Despite increased optimism about the economy, the social media landscape indicates that we are in a similar place to where we were this time last year when it comes to spending; buzz about Christmas and holiday shopping is down 3% year-over-year. This activity is in line with other research at Nielsen relative to retail expectations and consumers’ personal finances that indicate modest spending from a cautious consumer base.

However, consumers are still buzzing about the gifts they’ve already purchased or are planning to buy in the coming weeks. Notably, online discussion focuses largely on offline shopping.

While online shopping has been rising over the last few years, we’re also finding that consumers are using the internet to find the best deals at retail outlets, toy stores and more. So what happens online, doesn’t always stay online in the new economy where deal hunting is driving buzz.

As consumers count down the days to the holiday season, we see two key trends emerging:

1. Parents are actively buzzing about the must-haves of the season within online communities
2. Buzz about gift cards is on the rise, largely in response to retailers’ use of gift cards as purchase incentives

Games that buzz
When analyzing the product categories shoppers most frequently discuss online, Nielsen found that kid-friendly video games generated more buzz than even the most buzzed-about toys, largely driven by highly engaged gamers. The November 15 release date for New Super Mario Bros is highly anticipated, catapulting this video game to the head of the pack in terms of buzz. Additional buzz in the gaming world has come from price drop and new model announcements for Playstation 3 and XBOX.

Zhu Zhu the next Tickle Me Elmo?
Buzz supports Toys “R” Us’ “Fabulous 15″ predictions for the 2009 holiday season, with Zhu Zhu Pets, Bakugan Brawlers and Transformers Revenge of the Fallen figurines topping the list of the most frequently buzzed about toys.

Shoppers deem Zhu Zhu Pets the hot toy of the season as parents swap stories of empty shelves and elevated prices at retailers. An emerging Zhu Zhu market has also sprung up on eBay. Strong buzz on LeapFrog’s educational toys are a holdover from the 2008 holiday season; parents are especially interested in the Leapster and Tag Reader product lines this season.

Gift Cards buzz is on the rise, buoyed by incentive programs
A growing proportion of online conversation focuses on gift cards—including gift cards awarded as purchase incentives (15% growth in buzz year-over-year, September 2008 vs. September 09). Amazon.com and Toys “R” Us have experienced the largest year-over-year growth in buzz about gift cards of the retailers and brands measured.

This increased interest in gift cards is largely driven by retailers bundling gift cards with purchase incentives. Gift card bundles essentially provide shoppers with two sets of gifts: the original purchase and the gift card which can either be given as a gift or used to buy more holiday presents. These incentives tend to generate a sizable amount of discussion online—especially when tied to the gaming category. For example, Amazon.com recently coupled a price break on Wii with a $25 gift card, generating a surge in online conversation about Amazon.

Retailers who do not currently use gift cards to encourage purchases may want to consider taking advantage of this growing opportunity during the holiday season.

Related: Watch Nielsen’s Ken Cassar Discuss Online Holiday Sales CNBC

“The one thing you think about as far as the NCAA tournament is it’s synonymous with CBS,” said Ziangas. “I think advertisers understand that. That’s why you have people like Coke and AT&T – and even GM is actually coming back to the tournament when they pulled out of the Super Bowl. Having that cache as far as that association of the tournament to the network and bringing in that great male 18+ demographic is something that very few advertisers see, and that’s why they jump on board with the NCAA tournament.”

Watch the video for more from Tom Ziangas about advertising and the NCAA Tournament.

By: Nic Covey, Director of Insights, Telecom Practice, The Nielsen Company

SUMMARY: Today, 10.3 million U.S. mobile subscribers use mobile video, which still leaves 214 million U.S. mobile subscribers who don’t. In the markets in which Nielsen tracks video over phones, the U.S. is tops in terms of penetration, but at 5%, the medium is far behind even other mobile media. Three key developments in the space could fuel considerable growth in the market.

An old idea, renewed
Back in 1966, Popular Mechanics reported that a portable television would be launched under a “famous maker’s label” by year’s end. Later that year, Motorola—a name not distant from the world of mobile video today—demonstrated to the world a remarkably small portable TV designed by their engineer De Loss Tanner. Tanner’s invention was claimed as the smallest TV in the world. The Columbus Dispatch, profiling the invention, called it a view to the future. Tanner, due to present the invention at a meeting of the Institute of Electrical Engineers, died six days before the conference.

It wasn’t until Sony’s launch of the “Watchman” in 1982, however, that a portable TV was introduced to the mass market. Surprisingly, after 42 years and several generations of portable televisions after Motorola’s Tiny TV, portable television has hardly become a mainstream medium. That, however, could change.

