Digital Intelligence
The monthly review of new research and developments in digital marketing
November 2007

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Another massive month for product development at the search engines, as the migration to the mobile web quickens.

Strong financial results from indicator stocks are giving investors greater confidence in the online media sector, and retailers are looking forward to a Christmas that will again break e-commerce records across Western Europe and North America; with the web's role in direct retail dwarfed by its role as the primary place for purchase research.

In this Digital Intelligence we're tracking these trends and sifting through the noise to give you the click-throughs and data that matters. Retailers, consumer brands and media groups who are finalising their plans for 2008/9 are bringing us in as architects and strategists - and through this we're consistently seeing four themes emerge: the challenges in making sense of the landscape are getting worse, social media is moving to the core of every agenda (not always for the right reasons), the risks of getting it wrong have amplified, and there is now an acceptance that training and coaching for senior management is essential to make strong digital decisions.

We hope you find the data and links useful, and if you have some comments or questions then mail me and the team back at this address.

Danny Meadows-Klue
Founder and Chief Executive
Digital Strategy Consulting

E-commerce

Brits to spend £13.6bn online this Christmas
New data from Forrester Research predicts that the British will spend up to 40% more this Christmas than in 2006, with total spend expected to reach £13.6bn, writes Revolution. Total European online spend is expected to grow 38.5%, The British spend more online than the Germans and the French combined (€11.5bn and €6.5bn respectively) and the UK now accounts for 38.5% of all European online retail spend. On average, British shoppers are expected to spend £509 (€731) online between 1st October and Christmas Day. Forrester's study used data from 17 countries and included online travel spending. Travel accounts for 31% of all money spent online and represents the largest online retail category.
From Brand Republic: http://www.brandrepublic.com, 23/10/2007
Forrester Research: http://www.forrester.com

Advertising

Bellwether Report finds 6% of UK adspend going online
Online has grabbed its biggest ever share of the UK's total adspend according to the latest quarterly Bellwether Report from the Institute of Practitioners in Advertising, writes Brand Republic. Figures for Q3 show internet marketing accounting for 6% of all UK adspend, with 31% of firms raising their online ad budgets and only 7% lowering them. Overall 8.3% of companies raised their marketing budgets during the quarter and 9.2% of firms reported a rise in above-the-line spending - a new record figure for the Bellwether Report.
From Brand Republic: http://www.brandrepublic.com, 15/10/2007
IPA: http://www.ipa.co.uk

Companies

AOL buys Quigo for $340m
Time Warner-owned AOL is to buy Israeli online advertising firm Quigo for $340m, writes Brand Republic. Quigo specialises in contextual ads and sponsored links and has about 10% of the contextual ad market. Clients using its AdSonar platform include Time Inc, ESPN.com and FoxNews.com. The purchase is AOL's fourth online ad marketing acquisition this year.
AOL is also launching a new UK video search engine dubbed Truveo which will search across a range of media sources and websites allowing users to browse through millions of online videos.
From Netimperative: http://www.brandrepublic.com, 07/11/2007
AOL UK: http://www.aol.co.uk

Microsoft launches new web analytics service
Microsoft has launched its beta for Project Gatineau its free web analytics service, writes New Media Age. The trial has currently gone live in the US. Unlike other free offerings the service provides demographic data in addition to age and gender segmentation based on users MSN Live IDs. Standard tools such as click tracking, marketing campaign reporting and conversion tracking are also included. The service uses technology provided by DeepMetrix, acquired by Microsoft in 2006.
Microsoft recently posted its fastest growth in revenues since 1999. Q3 revenues were up 27% year-on-year to $13.76bn (£6.7bn) with turnover reaching $4.29bn (£2.1bn) (from $3.48bn (£1.7bn) in 2006). The release of both Windows Vista and Halo 3 contributed to the strong results.
Finally, Microsoft also ended weeks of speculation when it piped Google to the post to take a 1.6% £240m (£117) stake in Facebook (valuing Facebook at $15bn (£7.3bn)). The deal will also see Microsoft selling ads for the site as it expands beyond the US.
From New Media Age: http://www.nma.co.uk, 31/10/2007
Microsoft: http://www.microsoft.com

Q3 revenues up 57% at Google
Google's latest results show that Q3 revenues at the online giant have risen 57% year-on-year to reach $4.23bn, writes Brand Republic. Revenues were also up 9% on Q2's revenues of $3.87bn. Revenues from Google-owned sites grew 68% from Q3 2006, reaching $2.73bn and accounting for 65% of all revenues. Adsense partner sites represented 34% of all Q3 revenues and reached $1.45bn. Net income for the quarter was $1.1bn (from $733m in 2006). Full-time staff numbers were up 2,130 from Q2 reaching 15,916.
The results followed news of Google's latest purchase: Finnish "micro-blogging" service Jaiku. Jaiku lets users send status updates to their friends and contacts via the web and their mobile phones. Users can also share their location and calendar and on some platforms the service can integrate directly with a phone's address book. Jaiku is Google's latest mobile-related acquisition, coming one month after the firm's purchase of Zingku.
From ClickZ: http://www.clickz.com, 18/10/2007
Google UK: http://www.google.co.uk

