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

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The outlook for digital advertising growth remains strong with new research putting online at 10% of all adspend in the US, and here the UK market topping £5bn by 2012 - that's on top of our own forecasts that now put UK online adspend ahead of TV by the end of next year.

We said that 2009 would be the year mobile advertising accelerates, and new forecasts are already sizing that sector at $4.8bn within five years. Also in our round-up of the last month's research and announcements, we look at MySpace entering the downloads market, how Brits are tuning into TV on the web (even though 22m homes now have digital TV), and the OpenSocial initiative.

Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

Advertising

UK online adspend set for £5bn by 2012
Online adspend in the UK is set to reach £3.4bn this year, up 27% from 2007 according to new findings from eMarketer, writes Brand Republic. Double-digit growth will continue for the next three years with online advertising expected to exceed £5bn by 2012. Search-related marketing accounted for 60% of all UK online adspend in 2007 and is forecast to top £3bn by 2012.
eMarketer's estimates of the UK's online ad market compares with forecasts from ZenithOptimedia and GroupM of £3bn and £3.4bn respectively.
From Brand Republic: http://www.brandrepublic.com, 28/03/2008
eMarketer: http://www.emarketer.com

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

Online set for 10% of all US advertising
Further projections from eMarketer estimate that US advertisers will spend $25.8bn (£12.9bn) online during 2008 - down from their previous forecast of $27.5bn (£13.77bn) made last October. However eMarketer predict that online is still on course to grow 23% from last year to account for 8.8% of all US adspend. Though growth is expected to slow, US online advertising is expected to reach $30bn (£15bn) next year, accounting for 10% of all US adspend.
eMarketer: http://www.emarketer.com, 31/03/2008

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

Online close to 10% of global adspend
ZenithOptimedia has upgraded its predictions for online adspend's share of the total global ad market for 2008 from 9.4% (from its December forecast) to 9.7%, writes Netimperative. Online is expected to show strong growth despite a slowdown in US and Western European total adspend. For 2009 the firm is expecting online to take an 11.1% share of global adspend - up from its previous forecast of 10.4%.
From Netimperative: http://www.netimperative.com, 02/04/2008
ZenithOptimedia: http://www.zenithoptimedia.com

Companies

Yahoo! joins OpenSocial initiative
Yahoo! has joined forces with Google, MySpace, Bebo and others in the OpenSocial initiative, writes The Guardian. The initiative was formed last November in order to make it easier for developers to create applications which will automatically work across numerous websites. The firms have now announced the creation of the OpenSocial Foundation - an independent non-profit organisation which will provide guidelines and set specifications for the future development of compatible applications. The Foundation will also help ensure that all members of the initiative will share influence over its future role and direction.
As yet neither Facebook nor Microsoft have joined the initiative.
The Guardian: http://www.guardian.co.uk, 25/03/2008
OpenSocial: http://code.google.com/apis/opensocial

Microsoft looks at ad yield management specialist Rapt
The announcement in March that Microsoft was interested in advertising yield management specialist Rapt (reported by vnunet.com) was particularly interesting because of the effect Rapt has had on the pricing of online advertising in the US domestic market. The smart technology creates a new landscape for advertising buying and sales which marks a step change in the way the industry works. Rapt's portfolio of clients includes Microsoft, Expedia, Dow Jones, The New York Times and Yahoo!
vnunet.com: http://www.vnunet.com, 14/03/2008
Rapt: http://www.rapt.com

TradeDoubler launches contextual advertising service
TradeDoubler has launched td AdMatch a new contextual ad service, writes Netimperative. td AdMatch works by scanning web pages for content and then contextually matching relevant ads using automated and manually specified keywords. The service supports text, image and display advertising and publishers are able to use their own customised ads. In addition advertisers only appear on pre-approved sites while advertisers only receive ads for advertisers they have applied to.
From Netimperative: http://www.netimperative.com, 02/04/2008
TradeDoubler: http://www.tradedoubler.com

MySpace set to provide legal music downloads
MySpace is close to signing a deal with Sony BMG and Warner Music to offer legal music downloads, writes The New York Post. The firm is also close to coming to an agreement with Universal Music. The joint venture is expected to offer a mixture of pay-per-download and ad-supported models. The deal is thought to remain cash-free with the labels expected to trade their content rights in exchange for minority equity stakes in MySpace Music and a share of all advertising revenues generated by the service. MySpace is thought to have between $50m to $100m (£25m to £50m) earmarked for the launch of the venture. MySpace currently attracts 15m unique visitors each month to its MySpace Music website.
From The New York Post: http://www.nypost.com, 03/04/2008
MySpace: http://www.myspace.com

