on mobile and set out to better understand the current concerns and future aspirations of their audience.

By taking a deep dive into the study, BET was better able to understand the nuances of their audience segments (“the African American is not monolithic” she reminded the audience). That understanding enabled BET to refine content and deliver more informed insights to their advertiser.

Lee identified key segments that make up 85 percent of the African American audience.

1. STRIVERS – An ambitious group of opinion leaders aged 20-40. These young leaders are rising in their communities and the corporate world.
2. CONSCIOUS SISTERS – These are women who are keen on aspects of their culture and spirituality. They focus on family and cooking meals at home.
3. TECHFLUENTIALS – World ambassadors aged 20-30 who are making the world a little smaller using technology, organizing fundraisers online, using skype, social media and more.
4. BRIGHT HORIZONS – This tech-savvy segment is focused on education and friends, gaming, mobile and social media.

Lee made the distinction that these groups are always evolving and people move in and out of them frequently.

The benefit of this comprehensive research is that it enabled BET to win on several key new scripted series and live events like the BET Awards. On the advertising front, the work helped BET connect specific products and advertisers to more specific segments of consumers and it had a major impact on informing BET’s social strategy. Moving forward, BET is expanding social for key shows and events this year, along with recent international expansion in Africa and Europe.

Amid all the data, Lee noted another valuable lesson: “We have to take advantage of the passion our audience has. If we provide them the programming and the social aspects they crave, we know they’ll stick with us.”

During his keynote address at Nielsen’s inaugural Consumer 360 Conference in Jakarta Indonesia on October 19, Mr. Pradeep Pant, President of Kraft Foods Asia Pacific, emphasized the strategic importance for companies to focus on consumers’ need states in order to win.

The Asia Pacific region is an engine of growth for Kraft Foods. Over the last three years, the company has seen robust double-digit growth in the region, and is “moving the global needle” more significantly by winning the hearts and minds of consumers with its higher purpose of “making today delicious”. Within the region, Indonesia ranks high as a key market for Kraft Foods.

Mr. Pant shared insights into how the company is innovating to satisfy its consumers. The company’s innovation efforts are centered on deep consumer and shopper insights and leveraging the best of “GLOCAL” (think globally, act locally). He also discussed how new product development, integrated marketing communications and winning in-store are critical pillars to its innovation efforts.

Mr. Pant highlighted a number of consumer and shopper trends in the region, which are potentially huge opportunities for companies. These include:

• Evolved Snacking: Move beyond category-specific options
• “Premium-ization”: consumers prefer a small taste of something special instead of a lot of something mediocre
• Fun, Healthy & Affordable Meals: Mothers are challenged to provide delicious meals for kids that are nutritious, enjoyable and budget-friendly
• Personalization: Consumers are demanding greater product personalization and the “mass” consumer group is fragmenting into smaller, niche segments
• Growing Children: Mothers feel that their children are growing up so quickly that they will be “gone in 60 seconds”
• Retail Touch Points: Impactful secondary touch points in modern trade stores are critical as 80 percent of shoppers visit only 20 percent of a store’s footprint
• Focused Assortment: Traditional trade store assortment needs to reflect the needs of shoppers who are focused on immediate consumption

Kraft’s Five Key Principals - How to Win Today’s Battle for Consumers’ Hearts and Minds:

1. Understand the needs of consumers and shoppers deeply – use analytics for smarter decision making
2. Go GLOCAL – not “global vs. local”
3. Expand product portfolio using insight-based solutions
4. Integrate Marketing Communications: Go beyond the 30-second TV commercial to multiple touchpoints
5. Use Shopper Insights to win in-store and use Sales as a brand-building instrument

These principles were instrumental to Kraft’s successes in various markets in the region, including:

