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

July 2008

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Digital Strategy Consulting


While marketing budgets across the board are feeling the pinch the IPA's latest data shows that online remains the only sector experiencing positive growth. In addition, revised forecasts from ZenithOptimedia now expect online to take 10% of this year's global advertising spend.

This month has also seen further evolutions in digital convergence - a trend we have been tracking in Digital Intelligence from the very beginning. Soon both Sony and Microsoft will have video-on-demand services for their various multi-function gaming devices, and both firms are now bringing in content partners to widen their offerings.

As consumers we're now used to the idea of things being connected and able to fulfil many roles - so it was no surprise this month to see that Facebook now takes over 45% of the UK's social networking traffic. Perfect timing then for us to tell you about a little Facebook app we've built to send you our latest news and headlines.

Best from all @ Digital


Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

 

Advertising

Global online adspend on course to take 10% during 2008
A new forecast from ZenithOptimedia predicts that online advertising is on course to take 10% of all global adspend during 2008, writes ClickZ. The firm has revised its last forecast from March to take into account the current economic problems. ZenithOptimedia now expect online adspend to reach $52.2bn (10%) in 2008, rising to $78.2bn (13.6%) in 2010. Their previous forecast put online at 9.7% ($47.5bn) for 2008, rising to 12.3% (66.9bn) in 2010.
From ClickZ: http://www.clickz.com, 01/07/2008
ZenithOptimedia: http://www.zenithoptimedia.com

Online remains on top as UK marketing budgets cut
The IPA's latest Bellwether report has found that online remained the only marketing sector not to experience budget cuts during Q2 writes Brand Republic. Growth in online marketing slowed to 6% over the previous quarter. In total 19% of firms surveyed increased their online budgets during the quarter, against 12% of firms who revised them down. Online search marketing remained strong with 18% of firms planning to spend more and only 9% planning to cut budgets.
The biggest cuts in marketing budgets came from the travel and entertainment, retail, consumer durables and FMCG sectors.
From Brand Republic: http://www.brandrepublic.com, 14/07/2008
IPA: http://www.ipa.co.uk

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Companies

Yahoo! opens up in radical strategy leap

We're really interested in the latest developments at Yahoo. The decision to open up its search technology to let users create their own engines feels like a classic long tail strategy and one that could step-change the firm's search volumes. The Build your Own Search Service (BOSS) lets any webmaster create search tools that deliver a customized interface and results pages for the individual site (rather like the one we have here on Digital's sites). Yahoo have stressed that this is also about social media and the importance of getting at data from within the consumer generated content sector. More on Netimperative, but much more to come from Yahoo...
From Netimperative: http://www.netimperative.com, 11/07/2008
Yahoo! UK: http://uk.yahoo.com

Facebook takes 45% of all UK social networking traffic
New figures from Hitwise show that traffic to Facebook in the UK has grown 188% in the last year, writes Brand Republic. The site accounted for 45.29% of all UK social networking traffic in June, 80% more than its closest rival. The top three sites (Facebook, Bebo and MySpace) now account for over 85% of all the UK's social networking traffic between them. Facebook's position echoes last month's Digital Intelligence which revealed that the site has now overtaken MySpace in terms of global unique users.
From Netimperative: http://www.netimperative.com, 23/07/2008
Hitwise: http://www.hitwise.co.uk

Top 10 social networking sites in the UK, June 2008

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

Top 5 social networking websites ranked by market share of US internet visits

Note: Data is based on a custom category of 57 of the leading social networking websites ranked by market share of U.S. visits, which is the percentage of online traffic to the domain or category, from the Hitwise sample of 10 million U.S. Internet users. Hitwise measures more than 1 million unique websites on a daily basis, including sub-domains of larger websites. Hitwise categorizes websites into industries on the basis of subject matter and content, as well as market orientation and competitive context.

