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Digital Intelligence
The monthly review of new research and developments in digital marketing

January 2008

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Digital Strategy Consulting


January saw a great start for the digital marketing, media and retail sectors.

Consumer spending was even greater at Christmas than most e-retailers had forecast with a leap of around 50%, online advertising looks set to overtake television spend in the near future as budgets are pulled from classic channels, and the switch to digital marketing is accelerating in Germany and across Central and Eastern Europe younger digital markets.

Our first international projects of the year confirmed the enthusiasm of marketers in New York to boost their integrated strategies with more online activities, and next month we are back in Sweden and Eastern Europe to see if the same trends are strong in those markets.

For details of new digital training and strategy programmes in your country e-mail me back, and in the meanwhile we all hope you enjoy this edition of Digital Intelligence. If you'd like to give a colleague access this year, then simply e-mail us back and copy them in, and we'll do the rest.


Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

 

Advertising

Digital ad revenues to overtake TV by next year in UK
GroupM predicts that UK digital advertising revenues will eclipse TV ad revenues by next year, writes The Guardian. The firm expects online adspend to grow over 30% during the next year, reaching £3.4bn. TV advertising will grow less than 1% during the same period. Alternative figures published by the World Advertising Research Centre (WARC) conclude that online adspend could grow as much as 37.9% in the coming year.
While Group M expects the UK to become the first major economy with higher adspend online than on TV, the firm forecasts that Sweden will achieve this during 2008 with 19.5% of adspend going online against 19.2% going on TV ads.

From The Guardian: http://www.guardian.co.uk, 03/01/2008
GroupM: http://www.groupm.com

Source: GroupM
GroupM: http://www.groupm.com

Source: GroupM
GroupM: http://www.groupm.com

Radio facing 2% fall in revenues in US
Radio advertising could fall up to 2% this year as the local advertising sector slows, writes Mediaweek. Revenues could drop below $20bn for the first time since 2002 as the industry faces its eighth year of slow-to-no-growth. Radio is said to be facing its worst crisis since the 1950s when it struggled through recession, the Korean War and the advent of television.
From Mediaweek: http://www.mediaweek.com, 31/12/2007
Netscape: http://www.strategyeye.com

Print publishing sector: ad revenues sliding for another decade
Another depressing report for the print publishing industry as the latest WARC figures point to an acceleration in the contraction of the newspaper ad industry. The World Advertising Research Centre - the group behind the official Advertising Association stats for the UK market - sees newspaper advertising shrink by more than £1.6bn between now and 2019 (a move from £6.7bn to £5.096bn over 12 years). That contraction is in spite of bullish growth in the overall ad market, although with the concentration being on digital channels. With the profitability of the print sector already under extraordinary pressure, this will wound investor confidence even further. Our take: among the firms without strong digital strategies, watch out for the spiral of cost cutting, weaker products, lower engagement, and even weaker drivers for advertisers; among those with the master plan the big question remains - does the collapse of print revenue get properly offset by the growth of digital channels.
WARC: http://www.warc.com, 21/01/2008

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E-commerce

Online sales grow 50% at Christmas
The latest IMRG Capgemini e-Retail Sales Index has found that Q4 online sales grew from £9.61bn in 2006 to £15.2bn in 2007, writes Netimperative. Online shopping peaked in the first week of December with sales up 9% year-on-year. Firms with both online and high street outlets such as John Lewis did best.
Further figures estimate that 15% of all UK retail spending during 2007 was online. Total internet spending reached a new high of £46.6bn during 2007, up 54% on 2006's figure of £30.2bn. For each £1 spent on goods in 2007, 15p was spent online - in 2006 online represented 10p of every pound.
From Netimperative: http://www.netimperative.com, 18/01/2008
IMRG: http://www.imrg.org
Companies

Google to bring Print Ads to UK

Google is planning to launch its Print Ads service in the UK, writes The Sunday Times. The service launched last year in the US and lets advertisers bid on print inventory in the same way as Google AdWords. Google Print Ads now supplies over 600 titles in the US.
In the UK, Google's advertising revenues grew 40% during 2007 to reach £1.25bn.
From The Sunday Times: http://www.timesonline.co.uk, 30/12/2007
Google Print Ads: http://www.google.co.uk/adwords/printads
Digital's update on the latest ad products from Google