Small audience, big potential
In the U.S. today, 10.3 million mobile phone subscribers access video content on their phone each month — an increase of 14% from last year. Through websites such as YouTube, or subscriptions to clips delivered by the carrier, or through “live” broadcasted TV programming, millions of U.S. subscribers today consume video news and entertainment in the way De Loss Tanner and other engineers envisioned nearly half a century ago.

The most popular means of mobile video consumption over phones in the U.S. is mobile Web video, with 66% of mobile video users viewing video this way. Still, much of the mobile video audience pays for access to a service: 42% of mobile video users access their video through a mobile video subscription. U.S. subscriptions to mobile video have recently risen to 16.4 million in Q3 2008 from 13.2 million in Q3 2007, a 27% year-over-year growth bolstered by unlimited data packages such as Sprint’s “Simply Everything” plan, that allow access to mobile video.

Still, though the mobile video market saw reasonable growth in 2008, the overall use of mobile video in the U.S., at 5% of all subscribers, is low compared to other mobile media: Internet, ringtones and games, for example. U.S. subscribers are not unique in their low penetration of mobile video. In fact, of the 11 mobile video markets tracked by Nielsen, penetration of mobile video consumption is highest in the U.S., followed by France and Italy where 4% of mobile subscribers access mobile video each month. None of the markets Nielsen tracks have surpassed the 5% threshold of usage, but some estimates place penetration in Japan and South Korea—markets where Nielsen doesn’t yet measure mobile video consumption—at nearer to 50% of the mobile market.

Though the U.S. audience for mobile video is small today, key developments could fuel considerable growth in the market in 2009 and 2010—expanding not just the universe of existing mobile video users, but also the universe of untapped subscribers. First, let’s look more closely at mobile video use, today.

The audience today
In the U.S., the profile of mobile video users is broad enough that it cannot be classified as merely a young, affluent man’s medium. While the audience does skew young, the makeup for mobile video content spans across the demographic spectrum.

• As of Q3 2008, the mobile video audience is more male than female (60% male, while men make up just 48% of the total mobile population).
• Mobile video users are considerably more likely to be younger—65% of all mobile video users are under the age of 35, compared to just 35% of all subscribers.
• African Americans and Hispanics continue to be disproportionately represented in the mobile video audience when compared to the total subscriber base. As of Q3 2008, 14% of the mobile video audience was African American (non-Hispanic) and 24% of the audience was Hispanic (compared to just 9 and 13% of all subscribers, respectively).
• From an income perspective, the mobile video audience is perhaps more balanced than expected, considering surcharges and device needs. As of Q3 2008, mobile video users were just slightly more likely to have household incomes of $100K, compared to all mobile subscribers (28% compared to 22%).

Broad and varied use
Perhaps one of the more “expected” uses of mobile video is while waiting in lines. However, Nielsen data suggest that the occasion for mobile video consumption is really much broader than this narrow, and perhaps rarer than imagined, opportunity. Indeed, how many lines does one wait in during a typical day?

And while mobile video viewers do report that they consume video while waiting for people or things (59% say they do so), 37% of viewers say they tune in to their phone while at home, 35% watch from their bed and about one in four users say they occasionally view while they are exercising.

Considering the diversity of place in which mobile video is consumed, it is less surprising to consider that mobile video viewers are not necessarily watching for just short intervals. In Q3 2008, 54% of mobile video viewers reported average mobile video sessions of 15 minutes or longer. As reported in the Nielsen Three Screen Report, the typical mobile video viewer tunes into their phone for an average of 3 hours and 37 minutes per month—an increase of 11% since Q1 2008. This increase is fueled in part by content providers making full-length episodes of television content available over mobile phones.

Keep it light and funny
From a genre perspective, Comedy is the most popular mobile video content. Forty percent of mobile video viewers in Q3 2008 said they had watched comedy content, at an average of 10 minutes per session. Weather, Music and Sports are the next most popular genres of mobile video content, respectively. The appeal of a broad range of genres in mobile video is apparent: 17 of the mobile video genres tracked by Nielsen have attracted audiences of more than one million unique mobile video users, including even Adult content.

As for specific brands of content consumed over mobile video, many of the leading television brands today are also the most watched brands in mobile video. As of Q3 2008, NBC is the most-watched mobile video brand in the U.S. A total of 4.7 million mobile video users watched NBC-branded mobile video entertainment in the typical month—46% of the overall mobile video audience.

After NBC, FOX, MTV, The Weather Channel, Comedy Central, YouTube and ESPN were the next most popular mobile video brands (reaching between 28% and 42% of mobile video viewers).

YouTube’s position in that lineup is important, as mobile Web-based video is playing an increasingly important part in the growth of the mobile video audience. In Q3 2008, about three million U.S. mobile subscribers accessed YouTube—the leading Web video provider accessed over the phone—through their phone. YouTube’s mobile audience grew 277% between October 2007 and October 2008.