1. Fueling the winning spirit in every child in Indonesia with Biskuat biscuits, by satisfying needs (nutrition and fun)
2. Breaking into the local sweets market (Mithai) in India with Cadbury Dairy Milk chocolates. This was prompted by deep insights that show that Indians consume sweets to both celebrate and start something auspicious or new
3. Bringing Oreo biscuits to life in China by appealing to local tastes (less sweet), involving an icon (in this case, world-renowned Chinese basketball player Yao Ming) and innovation (introducing ice cream Oreo biscuits and wafer sticks)
4. Rejuvenating Tang powdered beverage in the Philippines by “making water exciting” and expanding the range beyond the traditional orange flavor

Mr. Pant closed his keynote address, titled “Deep insights … Local execution – Capturing the Consumers’ Hearts and Minds” by reiterating the need to “make it real” for consumers.

Nielsen’s inaugural Consumer 360 Conference in Jakarta Indonesia brought together industry and Nielsen experts to share the most innovative and insightful views of the consumer.  The conference in Jakarta was themed “Capturing the Consumers’ Minds”.  More than 300 guests from a broad range of industries including Fast-Moving Consumer Goods (FMCG), Retail, Media, Telecommunications, Pharmaceutical and Social Media participated in the full-day proceedings.

Please contact us if you would like to be included in upcoming Nielsen Consumer 360 Conferences in the Asia Pacific region.

“I share, and therefore I am”

Just who, or what is Gen C?  This question, posed by Mr. Dan Pankraz, Planning Director/Youth Strategist, DDB Sydney, speaking at Nielsen’s inaugural Consumer 360 Conference in Jakarta, Indonesia, drew curious looks and blank faces among participants. Mr. Pankraz highlighted the need for companies to understand and engage Generation C, a group he believes to be the most highly influential in the world due to their need to share their lives via social media platforms.

Unlike Gen Y or Gen Z, Gen C is not an age cohort.  “Gen C are teens and 20-somethings that have been “hatched’ out of social media. What ‘C’ stands for has been widely debated. A few years ago it was about Generation ‘Content’ – now it’s about a multitude of things; constant connectivity, collaboration, change, co-creation, chameleons, cyborgs, curiosity. But most of all, Gen C is the ‘Connected Collective’ consumer,” Mr. Pankraz explained.

Gen C is not a target audience but a community of digital natives that will partner with brands. To successfully market to Gen C consumers, brands must create fresh, cultural capital for Gen C to talk about – a process which also gives them “status” within their cohorts or “tribes” and social networks.

What makes Gen C “tick”:

• Tribal behavior: Like many youths, Gen C form their identities by belonging and expressing themselves within “tribes” reflecting the desire to “connect” around interesting ideas, cultural objects, causes and movements. Brands need to get into conversations that are happening within and across tribes. This will give their messages more credibility and attention compared to external sources.

• Social status derived by what you share: Gen C gains credibility in their friends’ worlds by expressing opinions, sharing ideas, observations and thoughts. Their influence depends on what they share and how often they share it.

• Bee-like swarm behavior: Powered by social media platforms, Gen C members mobilize as one with their tribes like bees around topics that interest them. When it comes to buying decisions, 85 percent of youths rely on peer approvals. Everything is reviewed and rated, making decision-making a team sport. Marketers must talk to “we”, not “me”. Marketing successfully becomes all about “talking to the community, not the individual”, and creating a conversation for the swarm to run with.

• Social oxygen: Gen C thrives on constant connectivity via social media platforms. Mobile devices have become “social oxygen”, enabling them to connect, create and share opinions and thoughts with their tribes. The mobile phone acts as a lifeline to the world, connecting not only with people they want to talk with, but also shielding them from those they do not.

• Continuous partial attention: Teens today consume 13 hours of content daily and have constant exposure to new ‘news’. As experts at managing content and information, they engage in never-ending conversations, constantly “livestreaming” their experiences to the world.

• Chameleons: Gen C consumers are “chameleons”, constantly changing and morphing their identities to simultaneously belong to as many different tribes as possible. One-dimensionality is not an option for Gen C.