European telcos head for new markets
Broadband connections in Central and Eastern Europe rose 44% during 2007 and three of Europe's five biggest telcos are moving in to take advantage. Research from Screen Digest shows that France Telecom, Deutsche Telekom and Spain's Telefonica all now have stakes in the region. Broadband penetration across France, Germany, Spain, Italy and the UK reached 44% at the end of 2007. In comparison penetration in Central and Eastern Europe stood at only 13%. Russia has fewer than 7% of homes connected to broadband services.
Latin America is another growth market and consumer broadband access is expected to reach 30% of homes in the next five years. Connections grew 41% during 2007 compared to 23% across the "Big Five" West European countries. Telefonica is the leading European operator working in Latin America with stakes in Argentina, Brazil, Chile, Peru and Colombia.
Screen Digest: http://www.screendigest.com, 22/01/2008

Source: Screen Digest
Screen Digest: http://www.screendigest.com

Telegraph to launch seven new online programmes
The Telegraph website is planning to launch seven new online TV-style programmes covering subjects such as food and drink, culture, technology, finance, motoring, fashion and travel, writes The Guardian. The new line-up includes "Right On" a weekly politics talk show featuring Ann Widdecombe and described as "politically right, not politically correct".
From The Guardian: http://www.guardian.co.uk, 14/01/2008
Telegraph TV: http://www.telegraph.co.uk

T-Mobile gives free Wi-Fi to customers
Subscribers to T-Mobile's Web 'n' Walk 3G service are going to be offered free Wi-Fi access writes Netimperative. Users will be given free use of T-Mobile's network of 1200 UK Wi-Fi HotSpots (39,000 worldwide). Web 'n' Walk costs £12.50 per month in addition to any Flext price plan.
From Netimperative: http://www.netimperative.com, 10/01/2008
T-Mobile: http://www.t-mobile.co.uk

Sony brings Skype to PSP
Sony has confirmed that it is adding Skype VoIP functionality to its PlayStation Portable (PSP) gaming device, writes Telecoms.com. Sony are releasing a firmware update at the end of January for the PSP-2000 series which will allow users to make VoIP calls when they are connected to a wireless network. Sony are also releasing a range of additional peripherals such as microphones to take advantage of the new features.
From Telecoms.com: http://www.telecoms.com, 07/01/2008
Sony: http://www.sony.co.uk

Netscape to be shelved
AOL is to discontinue its Netscape browser from the 1st of February, writes StrategyEye. The firm is to encourage users to switch to Firefox. Before the launch of Microsoft's Internet Explorer Netscape had over 90% of the browser market but has now been reduced to only 0.6%. Internet Explorer currently has 77% with Firefox on 16%.
From StrategyEye: http://www.strategyeye.com, 02/01/2008
Netscape: http://browser.netscape.com

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Trends

Chinese internet population passes 200m mark
China's online population grew 53% to reach 210m at the end of 2007 from 137m the year before, reports PC World. The figures, from the China Internet Network Information Centre, put China only 5m users away from becoming the world's largest internet population. 40% of new users (or 29m people) came from rural areas.
86.6% of those surveyed use online music services making music the most popular web application ahead of instant messaging (81%). E-mail is the fifth most popular application with 56.5% using it.
From PC World: http://www.pcworld.com, 18/01/2008
CINIC: http://www.cnnic.cn/en/index/index.htm

UK web users get older
New data from Nielsen Online has found that British web users are getting older, writes StrategyEye. In October 2007 the average age was 37.9, up from 35.7 at the same time the year before. During the same period the proportion of under 25s online fell from 29% to 25%. In contrast the number of over 55s using the internet in the UK grew 22% during the 12-month period to 19%. Neilsen Online's Alex Burmaster commented: "New online offerings and technology are usually targeted at the young, but it's possible brands could be missing a trick if they continue down this path in the future."
From StrategyEye: http://www.strategyeye.com, 31/12/2007
Nielsen Online: http://www.nielsen-online.com