Future interests
Comedy is not just the most popular form of mobile video content today; it’s also what users want to see more of. Comedy is the top-aided category of interest among current users—though not by far. As of Q3 2008, 11% of mobile video users said they were interested in additional comedy programming, just ahead of music (10%) and full-length cinema released movies (9%), each of which may reflect the current youth skew of mobile video.

Satisfaction guaranteed
Although usage frequency among mobile video users is relatively low (17 videos per month median), overall satisfaction with the mobile video experience is high among current users.

As of Q3 2008, 71% of mobile video viewers said they were satisfied with the mobile video experience. That number is slightly higher among those who are paying for a subscription video service (77%) and lower among those who access mobile video by other means (67%). Mobile video users ages 18-24 also tend to be more satisfied with their experience than the typical user—76% say they are either satisfied or extremely satisfied with their experience.

Overall, network quality, costs and battery life appear to be the biggest pain points on the mobile video experience. Thankfully, these challenges have foreseeable solutions. From a network standpoint, carriers have been rolling out 3G networks throughout the U.S. that offer data throughputs six times as fast as 2 and 2.5G networks. From a cost perspective, the average price paid for subscription-based mobile video has declined in recent quarters, and consumers are increasingly able to access professional video content through the mobile web, without additional fees on top of their data plan.

Battery life is perhaps the most fundamentally gating factor to mobile media consumption. Immediate solutions involve the creative introduction of devices such as battery-powered cell phone cases that double the life of phones (Incase has introduced such a case for the iPhone), and longer-term solutions to power limitations are being developed quickly. A group at Stanford says they’ve designed a battery that can extend the life of laptop and phone batteries tenfold.

Growing the mobile video pie
Satisfaction among current users is good, but for the overall mobile video market to grow, the whole pie will have to grow. Today, only 5% of U.S. mobile subscribers use mobile video, but as mentioned, there are opportunities for mobile video growth in 2009 and 2010.

Today there is still a large degree of carrier control over the mobile video experience—a level of control that may have to loosen for the overall market to grow. Furthermore, mobile video is still costly and, from some perspectives, lacks the breadth of content (national, local and user generated) that it could provide.

Solving for these gating factors, three avenues for growth of the overall mobile video audience include:

1. the expanded use of mobile Web and mobile Web video;
2. the rollout of mobile digital TV (mobile DTV);
3. an improved advertising subsidization of subscription-based streaming mobile video services.

The latter is the most unlikely of the three growth drivers, but all are possible, and a combination of some of these three would grow the mobile video audience considerably into 2009 and 2010. A detailed review of these growth drivers can be found in the Tuned into the Phone: Mobile Video Use in the U.S. and Abroad report.

The time has come
The 1966 Columbus Dispatch article quoted at the beginning of this article was mostly bullish about the significance of Motorola’s tiny mobile television. At the end of that article, though, the reporter writes, “Now that the company has the teeniest TV ever built, they’re a little at a loss as to what to do with it. It probably won’t make a consumer product for years to come.”

Has the time come for more ubiquitous use of mobile video? It has, but only if the market can cooperate to move beyond mobile video’s plateau and make the medium an affordable and engaging experience for a broader audience of viewers.

Based on an excerpt of “Tuned into the Phone: Mobile Video Use in the U.S. and Abroad”, a new white paper from Nielsen’s telecom practice. Download the full paper for free.

Google was the most popular website with U.S. Internet users, drawing the largest audience (120 million unique visitors per month, on average) through October 2008.

As of 2008, the most prolific content downloaders in the U.S. live in California, according to Scarborough Research, a joint partnership with Nielsen and Arbitron. The San Francisco, Oakland, and San Jose market had the highest percentage (32%) of adults who had downloaded podcasts, video games, music/other audio clips, movies, videos, or TV programs in the past month.  The San Diego and Austin, Texas markets tied for a close second place (31%).  Nationwide, 24% of adults have downloaded online content in the past month.

Top 10 Websites: U.S.

Top U.S. Markets For Content Downloaders

View the press release.

Relive the greatest hits of 2008 — stay tuned on Nielsen Wire for more Tops In 2008 coverage.

Look ahead to the new year with Nielsen Wire’s 2009 Industry Outlook series.

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

Short answer: the jury is still out.  Monitor staff writer Gregory Lamb, who queried a range of experts on the topic, outlines the arguments on both sides, but steers clear of drawing any conclusions.

The story briefly addresses the prospects for video viewing via mobile devices, noting that more than one-third of all mobile phone subscribers in the U.S. own video-capable phones, while 6% are already paying for video plans, according to Nielsen.