Class Action Perspectives

REALITY CHECK: The State of New Media Options for Class Action Notice

Reports on emerging technologies, the popularity of mobile devices, and the demise of traditional media dominate media news. Traditional advertising vehicles – television, newspaper, magazines, and radio appear to have lost their luster. Even banner ads on the Internet, considered until recently to be a dominant new trend in advertising, are under fire.¹

Evaluating traditional versus "new media" is an effort to understand, measure, and compare the effectiveness of existing and emerging options. Not surprisingly, new media itself accounts for much of the noise about the demise of traditional media, as start-up business models try to rake advertising and marketing dollars away from media Goliaths by promoting their own venues as attractive alternatives. In addition, "old" media companies are facing the business realities of shifting audiences. The result has been the appearance of uncertainty about the degree to which these choices should be considered for the paid media component of class action notice programs.

What are these "new media" options, and how are people using them? Are they rapidly replacing traditional media? And in the class action context, do these new options necessitate a completely different approach to media-based notice programs? This article provides practitioners with answers to those questions and others, to help guide future planning and development of class action notice programs.

New Media Options: What Are They and Do They Change the Game?

Identifying class members by demographic characteristics has long been the first step in developing a media-based class action notice program.² A notice provider analyzes media usage and selects appropriate media based on demographics of the target audience. Understanding the media usage of the members of a specific class is paramount in designing a strategic and efficient paid media program to reach them. It’s equally important to examine both the strengths and the weaknesses of each media choice in order to select the most appropriate methods for reaching a class. This process and methodology remain the same as new media options are introduced and gain popularity. New media options that have prompted the most interest include the Internet, mobile media, and social media.

Internet

As an advertising vehicle, the Internet has existed since 1994,³ which makes it practically traditional by today’s standards. Banner ads and keyword search ads (the "sponsored links" results a user sees at the top of a search engine results list) are used in the class action context in many notice programs, especially those directed at consumers.

Paid Internet advertising is included in class action media program in cases in which demographics suggest class members may be effectively reached by it. The notice provider places banner ads in varying sizes on individual sites, portals, and networks. A short and clear ad provides immediate connection to a case website with a single click. But with the thousands of sites Internet users visit, it is difficult to cost effectively achieve extensive reach of a target audience through placement of banner ads alone. However, through new and emerging measurement tools, the reach of banner ads can now be measured against a host of demographics, allowing the Internet reach of a paid media notice program to be included in calculations of notice adequacy and increasing the efficiency of advertising via this medium.

Virtually any class action that has an informational website can benefit from keyword search ads, although they do not contribute to the measurable reach of a notice program the way banner ads do. Every major search engine accepts paid keyword links. This unique form of advertising guarantees that a site will appear near the top of the page when a user searches for targeted keyword terms. Unlike banner ads, which are delivered to specific web pages, keyword search ads require a class member to know what he or she is looking for. They are therefore not notice, but rather are cues to find the website that contains case information and notice materials. These ads are especially useful if a class action certification or settlement generates media coverage beyond paid advertising, as "earned media" is less likely to contain specific contact information, such as the website or toll-free telephone number, that a summary notice appearing as an advertisement does.

As a now-common component of many contemporary class action notice programs, online banner advertising has matured. However, new and exciting media forms such as mobile devices and social media are evolving. These channels have exhibited explosive growth and much interest recently. But beyond the hype, are these innovations viable for class action notice?

Mobile Media

Mobile devices are those that allow connectivity virtually anytime and anywhere. As a media type, "mobile" is now touted as the seventh mass media, behind print, recordings, cinema, radio, television and the Internet.⁴

In 1983, the first mobile phone was introduced with only one single function: voice calls to communicate with another phone. Mobile phones have evolved into multi-function devices that support voice calls, text messaging (SMS), multimedia messaging (MMS), games, Internet, camera, video, music, Bluetooth, and navigational systems (GPS). The introduction of high-speed technology and "smart" phones (integrated phone and PDA devices) is indeed revolutionizing communication.

The prospect of using these devices for class action notice is tantalizing but currently few options have the potential to significantly broaden the reach of a paid media program.

