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

August 2008

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Digital Strategy Consulting


In this summer's edition we track why rain on the high street accelerated the growth of online retail, how China emerged as the country with the largest internet population, Russia as Europe's fastest growing digital nation, and the BBC iPlayer continued to enjoy success as it crosses tipping points in new markets with new features.

The team here at Digital for years have said 2009 would be the year mobile advertising really takes off, and several new forecasts are aligning with us: we're expecting to see big rises from the acceleration now underway. And if you ever thought you were spending too much time online, then spare a thought for "extreme gamers" who according to new research are clocking up more than 45 hours on the web every week.

Best from all @ Digital


Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

 

Advertising

Online adspend now greater than mainstream TV
The summer report from the UK government's Ofcom group revealed a stark picture of a nation migrating into the digital networked society. The latest figures show that online adspend in the UK overtook spending across the mainstream analogue channels. According to Ofcom, online adspend grew 40% during 2007 to reach £2.8bn, or 19% of all UK advertising. TV advertising however remained static at £3.5bn with the mainstream commercial channels (ITV1, Channel 4, S4C and five) taking £2.4bn or 67% of all UK adspend (from 83% in 2002).
In addition the report revealed increased leaps in use of the web and laptops as ways to view TV. More than a third of 25-44s often go online while watching TV. Since we started Digital Intelligence in 2000 we've tracked hundreds of technology shifts, and in the UK we've argued that the arrival of wireless broadband at home would create a step change in viewing behaviour. This latest research explains the nature of shifts in consumer use of media, but should be seen as simply a snapshot of what continues to be a journey not yet finished.
From The Guardian: http://www.guardian.co.uk, 14/08/2008
Ofcom: http://www.ofcom.org.uk

Advertising spend by medium

Source: Advertising Association statistics published by www.WARC.com

Share of advertising spend by medium

Source: Advertising Association statistics published by www.WARC.com

Total online TV revenue

Source: Advertising Association statistics published by www.WARC.com

Frequency of using other media while watching TV

Source: Ofcom
Ofcom: http://www.ofcom.org.uk

Online ads more effective on branded websites
Online ads on branded sites consistently perform above those on other sites, writes Netimperative. Research from the US-based Online Publishers Association (OPA) has found that sponsorships on branded content sites perform 36% above those on portals and 42% above Dynamic Logic's MarketNorms average. Similarly, brand favourability towards online ads is 29% higher on branded content sites than the MarketNorms average. Consumers are also 20% more likely to purchase following advertising on branded content websites.
From Netimperative: http://www.netimperative.com, 01/08/2008
OPA: http://www.online-publishers.org

Sponsorships on branded content sites are 36% more effective than on portals

Source: Dynamic Logic's MarketNormscampaigns from the last 3 years through Q4 2007, OPA through Q12008OPA N=1,185 campaigns, n=883,688 respondents; MarketNorms2,231 /3,995,139 ; Portals 1,193/1,301,451
OPA: http://www.online-publishers.org

Ads on branded content sites significantly more likely to increase message association and purchase intent for affluent audiences

OPA averages are significantly (at 90% level) different than MarketNormsfor all metrics except Awareness and Brand Favourability +13%

Source: Dynamic Logic's MarketNormscampaigns from the last 3 years through Q4 2007, OPA through Q12008OPA 75k+ N=585 campaigns, n=215,555respondents; MarketNorms75k + 1,515 /824,909
OPA: http://www.online-publishers.org

Video ads placed on content sites significantly raise brand awareness and favourability

OPA averages are significantly (at 90% level) different than MarketNormsin all metrics except Purchase Intent

Source: Dynamic Logic's MarketNormscampaigns from the last 3 years through Q4 2007 ; OPA through Q1 2008 OPA Video N=32 campaigns, n=19,979 respondents; MarketNormsVideo 157/205,677
OPA: http://www.online-publishers.org

88% of UK searches looking for branded terms
New research from Hitwise shows that UK internet users are moving away from generic search terms such as "cheap flights" in favour of brand names and terms. In May 2008, 88% of UK searches for the 2,000 most popular search terms were for branded terms - a 65% year-on-year increase. All of the top 10 most popular search terms were brands. The most searched-for term during the month was "facebook", accounting for 1 in every 72 searches. The top ten list also featured four other social media search terms: "bebo" (2nd place), "youtube" (4th), "you tube" (5th), and "myspace" (6th).
Hitwise: http://www.hitwise.co.uk, 14/08/2008

Branded search volume as a percentage of searches for the top 2,000 UK search terms

