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

June 2008

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Digital Strategy Consulting


The figures are in for 2007, showing that online passed the £3bn threshold last year and now makes up 16% of the UK's ad market. In Europe online adspend grew 40% during the year and is on course to overtake the US by 2010. These trends are only set to continue with some analysts now predicting that online budgets in the UK could overtake TV this year.

The long-running Microsoft-Yahoo! saga has also come to a close with the clearest winner seeming to be... Google. Yahoo's determination to avoid being acquired has strengthened the search giant's position even further. It remains to be seen if and when their new ad deal will be rolled out worldwide.

This month also saw Facebook overtake MySpace with astonishing annual growth of 162%. Facebook is clearly no longer the underdog rebel upstart though at present its users seem to be staying loyal.

Best from all @ Digital


Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

 

Advertising

Online adspend breaks £3bn barrier in UK
Total online adspend surpassed £3bn for the first time during 2007 according to new figures from the Advertising Association and WARC, writes The Guardian. Online now represents 16% of the total UK advertising market. Online grew 39.5% year-on-year to remain the UK's fastest growing sector while total UK adspend grew 4.2% in 2007 to £19.4bn.
From The Guardian: http://www.guardian.co.uk, 10/06/2008
The Advertising Association: http://www.adassoc.org.uk

UK Advertising Expenditure at current prices, 2007

Note: These figures are inclusive of production costs.
Source: Advertising Association's Advertising Statistics Yearbook 2008
WARC: http://www.warc.com

UK Advertising Expenditure, % share

Note: These figures are inclusive of production costs.
Source: Advertising Association's Advertising Statistics Yearbook 2008
WARC: http://www.warc.com

UK Advertising Expenditure, year-on-year % change

Note: These figures are inclusive of production costs.
Source: Advertising Association's Advertising Statistics Yearbook 2008
WARC: http://www.warc.com

European online adspend up 40%
The latest IAB Europe / PwC figures show that online adspend in Europe grew 40% during 2007 to reach €11.2bn (£8.9bn) - from €7.2bn (£5.7bn), writes ClickZ. If current trends continue, European online adspend will overtake the US market by 2010.
Between them the big three markets of the UK, Germany and France accounted for two-thirds of the European online spending total (€7.3bn - £5.78bn). However some smaller markets saw big year-on-year increases: Greece was up by 91%, Spain by 55% and Slovenia by 49%.
IAB Europe forecasts that 10 of the 16 countries studied will spend over 10% of total ad budgets online by 2010. At present 7 nations have met this criteria.
Search remained the leading online ad sector accounting for 41% of the 2007 total, followed by display advertising, classifieds and lead generation ads.

From ClickZ: http://www.clickz.com, 03/06/2008
IAB Europe: http://www.iabeurope.ws

Online Ad Spend in Europe and US 2006-2007

Source: IAB Europe AdEx 2007/PwC
IAB Europe: http://www.iabeurope.ws

Online advertising spend as a % of total advertising spend per market

Source: IAB Europe AdEx 2007/PwC & WARC
IAB Europe: http://www.iabeurope.ws

Online advertising spend per user (Spend per User)

Source: IAB Europe AdEx 2007/PwC
IAB Europe: http://www.iabeurope.ws

UK online on course to overtake TV during 2008
Enders Analysis predicts that internet advertising will overtake TV as the UK's biggest ad platform during 2008, writes Broadcast. The firm forecasts that online adspend will grow 26.4% to reach £3.56bn against TV which is expected to fall 2.5% to £3.39bn. The figures put online at 19% of all UK adspend.
Online video advertising is predicted to reach £35m during the year, with most advertisers using existing TV spots.
Google is expected to take 80% of all UK search advertising spend in 2008, up from 78% in 2007.
From Broadcast: http://www.netimperative.com, 18/06/2008
Enders Analysis: http://www.endersanalysis.com

