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

June 2009

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Digital Strategy Consulting


Michael Jackson's death triggered surges to the web that slowed Google, crashed Twitter and saw millions of tracks downloaded in days. The horrors in Iran drove people online both inside and outside the country, and the single actions of Iranians with cameras and web connections revealed the truth to the world.

The web has given everyone a voice and it's at times like these the scale of change is clearest. We've been tracking the rise of social media for five years and there are more examples here: www.DigitalTrainingAcademy.com/socialmedia.

Meanwhile in the advertising industry the switch to the web remains unfaltering - even though growth appears to be stalling in the US, brands in every country continue switching budgets online because pressured marketers are looking for accountability. This is something we've seen first hand in auditing the effectiveness of brands' marketing spends.

This month we've also included links and comment about the UK's 'Digital Britain' report and the framework for developing our own digital economy.

Best from all @ Digital


Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

 

Statistics

Here are the latest stats and figures from the past month.

Consumer internet behaviour: Worldwide
Monthly internet use: key indicators for web users based on global data, May 2009

Digital Strategy - Consumer internet behaviour worldwide, May 2009

Internet audience in Europe
Total internet users by country across Europe, April 2009

Digital Strategy - Internet audience in Europe

Consumer internet behaviour: Germany
Key indicators for monthly internet use: in Germany, May 2009

Digital Strategy - Consumer internet use, Germany May 2009

Internet audiences in Germany
Time per person for top 10 parent companies, Germany May 2009

Digital Strategy - Internet audiences in Germany

Top 10 internet services in Germany
Audience reach for top 10 parent companies in Germany, May 2009

Digital Strategy - Top 10 internet services in Germany

Consumer internet behaviour: UK
Monthly internet use: key indicators for UK web users, May 2009

Digital Strategy - Consumer internet behaviour in the UK, May 2009

Internet audience: UK
Time per person for top 10 parent companies, UK May 2009

Digital Strategy - Internet audiences in the UK

Largest UK internet sites
UK audience reach for top 10 parents companies, May 2009

Digital Strategy - Largest UK internet sites

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Advertising

European online adspend grew 20% in 2008

The latest European online advertising study from IAB and PricewaterhouseCoopers (PwC) has revealed that online adspend grew 20% during 2008 to reach €12.9bn (£11bn), writes Brand Republic. The study examined the markets in 19 European countries. Although some mature markets showed less than 20% growth, only France and the Netherlands came in below 19% (with 18.5% and 9% respectively).
Online search advertising led the way with 26% growth, rising to €5.6bn (£4.8bn). Overall, search accounted for 43% of all European ad budgets in 2008 (from 41% in 2007). Classified adspend was up 17% on 2007 (to take 25% of all advertising), reaching €3.8bn (£3.25bn). Display advertising increased 17% to €3.3bn (£2.82bn) and email spend remained flat at €200m (£171m).

From Media Week: http://www.mediaweek.co.uk, 11/06/2009
IAB Europe
: http://www.iabeurope.eu

36% of all UK adspend to be online by 2013
PricewaterhouseCoopers's (PwC) latest Entertainment and Media Outlook report predicts that online advertising in the UK will take 36% of all adspend by 2013, writes Brand Republic. According to the firm, online ad expenditure grew 17.1% (£540m) year-on-year during 2008 to reach £3.35bn, giving it 19.2% of the UK ad market (from 15.5%). The report also predicts that the UK's total internet access market (including both wired and mobile) will grow at a compound rate of 7% between 2009 and 2013 to reach £8.84bn (from £6.32bn).
PwC expects the UK's entertainment and media market to decline until 2010 before growth resumes. Not all sectors will fully recover however: PwC forecasts that the only sectors which will be larger in 2013 than in 2008 are internet access, internet advertising, TV subscriptions and license fees, filmed entertainment and video games.