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

Microsoft in search and ad deal with Facebook
Microsoft has agreed a new deal with Facebook under which it will integrate its Live Search product and serve paid search ads on the social networking site writes The Financial Times. According to sources close to Facebook, the firm is aiming for advertising sales of $350m this year, from $150m in 2007. Microsoft invested $240m with Facebook last year, valuing the firm at $15bn.
From The Financial Times: http://www.ft.com, 24/07/2008
Facebook: http://www.facebook.com

Adobe working with search engines to make Flash files searchable
Flash media files (SWF files) will now be searchable according to a new announcement from Adobe writes IT Week. The firm is working with Google and Yahoo! so they can incorporate Flash Player code into their search algorithms. This will mean that dynamic websites featuring Flash code, including buttons, banners and menus can now be indexed by search engines and will feature in search results. Adobe plans to work with other content publishers and developers in the future.
From IT Week: http://www.itweek.co.uk, 01/07/2008
Adobe: http://www.adobe.com

1m 3G iPhones sold in first weekend
Apple has announced that it sold 1m of its new 3G iPhone during the first weekend they were on sale, writes The Financial Times. The firm also revealed that users downloaded over 10m application from the App Store in the three days following the launch. Many retail outlets across the world have sold out of the devices, including Carphone Warehouse, O2 and TeliaSonera in Europe. RBC Capital Markets has predicted that Apple will reach global sales of 5.1m of the new phones during Q3 2008.
From The Financial Times: http://www.ft.com, 15/07/2008
Apple iPhone: http://www.apple.com/iphone

Apple beats quarterly predictions with record Mac sales
Higher Mac and iPod shipments have contributed to Apple posting higher-than-expected quarterly results, writes Silicon.com. The firm reported revenues of $7.46bn and net profits of $1.19 for its third fiscal quarter, ending 28 June. Mac sales rose 41% with 2.5m units shipped while iPod sales were up 12% to 11m units shipped. Sales for the iPhone reached 717,000 during the period.
From Silicon.com: http://www.silicon.com, 22/07/2008
Apple: http://www.apple.com

ISPs agree to tackle online piracy with music industry
The UK's six biggest ISPs have signed a memorandum of understanding with music industry body the BPI and the Motion Pictures Association of America, writes The Financial Times. The deal was brokered by the Department for Business, Enterprise & Regulatory Reform (BERR) and the government is said to have made it clear that this is the internet industry's last chance to avoid legislative action or compulsory levies.
The memorandum commits the ISPs to work towards a "significant reduction" in illegal file-sharing and to develop legal music services. Under the plan ISPs will send 1,000 letters to highly active file sharers every week during a three-month trial. ISPs are working on a voluntary code of practice which will include agreed sanctions for dealing with persistent offenders. The code will be overseen by Ofcom.

From The Financial Times: http://www.ft.com, 23/07/2008
BPI: http://www.bpi.co.uk

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E-commerce

UK online shopping up 38% on 2007
Internet retail in the UK was up 38% in the first half of 2008 as consumers headed online to go shopping, writes The Guardian. According to the IMRG-Capgemini online sales index £26.5bn was spent online during the period, equivalent to 17p in every £1 spent by British shoppers. Online spending on clothing and footwear showed the highest growth with sales in March up 31% year-on-year.
IMRG predicts that online could take 50% of all UK retail spend within the next five years.
From The Guardian: http://www.guardian.co.uk, 18/07/2008
IMRG: http://www.imrg.org
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Trends

1/4 of the world now connected
Latest research from IDC confirmed that almost a quarter of the world's population (1.4bn) were now connected to the internet, using it on a regular basis. This is another threshold in the progress towards a Digital Networked Society and the IDC are forecasting continued strong growth to exceed 1.9bn (30%) by 2012.
From MarketingCharts: http://www.marketingcharts.com, 14/07/2008
IDC: http://www.idc.com

57% of Brits now spending over 6 hours per week online
New research from BT shows that 57% of all internet users now spend over 6 hours per week online, compared with 14% in 1998. writes Netimperative. In addition, 7% of users now go online for over 30 hours per week. Brits are also visiting more websites, with 19% visiting over 20 sites each week. 78% of UK users have shopped online, compared with only 19% in 1998. 56% have bought items in the last three months. 44% of households are now broadband enabled.
From Netimperative: http://www.netimperative.com, 28/07/2008
BT: http://www.bt.com

How long are we spending online per week?