Mobile Internet

Globally, nearly 4.1 billion people have a mobile phone.⁵ In the United States alone, there are 234 million mobile subscribers out of a total population of 307 million. Of these subscribers, nearly 65 million, or 21% of the population, are active users of mobile Internet during a 30-day usage period.⁶ With the growth of mobile subscribers fueled by smart phones, which speed up and simplify the mobile Internet experience, mobile Internet is forecasted to reach 134 million users in the US in 2013.⁷

Advertising opportunities to reach the mobile Internet audience include mobile web banners, content placement and search. These applications permit advertisers to target advertising to mobile phone users by their geographic location, demographics, day of week, and time of day. In December 2009, 62 million unique mobile users visited a mobile website. While Google search is the leading site, the email portals: Yahoo; Gmail; MSN/Hotmail; and AOL Email hold 4 of the other positions in the top 10 mobile Internet sites. Other mobile destinations accessed via mobile Internet mirror the total Internet in rank, if not size, with social networks, news, weather and sports sites performing well.⁸

Text Messaging

Short Message Service (SMS), also known as text messaging, is a mobile communication that has taken the world by storm. This feature allows the exchange of short text messages (maximum of 160 characters) between mobile devices. In 2009, more than 1.5 trillion text messages were sent over carrier networks in the US, more than doubling the amount from the previous year. This translates to more than 4.1 billion SMS messages being sent daily.⁹

As demonstrated by the chart below, text messaging is the most commonly used mobile data service, used by 63% of mobile subscribers.¹⁰ In an average month, U.S. subscribers are actually texting 75% more than making phone calls.¹¹

Mobile Content Usage 3 months ending Dec. 2009 vs. 3 months ending Sep. 2009 Total U.S. age 13+ Source: ComScore Mobilens
	Share (%) of U.S. Mobile Subscribers
	Sep-2009	Dec-2009	Point Change
Total Mobile Subscribers	100.0%	100.0%	N/A
Sent text message to another phone	61.0%	63.1%	2.1
Used browser	26.0%	27.5%	1.5
Played games	21.4%	21.6%	0.2
Used downloaded apps	16.7%	17.8%	1.1
Accessed social networking site or blog	13.8%	15.9%	2.1
Listened to music on mobile phone	11.7%	12.1%	0.4

 

Although text messaging appears to have an extraordinary potential to reach consumers with advertising, the Telephone Consumer Protection Act¹² prohibits commercial text messaging unless the consumer has an existing commercial relationship with or gives permission to the advertiser to text a message. This prohibition severely limits any consideration of SMS in class action notice plans, with the exception of "short code" messaging, when a consumer consents to receiving a text message. "Short code" involves an assigned short number that consumers may text to request further information, and has promising applications for class actions.

As has already been done in a few national consumer class actions, a publication notice may include a short code (e.g., #12345) among the other contact options such as a toll-free number and website address. A class member may then text a keyword (e.g., "drugsettlement") to the short code and receive a text message back with the case website address (e.g., "For complete information visit www.drugsettlement.com or call 1-800-123-4567."). While this procedure has the potential to quickly and easily deliver the case information directly to class members, the class member must first be aware of the case to request it. It depends on the class member seeing the summary notice or a news story in traditional media first.

How can we gauge the effectiveness of mobile media as a way of reaching consumers? Consumer surveys such as Nielsen Mobile and comScore M: Metrics, similar to those used for decades to measure traditional media, are evolving to track mobile usage. These reports currently provide insight into consumers’ mobile and offline media usage. They are increasingly more sophisticated in offering details on mobile usage along with behavioral, psychographic, demographic and product usage of mobile subscribers allowing media planners to understand the mobile landscape.

But mobile measurement is still in the formative stages and falls short of providing a complete picture of specifically who is being reached by advertising delivered through the device. More precise electronic measurement of usage through direct device monitoring is still in the future.

Social Media

"Social media" is an umbrella term coined to define the various online activities that bring together media technology and social interaction. Social media such as blogs and social networks offer a variety of user-generated content (UGC), from photo albums and movie reviews to comments on products and services.