From Brand Republic: http://www.brandrepublic.com, 16/06/2009
PricewaterhouseCoopers
: http://www.pwc.com

Internet advertising: European markets
Online advertising spend growth slows in maturing markets, December 2007-2008

Digital Strategy - Internet advertising, European markets 2007-2008

Internet advertising: Europe
Growth in online advertising categories across Europe in 2008

Digital Strategy - Internet advertising, Europe 2008

Internet advertising: Europe
Total online advertising in Europe 2007-2008

Digital Strategy - Internet advertising, Europe 2007-2008

Online adspend drops 5% in US to reach $5.5bn
The latest US figures from the IAB and PwC show that online adspend fell 5% year-on-year in Q1. Against the previous quarter the decline was even higher at 10%. The results represent the first time that year-on-year figures have been negative since 2002.
However, total US advertising figures from Nielsen suggest a slower drop in online adspend. Their figures for online display advertising show a 3.4% drop (to $2.11bn) against a total quarterly advertising decrease of 12% (to $27.9bn).
At the other end of the scale TNS Media have bucked the trend to report an 8.2% year-on-year rise in quarterly online display advertising against a total fall in the US advertising market of 14.2%.

From ClickZ: http://www.clickz.com, 08/06/2009
IAB US
: http://www.iab.net

Internet advertiser volumes: UK
Online display advertising sectors and volumes of campaigns: January-April 2009

Digital Strategy - Internet advertiser volumes, UK January-April 2009

Online display ad activity up 21% in first third of 2009
Nielsen Online have released new research which shows that activity in the UK's online display advertising sector grew 21% year-on-year in the first four months of 2009, writes Media Week. The research studied the online display ad market by tracking three metrics: the number of advertisers; the number of individual campaigns they ran; and the number of ad creatives used. On average, 5,900 advertisers ran online display ad campaigns each month; 11,000 campaigns were run; and 32,000 ad creatives were used.
Growth was predominantly driven by big brand advertisers in the retail and finance sectors such as Tesco, Marks & Spencer, HSBC and Barclays.

From Media Week: http://www.mediaweek.co.uk, 04/06/2009
Nielsen Online
: http://www.nielsen-online.com

Online advertising spend: US
Internet advertising spend in the US since the internet "boom" in 2009

Digital Strategy - Online advertising spend: US

Internet advertising: US
Advertising spend migration in the US

Digital Strategy - Internet advertising: US

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Government
Government releases Digital Britain report
The Government has finally published its Digital Britain report by Communications Minister Lord Carter. The 238 page report sets out the Government's "strategic vision" for the next stage of the UK's digital development in order for the country to remain at the "leading edge of the global digital economy". New measures outlined in the report include:
  • Universal UK access to broadband speeds of 2Mbps by 2012.
  • Setting up a fund to invest in next generation broadband using a 50p monthly levy on all fixed telephone lines.
  • A three-year plan to raise digital participation.
  • Legal and regulatory changes to fight digital piracy with an increased role given to Ofcom.
  • A change in Channel 4's remit, with a new role as the 'open new media authority' (instead of 'the open broadcasting authority').
  • Liberalising the mobile spectrum, extending 3G licenses and improving 3G coverage.
  • Holding a consultation to examine funding for local, national and regional news (including the proposal to redirect £130m from the BBC licence fee to pay for ITV regional news).
  • Setting the digital radio switchover date for 2015.
  • Supporting public service content partnerships.

The following is our round-up of the most useful and relevant Digital Britain stories from around the web:

Social networks: A first step towards European regulation
European regulators unveiled long anticipated plans this week for guidelines about how social networks such as Facebook and MySpace should handle European privacy rules, writes the Wall Street Journal. Regulation in a young and fast changing space is always risky, and many will argue lacks necessity because of the existing data protection directive. However the guidelines appear to have been set very low, simply reconfirming what would be common knowledge even for novice internet users.
The WSJ confirms that key elements include...

  • Sites should offer privacy-friendly default settings.
  • Users should be advised that pictures should only be uploaded with the individual's consent.
  • Sites must set maximum periods to retain data on inactive users. Abandoned accounts must be deleted.
  • Users should be allowed to adopt a pseudonym.

The reason why this matters is that global players such as Facebook are based outside the EU's jurisdiction and citizens from the 27 European nations would have different types (usually weaker) privacy frameworks on these global sites to the national equivalents. The recommendations also include getting social network owners to place default security settings at a high level and allow users to limit data disclosed to third parties. Sensitive information, such as race, religion or political views are also covered, along with behaviourally targeted advertising.
From the Wall Street Journal: http://online.wsj.com, 24/06/2009

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Companies

Vodafone and MySpace extend partnership with launch of Music Studio

Vodafone are strengthening their ongoing ties to MySpace by launching an online music studio, writes Netimperative. The 8-month campaign will see the firms build a MySpace community geared towards musicians and music fans in the UK, Germany and Spain. The Music Studio will feature:
  • an online remixing tool for musicians to play with tracks by established artists;
  • tips and tricks on playing and recording music and using MySpace to promote artists;
  • regular monthly competitions for bands and artists to promote themselves and win recording time;
  • news and interviews from Vodafone-sponsored events across Europe;
  • discussion forums and community tools for musicians to link to events.

