Another cracking month for the internet sector and we held back this
round-up of September research to include the two new records set for
online adspend in the UK and the US.
Online is taking almost 15% of the adspend cake in the UK and
crossed $5bn in a single quarter in the US. The tide of migration to
free content is pulling hard and this month we look at how the New York
Times, the FT and probably the Wall St. Journal are all getting seduced
again to ad funded models; questioning the role of subscription barriers
that block audience growth. In our sector focus there's more on the
music industry as the Charlatans give away their latest CD and Radiohead
let you chose how much their music is worth.
Founder and Chief Executive
Digital Strategy Consulting
US online adspend: new records set as net breaks $5bn a quarter
The latest numbers for the US from
PricewaterhouseCoopers (PwC) and the IAB confirm that the world's
largest online ad market is still enjoying the largest annual growth
in real terms. Spend surged ahead by 25.4%, crossing the $5bn
(£2.46bn) mark in
a single quarter.
US Internet advertising revenues for the first six months of 2007 were
nearly $10bn (£4.92), setting yet another new record and were almost 27% up on the first half of 2006. Spend reached nearly $5.1bn
the second quarter of 2007.
The growth was propelled not just by search engines (which increased
their share of online adspend to 41%) but also by the wider consumer
advertising sector. Classifieds continued to swell, but they did lose
share within online to the Rich Media and Video formats which now
account for 8% of all online advertising.
Read more analysis of these figures:
Source: IAB US, PricewaterhouseCoopers 2007
UK online ad spend: biggest leap yet
Today's new figures confirm the switch to online continues to
accelerate in Europe's lead media market. The internet's share of all
advertising swelled to almost 15% in the first half of 2007, with
further record-setting leaps in real growth. Boosted in particular by
massive increases in the supply of media from social networks, and the
continued switch of acquisition budgets into search, the wider media
sector is starting to feel the real impact of the digital networked
economy as the models that underpin many print and broadcast players
get called into question.
As Digital's team forecast, online ad spend growth held steady at
above 40% year on year, giving the largest quarters and rises in the
history of the medium, and forcing the TV and magazine industry into
panic, issuing statements in defence of classic channels.
First half of 2007: £1,334.3 million
First half of 2006: £917.2 million
Year on year growth: 41.3%
Online adspend market share: 14.7%
With the UK market acting as a key indicator for European online
adspend behaviour, the results will boost stock prices for Continental
firms looking for models of their own country's digital economy
several years down the line. The research is particularly accurate
because it relies on publisher revenue declarations (under
non-disclosure agreements to PricewaterhouseCoopers), and is one of
the only markets in the world to include a revenue declaration from
set to beat display:
classified advertising: up 72% year-on-year
Market value for period: £277.7m
Market share within online: 20.8%
Online display advertising: up 33% year-on-year
Market value for period: £287m
Market share within online: 21.5%
analysis from Digital on these results go to
24/7 Real Media launch customer re-targeting tool
24/7 Real Media have launched a new tool which allows advertisers to
target potential customers with personalised display ads, writes
Netimperative. The new Search Re-Targeting service serves users who
click on search engine text ads with customised display advertising on
any website in the Global Web Alliance network. Display ads can be
modified in relation to the original keyword a user searched for and
can also relate to the purchase stage reached by a user. The system
can be used for example to keep potential customers interested in
potential purchases by offering discounts a month after an original
search had been made. Foreign currency firm Interchange FX have
carried out the first live UK trial of the system, by comparing two
identical display ad campaigns. The campaign with Search Re-targeting
enabled saw click-through rates increase eight times.
24/7 Real Media's Global Web Alliance network includes over 950 sites
and serves ads to 121m unique users worldwide.
24/7 Real Media:
Google launches mobile ad platform
Google has added another string to its bow with the launch of
AdSense for Mobile, writes Telecoms.com. The platform places targeted
text adverts on publishers' mobile websites.
Google is increasingly looking at the mobile space: the firm's CEO
Eric Schmidt said last year that he believes that mobile phone calls
should be paid for through advertising.
Blyk offers free calls in exchange for advertising
Ad-funded mobile network Blyk has launched in the UK, writes
Netimperative. The network is an invitation-online mobile virtual
network operator aimed at 16-24 year olds. Users are profiled during
registration and by ongoing SMS polling to help brands target more
effectively. Users receive up to 6 brand picture messages per day and
in exchange receive 217 free texts and 43 free minutes per month.
Facebook overtakes MySpace to become UK's most popular social network
According to new data from Nielsen//NetRatings Facebook overtook
MySpace in August 2007 in terms of unique visitors, writes Brand
Republic. Facebook received 6.5m visitors during the month against
6.4m for MySpace. Facebook's audience has increased by 541% since
December 2006 compared to growth at MySpace of 20%. Facebook is also
the most popular social network in terms of total time spent visiting
the site with 991m minutes, ahead of Bebo (600m minutes) and MySpace
(540m minutes). Worldwide Facebook now has 42m members, with 5m based
in the UK. The site attracts 200,000 new members per day.
The rapid success of Facebook has led to a number of offers for the
firm, although the site's co-founder and chief executive Mark
Zuckerberg has said that he wants Facebook to remain independent.
Microsoft, which already delivers ads on the site, is said to be in
talks about acquiring a 5% stake for up to $500m (£246m),
valuing the site at around $10bn (£4.92bn).
