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Digital Strategy Consulting

Digital Intelligence
The monthly review of new research and developments in digital marketing
March 07

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Online adspend broke the £2bn mark here in the UK and closed 2006 with 12.4% of the total advertising cake. Almost exactly in line with our prediction in the Autumn (12.5%), the growth in search continued to fuel web ads (paid for clicks account for 58% of the total), alongside a broadening of the firms using graphical and banner formats. The increase of 41% sees web adspend overtake national newspapers, and cross the threshold of being half the size of the TV market. With total advertising spend rising only 1.1% year-on-year, it's clear that the web is now the main driver in the wider advertising economy.

The UK may be the largest online advertising market in Europe, but growth has been strong in France, Spain, Scandinavia and Germany. The audit of the Spanish market - also published this month - revealed another massive leap: online marketing in Spain grew 91.38% in 2006, reaching €310.5m and taking 4.25% of all combined Spanish adspend. Search marketing in Spain rose 132,41% (46.58% of all online adspend).

Best regards from all here at Digital,




Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting




Advertising

IAB UK/PwC report: UK expenditure breaks the £2bn barrier
The online ad market grew 41.2% in 2006 as advertisers spent £2.016bn on internet advertising, reports IAB UK. According to the latest IAB UK/PwC online adspend study, online marketing now accounts for 11.4% of all advertising (from 7.8% in 2005). The study also revealed that:

  • Online adspend overtook national newspapers for the first time as newspapers grew 0.2% to £1.9bn (and 10.9% market share).
  • Advertising across all traditional media combined fell 2.9% (£466.1m). However with the increase in online spending the entire market grew 1.1%.
  • Online adspend reached £1.098bn in the second half of 2006 - 12.4% of all UK advertising.
  • The UK now leads the world for share of advertising online; the global average is 5.8%.

IAB/PwC UK online adspend figures 2006: http://www.iabuk.net, 28/03/2007

US online adspend grew 34% from 2005-2006
Figures from the US IAB/PwC study shows that online adspend rose 34% in 2006 to reach $16.8bn (£8.50bn) (from $12.5bn (£6.33bn) in 2005). Based on the IAB/PwC results eMarketer have release their latest market predictions, forecasting that online adspend will reach $36.5bn
(£18.5bn) in 2011. eMarketer expect double digit growth to continue until at least 2011 for the following reasons:

  • Audiences will continue to spend more time online and advertisers will need to keep up with them, shifting their spending away from other media.
  • The greater targeting and tracking of online marketing will continue to make the medium more attractive.
  • As new formats such as online video become more widely used large brand marketers will devote more of their budgets to online campaigns.

From eMarketer: http://www.emarketer.com, 20/03/2007
IAB US: http://www.iab.net

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

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

IPA publishes list of compliant UK media firms
The IPA has published a list of UK-based media companies who have complied with the industry standard 30Kb creative file size. The list includes key media firms such as Yahoo!, Channel Four, AOL, Haymarket and Orange. The format was agreed last November in a joint consultation with the IAB and the ISBA. Under the agreement the format will be reviewed annually with a long-term view to increasing the limit.
IPA press release: http://www.ipa.co.uk, 01/03/2007

 
Companies

Yahoo! scores better click-through rates
Yahoo!'s new search ranking model has increased the number of click-throughs from sponsored search results according to new data from comScore, writes Netimperitive. Sponsored search click-throughs rose 5% in the first week and 9% in the second week following the launch of Yahoo!'s new model. The new ranking model is one of the elements of Yahoo!'s new 'Project Panama' search advertising system which takes into account the click-rate of online ads when determining which ads to run alongside search results.
Yahoo! has also announced the launch of its new Yahoo Mobile Ad Network which will enable marketers to place ads on the mobile sites of third-party publishers. Yahoo! intends to deliver text, display and video ads for mobile sites within the next few months. Yahoo! is aggresively moving into the mobile domain and has also announced the launch of three new mobile services: Yahoo Mobile Content Engine, Mobile Media Directory and Mobile Site Submit.
From Netimperitive: http://www.netimperative.com, 27/03/2007
Yahoo! UK: http://uk.yahoo.com