Trends

Brits head online to watch videos
UK traffic to online video sites grew 178% year-on-year from February 2007 to 2008 reports Hitwise. According to the firm the top 25 video websites accounted for 2.22% of all UK internet visits - equal to one in every 45 visits that month. YouTube remained the most popular video site and the eighth most popular website in the UK overall. YouTube US & UK combined accounted for 69.31% of all UK visits to the top 25 video sites in February. BBC iPlayer was the third most visited video site, growing 423% since last December.
Hitwise: http://www.hitwise.com, 26/03/2008

Source: Hitwise
Hitwise: http://www.hitwise.com

Mobile

Mobile search market to reach $4.8bn by 2013
The latest estimate from Juniper Research expects annual revenues from mobile search to reach $4.8bn (£2.4bn) by 2013, writes ENN. 40% of mobile search advertising budgets will go to local search services.
From ENN: http://www.enn.ie, 18/03/2008
Juniper Research: http://www.juniperresearch.com

Broadcasting

22m homes now have digital TV
Ofcom's latest research has found that 22.2m UK households now have digital television services on their main TV set, writes Brand Republic. The latest Digital Television Progress Report also found that multi-channel TV take-up grew from 86.1% in Q3 2007 to 87.6% in Q4. Growth was driven by sales of digital terrestrial TV, with 4m units sold during the final quarter of 2007. Over 4m Freeview units were sold during the period, up from 2.4m in Q3 2007. 15m UK homes now have at least one Freeview box. BSkyB added 145,000 new subscribers, growing to 8.3m in total. Customers using cable TV services grew 61,000 to over 3.5m in total. Cable overtook analogue TV for the first time, becoming the UK's third largest TV platform with 13.6% of the total TV market.
From Brand Republic: http://www.brandrepublic.com, 27/03/2008
Ofcom: http://www.ofcom.org.uk

Best practice internet marketing tips

Internet publishing - 100 posts of advice and best practice
It's been a busy month for teaching publishers and our online classroom for media owner publishers just topped 100 posts. I only get to answer a few questions online when the schedule is this hectic, but it's been fascinating looking back at them. They follow some of the management strategy clinics we run with digital publishers and website owners to help them see the scope and potential for boosting their businesses through smarter online content and commerce strategies. Since the start of the year we've been running projects as far afield as New York, Croatia and Sweden, and for me it's been real interesting seeing how many problems are similar across the different markets. Some - like navigation and structures - even echo those we encountered back at www.telegraph.co.uk in the mid 90s, while some - like social media engagement - are so new that many are like rabbits caught in the headlamps and unsure how to even start. Check out some of the comments and add in your own points if you like... Read more »

Further best practice tips at Digital Strategy Consulting.com:
Online advertising: using Digital's Web Advertising Conversion Funnel
Dayparting - how online ads can learn a lesson from broadcast media
Sales structures - how do you structure an internet advertising sales team effectively?

Meadows-Klue on Media
www.DigitalStrategyConsulting.com/blogs

Scattered postings from one person's journey on the road to the digital networked society

Newspaper ad market: from bad to worse?
It's a grim time in the newspaper industry, and with the US newspapers about 5 years further down the track in suffering the effects of CraigsList and the free to air ad models, savvy European publishers should be looking westwards for a glimpse of a future they want to avert. This article in the New York Times neatly sums up the problems, charting the fall of both audiences and ad revenues. Though interestingly they conclude it could take 5-10 years before the sector stabilises. Nice way of putting it: it could be 5-10 years before the majority have collapsed! The ad models are simply out of date, the audiences moving to more effective channels, and the economics of many print titles unworkable. I love newspapers, I've been privileged enough to work for several, I was offered the editorship of a London freesheet when I was only 18, but the businesses need to adapt fast; revolutionary change in compressed timeframes, otherwise it's all over.
Post a comment: http://www.DigitalStrategyConsulting.com/blogs, 03/03/2008
Read more in the New York Times: http://www.nytimes.com

Read more at Digital Strategy Consulting.com:
Online newspapers up, print ads sliding further: larger slice of a smaller pie

Statistics

Monthly internet usage statistics for Germany, February 2008

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

Monthly top ten German parent companies for February 2008

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

Top 10 popular websites in the UK, February 2008

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

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