Blogging for news
The rise of blogs to the heights of official news sources was confirmed this month when a survey by Brodeur and MarketWire reported by Marketing Pilgrim showed 75% of journalists using blogs as a place for story ideas and research. 30% of journalists surveyed said they had their own blog and 21% said they spent over an hour a day on blogs. Big implications for PR agencies and brands everywhere.
From Marketing Pilgrim: http://www.marketingpilgrim.com, 14/01/2008
Brodeur: http://www.brodeur.com
New Media Journalist Survey (PDF): http://takingtheblogosphereseriously.com
Digital Insight Report for newcomers to blogging

Source: Screen Digest
Brodeur: http://www.brodeur.com

Web makes perfect match for online dating in the UK
Staggering to reflect on, but half of the UK's single population are now logging-on to dating sites. That's the latest finding from web dating specialists Parship who reckon almost eight million Brits tried online dating last year, an increase of around 50% on 2005. The gender balance is pretty even (52 per cent of men vs 48 per cent of women use online dating). Parship's UK and Ireland director Tony Blin Stoyle sees higher rates among older people: "UK singles, particularly those aged 30 to 40, recognise that as they get older and their social networks become smaller, they need to maximise their opportunities in order to meet a partner. if you rely on traditional routes and wait for a chance encounter with someone special, you could end up waiting a very long time."
Parship: http://www.parship.co.uk, 21/01/2008

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Industry focus: Online Music

European Commission makes iTunes lower costs in UK
The European Commission has ruled that it is unlawful for Apple to charge more for iTunes downloads in the UK than in the rest of Europe. Costs for single downloads in the UK are 79p - nearly 10% higher than the continental rate of 0.99. Costs are expected to come down in the next six months and the EC is now ending its anti-trust action against Apple.
From Brand Republic: http://www.brandrepublic.com, 09/01/2008
iTunes: http://www.apple.com/itunes

Digital music sales double
Music retailers are reporting a sudden leap in sales of online music here in the UK, and a 100% growth in sales in the week after Christmas (based on year on year comparisons) - reports The Financial Times. This is more than just lots of iTune downloads and iPhone Christmas presents: the music sector is heading towards another crossing point where digital sales will replace physical CDs, probably in the UK and Scandinavia first, but then in the US and Western Europe.
From The Financial Times: http://www.ft.com, 03/01/2008

Radiohead profit from In Rainbows experiment
Radiohead have made more money from digital sales of In Rainbows than from all their other EMI albums combined, writes StrategyEye. The band's contract with EMI included no provision for digital rights, leaving them with nothing from official online sales of their music. Rumours of 1.2m digital sales of In Rainbows have been rejected by the band, though official figures are yet to be released. A CD version of the album went straight to number one when it was released at the start of January.
From StrategyEye: http://www.strategyeye.com, 02/01/2008
Radiohead:
http://www.radiohead.com

Mobile

Mobile marketing set to take off

The Mobile Marketing Association (MMA) has released its inaugural Mobile Attitude and Usage Study covering five markets in Western Europe, writes Mobile Europe. The study polled 1,535 mobile users in the UK, Germany, France, Italy and Spain and suggests that conditions are right for strong mobile marketing growth. Key findings include:
  • 1 in 10 mobile users is highly interested in mobile marketing with 3 in 10 showing moderate interest.
  • Half of all Italian and Spanish mobile users are at least moderately interested in mobile marketing.
  • 2-way text messaging is the most important functionality across all age groups. 7 in 10 consumers have used text messaging with Italy and Spain the most experienced markets.
  • 15% of all consumers have experienced mobile marketing.
  • Interactive voting, advertising and product or service information are the most common forms of mobile marketing.
  • Users are most attracted to mobile coupons, special sales and alerts about accounts and purchases.

Mobile Marketing Association press release: http://mmaglobal.com, 15/01/2008

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Broadcasting

Viewers watch 3.5m BBC programmes with iPlayer in two weeks

Online viewers watched 3.5m programmes using the BBC's iPlayer service in the first two weeks following its relaunch on Christmas Day, writes Brand Republic. The iPlayer site attracted over 1m visitors during the period with an average of 250,000 programmes being downloaded or streamed each day. Figures from Hitwise show that traffic to the iPlayer site grew 14-fold between the beginning of December and the beginning of January. The site also entered the ranks of 100 most visited websites in the UK, peaking at number 62.
According to The Telegraph the BBC is also in negotiation with ISPs to cache copies of the most popular programmes directly at local exchanges. ISPs have voiced concerns about the amount of bandwidth iPlayer traffic could consume. "Project Cheetah" will see the BBC place around 200 servers at various points on the BT network, reducing the amount of traffic from the BBC's central servers.
From Brand Republic: http://www.brandrepublic.com, 15/01/2008
BBC iPlayer: http://www.bbc.co.uk/iplayer

