Contents | Advertising | E-commerce | Companies | Company focus | Broadband | Trends | Mobile | Broadcasting | Statistics

Digital Strategy Consulting

Digital Intelligence
The monthly review of new research and developments in digital marketing
October 06

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10% of retail spend, 10% of advertising spend: that's what the internet is taking today in the UK. In the last few weeks we've been working for media groups from as far a field as the US, China, New Zealand and Mexico, yet everyone is looking to the UK where the march to the digital networked economy is just that little bit further on. And at Digital we've always argued that there's a 3-5 year time-lag between where audiences focus their attention and where advertisers focus their marketing - so even if there was no further growth in online activity, the growth in online marketing would be guaranteed until the end of the decade.

In this month's Digital Intelligence we're also giving you the latest numbers on broadband, and the forecasts for its growth, and as online adspend overtakes national press in the UK we can confirm that people now spend more time online across Europe than they do reading newspapers - well, the printed versions at least! As these dramatic shifts in media and marketing continue remember that our Digital Training Academies can help you and your team health-check your strategy for 2007, or build the skills needed to get the most from these changes - just email me back for more.

Best regards from all here at Digital,




Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting




Advertising

Bellwether report finds 24.1% of companies raising online marketing budgets
The latest IPA Bellwether survey for Q3 has more good news for online marketing, writes Media Week. 11.5% of companies are now budgeting over 15% of their annual budgets on online marketing - twice the number than in 2000. 24.1% of firms have raised their online marketing budgets. Overall 22% of companies have raised their marketing budgets, with total marketing spend up 22.7%.
From Media Week: http://www.mediaweek.co.uk, 16/10/2006
Institute of Practitioners in Advertising: http://www.ipa.co.uk



E-commerce

Studies show online retail is booming in UK
Four new studies have demonstrated how online shopping has reached the tipping point in the UK. The first, from the Office for National Statistics (ONS) found that online sales grew 56% during 2005 to £103bn (reported in The Telegraph). Businesses are playing a leading role in online retail. 15% of firms made sales online during the year while 57% made purchases. Online purchases by businesses rose 50% to reach £72.8bn while online sales to households grew 30% to £21.4bn.

A joint study from Nielsen/NetRatings and eBay.co.uk revealed that 18.6m consumers made online purchases in July spending a total of 23.4m hours shopping online (reported by This is Money). eBay is the UK's most popular shopping site: over half of all UK internet users visited in July (12.2m users) spending an average of one hour and 45 minutes each browsing the site. Tesco.com is the most successful high street brand operating online, attracting 4.3m consumers and on course to make £1bn in online sales this financial year.

Figures from the Interactive Media in Retail Group (IMRG) British consumers spent £13.5bn online during the first half of 2006, up 40% year on year and equivalent to 10% of all UK retail revenue.

Royal Mail's new research suggests that catalogues are channelling British shoppers online. Consumers have spent an average of £609 each on goods online this year according to the study. 61% have looked at catalogues before making online purchases and 83% 83% regularly use catalogues before buying online.

  • 45-54 year olds spend the most online, averaging £724 each per year.
  • 20% of men have spent over £1,500 online this year against 10%.
  • Regionally, Scots spend the most online (£701/year), followed by the North West (£627/year) and the South West (£549/year).
  • Most users have shopped online for an average of 3.7 years.

The Telegraph: http://www.telegraph.co.uk, 13/10/2006
This is Money:
http://www.thisismoney.co.uk, 05/10/2006
Royal Mail Group press release:
http://www.news.royalmailgroup.com, 16/10/2006

Top UK sites for buying online


Number of people visiting, July 2006

Average time per person

eBay.co.uk

12,174,073

1:42:03

Amazon

7,382,135

0:16:03

Tesco

4,310,278

0:15:04

Argos

3,313,477

0:13:33

Play.com

1,941,827

0:15:14

John Lewis

1,545,272

0:08:11

Comet

1,115,762

0:08:23

Currys

1,010,028

0:06:11

Sainsburys

859,960

0:11:27

Asda

807,856

0:10:26

Source: Nielsen/NetRatings July 2006
Nielsen/NetRatings:
http://www.nielsen-netratings.com

