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

September 2007

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Digital Strategy Consulting


Online retail took a major leap this summer, breaking the £4bn threshold for July alone. That’s a staggering 80% growth year-on-year, and well above seasonal expectations (we’re thinking the British ‘Summer’ had something to do with this one).

In the social networking stakes Bebo pipped MySpace in the UK, as both saw audiences swell along with FaceBook and YouTube. Meanwhile in the US the crossing point for online ad spend overtaking newspapers is in sight as latest research suggests 2011 as the date when it happens.

Follow the links for the stories behind the headlines, and we've included extra links to some of our Digital Insight Reports that are now being opened up to clients, friends and partners.


Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

 

 Advertising

US online adspend to overtake newspaper advertising by 2011

According to the annual media sector study from Veronis Suhler Stevenson (VSS) online advertising will surpass newspaper adspend by 2011, writes The Financial Times. VSS expect online to grow over 21% per year to reach $62bn (£30.63bn) in 2011 against a predicted figure of $60bn (£29.64bn) for newspaper advertising.
From ENN: http://www.electricnews.net, 07/08/2007
Veronis Suhler Stevenson: http://www.vss.com

US marketers set to spend £445m on social networks
eMarketer projects that US marketers will spend $900m (£445m) on social networks this year. The study follows the latest annual figures from News Corp which show that MySpace parent Fox Interactive Media (FIM) made its first profit on revenues of $550m (£272). 80% of FIM’s revenues are thought to be generated from MySpace. Facebook is also in line to surpass expectations this year. Membership has grown from 8.9m users last September to over 31m active users. The site has partnered with Microsoft to sell banner advertising and is forecast to surpass eMarketer’s previous ad revenue projection of $125m (£62m) for 2007.
From eMarketer: http://www.emarketer.com, 13/08/2007

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

US Online Social Network Advertising Spending by Type of Network

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

Worldwide Online Social Network Advertising Spending 2006-2011

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

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 E-commerce

Online spending up 80% as British consumers shun the rain

The IMRG (Interactive Media in Retail Group) index shows that UK online shopping in July grew 80% year-on-year to reach a new high of £4.2bn, writes Brand Republic. Average growth for the 12 months prior to July was 36%. Electrical goods sales grew fastest, rising 102% from the previous year. Online sales of clothing and accessories reached a new high with growth of 56%.
From Brand Republic: http://www.brandrepublic.com, 20/08/2007
IMRG: http://www.imrg.org
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 Companies

comScore overhauls web measurement tools

Online research firm comScore is launching its new qSearch 2.0 interface which incorporates search results from sites beyond the major search engines, writes Netimperative. Currently comScore’s traditional measurement tools provide data from the five main US search engines (Google; Yahoo!; Microsoft; Ask and Time Warner Network). Under the new system comScore will add results taken from local search services (such as maps and local directories), in addition to data from the top 50 properties worldwide where search activity is identified, including sites such as MySpace, Baidu, and Naver. comScore will also be taking data from major “vertical” search locations (e.g. eBay, Amazon or Expedia). qSearch will also track data for searches which take place on partner sites and redirect users to search engines. According to comScore’s results for July, Google Sites kept their top place with 55.2% of searches made among the top five engines, followed by Yahoo! Sites (23.5%), Microsoft Sites (12.3%) Ask Network (4.7%) and Time Warner Network (4.4%).
From Netimperative: http://www.netimperative.com, 21/08/2007
comScore : http://www.comscore.com

YouTube places first ads
Google-owned video site YouTube has placed its first ads on the site, writes ENN. The ads will only run on the most popular content provided by YouTube partners, with revenues being split between them. The ads themselves take the form of semi-transparent overlays which run over the bottom fifth of the video screen. The ads start roughly 15 seconds into a clip and disappear if they are not clicked on after 10 seconds. If a user clicks on the ad the main video is temporarily paused while the overlay plays on top. YouTube developed the format after research suggested that most users would not accept pre-roll ads directly built into the clips. YouTube currently has around 130m subscribers and partners now include the BBC, Warner Music and Chelsea Football Club.
From ENN: http://www.electricnews.net, 22/08/2007
YouTube: http://www.youtube.com

Bebo becomes the UK's most popular social networking site
Figures for July from ComScore show that Bebo has grown 63% since the start of the year attracting 10.7m unique visitors during the month and putting it ahead of both MySpace (10.1m) and Facebook (7.6m), writes Brand Republic. Overall Bebo now reaches 32% of the UK population, while MySpace and Facebook reach 32% and 24% respectively. Bebo is particulalry strong in Europe with nearly 63% of its users from the region. Both Facebok and MySpace attract around two-thirds of their users from North America. Facebook remains the fastest growing social network in the UK however with growth of 366% since the start of the year. Bebo has also announced a deal with Microsoft to integrate their Windows Live Messenger service with the site. Users will be able to import and export their contact lists direcly between the two services and an IM Me icon will display their online presence allowing contacts to chat via the site. Bebo said that around 90% of their users also use Windows Live Messenger regularly.
From Brand Republic.co.uk: http://www.brandrepublic.com, 15/08/2007
Bebo: http://www.bebo.com