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

Top 10 search terms in UK, May 2008 and 2007

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

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Companies

Guardian.co.uk holds on to top spot

The latest figures from the Audit Bureau of Circulations Electronic (ABCe) show that traffic to the Guardian.co.uk website grew 28% year-on-year in July to reach a record 20,622,063 unique users (up 1% on June 2008). Other sites also had record months: traffic to the Times Online grew 56% year-on-year to reach 16,391,514 unique users, while Sun Online achieved 15,972,490 unique users with year-on-year growth of 69%. The three sites also saw record levels for page impressions with Guardian.co.uk registering 186,430,603 page views, Times Online registering 123,978,303 and Sun Online registering 292,031,461.
The Guardian: http://www.guardian.co.uk, 21/08/2008
ABCe: http://www.abce.org.uk
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E-commerce

Online spending in UK rises 11.3% in July
The latest e-retail sales index from IMRG and Capgemini shows that online retail grew 11.3% in July from the previous month, writes vnunet.com. Total online sales for the month reached £4.8bn, equivalent to £79/person in the UK, as consumers avoided the rain and used the internet to look for deals and save money. Data from the British Retail Consortium shows that high street sales were down 0.9% during the same period. Clothing, footwear and accessories was the fastest growing online category in July, rising 22.8%.
The figures echoed the latest Experian National Retail FootFall Index which predicts that the next twelve months will be the slowest period for retailers since the early 1990s.
From vnunet.com: http://www.vnunet.com, 20/08/2008
IMRG: http://www.imrg.org
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Trends

Two-thirds of British homes online
Nearly 16.5m UK households are now connected to the internet according to the latest figures from the Office for National Statistics (ONS), reports the BBC. The figure represents a year-on-year increase of 1.2m homes and represents almost two-thirds of all UK households. According to the figures over two-thirds of British adults now go online every day. Education is also a defining factor: 93% of adults aged under 70 with university degrees or similar qualifications have internet access at home. In comparison only 56% of people without formal qualifications use the internet. Further recent figures from Ofcom show that use of PCs and laptops has grown fourfold since 2002.
From The BBC: http://news.bbc.co.uk, 26/08/2008
ONS: http://www.statistics.gov.uk

Index of internet connectivity

Source: ONS
ONS: http://www.statistics.gov.uk

Media multi-tasking: now the norm
The summer report from Ofcom report has quantified the emergence of high levels of multi-tasking between the TV and other channels and how they have become the norm. TV attention is now clearly divided as many consumers switch on their mobiles and their laptops, with the TV acting as background entertainment, getting only a shrinking portion of their focus. Three quarters of 20-34 year-olds 'regularly' use a mobile while watching TV. The use of mobiles at home as well as outside also becomes more interesting and can be tied back to the way personal phone books have now become so device dependant that many consumers will use their mobile at home or work for convenience rather than a landline.
From The Guardian: http://www.guardian.co.uk, 14/08/2008
Ofcom: http://www.ofcom.org.uk

Social media: growth continues
This summer's news from MySpace confirmed there's no slowdown in sight to the growing desire for people to build their own web pages and footprints online, writes MarketingVOX. While Facebook offers the simple 'plug-and-play' approach to templates, the more advanced interface of MySpace continues to draw new audience, clocking up a record 75.2 million unique visitors in the US (July 2008), a leap of over 2 million on the previous month.
From MarketingVOX: http://www.marketingvox.com, 15/08/2008
MySpace: http://www.myspace.com

China now the world's leading internet nation
China has overtaken the US to become the world's biggest online market, writes the BBC. New figures from the China Internet Network Information Center (CNNIC) show that over 253m Chinese now go online, eclipsing for the first time the 223m people using the internet in the US. China's online population grew 56% in the last year although internet penetration currently remains low at only 19% (against 71% in the US). Analysts predict that growth will continue at about 18% p.a. to reach 490m in 2012.
From The BBC: http://news.bbc.co.uk, 28/07/2008
China Internet Network Information Center: http://www.cnnic.cn/en/index

Growth of netizens in China

Source: China Internet Network Information Center
China Internet Network Information Center: http://www.cnnic.cn/en/index

Internet Penetration Rate in China

Source: China Internet Network Information Center
China Internet Network Information Center: http://www.cnnic.cn/en/index

Russia has Europe's fastest growing online population
New research from conScore shows that Russia has the fastest growing internet population in Europe, writes Netimperative. Year-on-year Russia's online audience grew 27% to reach 17.m people in June this year, followed by France (up 21% to 31.5m), Spain (up 15% to 16.2m) and Ireland (up 15% to 1.6m). Europe's total online population grew 8% to reach 241.8m users.
Penetration rates were highest in the Netherlands with 82% of all over-15 year-olds going online in June, followed by Denmark (77%), Sweden (76%) and Norway (76%).
The UK remains the leading nation for time spent online at 28.5 hours/person, followed by Spain (25.1 hours/person) and the Netherlands (23.4 hours/person).
From Netimperative: http://www.netimperative.com, 28/08/2008
comScore: http://www.comscore.com

Growth of European internet audiences ranked by year on year growth rate*

Total unique visitors (000)** age 15+
Home & work locations
June 2008 vs. June 2007

* Rankings based on the 16 individually reportable European countries in comScore World Metrix. European Internet audience figures are comprehensive and include visitation from countries that are not individually reportable.