In the early years of Internet development, UGC was viewed as a far-off scenario in which entire communities would spring up based upon common interests. In those days, Internet users would compose thoughts and comments on their websites in web-logs (blogs). As speed and ingenuity took hold, personal blogs led to the envisioned communities: websites where people congregate to connect to friends and strangers and share everything from thoughts to images to résumés. They began as outlets for niche groups such as college students and mothers but have ballooned into a sub-media category incorporating people of all ages and walks of life. Social media giant Facebook, for example, started in 2004 as an online community for college students, but as of January 2010 had grown to over 100 million members in the US alone, more than 60% of which are 25 or older.¹³

Overall, social media use is growing at an astonishing rate, both in terms of the number of users and the amount of time spent on the websites. As of April 2009, as noted in the chart below, users logged almost 300 million minutes on the micro-blogging site Twitter, compared to just 7 million in 2008. As of December 2009, the average time a U.S. user had spent on Twitter increased 368% from December 2008, and the site’s unique users hit 18.1 million, an increase of 579% over December 2008.¹⁴ Globally, at least 10% of all time spent on the Internet is on social media sites.¹⁵

Top 10 social networking and blog sites ranked by total minutes for april 2009 and their year-over-year percent growth (U.S., home, and work)
Site	Apr-2008 total minutes (000)	Apr-2009 total minutes (000)	Year-over-year percent growth
Facebook	1,735,698	13,872,640	699
Myspace	7,254,645	4,973,919	-31
Blogger	448,710	582,683	-30
Tagged	29,858	327,871	998
Twitter	7,865	299,836	3712
Myyearbook	131,105	268,565	105
Livejournal	54,671	204,121	273
Linkedin	119,636	202,407	69
Slashkey	N/A	187,687	N/A
Gaia online	173,115	143,909	-17

 

However, extrapolating the future of individual social media networks is problematic because the wave of popularity may wane quickly. Consider for example that as Facebook and Twitter have grown, MySpace, which led the pack by a substantial margin in 2008, dropped off considerably in 2009 and has had to re-evaluate their strategy, now focusing efforts to be a social gathering place for music interests.

In addition to social networks, blogs continue as a growing element of social media. Among active Internet users (those who use the Internet every day or every other day) globally, 73% have read a blog, and 36% think better of companies that have blogs.¹⁶ Thirty-four percent of bloggers write about their opinions of products and brands.¹⁷ These statistics point to why social media has seen such a meteoric rise; it taps into a consumer’s emotional need to be heard by giving them the ability to comment.

As social media grows and diversifies, it will have a role to play in class action notification, but there are distinct limitations. Blogs offer opportunities to get in front of narrow, niche audiences, appealing to a specific interest or opinion. Although valuable in reaching a very focused audience, blogs can have uncontrolled and controversial content that can be problematic when trying to present neutral notice.

While participating in blogs and social networks offer opportunities to communicate with consumers, traditional media such as television or national print publications remain the more efficient media vehicles to reach large mass consumer audiences due to how ads are delivered. Unlike print media, where each and every reader has an opportunity to see an advertisement, the advertising on social media sites, as with all Internet websites, is delivered to one user at a time. The frequent user of the website will be the most likely to be exposed to the messages and most ads are delivered to the heaviest users. For a paid media notice program, sites must be selected based on their ability to reach specific target audience segments. Therefore, the cost of accumulating significant mass audiences on individual sites can be prohibitive.

However, social media – both blogs and social networks – provide interesting opportunities for non-paid notice. Outreach to bloggers with a press release and a brief explanation of the relevance of a case to the blog’s target audience can result in postings explaining the settlement and links to the case website. And social networks have preexisting defined groups that can be quite useful in distributing information about a case. For example, in The Authors Guild, Inc. v. Google Inc., No. 05 CV 8136 (S.D.N.Y.), information on the proposed settlement was provided to author and writer groups on the professional networking site LinkedIn.

Social media also offers additional avenues to drive traffic to a case website through individuals – the online equivalent of "word of mouth." Many social networks like Facebook, LinkedIn, and Digg offer ways to share links by simply adding a line of code to a settlement website. Users can click on the links to share the site with their social networks via functions such as a "newsfeed" or "local activity." As their friends and connections see the link, they will also be informed about the settlement and determine if their rights are affected. This also serves as organic growth to the reach of sites, similar to the pass-along effect of traditional print advertising.

Advertising dollars spent on social media are growing exponentially, nearly 34% annually to a projected $3.1 billion by 2014.¹⁸ With membership numbers and spending expanding so significantly, social media can play a role in certain class action notification programs that involve class members heavily engaged in online activity. But it will not be able to be effective without the assistance of traditional media, which still provides the greatest reach of class members in consumer cases.

New Media: Customizing Expanded Access to Information

New media options provide an array of choices for gathering and sharing information as well as for watching and listening to entertainment and getting news and other updates. The Internet and mobile media are increasing consumer connections to one another and to businesses trying to serve them. As a result, there are shifts in consumer behavior as media options multiply.