Online taking over 50% of UK marketing budgets
New research from Clash-Media has found that over half of an average marketer's budget is now dedicated to online marketing, writes Netimperative. The research shows that over 70% of firms use search engine optimisation, paid search and e-mail marketing. The use of offline marketing in general has decreased with only press and TV advertising showing growth.
From Netimperative: http://www.netimperative.com, 13/06/2008
Clash-Media: http://www.clash-media.com

Interactive adspend on course for 15%
GroupM predict that global interactive marketing (including online, mobile and gaming) will take 15% of all adspend budgets by 2009, writes Brand Republic. GroupM expects interactive to continue to grow as traditional advertising media decline. According to the firm's study "Interaction: Addressable, Searchable, Social and Mobile" interactive media accounted for 11% of all adspend during 2007. The study surveyed 35 countries and ascribed interactive's growth to the development of more advanced handsets, cheaper laptops, faster broadband connections and the increasing use of Wi-Fi connections. In the UK, GroupM expect interactive adspend will reach 30% by 2009 (from 10% in 2005). The study also expects users to spend up to 46 minutes per day online (from 27 minutes in 2005).
From Brand Republic: http://www.brandrepublic.com, 25/06/2008
GroupM: http://www.groupm.com

Q1 ad revenues up 24% in US
New figures from IDC show that online ad revenues in the US rose 24% year-on-year in Q1 to reach $7.1bn (£3.6bn), writes ClickZ. IDC predict that quarterly online ad revenues will continue to grow between 15% and 20% during each quarter of this year. The firm also predicts that US online adspend will more than double in the next five years from $25.5bn (£12.9bn) in 2007 to $51.1bn (£25.8bn) in 2012. Online's share of the total US ad market will grow from 8.6% to 15.6% during the same period. Globally, IDC predict that online adspend will reach $106.6bn in 2011 from $65.2bn this year, representing 13.6% of all worldwide adspend.
IDC's study also showed that Google's net share of the US ad market rose from 23.1% in Q1 2007 to 24.8% in Q1 this year.
From ClickZ: http://www.clickz.com, 10/06/2008
IDC: http://www.idc.com

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Companies

Yahoo! partners with Google to avoid shotgun wedding to Microsoft

The long-running acquisition talks between Yahoo! and Microsoft have finally come to an end following Yahoo's decision to work with Google, writes The Telegraph. The deal builds on the firms' recent ad partnership and will see Yahoo! displaying Google ads next to its search results in the US and Canada from this September. The firms also intend to make their instant messaging tools compatible. Analysts expect Yahoo! to gain up to $800m in additional annual revenues from the deal.
Google has had other reasons to be happy this month with news that year-on-year traffic to the site was up 12% in the UK in May. According to Hitwise, the search giant received 87% of UK searches during the month compared to 68% of US searches.
The firm has also made some changes to its ad business, integrating its Google Analytics and Google TV Ads services. The new system will allow marketers to track the impact of TV ads on website traffic by analysing the scheduling of TV ads against subsequent impressions and CPM. In addition it can provide region-specific reports to track web traffic from localised TV campaigns with data being updated throughout the day.
Google has also launched a beta version of its latest tool Ad Planner. The service helps advertisers to track which websites their target audiences are visiting, helping them to target their campaigns more precisely.

The Telegraph: http://www.telegraph.co.uk, 13/06/2008
Google Ad Planner: https://www.google.com/adplanner

Percentage of U.K. searches among leading search engine providers

Note: Data is based on UK Internet usage over the four week rolling periods (ending 31/5/2007, 26/4/08, 26/5/2007) from the Hitwise sample of 8.4 million UK Internet users. Note that the percentages for the search properties include the .uk and .com domains.

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

Percentage of U.S. searches among leading search engine providers

Note: Data is based on four week rolling periods (ending 31/5/2007, 26/4/08, 26/5/2007 from the Hitwise sample of 10 million U.S. Internet users. * - includes executed searches on Live.com and MSN Search but does not include searches on Club.Live.com.

