According to Nielsen, African-Americans use the most voice minutes – on average more than 1,300 a month. Hispanics are the next most talkative group, chatting an average of 826 minutes a month. Even Asians/Pacific Islanders, with 692 average monthly minutes, talk more than Whites, who use roughly 647 voice minutes a month.

African-Americans and Hispanics also text the most. Hispanics send and receive around 767 SMS messages a month while African-Americans send and receive around 780 – significantly more than Asians/Pacific Islanders (384 texts a month) and Whites (566 texts a month). The voice and text results are compiled from one year (April 2009-March 2010) of mobile usage data gathered by the The Nielsen Company, which analyzes the cellphone bills of more than 60,000 mobile subscribers each month in the United States.

Women Have Their Say
And if you think women in the U.S. talk more than men on their cellphones, Nielsen data confirms your suspicion. On average, women talk 22 % more than men (856.3 minutes a month compared to men’s 666.7). Turns out, American women are more communicative in general on mobile devices; they text more, too, sending or receiving an average of 601 SMS messages a month compared to the 447 monthly text messages sent or received by the average American male.

Teens Rule for Texting
Not surprisingly, teens text the most, sending or receiving an amazing 2,779 SMS messages a month. In the next two age brackets, text usage falls by more than half each time, with those aged 18-24 sending or receiving 1,299 messages and those aged 25-34 exchanging an average of 592 messages. While the text usage varies greatly between those 18-24 and those 25-34, their voice usage is quite close (981 voice minutes for 18-24 and 952 minutes a month for those 25-34 years old.)

The South Speaks Up
Location plays into usage patterns as well. Southerners are the most talkative, but while Florida ranks high in terms of monthly voice minutes used, it ranks very low for text messaging (the state has one of the highest median ages and older Americans text the least.) Mississippi, interestingly enough, ranks high for both talking and texting.

AT&T’s shift away from unlimited data pricing has led us to examine the issue of data consumption in the United States. The Nielsen Company collects phone bills from more than 60,000 mobile customers every month and analyzes every line item on the bill. These bills show how much data each customer has consumed in the previous month, regardless of whether the customer is on a metered or unlimited data plan, in order to give customers the opportunity to understand their data consumption habits.

When we look at smartphone data consumption distribution and year-over-year change, we see a large disparity of usage among smartphone users and are struck by the staggering amounts of data used by the heaviest users.

Average data consumption increased from about 90MB per month during the first quarter of 2009 to 298MB per month during the first quarter of 2010. This represents a year-over-year increase of approximately 230 percent. While this increase is substantial, in the first quarter of 2009 more than a third of smart phone subscribers used less than 1MB of data per month; this number has dropped to a quarter in the first quarter of 2010 as the number of applications and the utility of smart devices has increased substantially. That means about 20 million current smartphone users are hardly using data.

Other conclusions:

1. Usage-based pricing may be more fair. The top 6 percent of smart phone users are consuming half of all data. The vast majority of customers, 99 percent according to the 60,000 phone bills that Nielsen collects and analyzes every month as part of their Customer Value Metrics product, are better off with a pricing scheme like AT&T’s new data pricing model than under flat-rate pricing where they are paying for much more than they ever use.
2. There is a growing need to educate smartphone users. With about 23 percent smartphone penetration in the United States, we are still in the early adopter phase. A quarter of these early adopters are not using their device for data services at all. They use exactly zero MB per month. For some reason these customers have purchased a miracle in engineering and technology that has more computing power than what was used to get men safely to the moon and back and yet they only use their smartphone for phone calls and text messaging. Operators have to do a much better job in conveying the value and utility of these powerful devices–and to marrying the right device to the right customer. The more suitable the device is to the usage and spending pattern of the customer the more satisfied the customer will be.
3. More than a third of smartphone users have not yet signed up for a data plan. Most of these smart phone users were among the first to get these devices, before operators required a data plan be added to the device subscription. Over time, these device owners will get converted into paying customers for data, but it is critical for the long term success of the industry to not only collect revenue but to also provide and convey value.