With these increased choices, overall media usage is predicted to reach an all time high in 2010. The U.S. Census Bureau reports the total number of hours spent outside of work with all forms of media exceeds 9.5 hours per person per day.¹⁹ Add to this the use of Internet at work and of mobile phones, in general, and it is evident that opportunities to communicate with consumers are growing dramatically. But does this mean that new media is more effective in reaching various audiences and that traditional media is now less effective and on the verge of extinction? As it turns out, no.

Traditional Media: "The Reports of My Death Are Greatly Exaggerated."

Declines in print circulation and broadcast ratings, along with the emergence of new media outlets and usage patterns are spawning rumors about the demise of traditional media. But today, people still spend the largest share of their media time with traditional media – particularly television, which accounts for 45.8% of all media usage.²⁰ As of February 2010, 90% of television households subscribe to cable or some form of satellite TV,²¹ meaning viewers have hundreds of channels from which to choose. Not only are there more and better programming choices, new devices like DVRs and smart phones give consumers access to television programs without time or place constraints, further fragmenting specific program audiences. The challenge is now how to effectively deliver advertising messages to those consumers who have the tools to avoid these messages simply by fast forwarding past them.

But what about the much-discussed impending death of newspapers? Due to financial challenges and declining circulations, many analysts are rightly concerned about the future of the industry.²² However, an immediate death is not even remotely probable given that so many consumers still turn to their daily newspaper for news and information. While newspaper readership has declined about 13% in the past five years, currently 50% of all adults still read a newspaper more than 22 times each month.²³ Newspapers remain a tangible, trusted source of information for young and old alike.²⁴ The heaviest users of newspapers are older adults and many notice plans, therefore, use newspapers to reach this target audience. More than 50% of U.S. adults are 45 and older, and 58% of them still read a Sunday newspaper.²⁵

Overall, even today, with audiences fragmented by the magnitude of the choices that users have online and on television, Sunday newspapers and leading magazines can get more readers than the average daily website or television show.

Historically, newspapers have not been as good at reaching young adults, and the biggest decline in newspaper readership is in the 24-44 year-old demographic, precisely the group that leads the way in embracing new media. Currently 40% of this target still reads a Sunday newspaper,²⁶ so print advertising should continue to be used to reach them in combination with the new media options their demographic has so eagerly espoused. However, the newspaper business models must find ways to appeal to younger audiences that will grow up more comfortable with electronic media. Newspapers are evolving to embrace their growing online audiences and to incorporate the distribution of content through social networks and the new wave of devices such as Kindle, iPad, and Android. Time will tell if traditional media will successfully find the key to merging the old with the new.

Conclusion: Traditional Media Trumps New Media for Mass Reach

However dazzling, convenient, and fun we find the 24/7 connectivity and speed of the new devices and the social networks, media buying is still based on the demographics of specific target audiences and the media those audiences consume. Paid media programs that must provide significant reach of any target audience, particularly in consumer cases, continue to require traditional media components and credible audience measurement. As new media options become available, audiences’ attention is divided among the rapidly multiplying media choices and it becomes more difficult for any new media source to reach a significant portion of a target audience. Media sources that provide mass reach, therefore, will become even more valuable in class action notice programs. For now, those mass reach sources are traditional, reliably measurable, media types. While people are certainly using new types of media to get their information, it will take time for their measurement metrics to mature before the courts can rely on them for reach estimates.

New media, however, has a role to play by providing a collection of niches to complement the mass audience reach of traditional media. New media can be expected to evolve in importance over time as new channels are introduced for exposing class members to notice and providing new avenues through which to respond and access information.

New media options are numerous and growing and each one is taking a slice from other competitors. Consumers, especially younger consumers, "increasingly want their information and their entertainment in the on-demand format of online or on any mobile device"²⁷ and they will drive the evolution of new media and its measurement. But, for the foreseeable future, traditional media outlets will still dominate the media landscape while new media looms on the horizon.

 

Reproduced with permission from Class Action Litigation Report, 11 CLASS 187, 02/26/2010. Copyright_2010 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.

                             

¹ Kathryn Koegel, It’s D-Day: The State of Digital Display, May 12, 2009, at http://www.primaryimpact.com/blog/?p=70.

² See Chapter 20.A, "Quantifying Notice Results in Consumer, Mass Tort, and Product Liability Class Actions—the Daubert/Kuhmo Tire Mandate."