• Co-creators: The social web has brought out Gen C’s creativity, leading to what Mr. Pankraz calls the “democratization of creativity”. They no longer consume ideas, but actively participate, play and collaborate. They demand to be part of the brand story.

Five Tips For Creating Content For Generation C:

• Keep it relevant, useful and entertaining
• Enhance social status within tribes
• Ask for a reaction and have a fun social interface
• Connect Gen C members with each other, not just with a brand
• Enable Gen C to participate in, play with or produce themselves and pass on

Please contact us if you would like to be included in upcoming Nielsen Consumer 360 Conferences in the Asia Pacific region.

The Vice Minister’s address heralded a host of good news for businesses operating in Indonesia, which  now has “increased importance in the world,” he said. The Indonesian GDP is expected to grow at a conservative rate of 5.9 percent in 2010, up from 4.5 percent in 2009. According to Mr. Siregar, this growth will be led by exports and investments, which are the “more sustainable pillars of growth” compared to government consumption/spending. In August 2010, non-oil and gas exports hit a record high for the country.

Mr. Siregar singled out Indonesia’s ranking in the 2010-2011 Global Competitiveness Index released by the World Economic Forum. Indonesia’s ranking moved significantly up 10 spots to 44^th place, up from 54^th place in the 2009-2010 Index, underscoring the country’s resilience amidst challenging economic conditions.

As a precursor for more positive developments in the future, Mr. Siregar informed the audience that in five months, GDP per capita in the country is likely to hit $3,000, a level at which economic growth can be expected to accelerate.

Mr. Siregar outlined the Trade Ministry’s three priority strategies:

1. Trade: sustain market and product diversification, promote value-added products, improve product competitiveness.
2. Investment: improve investment climate by simplifying and integrating procedures.  Recent initiatives include leveraging technology to accelerate application processes, and BKPM (Investment Coordinating Board of the Republic of Indonesia) now acting as a “one-stop shop” to issue investment permits within seven days.
3. National Competitiveness:  improve the interconnectivity between islands, intra-island and internationally through logistics, transport and regional developments.

Nielsen’s inaugural Consumer 360 Conference in Jakarta brought together industry and Nielsen experts to share the most innovative and insightful views of the consumer. The conference in Jakarta was themed ”Capturing the Consumers’ Minds”, and more than 300 guests from a broad range of industries including Fast-Moving Consumer Goods (FMCG), Retail, Media, Telecommunications, Pharmaceutical and Social Media participated.

Please contact us if you would like to be included in upcoming Nielsen Consumer 360 Conferences in the Asia Pacific region.

Approximately 1.2 percent of the population (about 10 million people) in the capital city Jakarta belong to an affluent segment of consumers. These consumers spend upwards of 15 million rupiah (about US$1,700) or more on routine monthly household expenditures. While this segment is a relatively small, it presents a wealth of opportunities for marketers to gain higher margins, achieve stronger brand loyalty and powerful word-of-mouth endorsements.

Ms. Nurdjalim highlighted some of the changing/emerging values of the affluent consumer segment in Indonesia, which include:

• Affluent consumers are developing a holistic view of health and well-being.
  “They now want it all – look good, feel good, be spiritually fulfilled and are also looking at healthy eating options such as organic rice,” she said.  In addition, these consumers will not be deterred by the significantly higher prices of products and services that they feel will enable them to achieve their health and well-being objectives.
• Affluent consumers are starting to invest more in their children’s future prospects.
  These investments include sending their children for overseas education.  More than 50,000 Indonesian students travel abroad annual for studies, with the majority going to Singapore and Australia. “This trend has not gone unnoticed by financial services firms, some of which are already offering global financial services that facilitate overseas education,” she added.