The industry has its work cut out for itself as it undergoes its most revolutionary shift to a post-voice-centric world. The priorities of large swaths of customers are shifting. Some operators have been better than others in adapting to the changing industry landscape and have been able to capitalize on it. As this trend continues, voice calls are increasingly commoditized and the average revenue per user on voice has been falling. Operators with the right cost structure will still be able to operate efficiently, effectively and profitably in this increasingly challenging voice segment, but most operators are condemned to sink or swim in the new data-centric world.

The anecdotes documenting the love affair between teenagers and texting are countless. Many parents can attest that their offspring text rather than talk, even when they sit next to each other in the back of the car. Their children text in the morning before they brush their teeth and continue late into the night with the last text messages, also called SMS, sneaked in under the covers right before they close their eyes to sleep. Until now, there has been very little firm data available about how pervasive texting has actually become among the under-aged.

Source: Nielsen CVM, Q3 2009

Nielsen analyzes more than 40,000 mobile bills every month to determine what consumers actually are spending their money on. The results are staggering: American teenagers are using 3,146 messages a month, which translates into more than 10 messages every hour of the month that they are not sleeping or in school. Even the under 12 segment are sending 1,146 messages per month, which is almost four text messages per waking hour that they are not at school.

While the 13-17 year old age bracket is already highly saturated, the last holiday season was good to the under 12 segment when it came to text messaging. A full 8 percent increase in SMS usage was measured combined with a near doubling in text message volume for that segment in the following quarter (Christmas, Hanukkah, and Kwanzaa are late in December, so usage increases will be recorded in Q1).

There has been a lot of discussion regarding the cost of texting, mainly driven by the increasing individual per message price. Looking at the same bill panel we can see that only a very small percentage of people who text message are doing so on a pay-as-you-go basis at the 20 cent per message rate with the vast majority of users subscribing to plans. When we actually incorporate the effect that the significant uptake of messaging bundles has on the actual price that customers are paying for each text message, we find that wireless customers are actually paying only 1 penny per message.

Source: Nielsen CVM, Q3 2009

The text messaging market in the United States is very similar to the newspaper or magazine market. For example, the Wall Street Journal’s newsstand price is $2, but if you subscribe to the Journal, it is $119 per year–a whopping 80 percent discount. For People Magazine, the cover price is $3.99 while the annual subscription is 47 percent off at only $2.09 an issue, a great deal if you are subscribing. For text messaging, the discount is more than 95 percent, due to the heavy prevalence of large texting bundles. What is even more interesting is that from first quarter 2008 to third quarter 2009, the effective price of a text message has decreased by 47 percent.

After all the negative publicity that text messaging has received, a look at the facts is showing quite a different picture. When one takes into account usage, text messaging is very affordable and cheaper than ever before, especially when compared to various European countries where texting has been widespread for years. While U.S. carriers offer unlimited texting for between $10 and $20 per month (if it is not already bundled into the plan), not every country in Europe is as competitive as the United States. For example, Germany, the largest European market, wireless providers charge about €25 for between 300 text messages and 30 MMS and up to 3000 text messages per month.

Overall, text message usage is also expected to grow as the heavy text messaging population ages and entices the older generations to text with them in order to stay in contact with them as any parent of a teenager can probably attest to. The average text message number has increased every year, but the huge room for growth that is still remaining has been underestimated given the penchant for texting among the 17 and under segment.

SUMMARY: When is a phone not a phone? In the hands of children and tweens, today’s cell phones are primarily used as text messaging devices, cameras, gaming consoles, video viewers, MP3 players, and incidentally, as mobile phones via the speaker capability so their friends can chime in on the call. Parents are getting dialed in to the social media phenomenon and beginning to understand—and limit—how children use new media.

• This article draws from a keynote speech delivered last month at the Children’s Advertising Review Unit (CARU) annual conference.

Digital media is an enabling framework for brands, parents and educators—it’s on demand, interactive, sensing and connected. And social media adds expression and sharing capabilities. A vast menu of web and mobile tools has been developed to facilitate information sharing and commentary on the Web. Applications and outlets have kept pace as consumers rush to populate blogs, Twitter, YouTube, Facebook, forums, message boards and online communities.

In the marketing world, the buzz is all about consumer-generated media. Companies have discovered thatno paid-for communication campaign has the impact of missives penned by consumers grounded in relevant, first-hand experience. Their influence is immediate, highly viral and authentic, with an extremely long tail attributable to archived material.