Base: All internet users; 2008 (1,150), 1999 (443), 1998 (553).

Source: BT 21st Century Life Index
BT: http://www.bt.com

How many websites do we visit per week?

Base: All internet users; 2008 (1,150), 1999 (443), 1998 (553).

Source: BT 21st Century Life Index
BT: http://www.bt.com

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Mobile

Mobile internet reaches its critical mass say Nielsen Mobile

New figures from Nielsen show that 15.6% of mobile phone users in the US (40m people), 12.9% of users in the UK and 11.9% of users in Italy are now using mobile internet services, writes BBC News. According to the firm a confluence of web-enabled devices, networks, new pricing plans and content has come together to create a critical mass of users.
In the US, portals, online email and weather sites remaining the most popular mobile internet destinations. Users are also getting used to seeing ads on their mobiles: 26% of mobile internet users remember seeing some form of advertising. Mobile internet users are also 60% more likely to engage with advertising than average mobile users.
From BBC News: http://news.bbc.co.uk, 10/07/2008
Nielsen Mobile report (PDF): http://www.nielsenmobile.com/documents/CriticalMass.pdf

Mobile internet usage penetration across sixteen measured countries (Q1 2008)

Source: Nielsen Mobile
Nielsen Mobile: http://www.nielsenmobile.com

Mobile payments set for $300bn within five years
The latest mobile sector study from Juniper Research predicts that total payments made by mobile phones will be worth over $300bn by 2013, writes Telecoms.com. 40% of such sales are expected to come from mobile ticket purchases for transport, sport and entertainment events. Consumers from Western Europe and the Far East are expected to represent over 60% of Juniper's predicted mobile-based spending figure.
From Telecoms.com: http://www.telecoms.com, 01/07/2008
Juniper Research: http://www.juniperresearch.com

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Broadcasting

Online radio attracts 9.4m listeners
New research from radio audience measurement body Rajar has found that 9.4m people are now using online radio services on a weekly basis, writes Brand Republic. In total 14.5m people listened to online radio services during April and May, up 2.5m from November 2007. Podcasts downloads were also up, reaching 6m (from 4.3m). 3.7m users say they listen to them every week. Nearly three-quarters of podcast listeners use iTunes to download them. 53% of those polled said that they would be interested in downloading podcasts featuring ads if those podcasts were free.
From Brand Republic: http://www.brandrepublic.com, 02/07/2008
Rajar: http://www.rajar.co.uk

Coming to a PSP near you
Sony and Sky are teaming up to launch a video-on-demand service dubbed Go!View for Sony's portable PSP device, writes Netimperative. PSP owners will have access to films, TV Shows and sport from a range of media suppliers including the BBC, Disney, ABC and Sky Sports. Users can get monthly subscription packs for Comedy, Sport and Entertainment, while TV shows and films can be rented individually. Content is ported to the PSP via the user's PC.
Sony is also launching its PlayStation 3 video rental downloads service in the US with an initial selection of around 1,200 TV shows and 300 films. Users can download in both SD and HD with TV episodes costing around $2 and films around $3. Users have a 14 day period in which to watch their downloads.
From Netimperative: http://www.netimperative.com, 15/07/2008
Go!View: http://www.goview.tv

Microsoft to stream Netflix movies on Xbox 360
Microsoft is expanding its available catalogue of video downloads with the addition of 10,000 films and TV episodes from the Netflix library, writes ENN. The service will launch in the Autumn and will be free to users who have accounts with both Netflix and Xbox Live Gold.
From ENN: http://www.enn.ie, 15/07/2008
Xbox Live: http://www.xbox.com/live/

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Statistics

Monthly internet usage statistics for the UK, June 2008

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

Monthly top ten UK parent companies for June 2008

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

Top 10 popular websites in the UK, June 2008

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

Active Home Internet Users by Country, May 2008

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

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