Microsoft anticipates shifting majority of adspend online by 2010
A top Microsoft executive has predicted that the majority of the firm's adspend will be spent online by 2010, writes BizReport. Speaking at the AAAA Media Conference Mich Mathews (Senior Vice-President of Microsoft's Central Marketing Group) said: "We're actually pretty confident that by 2010, the majority of our media mix will shift to digital." She went on to explain that we had now entered "The Era of Customer Participation" in which broadcasting to passive targets is being replaced by audience interaction. However, TV and print will not be completely abandoned and will still be used for tactical roles. Microsoft has recently signed up to eBay's TV ad auction system in the US. Figures from Advertising Age show that Microsoft spent $945m in total marketing during 2005.
From BizReport: http://www.bizreport.com, 05/03/2007
Microsoft UK: http://www.microsoft.co.uk/

DoubleClick acquires Tangozebra
Digital ad firm DoubleClick has bought Tangozebra for £15m, writes Netimperitive. Tangozebra's rich media products will be merged with DoubleClick's DART platform to create an integrated management suite able to create, serve and track all digital advertising formats (including rich-media, podcasting and in-game advertising). DoubleClick is also planning to integrate mobile ad serving into its DART platform this year. Following the merger DoubleClick's team will grow to over 250 staff.
News of the merger has been followed by reports that DoubleClick has been put up for sale for around $2bn (£1.1bn). Microsoft is said to be interested in buying the firm though has not made any public announcement.
From Netimperitive: http://www.netimperative.com, 01/03/2007
DoubleClick UK: http://emea.doubleclick.com/uk

BBC signs YouTube deal
The BBC is to launch three branded video channels on the online video sharing site YouTube, writes Brand Republic. A "public service" BBC channel will have clips of new programs and specially comissioned online-only content designed to tie-in with popular shows like "Dr. Who" and "Life on Mars". The channel will aim to raise awareness of current programming and drive traffic back to the BBC's website. The BBC Worldwide channel will provide archive clips from entertainment shows and factual programmes (such as wildlife prorammes). This channel will include some advertising. Finally, the BBC News channel will offer around 30 news clips each day. It will be fully funded from advertising but will not be available to users from the UK.
The BBC hopes the channels will drive users to its forthcoming online iPlayer service in addition to raising revenues for BBC Worldwide.
The BBC has also announced a twelve-month 3G mobile trial in partnership with 3 UK, Orand and Vodafone. The service will include live streaming of BBC One, BBC News 24, BBC3 and up to 8 radio stations.
From Brand Republic: http://www.brandrepublic.com, 02/03/2007
YouTube BBC press release: http://www.youtube.com

News Corp and NBC join forces to launch new video website
News Corporation and NBC Universal are to launch a new online video website, writes Brand Republic. The site will include thousands of hours of back catalogue TV programmes, films and clips available for free. The two firms have also signed distribution partnership agreements with AOL, Yahoo! and Microsoft. The service will be funded through advertising and Cisco, Intel, General Motors and Cadbury-Schweppes are all said to be lined up.
From Brand Republic: http://www.brandrepublic.com, 22/03/2007
News Corporation: http://www.newscorp.com

Trends

Worldwide internet use grew 10% during 2006
747m internet users aged 15+ went online in January 2007, up 10% year-on-year, reports eMarketer. According to the figures from comScore, India, the Russian Federation and China showed the highest growth, with increases of 33%, 21% and 20% respectively. China now has 86.8m internet users (aged 15+), second only to the US with 153.4m users. For time spent online, Canada came top with 39.6 hours/month, followed by Israel (37.4 hours/month) and South Korea (34.0 hours/month). In each of the top ten countries broadband users spent significantly more time online than narrowband users.
From eMarketer: http://www.emarketer.com, 07/03/2007
comScore: http://www.comscore.com