³ David Weir, The First Banner Ads, Fifteen Years Later, Oct. 27, 2009, at http://industry.bnet.com/media/10004796/the-first-banner-ads-fifteen-years-later/.

⁴ Michael Martin, How to Get Started With Mobile Marketing, May 6, 2010, at http://searchengineland.com/how-to-get-started-with-mobile-marketing-41032.

⁵ Press Release, International Telecommunication Union, New ITU ICT Development Index compares 154 countries, Northern Europe tops ICT developments, Mar. 2, 2009, at http://www.itu.int/newsroom/press_releases/2009/07.html.

⁶ Press Release, comScore, comScore Reports December 2009 U.S. Mobile Subscriber Market Share, Feb. 8, 2010, at http://www.comscore.com/Press_Events/Press_Releases/2010/2/comScore_Reports_December_2009_U.S._Mobile_Subscriber_Market_Share.

⁷ eMarketer, Getting to Know the Mobile Population, August 25, 2009, at http://www.emarketer.com/Article.aspx?R=1007236&Ntt=getting+to+know+the+mobile+population&No=0&xsrc=article_head_sitesearchx&N=0&Ntk=basic.

⁸ Nielsen Mobile, Mobile Audience Mirrors Total Internet as Search, Email, Social Networking Drive Traffic, Feb. 2, 2010, at http://blog.nielsen.com/nielsenwire/online_mobile/mobile-audience-mirrors-total-internet-as-search-email-social-networking-driving-traffic/.

⁹ Press Release, CTIA – The Wireless Association, CTIA – The Wireless Association® Announces Semi-Annual Wireless Industry Survey Results, Mar. 23, 2010, at http://www.ctia.org/media/press/body.cfm/prid/1936.

¹⁰ Press Release, comScore, supra note 6.

¹¹ The Nielsen Company, In US, SMS Text Messaging Tops Mobile Phone Calling, Sept. 22, 2008, at http://blog.nielsen.com/nielsenwire/online_mobile/in-us-text-messaging-tops-mobile-phone-calling/.

¹² 47 U.S.C. § 227.

¹³ Peter Corbett, Facebook Demographics and Statistics Report 2010 – 145% Growth in 1 Year, Jan. 4, 2010, at http://www.istrategylabs.com/2010/01/facebook-demographics-and-statistics-report-2010-145-growth-in-1-year/.

¹⁴ Lance Whitney, Twitter, Facebook use up 82 percent, Feb. 22, 2010, at http://news.cnet.com/8301-1023_3-10457480-93.html.

¹⁵ The Nielsen Company, Global Faces and Networked Places, Mar. 9, 2009, at http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/03/nielsen_globalfaces_mar09.pdf.

¹⁶ Universal McCann, Power to the People – Social Media Tracker Wave 3, Mar. 2008, at http://www.slideshare.net/mickstravellin/universal-mccann-international-social-media-research-wave-3.

¹⁷ Id.

¹⁸ MarketingCharts.com, Forrester: Interactive Marketing to Hit $55b by 2014, July 10, 2009, at http://www.marketingcharts.com/interactive/forrester-interactive-marketing-to-hit-55b-by-2014-9744/.

¹⁹ U.S. Census Bureau, 2010 Statistical Abstract (Table 1094: Media Usage and Consumer Spending: 2004 to 2012), at http://www.census.gov/compendia/statab/2010/tables/10s1094.pdf.

²⁰ Id.

²¹ The Nielsen Company, Television Audience 2009, at http://blog.nielsen.com/nielsenwire/wp-content/uploads/2010/04/TVA_2009-for-Wire.pdf.

²² Marcel Fenez, et.al., PricewaterhouseCoopers, Moving into Multiple Business Models: The Outlook for Newspaper Publishing in the Digital Age, Apr. 2009.

²³ Data from Fall 2009 MRI Survey. Mediamark Research & Intelligence (MRI) surveys a large sample of U.S. adults about the media they see and hear and about the products they use. Participants in the survey are identified by age, occupation, income, education and by where they live, among other things. They are asked what magazines and newspapers they read, what TV shows and cable channels they watch, and are asked questions about Internet acc=ess and radio formats. Survey data indicate the brands and products they use from among 500 categories and 6000 consumer brands.

²⁴ Belo Interactive, Online Credibility Survey, 2004, at http://www.dallasnews.com/sharedcontent/dws/spe/credibility/.

²⁵ Fall 2009 MRI supra note 23.

²⁶ Id.

²⁷ Koegel supra note 1.