Digital Intelligence
The monthly review of new research and developments in digital marketing
February 2008

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The acquisition frenzy continues this month with some of the world's biggest internet brands still in battle for taking over each other (and still finding time to buy more smaller internet companies along the way).

The economies of scale mean a service like email or photo-sharing once developed can be rolled out worldwide at very low cost, economics that pressure online services that are only national and trigger the race for growth.

At Digital we said that 2008 was the year television programming would hit the web, and here in the UK the BBC's iPlayer is making headlines with 2.2m people a month watching TV through the player. MySpace has launched video advertising (pre-roll and post-roll formats), helping create a framework for brands to reach video watchers, and with Joost and the IPTV pureplays growing fast, this year is the crossing point for television programming on the web.

For mobile telephony the middle of the year will a big crossing point as the volume of calls made on mobile networks overtakes those on fixed networks according to the latest predictions (below).

Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

Advertising

MySpaceTV introduces first pre and post-roll ads
MySpaceTV is using pre and post-roll ads for the first time in a music video shown on the site, writes Brand Republic. The ads will feature in the Mark Brown featuring Sarah Cracknell single "The Journey Continues". MySpace signed a deal with EMI's Positiva Records allowing it to show the music video for the first time.
From Brand Republic: http://www.brandrepublic.com, 20/02/2008
MySpaceTV: http://vids.myspace.com

E-commerce

January online sales up 75%
Online shoppers looking for bargains sent sales figures soaring in January, spending £4.5bn during the month - a 75% increase on the year before, writes BBC News. According to the IMRG Capgemini e-Retail Sales Index the equivalent of £74 for every person in the UK was spent online during the month. Sales for electrical goods saw the biggest rise (up 38% year-on-year) followed by clothing (up 32%) and health and beauty (up 18%). The growth in sales volume over the last three months was over double the growth for the same period the year before.
From BBC News: http://news.bbc.co.uk, 22/02/2008
IMRG: http://www.imrg.org

The IMRG-Hitwise Hot Shops List
The top 20 UK e-retailers* selling goods and services within the IMRG Capgemini Index Classification in January 2008.

* The IMRG-Hitwise Hot Shops List excludes eBay and price comparison / aggregator websites such as Kelkoo and Froogle.

Source: IMRG / Hitwise
IMRG: http://www.imrg.org
Hitwise: http://www.hitwise.co.uk

Companies

ABC combines print and online reporting
The Audit Bureau of Circulations (ABC) has for the first time started to publish combined print circulation and website unique user figures in a single monthly report. The Multi-platform Monthly Report will cover circulations and unique user figures from the Daily Mail (and Sunday Mail), the Guardian (and Observer), The Sun (and News of the World), the Telegraph (and Sunday Telegraph), and the Times (and Sunday Times). The report will also break down audiences by geographical location: UK, Republic of Ireland and other countries.
ABC: http://www.abc.org.uk, 20/02/2007

Google is UK's most popular site of 2007
Google has come top of a Nielsen Online study looking at the UK's most popular websites of 2007. Google search averaged 25.1m British users/month, followed by MSN / Windows Live Messenger (14.7m) and eBay (14.5m). Beat That Quote was the UK's fastest growing website, with annual growth of 1,165% (from 31,000 UK visitors to 392,000 UK visitors year-on-year), ahead of Facebook (781% growth from 1.1m visitors to 8.9m visitors) and Local.co.uk (648% growth from 71,000 visitors to 531,000 visitors).
Nielsen Online (PDF): http://www.nielsen-netratings.com

Google is now UK's strongest brand
According to the latest Superbrands study Google is now the UK's strongest brand, pushing ahead of Microsoft and the BBC, writes Brand Republic. Google is the only brand in the list which was formed after 1990 - in comparison the average top-50 firm has 90 years of operation. The brand strength of firms such as British Airways and BP suggests that British origins and longevity remain important.
From Brand Republic: http://www.brandrepublic.com, 25/02/2008
Superbrands: http://www.superbrands.uk.com

Source: Superbrands
Superbrands: http://www.superbrands.uk.com

Trends

Over 60% of Brits now online
eMarketer's latest look at the UK market has found that nearly 37m people went online in an average month during 2007 - over 60% of the UK's population. eMarketer expects the number to keep rising and predicts that 70% of the population will be regularly online by 2012. The high levels of internet usage mirror levels of online shopping as the UK is predicted to account for at least 40% of all Western European online sales during 2008. Average spend per buyer is also set to increase during the year to over £1900. eMarketer expects the UK's share of European online retail to decrease slightly in the next few years as other markets catch up though the UK will remain the single greatest European market in 2011.
From eMarketer: http://www.emarketer.com, 19/02/2008

Source: eMarketer
eMarketer: http://www.emarketer.com

Polish audiences impact UK site rankings
Latest numbers Hitwise show just how big the Polish community in the UK has become. Portals, social networks and media sites all now scoring high in the UK charts.
From Digital Strategy Consulting: http://www.digitalstrategyconsulting.com
Hitwise: http://www.hitwise.co.uk