Giving voice
What motivates people to go online and on the record with personal opinions and information? In part, it is the very human need to be heard and to connect with others. It is the desire to make a difference, to influence the world around us. It is the drive to evangelize on behalf of the things and the people we love. And it is the ongoing quest for authenticity in a world governed by image.

Mobile devices represent a major impetus behind the social media movement, driving part of the 250% audience increase for the year ending February 2009. Teens represented 19% of the 12.3 million active social networkers.

Childhood connections
To adults, cell phones are a communications device. To children, they are a lifeline. Consider that the average 13-17 year old sends more than 2,000 text messages per month. Compared with the total mobile Internet population, teens are much bigger consumers of social media, music, games, videos/movies and technology/science.

Parental use of advanced data services mirrors that of their tween kids. If their children text, then 80% of parents will text as well. Although following their kids’ lead on devices and media, parents still set limits. Six in ten forbid downloads onto their children’s phone for financial and security reasons.

TV times
Even as social media dominates press coverage, TV viewing is on the rise among children and teens. Younger children age 2–11 spend almost 102 hours per month watching traditional TV at home—a 17% increase from May of 2008 to the second quarter of 2009. The increasingly popular time-shifted TV option averaged 5:26 hours during the timeframe, a 26% year-over-year increase.

Traditional TV viewing expanded at a slower rate (13.5%) among teenagers than among younger kids—to 101+ hours, and teen time-shifted viewing showed a 35% growth rate with 4:54 hours of watching time. Interestingly, Internet use was down (-15%), to 10:22 hours per month. The biggest media gainer was video viewing on the Internet, where Hulu and YouTube helped spike time by 66% for a total 2:41 viewing hours. Teens deployed mobile phones to catch videos, spending 6:30 hours with mobile video streams—a 20% year-over-year increase.

Young enough
The debate rages on: what is the right age to give a child their own phone? The answer seems to be younger every year, and if you don’t give them a phone, they’ll just borrow one. In 2008, the average age when kids started to borrow a cell phone was 8.6 years; in 2009, it was down to just 8 years old. As to ownership, in 2008, a child typically was given a mobile phone at age 10.1 years; by 2009, it was down to 9.7 years old.

The next time you hear “everybody’s got one”, the fact is, that classic ploy may be true. By age 10, roughly half of children own a mobile phone. By age 11, six in ten own a mobile phone. By age 12, fully three-fourths of all children have their own mobile phone.

Game on
How do they use phones? Two-thirds of tween mobile phone owners took pictures with their camera phones in the last year. Half spent time playing the pre-installed games. Four in ten activated the speakerphone feature. Twenty-eight percent filmed a video clip, and 24% listened to the MP3 capability.

More than half of the youngest (age 8) mobile phone owners used their cell to send text messages in the last 12 months. That figure soared to 81% for 12-year-old mobile users. The vast majority of text messages were directed to friends and family (90%). All other cell phone uses tracked in the single digits, such as voting on TV shows (8%), buying a ringtone or music (9%), buying wallpaper or a screensaver (4%), buying a game (5%), responding to an ad (5%) or looking up their horoscope (4%).

Parental controls
Surprisingly, given all the publicity about cyber stalking and cyber bullies, more than half of parents do not apply any parental controls offered by service providers to their children’s cell phone usage—although the use of these paid-for controls is increasing. Among those who do assert these built-in controls, 20% limit the number of calls, texts or instant messages, followed by download limits (17%), talk time or voice minute allocations (16%), mobile website access limits (15%), locator services and restricted in/outgoing number access (13% each), time of day restrictions (11%), and alerts to unauthorized texts, IMs or callers (6% each).

While the use of paid-for controls may not be high, just about all parents restrict how tweens use their phone and six in ten prohibit downloads that incur charges. Not taking the phone to the dinner table and maintaining certain grades are other rules put in place by 42% and 40% of parents, respectively.

Coming challenges
From a media perspective, choice leads to fragmentation, and ultimately, divided consumer attention and diminished import for a single medium. Even as social media gains popularity among the general public and marketers, there is no accepted benchmark or measure of effectiveness, making it difficult to forecast or predict the impact of a campaign.