** Excludes traffic from public computers such as Internet cafes or access from mobile phones or PDAs.

Source: comScore World Metrix
comScore: http://www.comscore.com

European internet usage overview ranked by penetration of total country population age 15+*

Total unique visitors (000)** age 15+
Home & work locations
June 2008 vs. June 2007

* Rankings based on the 16 individually reportable European countries in comScore World Metrix. European Internet audience figures are comprehensive and include visitation from countries that are not individually reportable.

** Excludes traffic from public computers such as Internet cafes or access from mobile phones or PDAs.

*** Geographic population breakdowns supplied by U.S. Census Bureau, 2007.

Source: comScore World Metrix
comScore: http://www.comscore.com

"Extreme Gamers" play games for 45 hours per week
A new study from NPD Group has found that Extreme Gamers play games for an average 45 hours per week and have bought 24 titles in the past three months. The "Games Segmentation 2008" report identified 7 gamer segments based on usage, ownership and frequency. Of the 174m gamers who use PCs, Macs and video game systems 3% are Extreme Gamers, 9% are Avid PC Gamers, 17% are Console Gamers, 14% are Online PC Gamers, 15% are Offline PC Gamers, 22% are Young Heavy Gamers and 20% are Secondary Gamers.
Young Heavy Gamers represent at least 1/3 of any system's owners and are strong users of portable platforms: 60% of Nintendo DS (NDS) and PlayStation Portable (PSP) owners are Young Heavy Gamers. Although the PC is used for gaming more than any specific console, Console Gamers, Young Heavy Gamers and Extreme Gamers are all more likely to play games using a console.
NPD Group: http://www.npd.com, 11/08/2008

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Mobile

Global mobile adspend to reach $2.4bn in 2009

The latest Wireless Trends Outlook from Strategy Analytics predicts that global mobile adspend will reach $2.4bn in 2009 up from $1bn this year, writes Cellular-news. The firm predicts that the increased use of Adobe's Flash and the launch of Nokia's "Comes with Music" service will both help to further stimulate the mobile advertising sector.
Similar research from eMarketer goes much further in accounting for the growing economies of Brazil, Russia, India and China. eMarketer expects total mobile advertising expenses (including creative, IT and other related spending costs) to reach $6.44bn in 2009, rising to $19.15bn in 2012.
From Cellular-news: http://www.cellular-news.com, 12/08/2009
Strategy Analytics: http://www.strategyanalytics.com

Source: Strategy Analytics
Strategy Analytics: http://www.strategyanalytics.com

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

Global mobile phone sales up 12% in Q2 2008
Worldwide mobile phone sales grew 11.8% during Q2 to reach 305m units according to new figures from Gartner. Sales of mobile phones in Western Europe reached close to 42m units during the quarter, up 16% from the previous quarter. However, quarterly year-on-year sales were down 8.2% as the region reached total mobile penetration rates of 121.5% for the first six months of the year.
North American sales grew to 44.1m units, up 6.58% year-on-year and 5.3% over the previous quarter.
Gartner predicts that total mobile phone sales will reach 1.28bn units during 2008.
Gartner: http://www.gartner.com, 27/08/2008

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Broadcasting

BBC adds series stacking to iPlayer
The BBC is to expand the selection of episodes available to watch through its iPlayer service with the implementing of series staking in September, writes Brand Republic. Individual episodes of TV programmes will no longer be removed after seven days but will remain accessible for the entire duration of the series. Viewers will now be able to start watching a series half-way through its broadcast schedule and still have time to catch up.
In another move to widen access to the BBC's vast archive BBC Worldwide intends to launch an ad-supported online music service. The service will feature both audio and video content from the BBC's radio and television archives and content will be available as free streams or paid downloads.
From Brand Republic: http://www.brandrepublic.com, 26/08/2008
BBC iPlayer: http://www.bbc.co.uk/iplayer
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Statistics

Monthly internet usage statistics for the France, March 2008

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

Monthly top ten French 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, July 2008

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

Active Home Internet Users by Country, June 2008

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

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