Source: Hitwise
Hitwise: http://www.hitwise.co.uk

Source: Hitwise
Hitwise: http://www.hitwise.co.uk

Source: Hitwise
Hitwise: http://www.hitwise.co.uk

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Statistics

Monthly internet usage statistics for the UK, December 2007

Source: Nielsen/NetRatings Home/Work Panel monthly statistics
Nielsen Online: http://www.nielsen-online.com

Monthly top ten UK parent companies for December 2007

Source: Nielsen/NetRatings Home/Work Panel monthly statistics
Nielsen Online: http://www.nielsen-online.com

Top 10 popular websites in the UK, December 2007

This list features the most popular websites based on UK Internet usage for December 2007, ranked by market share of visits across all Hitwise industries.
Source: Hitwise Datacentre, December 2007, based on market share of visits
Hitwise: http://www.hitwise.co.uk/datacenter

Top 10 Search Terms in 10 Categories, December 2007

The terms which were searched for most often on the web in December 2007.

Top 10 Search Terms by Category, Four Weeks Ending December 29, 2007 (%)
IT and Internet Automotive Manufacturers
Search Term Search Volume Search Term Search Volume
paypal 6.58 honda 1.77
paypal.com 1.45 toyota 1.75
www.paypal.com 0.96 nissan 1.38
mapquest.com 0.70 ford 1.10
pay pal 0.69 dodge 0.85
people search 0.56 harley davidson 0.79
people finder 0.40 chevrolet 0.75
experian 0.35 jeep 0.68
futures tradingcharts 0.32 suzuki 0.65
paypal account 0.28 honda motorcycles 0.63
Movies Net Communities and Chat
Search Term Search Volume Search Term Search Volume
netflix 1.52 myspace 6.52
imdb 1.13 myspace.com 3.09
blockbuster 0.64 craigslist 2.26
movies 0.56 youtube 1.84
fandango 0.50 www.myspace.com 1.51
i am legend 0.44 facebook 1.04
cloverfield 0.41 my space 0.69
netflix.com 0.37 you tube 0.69
regal cinemas 0.28 youtube.com 0.41
cinemark 0.26 craigs list 0.37
Food and Beverage Brands and Manufacturers Pharmaceutical and Medical Products
Search Term Search Volume Search Term Search Volume
pizza hut 2.42 lyrica 0.62
starbucks 1.09 lexapro 0.50
omaha steaks 0.96 chantix 0.47
harry and david 0.89 viagra 0.40
honey baked ham 0.68 depression 0.33
mcdonalds 0.53 alli 0.32
dominos pizza 0.51 levaquin 0.31
betty crocker 0.51 cymbalta 0.27
candystand 0.45 seroquel 0.27
subway 0.41 bipolar disorder 0.26
Blogs and Personal Web Sites Broadcast Media
Search Term Search Volume Search Term Search Volume
yahoo 360 0.48 cnn 2.07
perez hilton 0.48 fox news 1.61
myspace 0.43 msnbc 0.75
livejournal 0.31 cnn.com 0.73
360 0.27 news 0.57
myspace surveys 0.24 bbc news 0.52
myspace.com 0.19 ksl.com 0.49
santa tracker 0.17 ksl 0.32
area codes 0.16 bbc 0.31
xanga 0.16 cnn news 0.31
Shopping Rewards and Directories Travel Destinations and Accommodations
Search Term Search Volume Search Term Search Volume
consumer reports 0.24 hotels.com 0.37
mycokerewards.com 0.17 disneyland 0.34
coupons 0.14 disney world 0.22
free samples 0.09 holiday inn 0.21
shopzilla 0.08 hotels 0.18
pch.com 0.07 motel 6 0.18
mycokerewards 0.07 walt disney world 0.15
free stuff 0.07 las vegas 0.15
gift ideas 0.07 hampton inn 0.12
cnet 0.07 carnival cruise 0.12

Source: Hitwise
Hitwise: http://www.hitwise.co.uk

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