Top 15 Countries by Internet Penetration, January 2006 and 2007

Countries

January 2007 (000)

January 2006 (000)

Change (%)

Worldwide

746,934

676,878

10%

US

153,447

150,897

2%

China

86,757

72,408

20%

Japan

53,670

51,450

4%

Germany

32,192

31,209

3%

UK

30,072

29,773

1%

South Korea

26,350

24,297

8%

France

24,560

23,712

4%

India

21,107

15,876

33%

Canada

20,392

18,332

11%

Italy

18,106

15,987

13%

Brazil

14,964

12,845

16%

Spain

12,710

12,206

4%

Russian Federation

12,707

10,471

21%

Netherlands

11,077

10,772

3%

Mexico

10,149

8,624

18%

Notes:
1. Unique visitors are aged 15 or older.
2. Data excludes traffic from public computers, such as Internet cafés and access from mobile phones and PDAs.
Source: comScore, January 2007
comScore: http://www.comscore.com

Top 10 Countries by Average Monthly Hours Online per Unique Visitor  Broadband vs. Narrowband

 

 

Average Monthly Hours Online

 

Average Monthly Hours Online

Among All Users

Among Broadband Users

Among Narrowband Users

Canada

9

39.6

41.3

14.2

Israel

28

37.4

38.8

10.9

South Korea

6

34.0

36.1

N/A**

US

1

31.6

37.2

13.5

UK

5

31.2

35.6

7.5

Chile

20

30.9

38.6

12.6

Brazil

11

30.2

38.5

17.0

Finland

30

28.7

34.2

N/A**

Spain

12

27.9

33.4

9.1

Sweden

21

27.5

31.4

9.7

Among Visitors Age 15+*
January 2007
Total Worldwide – All Locations

* Excludes traffic from public computers such as Internet cafes or access from mobile phones or PDAs.
** Level of narrowband penetration extremely low, therefore an accurate reportable estimate is not available.
Source: comScore World Metrix
comScore: http://www.comscore.com

UK now top online country in Europe
New research from eMarketer suggests that the UK is now Europe's leading online economy. As competition in the communications sector has pushed prices down, broadband subscriptions and time spent online have risen. The UK now has 12m broadband-enabled households, overtaking both Germany (11.8m) and France (11.2m). In addition, UK internet users each spend up to six hours more online per week. As of March 2007, 47.1% of UK households had broadband connections and eMarketer predict that this could rise to 76.8% by 2011 (equivalent to 20m households). Further data also shows that the internet is showing high penetration across all age groups: nearly 25% of British users are now over 50.
Informa's Converging Media (CM) Index for May 2006 (which measures digital content consumption across multiple platforms) also estimated that the UK was the most digital country in Western Europe.
From ENN: http://www.emarketer.com, 28/03/2007
Informa: http://www.informa.com

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

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

Broadband

Europe is world's leading DSL region
A study from the DSL Forum shows that DSL subscriptions grew 30% during 2006 to reach 185m, writes Telecoms.com. Total broadband subscriptions reached over 281m, giving DSL a 65.7% market share. In Europe 17.5m users took out DSL subscriptions during 2006, up 36% on 2005 to reach 66,374,600. Europe's total accounted for 35% of all DSC subscriptions worldwide. The US remains the world's largest broadband market with over 57m subscribers. China, the world's second market, added 14.4m subscribers in 2006 to reach 51.9m.
From Telecoms.com: http://www.telecoms.com, 29/03/2007
DSL Forum: http://www.dslforum.org