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

comScore qSearch 2.0 U.K. share of search report - April 2008 vs. March 2008

Total U.K., Age 15+ - Home & Work Locations (excludes searches from public computers such as Internet cafes or access from mobile phones or PDAs)

Source:
comScore qSearch 2.0
comScore
: http://www.comscore.com

Facebook overtakes MySpace
Facebook has surpassed MySpace in terms of global unique users according to new data published by ComScore, writes Brand Republic. Facebook's user base grew 162% year-on-year from 47.2m to 123.9m in May 2008. MySpace grew 5% during the same period from 109.5m to 114.6m.
According to the Wall Street Journal, VISA has partnered with Facebook to offer $2m of advertising to small businesses. VISA will offer $100 (£50) of targeted on-site advertising to each of the first 20,000 US-based firms which download an application to join VISA's new business network on Facebook.

Brand Republic: http://www.brandrepublic.com, 23/06/2008
VISA Business Network: http://apps.facebook.com/visabusiness

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E-commerce

Online shopping continues to grow in UK
A new consumer study by Verdict Research has found that online retail spending grew 35% in the UK during 2007 to reach £14.7bn, writes Netimperative. Verdict expect the trend to continue as consumers become used to making make more frequent and more expensive purchases online. The study predicts that online retail sales will reach £44.9bn in 2012, equivalent to about 13.8% of total retail spend.
Netimperative: http://www.netimperative.com, 04/06/2008
Verdict Research: http://www.verdict.co.uk
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Mobile

UK comes first in Western Europe for mobile advertising

65% of all mobile phone ad requests in Western Europe come from the UK, writes Netimperative. The research from AdMob show that it served 196,323,883 ad requests in the UK during May, equivalent to 65.1% of the total Western European figure. Spain showed the greatest increase with growth of 270% from September 2007, followed by Italy (up 210%).
In total AdMob's network impressions grew 16.9% and the firm now serves 100m impressions per day. 22.4% of impressions came from smartphones.
From Netimperative: http://www.netimperative.com, 20/06/2008
AdMob: http://www.admob.com

Ad requests by country May 2008

Source: AdMob
AdMob: http://www.admob.com

Mobile ads appeal to young consumers
Mobile advertising is nearly ten times more effective on 16-24 year-olds than alternative forms of advertising, writes Telecoms.com. The findings were revealed in new research commissioned by mobile ad firm JumpTap. 9% of 16-14 year-olds said that they would probably purchase a product following a mobile advert. Women find the format even more appealing with 15% saying they would be likely to make a purchase following a mobile ad. Overall recall rates were also higher with 10% of 16-24 year-olds and 28% of 45-79 year olds saying that they would try to find out more about a brand following a mobile ad.
The figures are echoed by stats from MVNO Blyk, the ad-funded mobile service, which recently announced average ad response rates of 29%.
From Telecoms.com: http://www.telecoms.com, 12/06/2008
JumpTap: http://www.jumptap.com

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Broadcasting

BBC One to go live online
The BBC is to broadcast its flagship channel BBC One online as a live video stream, writes Brand Republic. This is the first time that the corporation has broadcast one of its original analogue channels via the internet. The BBC announced the plan in its latest Statements of Programme Policy and it intends for the move to take place later this year.
In the meantime the BBC has just launched the latest beta version of its successful iPlayer service. The revamped service now combines both TV and radio content and features live radio streams. Other upgrades to the iPlayer include better sound quality, TV listings and new recommendation tools in addition to improved "listen again" and "last played" features. iPlayer traffic has continued to grow with recent statistics from Hitwise revealing that The Apprentice had become the most viewed programme.
From Brand Republic: http://www.brandrepublic.com, 05/06/2008
iPlayer: http://www.bbc.co.uk/iplayer

Top BBC programme sites sending traffic to iPlayer

Weekly upstream % of www.bbc.co.uk/iplayer based on UK usage

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

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Statistics

Monthly internet usage statistics for Germany, March 2008

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

Monthly top ten German parent companies for March 2008

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

Top 10 popular websites in the UK, May 2008

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

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