Companies

Amazon sales grow 24% to reach $2.31bn
Q3 sales at Amazon rose higher than expected to reach 24% year on year (from $1.86bn to $2.31bn) as new lines such as electronics and jewellery showed strong growth, writes The Guardian. Profits for Q3 reached $19m. Year on year, US sales increased 21% (to $1.26bn) while international sales increased 29% ($1.05bn). Amazon also launched its new video download service Unboxd during the period.
The firm currently expects Q4 sales to come in between $3.625bn - $3.950bn (up 22% - 33% year on year) with full year sales of $10.68bn.
From The Guardian: http://technology.guardian.co.uk, 25/10/2006
Amazon UK: http://www.amazon.co.uk


eBay quarterly profits up 10%
Q3 profits at eBay have risen 10% to $281m (from $255m in 2005), writes the Financial Times. Revenues during the period grew 31% year on year to $1.45bn (£776m), against $1.10bn (£588m) in 2005. The site saw 584m new listings in Q3 including 95m new store inventory listings - a 27% increase on last year. $12.6bn of goods were sold, up 17% year on year from $10.8bn.
From The Financial Times: http://www.ft.com, 19/10/2006
eBay UK:
http://www.ebay.co.uk

MySpace draws older crowd
According to data from ComScore Media Metrix, over half (51.6%) of all US visitors to MySpace in August were 35 or older, writes NetImperitive. In contrast only 30% of visitors are under the age of 25. The 35-54 age group grew 8% year on year to August 2006 from 32% to 41%.
Further research from Nielsen//NetRatings and reported by eMarketer found similar results in September, with 46% of MySpace's US users visitors aged 35+ (from 38% in 2005). However, teens still spend far more time when they visit the site. According to Advertising Age (http://adage.com) the average 12-17 year-old user spent 260 minutes on the site during the month viewing about 808 pages. Those in the 35-54 year-old spent 179 minutes visiting the site and viewed 560 pages.
The site in continuing to find new ways to keep its users entertained and is about to launch an international version of its Secret Shows franchise "The List " which features footage from secret gigs that lucky MySpace users can receive invitations to.
NetImperitive: http://www.netimperative.com, 06/10/2006
eMarketer:
http://www.emarketer.com, 13/10/2006
ComScore Media Metrix: http://www.comscore.com

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

Source: comScore Media Metrix, total U.S. - Home/Work/University Locations
comScore Media Metrix: http://www.comscore.com


Demographic profile of visitors to select social networking sites - Percent composition of total unique visitors August 2006


Total Internet

MySpace.com

Unique Visitors (000)

173,407

55,778

Total audience

100.0

100.0

Persons: 12-17

9.6

11.9

Persons: 18-24

11.3

18.1

Persons: 25-34

14.5

16.7

Persons: 35-54

38.5

40.6

Persons: 55+

18.0

11.0

Source: comScore Media Metrix, total U.S. - Home/Work/University Locations
comScore Media Metrix: http://www.comscore.com

Demographic profile of visitors to MySpace.com - percent composition of total unique visitors August 2006 vs. August 2005


August 2005

August 2006

Point change

Unique Visitors (000)

21,819

55,778

Total audience

100.0

100.0

0.0

Persons: 12-17

24.7

11.9

-12.8

Persons: 18-24

19.6

18.1

-1.4

Persons: 25-34

10.4

16.7

6.2

Persons: 35-54

32.4

40.6

8.2

Persons: 55+

7.1

11.0

3.9

Source: comScore Media Metrix, total U.S. - Home/Work/University Locations
comScore Media Metrix:
http://www.comscore.com

Company focus - Google: where growing profits are matched by expanding products

  • Q3 results
  • Annual revenues prediction
  • YouTube purchase
  • Google Docs & Spreadsheets
  • Google Code Search launch

It's been another busy month for Google, featuring stellar profits, further acquisitions and new product launches. The firm is also set to enter into the record books as it pockets a monster slice of the US online advertising market.

Third quarter profits at the firm nearly doubled from $391m (£202m) in 2005 to $733m (£390m) this year, as revenues rose 70% to hit $2.7bn (£1.43bn). Google's search advertising business provided a significant source of revenue: the firm continues to attract 44.1% of the US search market (based on ComScore figures). However, revenues from outside the US also rose - they now account for 44% against 39% in 2005 (from Brand Republic, 20/10/2006).

Amazingly, according to eMarketer, Google is now on course to take 25% of all online adspend in the US this year. They're predicting that Google revenues will reach $4bn for the year out of a total US spend of $16bn (reported by MarketWatch, 16/10/2006).

The figures followed the widely-anticipated announcement that Google was to purchase YouTube. The final deal saw YouTube sold for $1.65bn (£884m) in a no-cash stock deal, giving Google access to the 12m visitors a month the video site attracts. YouTube remains the dominant website in its sector and received 46% of all visits to online video websites in September (from Brand Republic, 10/10/2006).