Five Guiding Principals for How to Reach the Rich:

1. Up close and personal: The affluent segment wants to be perceived as a distinctive and privileged group.  “Privileges extended to a bigger group or the ‘mass affluent’ are not privileges in the eyes of the affluent segment,” she said.
2. Power of gimmicks: Indonesians as a whole love marketing promotions and the affluent segment is no exception to this passion.  However, this segment wants promotions that reflect their lifestyles and project a real privilege.
3. Power play: Because of their relatively stronger spending power, the affluent segment demands to be given special treatment and attention. For example, when choosing between platinum credit card offerings, the majority of affluent consumers cite flexibility as the main decision factor. If the consumer is king, then the affluent consumer should be treated even more royally, said Ms. Nurdjalim.
4. Exclusiveness: Ms. Nurdjalim emphasized the need to maintain “purity” of the affluent segment by carefully defining the target market. If the affluent consumer feels that exclusivity is compromised, they are very likely to seek out other providers who can provide the level of exclusivity they feel they deserve.
5. Recognition: The desire to show prominent evidence that they can afford luxury goods or are able to engage in luxury activities are factors that drive affluent consumers to engage in conspicuous consumption behaviour. These activities reinforce the recognition they demand for having upgraded their social status or continuing to belong to this “select” community.

Nielsen’s inaugural Consumer 360 Conference in Jakarta Indonesia brought together industry and Nielsen experts to share the most innovative and insightful views of the consumer. The conference in Jakarta was themed “Capturing the Consumers’ Minds”. More than 300 guests from a broad range of industries including Fast-Moving Consumer Goods (FMCG), Retail, Media, Telecommunications, Pharmaceutical and Social Media participated in the full-day proceedings.

Please click here if you would like to be included in upcoming Nielsen Consumer 360 conferences in the Asia Pacific region.

With all eyes on the economic recession in the U.S., it’s easy to underestimate the major trends currently reshaping the consumer packaged goods (CPG) industry. According to The Nielsen Company’s Retail 2015 Forecast, the pace of change is only accelerating as technology, marketing trends and retail formats converge to redefine how CPG retailers and manufacturers interact with consumers.

Big Winners
By 2015, we predict mass supercenters and e-commerce to be the big winners by dollar share gains, growing by a combined five share points between 2009 and 2015. Warehouse club, dollar store and pet store share will also grow share positions. Nielsen forecasts that supermarkets will continue to lose share, but at a declining rate. While both high-end and low-end niche grocers will grow share, overall share positions will remain fairly low given lower per-store sales compared to larger formats. Other key CPG channels, including drug stores, mass merchandisers and convenience stores, will grow dollar sales but will suffer share losses.

Nielsen expects to see further CPG retail consolidation as retailers look for scale and opportunities to expand their footprint into existing and new areas. Retail consolidation will be most active within the supermarket and convenience channels in the race for scale. Today’s big players will only grow bigger. Industry change will grow faster and more intense in the next five years, requiring advanced, future-focused change management skills among CPG professionals.

Out with the Paper Shopping List, in with the Smartphone
One of the biggest CPG shifts by 2015 is already underway: the use of smartphones to engage consumers and help them make better shopping choices. According to Nielsen, smartphone penetration stands at 23% of all mobile subscribers and is expected to overtake feature phones in the U.S. by the end of 2011. Nielsen predicts that by 2015, smart phones will be the primary enabler of consumer shopping engagements and new technology innovations will generate additional opportunities for retailers and manufacturers.

Coming to a Smartphone Near You: a Personalized Shopping Experience
Driving the rapid adoption of smartphones is the seemingly endless variety of apps, which take full advantage of the smart phone’s geographic location and interactive capabilities. Retailers are already using smartphones as a replacement for frequent shopper cards, sending store coupons and deals directly to a shopper’s phone. Nielsen expects CPG companies to further leverage the smartphone’s location tracking abilities to target communications and promotions to shoppers both in and out of stores, and up sell consumers on other items based on prior purchases. In addition, consumers will have the ability to locate the best available price for a given item, access real-time product reviews and promotions and manage everything from household budgets and pantry inventory to tax preparation and filing.