From Brand Republic:
Most popular social networks in the UK - August 2007 - and
growth across 2007
In August 2007, 6.5 million Britons (20% of all active Britons online)
visited Facebook; 541% more than did so in December 2006
Fastest growing social networks* in the UK across 2007
*Minimum requirement of 125,000 Unique Visitors in August 2007.
**PerfSpot had no recorded figures until April 2007
E.g. Facebook's audience grew 541% from 1 million in December 2006 to
6.5 million in August 2007
Most engaging social networks by total time - August
Britons spent 991 million minutes in total on the Facebook. The
average visitor to Second Life spent 5 hours 29 minutes there during
Brits continue to spend more time online
New data from Point Topic shows that the British are staying online
for longer, writes ENN. 86.6% of home internet users now spend at
least 6 hours online each week, up from 83% at the end of last year
(and 50% at the end of 2005). Amazingly 5% of those polled claim to
spend over 80 hours a week online. According to the research 90% of
broadband users go online to use e-mail and 60% to use auction sites
such as eBay. In addition 40% of broadband users also download music,
with 16% going online to watch TV or streaming video. 70% of all
respondents also shop online (from 65% in 2006).
Content goes free
Our special focus this month examines how both the newspaper and
music sectors have both made moves away from strict subscription
models towards other income-generating strategies. For the most part,
online consumers remain unconvinced by attempts to make them pay for
content online. The very nature of the internet and its global
explosion during the last decade has meant that users could normally
find what they wanted for free elsewhere with only a few clicks of a
mouse. Studios, record labels and publishers have been among those
groups who have resisted this change but a number of stories this
month suggest that content producers have finally realised that they
can't keep their heads in the sand indefinitely. The internet has
irrevocably changed the relationship between media providers and
consumers. However it has also created an unlimited supply of niche
markets and the fastest growing advertising sector of the past decade.
New York Times abandons subscriptions
The New York
Times has stopped charging users for content on its NYTimes.com
website, writes Netimperative. The paper launched its paid service two
years ago and charged $7.95/month (£4) or $49.95/year (£20) for access
to its news and columns online. Senior vice-president and general
manager of the website Vivian Schiller explained the move: "Since we
launched TimesSelect in 2005, the online landscape has altered
significantly. Readers increasingly find news through search, as well
as through social networks, blogs and other online sources." The paper
has identified the "greater potential for revenue from online
advertising" and some sections of the site will have sponsorship
placements. Under the new strategy archives from 1851-1922 and from
1986-present will be completely free with only archive content from
between 1923 and 1986 continuing to be charged for.
FT.com opens up content for free
The Financial Times's FT.com website is to start letting
users access stories for free, writes Netimperative. Under the new
charging model users will be able to access 30 free article per month
before being asked to subscribe. The new system will make it possible
for bloggers and news aggregators to link directly to FT.com content.
The change in charging strategy coincides with a major site overhaul
which will include new blogs, a new markets section and increased
editorial content. Standard and premium subscription will cost £99 and
Murdoch plans to make Wall Street Journal free
Rupert Murdoch has declared he is interested in removing the $99
(£49) subscription charge from the Wall Street Journal's wsj.com
website, writes Brand Republic. "It would be an expensive thing to do
in the short term. In the long term, it may be a great thing to do,"
said Murdoch addressing the Goldman Sachs Communacopia conference.
WSJ.com currently has 983,000 subscribers. Murdoch's $5bn (£2.5bn)
acquisition of Wall Street Journal parent company Dow Jones should be
completed by November.
From Brand Republic:
Radiohead let fans decide cost of new album
Radiohead have released their latest album directly through their
website and are letting fans decide how much they want to pay for it,
writes Brand Republic. Technically fans can pay nothing for the
10-song album "In Rainbows" though they are still required to cover
the 45p credit card fee. Radiohead are currently out of contract,
giving them the freedom to release their music on their own terms.
Fans can also buy a deluxe £40 "discbox" box set through the website
which includes CD and vinyl copies of the album, a second CD and a
From Brand Republic:
Radiohead - In Rainbows:
Charlatans release music for free through Xfm
The Charlatans are to release their next album for free through the
Xfm website, writes Brand Republic. The album should be ready in early
2008, though in the interim the band are releasing their new single
"You Cross My Path" through the site on 22nd October. The Charlatans
are now backed by Alan McGee who now believes that CD sales are
incidental. He said: "The band will get paid by more people coming to
gigs, buying merchandise, publishing and synch fees. I believe it's
the future business model."
Prince also gave his last album away for free through the Mail on
Sunday last July prior to his 21 night residency in London.
From Brand Republic:
Mobile ad spending to grow 120% during the next year
The latest Jack Myers Media Business Report forecasts that global
mobile advertising will grow 120% during 2008 to reach $1.1bn (from
$500m - £246m), writes ClickZ. The report expects similar growth
during 2009 making the mobile ad market worth $2.4bn (£1.18bn) -
roughly 1% of total global adspend. Online advertising, according to
the report, will grow 20% during 2007, reaching $16.7bn (£8.21bn).
This is forecast to rise a further 24% in 2008 and 28.5% in 2009.
Jack Myers Media Village:
Monthly internet usage statistics for Germany, October 2007
Source: Nielsen/NetRatings Home/Work Panel monthly statistics
Monthly top ten German parent companies for October 2007
Source: Nielsen/NetRatings Home/Work Panel monthly statistics
Top 10 popular websites in the UK, August 2007
This list features the most popular websites based on
UK Internet usage for August 2007, ranked by market share of visits
across all Hitwise industries.
Source: Hitwise Datacentre, August 2007, based on market share of visits