Majority now use broadband in Ireland
Over half of all Irish internet users are now using broadband services to get online, writes ENN. New figures, published by the Commission for Communication Regulation (ComReg) show that 50.1% of Ireland's 1.036m active internet subscriptions are broadband connections. Broadband subscriptions rose 80,000 during Q4 2006 to reach 517,000. ComReg estimate that 71% of Irish broadband connection are residential.
From ENN: http://www.electricnews.net, 27/03/2007
ComReg: http://www.comreg.ie

Statistics
 

Monthly internet usage statistics for France, February 2007

Sessions/Visits Per Person 56
Domains Visited Per Person 99
PC Time Per Person 56:59:52
Duration of a Web Page Viewed 00:00:43
Active Digital Media Universe 24,334,046
Current Digital Media Universe Estimate 31,781,900

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

Monthly top ten French parent companies for February 2007

Property Name
Unique Audience
(000)
Reach %
Time Per Person
Google 19,752 81.17% 00:55:31
Microsoft 19,720 81.04% 03:22:31
France Telecom  15,694 64.49% 01:24:30
Iliad  13,689 56.25% 00:33:48
PagesJaunes 11,499 47.25% 00:19:54
Yahoo! 10,863 44.64% 00:50:52
eBay 10,494 43.13% 01:21:34
PPR 9,089 37.35% 00:20:57
Wikimedia Foundation 7,719 31.72% 00:07:54
Benchmark Group 7,672

31.53%

00:12:33

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

Top 10 popular websites in the UK, February 2007

Rank

Website

Market share

1

www.google.co.uk

7.86%

2

www.ebay.co.uk

2.85%

3

www.hotmail.com

2.71%

4

www.google.com

2.37%

5

uk.msn.com

1.63%

6

www.orange.co.uk

1.6%

7

uk.mail.yahoo.com

1.23%

8

www.myspace.com

1.12%

9

www.bebo.com

1.1%

10

uk.yahoo.com

0.97%

This list features the most popular websites based on UK Internet usage for February 2007, ranked by market share of visits across all Hitwise industries.

Source: Hitwise Datacentre, February 2007, based on market share of visits
Hitwise: http://www.hitwise.co.uk/datacenter

Worldwide Active Internet Universe, February 2007

Country January 2007 February 2007 Growth (%) Difference
Australia 10,752,677 10,803,199 0.47% 50,522
Brazil  14,034,406 14,068,257 0.24% 33,851
France  20,821,270 21,546,565 3.48% 725,294
Germany 33,354,455 33,035,325 -0.96% -319,130
Italy  17,431,588 17,900,166 2.69% 468,578
Japan  44,619,292  44,738,950 0.27% 119,658
Spain  13,140,050  12,704,828 -3.31% -435,222
Switzerland  3,702,799  3,718,731 0.43% 15,932
UK  23,389,803  24,514,132 4.81% 1,124,329
US  147,015,620  144,805,311

-1.50%

-2,210,309
TOTAL  325,484,069  327,835,464

-0.13%

-426,498

Source: Nielsen/NetRatings 2007
Nielsen/NetRatings: http://www.nielsen-netratings.com

The Top 10 Internet Advertisers by Media Value

Position

Advertiser

Media Value ($000)

Sector

1

LendingTree.com

13,603.6

Financial Services

2

University of Phoenix Online

12,730.2

Education

3

Fidelity Investments

12,107.0

Financial Services

4

Monster.com

11,700.0

Classifieds

5

LowerMyBills.com

11,119.8

Financial Services

6

Netflix

10,872.3

Media & Entertainment

7

eBay

10,753.2

Retail

8

Classmates.com

10,521.3

Miscellaneous

9

Nextag Services

8,060.7

Miscellaneous

10

E*Trade Financial Online

7,894.0

Financial Services

Methodology: Chart represents the value of display advertising in both standard and non-standard ad formats. Media expenditure estimates do not always take into account special considerations including publisher discounts, barter agreements, co-sponsorship, affiliate relationships, etc.
Source: TNS Media Intelligence
TNS Media Intelligence: TNS Media Intelligence

     
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