Prepare for the Future
Consumer packaged goods retailers and manufacturers should focus on the following initiatives now to position their businesses for future success:

• Develop or buy online/digital/social marketing expertise. If you don’t have this expertise today, get it.
• Plan for diminishing returns from traditional media. Newspaper feature ads and free standing insert (paper-based) coupons dominate today, but for how long?
• Nurture retailer/supplier relationships. Have contingency plans dealing with consolidation impact.
• Get more flexible with format planning. Consumers today are flexible and completely mobile, which means we need to get more flexible about how and where we sell our products. Study emerging economies to understand flexible markets. Think about future format planning for your next one to three generations of formats.
• Demand forecasting by category and consumer segment. Understand how changes in demand at the category and consumer level will provide risks or opportunities
• Expand via regional or global opportunities. With slowing domestic population growth impacting sales growth, seek opportunities outside traditional geographies to reach more households.
• Make future management a company strength. Given the pace of change that we will experience over the next five years, future management needs to be a core competency or the chances of your stores or brands being a part of the future will be in serious jeopardy.
• Understand the new faces of opportunity. With an increasingly aging and ethnic population, you can’t afford to ignore generational and multi-cultural consumers. It is critical for marketers to adapt in order to gain the attention and brand/shopper loyalty of diverse generations and multi-cultural families of the future.

Gone are the days when online marketing was led solely by the dotcoms of the world. Today, many CPG companies have embraced online and social marketing and are pushing the envelope further each day. In the midst of considerable consolidation and change, the future will be owned by those companies that harness technology to the make the consumer shopping experience easy, efficient and fun.

Continued unemployment means more sensitivity to price changes and promotion activities. Even optimistic views of the economy see a shopper impacted by stubbornly high unemployment, which is predicted to remain around 8-9% over the next three years. As consumer packaged goods (CPG) marketers plan for the future, understanding the nuances of price sensitivity and the consumer’s shifting value paradigm will be critical to success.

During the “Great Recession,” we have seen consumers make dramatic changes to their buying habits. In the “new normal,” these changes are expected to stick:

• More dining at home and less dining out
• Shopping for in home meals with shopping lists
• Finding better values by shopping alternative channels
• Trading down across categories and within categories or opting out of categories all together

Trends that started before the recession and are likely to continue include:

• Health & Wellness: U.S. consumers are still looking to lead healthier lives, but economic pressures have led some consumers to alter their prior habits & practices.
• Convenience: convenient & easily accessible store locations; convenient & easy-to-find in-store or on-shelf product location; food & non-food solutions that save time from our busy lives “aren’t going to get less important.”
• Demographic Trends: aging population & multi-cultural consumers were target consumer groups for many retailers & manufacturers prior to this recession.

Given the rise and length of the unemployment situation, unemployment is now another way to segment consumers to target specific price and promotion programs. This group of consumers will also provide opportunities for those companies who understand them best and respond accordingly.

Pricing and promotions are becoming a more defining factor

Stores in higher unemployment areas have a higher frequency of promotion, and the gap in incremental promoted volume between high and low unemployment areas is widening. As such, the amount of volume sold on promotions in high unemployment areas has been increasing at a greater rate than in low unemployment areas.

When looking at consumer response to both everyday price and promotional pricing, we find that consumers in higher unemployment areas are more 6.5% more sensitive than consumers in low unemployment areas to changes in everyday price.

Private Label growth fueled by high employment areas
Private label developed faster and continues to be more developed in stores in high unemployment areas. However in both 2008 and 2009, private label grew significantly in all areas.

Since consumer are looking for low prices both within store (upper left) and between channels (lower left) – especially true for areas with higher unemployment.

Strategies for the “Left Side of the Grid”

• Competition on price is crucial – be competitive across and within stores
• Focus on efficiency of trade dollars
• For retailers, use weekly the circular on the categories to draw consumers to your store
• For manufactures, focus on price to be competitive.