Microsoft to launch new business unit following aQuantive acquisition
Microsoft has completed its biggest ever purchase with the $6.5bn (£3.2bn) acquisition of aQuantive, writes Netimperative. The deal was first announced in May and will now see Microsoft creating a new business group based around aQuantive’s operations. The Advertiser and Publisher Solutions (APS) Group will be responsible for all of Microsoft’s ad platforms including Atlas, DrivePM and Microsoft’s own AdCentre. In-game ad firm Massive and mobile ad firm ScreenTonic will also be incorporated into the APS division.
From Netimperative: http://www.netimperative.com, 14/08/2007
Microsoft: http://www.microsoft.com

Hitwise launches desktop widget
Online research firm Hitwise have released a new widget detailing online usage trend data taken from from Hitwise To Go, writes Netimperative. The widget will feature data on online usage behaviour in the US, UK and Asia Pacific markets. Currently the tool is available on the Yahoo Widget platform but Hitwise intend to also release it for Google Gadget and Yourminis. Data from Hitwise To Go is drawn from the behaviour of over 25m internet users and how they interact with over 1m websites per day.
From Netimperative: http://www.netimperative.com, 16/08/2007
Hitwise: http://www.hitwise.co.uk

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 Trends

Global online population to reach 1.5bn by 2011

JupiterResearch's latest Worldwide Online Population Forecast predicts that the worldwide online population will reach 1.5bn by 2011 (from 1.1bn in 2006), writes eMarketer. According to the forecast 22% of the world’s population will be online, with most growth coming from Brazil, Russia, India and China. As growth slows in the mature markets of the US, Canada, Japan and Western Europe share of global online internet users is likely to fall in these regions: only 17% of all internet users will live in the US by 2011 down from 21% in 2006. eMarketer estimate that there were 1.1bn internet users in 2006 with numbers set to reach 1.3bn for this year – these figures are in line with recent studies produced by both Morgan Stanley and The International Telecommunication Union (ITU).
From eMarketer: http://www.emarketer.com, 01/08/2007

Internet Users Worldwide 2006 & 2011

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

Internet Users and Penetration in Select Countries Worldwide 2006

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


61% of British households are online

The latest quarterly figures from the Office of National Statistics (ONS) show that 61% of UK households (15m households) now have internet access. Access has risen by 7% since 2006 (equivalent to just over 1m households) and by 36% (4m households) since 2002. 84% of those with internet access now have broadband connections, up from 69% in 2006. Overall, broadband services accounted for 86.1% of all internet connections in June, from 83.6% in March. Dial up services accounted for only 13.9% of connections.
ONS: http://www.statistics.gov.uk, 28/08/2007

Households with access to the Internet, Great Britain

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

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 Mobile
Ofcom predicts surge in mobile internet usage
Ofcom’s annual Communications Market Report argues that widespread use of mobile internet services in the UK is just around the corner, writes Brand Republic. The report identified four main developments necessary for greater usage:
  • 3G usage has become more commonplace as connections reached 7.8m in 2006;
  • the majority of handsets now have internet capability;
  • mobile internet charges have fallen;
  • mobile operators are now able to offer internet services comparable fixed-line counterparts.
Ofcom have also revealed that time spent on mobiles (82bn minutes) accounted for 1/3 of all call minutes in 2006. Daily mobile phone usage averaged 4 minutes (up 58% from 2002). Text messaging rose 20% from 2005-2006 with 12 messages sent per mobile phone per week. A related study from Juniper Research predicts that 1bn people will be using mobile broadband services by 2012. Revenues from such services will reach $400bn during the same period. Demand is expected to come mostly from North America and Western Europe, followed by the Far East and China.
From Brand Republic: http://www.brandrepublic.com, 23/08/2007
Ofcom: http://www.ofcom.org.uk

Mobile advertising to reach £1.71bn in Western Europe by 2011
New estimates from eMarketer predict that mobile ad spend in Western Europe will grow to $3.46bn (£1.71bn) in 2011 from $382m (£189m) in 2006. Data from the European Information Technology Observatory (EITO) forecasts that the European mobile subscriber market will total 850m users by the end of 2007 and will reach 920m by 2010.
From eMarketer: http://www.emarketer.com, 22/08/2007

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

Mobile Advertising Spending in Western Europe 2006-2011

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

Mobile Phone Subscribers in Europe by Country, 2005-2010

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

Global mobile phone sales rise 11%
258m mobile phones we were shipped worldwide in Q2 according to Strategy Analytics, writes ENN. The figure represents an 11% year-on-year increase and a 4% increase on Q1 2007 (247m units shipped). Total shipments for the first half of 2007 exceeded half a billion units for the first time, as demand remained particularly strong in emerging markets. Strategy Analytics predict that 283m mobiles will be sold during Q3. A similar study from IDC calculates global Q2 shipments at 272.7m, up 16.5% year-on-year.
From ENN: http://www.electricnews.net, 02/08/2007

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

Top Five Mobile Phone Vendors, Shipments and Market Share, Q2 207

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Source: IDC
IDC: http://www.idc.com

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 Statistics

Monthly internet usage statistics for the UK, July 2007

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

Monthly top ten UK parent companies for July 2007

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

Top 10 popular websites in the UK, July 2007

This list features the most popular websites based on UK Internet usage for May 2007, ranked by market share of visits across all Hitwise industries.

Source: Hitwise Datacentre, July 2007, based on market share of visits
Hitwise: http://www.hitwise.co.uk/datacenter
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