Google has continued to release its own products and services however and October saw the beta release of Google Docs & Spreadsheets its integrated online software package. This offers free access to the firm's word-processor application Writely (acquired last March) in addition to its own Google Spreadsheets product. The system is designed to offer users simples ways of sharing and editing documents online in addition to all the usual software features.

Finally, Google Labs has also released its latest specialised search service, Google Code Search. This allows programmers to search through billions of lines of publicly available code to look for examples or functions (from ENN 05/10/2006).

Broadband

UK broadband connections on course for 18.46m by 2008
The latest "Spatial Broadband Forecast" report from Point Topic predicts that the number of broadband lines in the UK will reach 18.46m by the end of 2008 (from 9.77m in 2005), writes eMarketer. The proportion of broadband-enabled households will also nearly double during the same period from 2005's 34% to 64% at the end of 2008.
Further data from Jupiter Research predicts that 75% of UK internet-enabled households will have broadband connections by the end of 2006.
From eMarketer: http://www.emarketer.com, 16/10/2006
Point Topic: http://point-topic.com


Source: Point Topic
Point Topic: http://point-topic.com

Broadband users grow 33% year on year
According to the latest tracking study from the Organization for Economic Co-operation and Development (OECD), there are now 181m broadband subscribers across the 30 countries studied: a year on year increase of 33%, writes ClickZ. Access rates have also increased from 11.7 subscribers/100 inhabitants to 15.5 subscribers/100 inhabitants. DSL remains the most popular means of connection (63%) compared to cable (29%) and other methods (8%).
From ClickZ: http://www.clickz.com, 17/10/2006
OECD:
http://www.oecd.org

Broadband Subscribers Per 100 Inhabitants, 2001-2005

Country
2001
2002
2003
2004
2005
Australia 0.9 1.8 3.5 7.7 13.8
Austria 3.6 5.6 7.6 10.1 14.1
Belgium 4.4 8.7 11.7 15.5 18.3
Canada 8.9 12.1 15.1 17.6 21.0
Czech Republic 0.1 0.2 0.5 2.5 6.4
Denmark 4.4 8.2 13.0 19.0 25.0
Finland 1.3 5.5 9.5 14.9 22.5
France 1.0 2.8 5.9 10.5 15.2
Germany 2.3 4.1 5.6 8.4 13.0
Greece 0.0 0.0 0.1 0.4 1.4
Hungary 0.3 0.6 2.0 3.6 6.3
Iceland 3.7 8.4 14.3 18.2 26.7
Ireland 0.0 0.3 0.8 3.3 6.7
Italy 0.7 1.7 4.1 8.1 11.9
Japan 2.2 6.1 10.7 15.0 17.6
Korea 17.2 21.8 24.2 24.8 25.4
Luxembourg 0.3 1.5 3.5 9.8 14.9
Mexico 0.1 0.3 0.4 0.9 2.2
Netherlands 3.8 7.0 11.8 19.0 25.3
New Zealand 0.7 1.6 2.6 4.7 8.1
Norway 1.9 4.2 8.0 14.8 21.9
Poland 0.1 0.3 0.8 2.1 2.4
Portugal 1.0 2.5 4.8 8.2 11.5
Slovak Republic 0.0 0.0 0.3 1.0 2.5
Spain 1.2 3.0 5.4 8.1 11.7
Sweden 5.4 8.1 10.7 14.5 20.3
Switzerland 2.0 5.6 10.1 17.5 23.1
Turkey 0.0 0.0 0.3 0.7 2.1
UK 0.6 2.3 5.4 10.5 15.9
US 4.5 6.9 9.7 12.9 16.8
OECD 2.9 4.9 7.3 10.2 13.6
EU 15 1.6

3.4

5.9 9.7 14.2

Source: OECD
OECD: http://www.oecd.org

Trends

Internet usage overtakes traditional press

Europeans now spend more time online than reading newspapers according to new data from Jupiter Research, writes Brand Republic. The average European now spends four hours online/week against three hours/week reading newspapers and magazines. Total media usage has now grown to 19 hours/week (from 15 hours/week in 2003). Age of users and broadband access are the main contributing factors to internet usage in each country. Broadband users spend over three times longer online than dial-up users (7 hours against 2). Users in France (which has the highest concentration of broadband access at 79%) spend most time online, while users in Germany (42% broadband penetration) spend least time online but 14 hours/week watching television (against the European average of 10-12 hours).
Europeans under 24 now spend 6 hours/week online against 12 hours/week watching television and 2 hours/week reading print media. Jupiter's study compared 5,000 users in the UK, France, Germany, Italy and Spain.
From Brand Republic: http://www.brandrepublic.com, 10/10/2006
Jupiter Research:
http://www.jupiterresearch.com