Strategies for the “Right Side of the Grid”

• Use smaller discounts on temporary price reductions especially for categories that see large increases in feature or display responsiveness in high unemployment areas
• There may be opportunities to take price up for profit
• Manufacturers need to highlight quality through advertising focusing on brand building and consumer benefits
• Maintain promotional spending, but there is no need to focus on Price

At the Nielsen Consumer 360 conference, secrets were revealed as to why some companies see tremendous success when they are developing and launching new consumer packaged goods (CPG) products and others don’t.

The big takeaway? Manage ideas lightly and manage process precisely.

Companies with less senior management involvement in the new product development process generate 80% more new product revenue than those with heavy senior management involvement. And companies with rigid stage gates average 130% more new product revenue.

There’s More to Innovation than Ideas
Thousands of companies are searching for answers on how to successfully develop and launch news products. Having an innovation emperor like Jobs at Apple and removing the constraints and getting more ideas is always a great start, but there is more to innovation than ideas. Excellence in selection, development, execution and learning make a huge difference on performance and results. For example:

• Using an outside ideation firms (vs. not) tends to result in a 15-20% improvement.
• Selecting the right idea and commercializing it correctly can deliver a 130% increase.
• Learning from mistakes can create an uplift of 50% to 90%.

To understand how successful companies win at new product development, Nielsen conducted a study among 30 CPG companies and identified about two dozen best practices that drive better-than-average incremental revenue from new products.

Manage Ideas Lightly
Simply being physically near corporate headquarters can actually stifle new idea generation. In fact, having no “Blue Sky” innovation team at all is better than having a team on-site at corporate headquarters. The best place for your breakthrough innovators? Far, far away. According to Nielsen’s research, companies with an off-site Blue Sky innovation team report 5.7% of revenues coming from new products, compared to 2.7% when the team is on-site.

One key insight from the study is that heavy involvement in new product development from the senior staff can destroy value. Senior management is often too quick to get involved in the creative process, especially when things are not going well. Their mere presence can stifle free-thinking and boundary-less ideas, which can doom the new product development process to failure.

Manage the Process Precisely
One of the important keys to success is to precisely manage the new product development process, not the ideas themselves. CPG companies with rigid stage gates – decision points in the process where a new product idea must pass certain criteria to proceed forward – average 130% more new product revenue than companies with loose processes.

The most successful new products tend to have:

• Two to three stage gates that are strictly followed across the organization. The first stage gate is typically designed to identify ideas that will then be developed into a concept and prototype, while the last stage gate is usually designed to determine whether a product should be committed to production and market.
• A focus on growing brands, not ones acquired or designated by senior management.
• An innovation planning cycle that spans several years.
• A formal scorecard to evaluate financial results.
• A standardized and required post-mortem on all new product development efforts.
• A knowledge management system to retain key lessons and insights from previous product launches.

The truth is, companies with successful innovation track records go to great lengths to create an ideal creative environment and the right behaviors, supporting policies and procedures. When they execute well, the best ideas rise to the surface and into consumers’ homes.

From post World War II to about 1990, industry supply and aggregate consumption were approximately equal. In this situation, pricing power is strong. However, the impact of globalization, technology and productivity gains has generated a significant oversupply situation – a 25% increase. The impact of this oversupply situation on pricing power has been dramatic, driving pricing power down by 43%.

The traditional supply-driven approach pushes supply into the market. As demand shifts, the push approach can lead to significant misalignment with dynamic demand. Companies with offers that are misaligned with demand end up as commodities that are a “Price Taker.”

Win on Demand
Going forward, successful growth companies will compete on supply, but will win on demand. The “Demand Paradigm” anticipates current, latent and emerging demand and creates pull for its offers. Offers that are in demand create pricing power and the ability to be a “Market Maker.”

The demand chain signifies the arrival of a new level of precision where manufacturers, retailers and media companies look at the consumer through a single integrated lens.