A particular challenge for companies wanting to incorporate social media into their communications arsenal is the blurred line between private and public information, given the highly personal nature of many postings. Advertising models are still in flux, exploring boundaries of ethics, taste and transparency.

Untapped potential
Social media presents a world of new possibilities. Not a better mousetrap, but a new operating DNA for interacting with consumers. It can serve as an early radar or warning system, alerting to trouble spots and yielding fresh insights.

For parents, old rules still govern new media. They will need to stay engaged, enrolled and involved in their children’s lives. The motto “trust but verify” applies. For advertisers, old rules also are still in force. The need for transparency and trustworthiness becomes amplified on new media circuits. Ultimately, the nature of new media will prove its value, as all parties engage in an interactive, ongoing, mutually beneficial conversation. Social media is organic and ever-evolving, constantly presenting new opportunities and challenges.

Kid Stuff
For more on children and their media habits, check back next month. We’ll be exploring television, DVD, DVR, VCR, on demand, online streaming and gaming preferences for children ages 2–11. The silver screen represents marketing gold!

• As of April 2009, Nielsen estimates that there are 6.4 million active iPhone users in the U.S., up from 2.1 million a year prior. The most impactful iPhone announcement this week may be the price reduction of $99 for the 8 GB version: cost has been one factor (in addition to AT&T exclusivity) that’s kept the overall iPhone audience modestly sized.
• 37% watch video on their phone (6x as likely as the typical subscriber)
• The iPhone audience is age-diverse: a device this powerful isn’t just for kids. There are roughly as many iPhone users 55 and older as there are 13-24.

• iPhone users look good to mobile marketers. Forty-percent have household incomes of $100K or more – twice the ratio among all subscribers (19%). That income may also be helpful for current iPhone owners who want to upgrade: in-contract iPhone owners may have to pay an additional $200 to upgrade before their contract expires.

• It’s not just for looks. 98% of iPhone users use the data features of their phone, services that should improve with the enhanced speed promised by the iPhone 3G S.

• 88% use the Internet (making them 4x as likely as the typical subscriber)

• 75% download apps (5x as likely as the typical subscriber)

• 72% used location based services (7x as likely as the typical subscriber)

Apple’s announcement came on the heels of the release of the latest so-called “iPhone killer” the Palm Pre smartphone. However, iPhone buzz continues to dominate the blogosphere.

Of those texters who recall seeing some form of advertising while using text-messaging, 45% say they have responded in some way. And the most popular response to any type of mobile advertising (text, video, Internet, etc.) —sending another text-message. Fully one-quarter of responders sent another text-message—emphasizing the interactivity and engagement this medium presents.

Learn more about the growing impact of text messaging in the November issue of Nielsen Consumer Insight.

In contrast, John McCain’s campaign has largely eschewed mobile marketing.  But that may just be the right strategy, according to Nielsen Mobile, which reported Monday that mobile advertising is a more efficient way to reach Democrats, rather than Republicans.

As of the second quarter of 2008, mobile media of all types were slightly more popular among Democrats, who were more likely than their Republican counterparts to use data services on their mobile phones, send text messages, or use mobile Internet, according to Nielsen.

View the full media alert.

Read coverage of Nielsen’s findings in MediaPost, Wireless and Mobile News, and Fierce Mobile Content.

But while mobile media use has grown rapidly in recent years, mobile advertising has been slow to take hold, Nielsen Mobile reported in a white paper released Tuesday.

In the U.S., some 76.8 million mobile users recall seeing advertising on their phones, according to Nielsen, but 63% report encountering mobile ads only infrequently — once a month or less.  Meanwhile, less than two-thirds of website homepage page views feature mobile advertising.

Lack of awareness of the size of the U.S. mobile audience, the complexity of the mobile marketing ecosystem, and advertisers’ reluctance to invest in mobile advertising are among the key factors restricting mobile ad growth, Nielsen’s analysts note.

View the full white paper.

Read MediaPost’s coverage of Nielsen’s findings.

Learn more about the outlook for mobile advertising – check out VentureBeat’s Q&A with Nielsen’s Senior Vice President of Mobile Media, Jesse Goranson