Top 10 most visited Polish websites in the UK, January 2008

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

UK Internet Traffic to Polish websites, January 2006 - January 2008

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

Digital music sales take off
New data from Point Topic shows that digital music sales now account for nearly 30% of the US market and 20% of the European market, writes VNUnet.com. Total revenues from digital sales grew 40% during 2007 to reach $2.9bn with revenues split roughly 50/50 between internet and mobile sales. Legal music downloads also grew during 2007, rising 53% to reach 1.7bn single music tracks.
In the UK the Entertainment Retailers Association new digital group (ERA Digital) predicts that digital music sales will surpass £160m during 2008. ERA Digital's figures found that album download sales in January reached £4.5m up 76% on January 2007. Single track downloads accounted for £6.3m in January as unit sales rose 45% year-on-year. If trends continue ERA Digital expects album download sales to total £69.4m this year, with single track downloads reaching £96.4m.
From VNUnet.com: http://www.vnunet.com, 27/02/2008
Point Topic: http://www.point-topic.com
ERA: http://www.bardltd.org

Mobile

Mobile calls set to overtake fixed line usage
The latest Telecoms Market Matrix report from Analysys predicts that UK calls made on mobile phones will overtake those made on fixed networks by the end of Q2 this year, writes Computer Weekly. Mobile calls across Western Europe are expected to overtake fixed line calls by the middle of the year. Some countries, including France and Portugal, have already crossed this threshold. Italy and Germany are expected to pass it in 2009 and 2010 respectively.
From The Guardian: http://www.computerweekly.com, 19/02/2008
Analysys: http://www.analysys.com

Mobile music market to reach $17.5bn by 2012
Juniper Research predict that the global mobile music market will be worth $17.5bn by 2012, writes Netimperative. Subscription music services and full-track downloads will contribute to the rise as the ringtones market will shrink from 68% (in 2007) to 38%. Ringtone prices will decrease under pressure from rival services. The report identified 2007 as the tipping point for the mobile music market as more consumers than ever before used their phones to access music services. Apple's iPhone was also identified as having raised the general awareness of mobile music services.
From Netimperative: http://www.netimperative.com, 27/02/2008
Juniper Research: http://www.juniperresearch.com

Broadcasting

BBC iPlayer streams over 17m programmes during first seven weeks
It's been a busy month for the BBC's iPlayer service with traffic stats and new partnership deals being announced at every turn. The re-launch of the iPlayer on Christmas Day certainly seems to have certainly been successful with the corporation reporting 17m online programme views in the first seven weeks according to The Guardian. Over 2.2m people used the service in January accessing an average of five shows per user. The BBC is now serving over 500,000 shows per day to an average 1.3m unique users a week. In total they provided 11m TV downloads and 15.9m radio streams during January. Traffic has also risen for the main bbc.co.uk website, up 29% year-on-year to reach 20m unique users per week during January.
The BBC has also announced syndication deals with Yahoo!, MSN and Blinkx which will allow the sites to host clips from BBC TV shows which will links back to full versions available through iPlayer. By providing content through various partners the BBC will clearly increase the reach of its content while still encouraging viewers to visit the iPlayer website to view full versions of programmes. The Blinkx deal in particular is interesting as Blinkx will themselves catalogue and index all content currently available through the iPlayer service.
Finally BBC Worldwide has revealed a rumoured partnership with Apple to sell BBC shows via iTunes. Programmes will be released on iTunes after they have been removed from the iPlayer service and downloads will cost £1.89 each.
From The Guardian: http://www.guardian.co.uk, 20/02/2008
BBC iPlayer: http://www.bbc.co.uk/iplayer

Sales of digital TV set-top boxes exceeds 100m units
The latest digital TV forecast from Strategy Analytics shows that global sales of digital set-top boxes surpassed 100m units for the first time during 2007, rising 12% to reach 102.4m units sold writes DTG News. IPTV's market share for the year grew 5.9% (from 3.6% in 2006). Cable's share also increased to 36.2% while both satellite and terrestrial saw declines. The report predicts that global sales will surge during 2008 in reaction to the coming switch-off of analogue TV services in the US and that annual sales of set-top boxes will reach 200m units by 2012.
From DTG News: http://www.dtg.org.uk, 22/02/2008
Strategy Analytics: http://www.strategyanalytics.net

Statistics

Monthly internet usage statistics for France, January 2008

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

Monthly top ten French parent companies for January 2008

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

Top 10 popular websites in the UK, January 2008

This list features the most popular websites based on UK Internet usage for January 2008, ranked by market share of visits across all Hitwise industries.
Source: Hitwise Datacentre, January 2008, based on market share of visits
Hitwise: http://www.hitwise.co.uk/datacenter

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