Demand Landscape
“Life Enrichment” or the “forces and factors” that shape demand, manifests itself across the ways consumers live, learn, work and play. By redefining the market around Life Enrichment, new opportunities for growth are opened.

The Demand Landscape creates a more precise understanding of usage need states and shopping drivers and benefits sought from a retailer. Detailed economics are created for each of these intersections to determine where the most profitable opportunities are found.

Re-Thinking – Not Re-Engineering
The constant companion of change is opportunity. Now is the time to seize the moment to embrace the arc of the growth. A forthcoming book,  How Companies Can Win, co-authored by Nielsen CEO David Calhoun and Rick Kash rings the bell of change and defines the strategies of how to create competitive advantage.

Malcolm Gladwell was first with opening remarks, jousting that Anderson has built a “cottage industry” around the subject of free (Anderson literally wrote the book on it). He joked that while Anderson had been tweeting about the debate, he had been keeping it quiet, painting himself as a sort of Don Quixote to Anderson’s “windmill.”

Gladwell based many of his opening remarks on the excerpts from Anderson’s book that reference a 2008 Dan Ariely book, Predictably Irrational. Ariely, a professor at Duke, conducted experiments on cost sensitivity using chocolates: one a high-end truffle and the other a popular milk chocolate treat. Ariely found that participants would choose the truffle over the chocolate treat when the truffle cost 15 cents and the milk chocolate was priced at a penny. When the cost of both came down one cent, though – making the truffle 14 cents and the milk chocolate free – participants switched allegiance and opted for the free chocolate. Gladwell agreed it’s possible to build a business off of free, citing Google, but what scares him is how the notion impacts the marketplace and ultimately promotes “irrational” consumer behavior.

For effect, Anderson took to the opposing platform for his remarks, even pointing the difference in attire between the two (casting Malcolm as truffle and Anderson as free chocolate — interesting how both presented themselves as the underdog).

Where Gladwell opted for candy to make his point, Anderson went to Gilligan’s Island — a show he watched routinely as a child. The strong TV ratings and pre-teen share of that program in its heyday, Anderson said, had more to do with the lack of viewer choice than program quality. For Anderson, a  free ecosystem broadens the range of content, allowing entertainment to reflect the individuality of consumers and producers as opposed to a one-size-fits-all model. Quality, he argued, is not always about production value, but can also be about relevance, as evidenced in the explosion and virality of consumer generated media. Hasker asked Anderson who would pay for a Gilligan’s Island in a world where consumer-generated videos of adorable cats took over. Anderson rebutted: this presumes a show like Gilligan’s Island was a product worth it to begin with.

Anderson then turned to a key topic of his book – the idea of freemium, where the few subsidize the many. In addition to ad-supported free content, Anderson argued that a free content economy will create an opportunity to sell more premium content direct to consumers, as promoted by free slices of that content.

Anderson concluded by saying that time is the true scarcity today, and that if content providers can win a consumer’s time, they’ll win their money.

Gladwell landed an early jab in the back and forth that followed opening remarks when he asked Anderson where this “free revolution” was, noting he’d written a lot of checks to his cable company over the years and he’d like to start saving some money. Gladwell argued that it was not the concept of free that expanded content options as Anderson argued, but consumers paying for premium content and the rise of things like cable TV. Well, that would be a good observation from the 1990s, Anderson jabbed back.

Gladwell argued that Anderson’s story of free works only when you remove a large chunk of history or crop out many of the ancillary costs of content production and delivery.

An audience question noted that much of the “free” news content consumed through Google comes from established news sources. Gladwell noted that while he likes many sites that aggregate content, he blunty noted that many were “parasites.” Anderson took the flipside, noting that such free content drives considerable traffic,  awareness and search engine “link love” to the original content provider.

Anderson was challenged by an audience question regarding Wired’s iPad app — priced currently at $4.99. Why not “free?” Anderson noted the Wired team was working on a number of models, from free to freemium to premium and other bundles.

So who won the debate? Here’s Anderson’s take.