Mobile

Mobile internet more successful in Europe than US
The latest "Mobile Tracking Study" from comScore Networks shows that Europeans are more likely to access the internet through their mobile phones than Americans, writes ClickZ. The research studied consumers in the US, France, Germany, Italy, Spain and the UK and found that on average 29% of European mobile users go online using their phones compared to 19% of US users. Germany, Italy and France have the highest levels of mobile internet penetration with 34%, 34% and 28% respectively. Across the six countries men were more likely to use mobile web services than women, accounting for 55% of all users. Portals such as Google, Yahoo! and MSN are more popular dominate the US market (accounting for 74% of all mobile traffic) while in Europe operator portals provided by carriers score as high or even higher.
From ClickZ: http://www.clickz.com, 23/10/2006
ComScore Media Metrix:
http://www.comscore.com

Mobile Internet Penetration by Country, September 2006


US
France
Germany
Italy
Spain
UK
Online population (000) 152,698 23,980 32,085 17,389 12,281 29,589
Online population accessing Web from mobile phone (%) 19 28 34 34 26 24

Note: The online population consists of people 15 years old and older from home and work.

Source: comScore Networks, 2006
comScore Networks: http://www.comscore.com

Mobile Internet Penetration- Most Popular Sites, September 2006 (%)

Site Category US
France
Germany
Italy
Spain
UK
Online Portal 74 24 29 34 28 31
Operator Portal 5 26 25 18 25 31
Specific Mobile Site 0 17 17 23 4 0
Commerce Site 4 4 8 7 6 8
News Site 2 10 0 11 2 9
Other 15 22 21 8 35 21

Source: comScore Networks, 2006
comScore Networks:
http://www.comscore.com


Broadcasting

British digital TV audience tops 70% of households
New figures from Ofcom show that 17.7m UK households (70.2%) had access to digital services at the end of June, up from 69.7% for Q1. The number of secondary TV sets able to receive digital broadcasts more than doubled year-on-year from 3.5m to over 7m as consumers upgrade their equipment to have greater access. Over 40% of the UK's 60m TV sets are now able to receive digital broadcasts.
From Ofcom: http://www.ofcom.org.uk, 04/10/2006

Statistics

Monthly internet usage statistics for the UK, July 2006

Sessions/Visits Per Person 37
Domains Visited Per Person 77
PC Time Per Person 32:44:54
Duration of a Web Page Viewed 00:00:47
Active Digital Media Universe 26,999,943
Current Digital Media Universe Estimate 36,713,722

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

Monthly top ten UK parent companies for July 2006

Property Name
Unique Audience
(000)
Reach %
Time Per Person
Microsoft 20,374 75.46% 02:28:07
Google 19,707 72.99% 00:32:29
Yahoo! 13,860 51.33% 01:20:16
eBay 13,426 49.73% 01:42:36
BBC 12,184 45.13% 00:43:04
Time Warner 8,357 30.95% 02:47:58
News Corp. Online 7,505 27.80% 00:40:01
Amazon 7,382 27.34% 00:16:03
InterActiveCorp 6,582 24.38% 00:06:59
HM Government 6,196

22.95%

00:14:07

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

Global Index Chart, month of September 2006


September 2006
August 2006
% change
Sessions/Visits per Person per Month 33 33 0%
Domains Visited per Person per Month 69 69 0%
Web Pages per Person per Month 1,446 1,469 -1.56%
Page Views per Surfing Session 43 44 -2.42%
PC Time Spent per Month 29:01:50 29:04:26 -0.15%
Time Spent During Surfing Session 0:52:58 0:53:29 -0.96%
Duration of a Web Page Viewed 0:00:43 0:00:43 0%
Active Digital Media Universe 322,885,426 322,426,832 +0.14%
Current Digital Media Universe Estimate 482,821,770 482,013,552 +0.17%

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

Top 10 popular websites, September 2006

Rank

Website

Market share

1

www.google.co.uk

7.72%

2

www.hotmail.com

2.99%

3

www.ebay.co.uk

2.70%

4

uk.msn.com

1.90%

5

www.google.com

1.65%

6

www.orange.co.uk

1.51%

7

uk.mail.yahoo.com

1.35%

8

uk.yahoo.com

1.00%

9

www.myspace.com

0.82%

10

search.msn.co.uk

0.80%

This list features the most popular websites based on UK Internet usage for September, 2006, ranked by market share of visits across all Hitwise industries.

Source: Hitwise Datacentre, September 2006, based on market share of visits
Hitwise: http://www.hitwise.co.uk/datacenter


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