BBC goes live with ads on BBC.com
Following approval from the BBC Trust the BBC has begun the placement of ads on its BBC.com website, writes Brand Republic. The adverts can only be seen by users outside the UK and are expected to bring in £70m/year in advertising revenues. DoubleClick has been chosen to handle the ads. British Airways, Airbus and Hublot are among the first advertisers to sign up. According to data from comScore the BBC has 28m users outside the UK.
From Brand Republic: http://www.brandrepublic.com, 07/11/2007
BBC.com: http://www.bbc.com

Amazon launches Prime service in UK
Amazon UK has followed its US and Japanese equivalents with the launch of its Prime service, writes New Media Age. The service costs £49 per year and provides unlimited free one-day delivery with no minimum order. In addition customers in London and Birmingham can get discounts on same-day delivery on orders made before 11.30am.
Amazon placed strong Q3 results with net sales up 41% to $3.26bn (from $2.31bn in 2006). Net income grew to $80m (from $19m the year before). Overall sales were boosted by the release of the latest Harry Potter book, with Amazon selling 2.5m copies.
From New Media Age: http://www.nma.co.uk, 06/11/2007
Amazon UK: http://www.amazon.co.uk

Industry focus: Social Networking

Londoners most social Brits
Over half of Londoners are now using social networks, according to new research by YouGov, writes Brand Republic. The study, commissioned by Garlik, also found that over 4m British internet users also now go online to write or contribute to blogs. With 51% London was the region with most social networkers, followed by the South East (48%). London also scored highly for online banking, with 85% of those in the capital running their accounts online, followed by the North East (82%) and the East Midlands.
Overall, UK traffic to social networks rose 153% from December 2006 to September 2007 according to Hitwise. In September 2007 1 in 20 visits to websites in the UK was to a social networking site. By the same month Facebook.com had grown to become the UK's fifth most visited URL (having increased its share 30-fold year-on-year). Facebook is also the UK's fifth most popular departure point for traffic to other websites.
The figures are even more significant in the light of comScore's latest research which found that the UK has the highest rates for social network usage in Europe. According to comScore social network sites had 24.9m unique visitors from the UK - equivalent to 78% of the UK's total online population. In August British internet users averaged 5.8 hours/month visiting such sites (with 23.3 visits/person). French users averaged 2 hours/month (on 16.8 visits/person) and German users averaged 3.1 hours/month (on 13.8 visits/person). In total Europe had 127.3m unique visitors to social networks in August, representing 56% of Europe's online population.
From Brand Republic: http://www.brandrepublic.com, 08/11/2007
YouGov: http://www.yougov.com

MySpace and Bebo sign-up to Google's OpenSocial initiative
Social network sites MySpace and Bebo have joined LinkedIn, Plaxo, Friendster, Xing and Google's own Orkut in signing up to Google's OpenSocial project, writes Brand Republic. OpenSocial provides a common set of APIs for web developers allowing plug-in applications, tools and widgets to work across a range of websites without the need for conversion. The project now has over 50 partners signed up including developers iLike and widgetbox.
From Brand Republic: http://www.brandrepublic.com, 02/11/2007
OpenSocial: http://code.google.com/apis/opensocial

Facebook ad platform signs up 100,000 branded pages in first 24 hours
Facebook have launched their new ad system, allowing firms to set up branded profile pages, writes Brand Republic. The site had 100,000 such pages 24 hours after launching the new system including Coca Cola, the New York Times and British Airways. The system also lets companies place ads in news feeds. Last month O2 signed up 63,000 students in 11 days with their Facebook group "The Battle for the UK's Favourite University", which offered a £50,000 party to the university with the most activity at the end of a 30-day period.
Facebook have announced that they are developing a new range of ad tools for marketers and claims that the site is effectively doubling in size every six months as 250,000 new users join each day. Globally the site now has over 50m users.
From Brand Republic: http://www.brandrepublic.com, 07/11/2007
Facebook: http://www.facebook.com

Mobile

Over 50m people will shop via mobile by 2011
New data from Juniper Research predicts that over 50m people worldwide will shop using their mobile phone by 2011, writes ENN. The mobile payments market is expected to be worth $11.5bn in the same year. The market is expected to grow as Near Field Technology and other mobile payment methods begin to offer consumers new alternatives to cash and payment cards.
Further data from Portio Research predicts that global mobile penetration rates will reach pass the 50% mark next year, rising to 75% by 2011. 65% of new users are expected to come from the Asia Pacific region.
Figures from Strategy Analytics for Q3 show that mobile phone shipments were up 12% to 285m. They forecast that 330m units will be sold worldwide during the final quarter of the year. Nokia remains the leading brand, selling 112m handsets and controlling 39% of the market.
From ENN: http://www.electricnews.net, 30/10/2007
Juniper Research: http://www.juniperresearch.com

Statistics

Monthly internet usage statistics for France, October 2007

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

Monthly top ten French parent companies for October 2007

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

Top 10 popular websites in the UK, October 2007

This list features the most popular websites based on UK Internet usage for October 2007, ranked by market share of visits across all Hitwise industries. Source: Hitwise Datacentre, October 2007, based on market share of visits
Hitwise: http://www.hitwise.co.uk/datacenter

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