The partnership complements the launch of the Vodafone Music Reporter platform on MySpace last year and reflects Vodafone's ongoing strategy to brand itself as a "key player in the music industry".
MySpace has had a tough time this month, announcing staff cuts of nearly 30% as the site restructures itself to try and play catch-up with Facebook and Twitter.
From Netimperative: http://www.netimperative.com, 24/06/2009
The Music Studio: http://www.myspace.com/themusicstudio

UK Twitter traffic up 22-fold in 12 months
New research from Hitwise has found that traffic to Twitter has increased 22-fold in the last year. According to the research, Twitter was the UK's 38th most-visited website in May this year and the 5th most-visited social network. In contrast the site only ranked 969th place a year ago in May 2008. 93% of Twitter's growth dates from 2009 as media coverage and increasing numbers of high profile celebrity users have raised public awareness and driven online registrations.
Hitwise have also discovered that Twitter is now the UK's 30th biggest source of traffic for other websites, responsible on average for 1 in every 350 site visits. 55.9% of downstream traffic from Twitter goes to other content-driven media websites including newspapers, blogs, other social networks and news and entertainment sites. In particular, Twitter is now the 27th biggest source of traffic to websites tracked by Hitwise in the "News and Media - Print" category. Twitter is less-successful in motivation shoppers however with only 9.5% of the site's traffic going on to visit online retailers.
The Twitter effect can be tremendous though: online picture site Twitpic is now the third most popular photo website in the UK after Flickr and Photobucket as a direct consequence of receiving 1 in every 13 downstream UK visits from Twitter.
From Hitwise: http://www.hitwise.co.uk, 24/06/2009
Twitter
: http://www.twitter.com

Self service ads trend grows: Yahoo! launch My Display Ads
New toolkits released from Yahoo! this month apply the ease of search engine advertising creation to graphical ads. It's another significant step in the restructuring of the advertising sector, changing the role of small ad agencies as well as creating a more efficient structure for taking messages to market. Look out for more extensive toolkits from MSN, and widespread adoption by online publishers from the print and broadcast sectors.
Yahoo!: http://uk.yahoo.com, 22/06/2009

Facebook overtakes MySpace in the US
Facebook has finally overtaken MySpace in the US according to new research from comScore, writes eMarketer. According to the metrics firm, Facebook received 70,278,000 unique visitors in the US during May this year, a 97% increase on May 2008. Unique visitors to MySpace fell 5% during the same period to 70,255,000. Previously comScore had predicted that it would take until 2010 for Facebook to overcome its rival.
Further evidence of Facebook's current dominance was also seen in the site's roll-out of personalised URLs. Over 3 million users logged on in the first 12 hours to register their chosen suffixes which now replace numerical identifiers for the first time.
In the UK, Facebook had further reason to celebrate this month as comScore also revealed that the site had overtaken Yahoo! during April to become the third most visited website, with 23.4m users.
From eMarketer: http://www.emarketer.com, 18/06/2009
Facebook
: http://www.facebook.com

Virgin Media to offer unlimited music download service
Virgin Media broadband customers will soon have unlimited access to Universal Music's entire back catalogue for a set monthly subscription, writes Marketing Magazine. Users of the service will pay around £20 a month and will be able to stream and download as much music as they want without limits. Users will be able to keep any MP3 files they download and play them on any compatible device without restriction. Virgin Media is currently in talks with other major record labels to try and sign up further partners before the service goes live later this year. Virgin Media also intends to offer a cut-price "entry level" subscription for people who do not require unlimited access.
From Marketing Magazine: http://www.marketingmagazine.co.uk, 15/06/2009
Virgin Media
: http://www.virginmedia.com

Dell generates £1.8m through Twitter
Global computer firm Dell has generated sales of over $3m (£1.8m) through its presence on Twitter, writes Revolution. According to the firm, sales have come from Twitter followers clicking directly from tweets to purchase products online. Dell has used Twitter for the last two years and tracks sales which initiate from the microblogging site using its proprietary ecommerce system. Sales from Twitter for the last six months totalled $1m (£600,000).
However, Twitter-led sales currently remain small beer for the computer giant which posted revenues of $12.3bn (£7.5bn) in Q1 2009.
From Revolution: http://www.revolutionmagazine.com, 15/06/2009
Dell UK
: http://www.dell.co.uk

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Trends

Media multi-tasking: a snapshot in changing behaviours of digital consumers

There is a marked increase in the number of people choosing to consume different media simultaneously, confirming the evolution of media multi-taskers according to new research from the European Interactive Advertising Association released in June 2009. The study highlights how consumers are entering a new phase of communications and commerce online and how dual simultaneous media consumption has become standard consumer behaviour.
From DigitalStrategyConsulting.com: http://www.digitalstrategyconsulting.com, 23/06/2009
Digital Strategy Consulting: http://www.digitalstrategyconsulting.com

Browser battles: Firefox market share
Possibly one of the fastest downloads in history. Mozilla's new Firefox 3.1.11 browser clocked up a staggering 150m downloads in its first 24 hours, writes VNU. Apple's Safari is logging a more sedate 11m for Safari 4 (over the first four days).
From Vnunet.com: http://www.vnunet.com, 14/06/2009
Firefox: http://www.firefox.com

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Ecommerce

Online retail set to grow 13.3% during 2009

A new report from Verdict Research estimates that online retail in the UK will grow 13.3% in 2009, despite a predicted decline in total retail of 0.6%, writes Telecoms Europe. According to Verdict, online retail spending will reach £20.9bn by the end of this year as both the number of online shoppers and expenditure per head continue to increase. Verdict predict that online spend will reach £31.2bn by 2013, accounting for 10% of all British retail.
From Telecoms Europe: http://www.telecomseurope.net, 02/06/2009
Verdict Research
: http://www.verdict.co.uk

Online shopping: Biggest UK sites
Top 10 retailers in the UK, April 2009

Digital Strategy - Online shopping: Biggest UK sites

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Mobile

More mobile handsets get Flash
HTC and Adobe have announced that the Flash content format that drives much of the high impact visuals on the web will soon be available on Android, writes CrunchGear. It's another small step towards achieving complete adoption of key content tools and much needed if the web experience is to be effectively reproduced on mobile devices.
From CrunchGear: http://www.crunchgear.com, 24/06/2009
Adobe Flash: http://get.adobe.com/flashplayer
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Broadcasting

Channel 4: web-enabled archive
This weekend the UK's Channel 4 television network announced 10,000 archived shows are being put online - and for free. Media guardian reported that over 4,000 hours of content on the way, and all viewable through the 4oD catch-up service. The implications are that pressure will grow to release the BBC's content archives which currently only run to 7 days. Great news for the web and internet users, good news for advertisers who have a new high volume channel for TV commercials, but in a world of television on-demand will there be any role for the linear broadcast schedule?
From Media Guardian: http://www.guardian.co.uk, 07/06/2009
Channel 4oD: http://www.channel4.com/4od
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 Comment: tracking the digital networked society for over a decade
www.DigitalStrategyConsulting.com/blogs


Lycos: A story of digital decay, diseconomies and disintegration
In the maelstrom of the dotcom days a lot of heady deals were done in time periods too short, surrounded by too much hype and too little strategy. The result was corporate debris with globally presented brands that were disjointed behind the scenes...
More...

How fast is your mobile broadband, no, really?
Shocking report from Epitro this week found the average UK mobile broadband download speed only 0.9megs: that's a quarter of the 3.6megs most suppliers claim...
More...

iPhone 3GS: gadgets you never knew you needed

Digital Strategy - iPhone 3GS: gadgets you never knew you needed
Some of this stuff nobody could make up, unreal.
More...

Digital minister quits UK government - by posting on Twitter
It's been a dismal week for the British Government. The European elections will see a the tide turn against the ruling Labour party, and as the newswires saturate with talk of cabinet coups, party lines being broken and the parliamentary party in disarray, one minister chose to resign - through Twitter...
More...

Digital society; analogue voting
It's voting day today here in the UK. As part of Europe's election, millions of us are weaving our way to community halls, churches and local government buildings, taking part in democracy...
More...

Freedom of the web? Not for Facebook in Iran
Iran has blocked access to Facebook...
More...

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