iab 22 may 2009
TRANSCRIPT
Overview of the UK online
Kieron Matthews – Marketing Director
What I’d like to cover
1. Overview of the market
2. Thoughts on how the market might develop
3. Some trends
4. Q&A
1. Overview of the market
Market has changed dramatically
2008• Optimism• Confidence• Integrated• Collaborative• Investment• Growth• Innovation
2009• Nervousness• Cut backs• Re-evaluation• Accountability• Media vs media• Caution• Regression
Market down
Markets in crisis
Disappeared from the High Street
Shoppers find convenience and value online
Nostalgia
• The term nostalgia describes a longing for the past, often in idealized form.[1] The word is made up of two Greek roots (νόστος nostos "returning home", and άλγος algos "pain"), to refer to "the pain a sick person feels because he wishes to return to his native home, and fears never to see it again".
• “In a time of anxiety, people are seeking out brands they’re comfortable with and they can trust,” said Ric Hendee, vice president for marketing services at Cotton Inc. in New York.
Looking back
Even my kids
Retrench to traditional products
+41%
+20%
+20%
+11%
+18%
In uncertain times……
….when budgets are being slashed
…..Marketing has to be accountable
This is the first recession
since the internet has become a
mass medium……..
Where were we this time last year?..
• 2007 was a landmark year for online with ad spend
reaching £2.8bn• The medium grew by 38% from £2.0bn in 2006
• Online overtook press classifieds and regional newspapers
• Our revised 2008 forecast was £3.2 - £3.3bn…
Number of internet users in the UK
Source: NRS UKOM: Jul-Dec 2008; Jul-Dec 2007 *Internet World Stats
66%
UK Pop
71%
UK Pop37%
Online
Pop
44%
Online
Pop
Internet users going online
more than once a dayNumber of people online
Ireland - 3.4 million internet users*
NI - 1 million internet users*
2 thirds of broadband services are now above 2 MB
Base: All who know speed of broadband connection at home. Q: Do you know the connection speed of your home broadband package? (Nov 06; Nov 07; Nov 08)
Source: BMRB Internet Monitor Nov 2006; Nov 2007; Nov 2008
48% of home broadband users have used wireless broadband at home in the last month (Nov 2008)
56
18
25
46TVInternetRadioNewspapersMagazines
Weekdays
Saturdays Sundays
Source: BMRB Internet Monitor, November 2008 Base: All Internet users aged 15+
Online second only to TV% of media time for all internet users
2008 adspend figure
£3,349.7mmarket in 2008
An increase of £537.1m year-on-year
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
Total mobile advertising revenue 2008
£28.6m
Source: IAB / PwC mobile display ad spend survey 2008; search spend figure derived from modelling and industry estimates
Mobile shows similar trend to online
Onl
ine
ad s
pend
£ m
illio
ns
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
Onl
ine
audi
ence
(m
illio
ns)
£51m
£153.1m
£165.7m
1998 1999 2000 2001
9.4m* £28.6m
*Source: Comscore 12 month average 2008
£19.4m
Mobile audience
and spend 2008
17.1% increase
New contributions in 2008 represented £88.3m
2008 vs. 2007
on a like for like basis
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
21.9%
19.2%
11.7% 5.1%
3.2%
1.0%5.4%
13.1%
19.5%
TelevisionPress DisplayInternetPress ClassifiedDirect MailOutdoorDirectoriesRadioCinema
2008 market share 19.2% (15.5% in 2007)
% share of revenues for January to December 2008
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
IAB estimates for actual ad spend by format are based on samples of categorised revenue from key IAB members provided by PwC. Data excludes unclassified figures.
Total advertisingmarket
£17.5bn
The market you operate in
Press 47%
TV 37%Outdoor 8%
Radio 6%
Cinema 1%
Digital 1%
Northern Ireland Ad spend
Source: NI IPA 2008 - excludes Search
Source: PricewaterhouseCoopers / Internet Advertising Bureau, The Advertising Association / WARC: WARC estimate for directories.
Online only medium showing growth in 2008
Total advertising market growth = -3.5%
Year on year growth for 2008
Mar
ket
Sha
re
Online’s share growth accelerates to 20%
Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC
2.5% 3.3% 4.2%5.5%
7.3%8.4%
10.4%12.4%
15.0%
18.6%19.8%
16.1%
H12003
H22003
H12004
H22004
H12005
H22005
H12006
H22006
H12007
H22007
H12008
H22008
The digital media mixThe developing mix of ad products
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
IAB estimates for actual ad spend by format are based on samples of categorised revenue from key IAB members provided by PwC. Data excludes unclassified figures.
Full year total
£3,349.7m
% share of revenues for the full year 2008
The digital media mix
Strong growth of Search continues
181.2248.5
337.0431.4
531.3
634.3
856.8
1005.5981.4
762.3
H12004
H22004
H12005
H22005
H12006
H22006
H12007
H22007
H12008
H22008
£m
Source: Internet Advertising Bureau / PricewaterhouseCoopers
Industry categories
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
IAB estimates for industry sector shares are based on samples of categorised net revenue from key IAB members provided by PwC.
Data excludes unclassified figures and covers 87% of online display revenues in H1 2008. NB – an immaterial amount of these figures are classifieds
H1 2008: Technology leads the way
Based on 87% of total display ad spend
Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
IAB estimates for industry sector shares are based on samples of categorised net revenue from key IAB members provided by PwC.
Data excludes unclassified figures and covers 96% of online display revenues in H2 2008. NB – an immaterial amount of these figures are classifieds
H2 2008: Entertainment utilises online
Based on 96% of total display ad spend
2. Thoughts on
how the market might develop
Forecasts for Total 2009 advertising
• Carat/Aegis Down 7%
• Group M Down 11%
• Enders Down 13%
Average forecast Down -10%
2009 online - Feb 09 forecasting event
• Group M 2%
• Enders 1%
Outlook for online in 2009
In the toughest year for advertising,
online is forecast to hold steady
and gain further share points while
traditional media declines.
In 2009, Flat is good!
3. Some trends
5 in fact
Be personal
Nike Bootcamp – click on image
Behavioural targeting
youronlinechoices.co.uk
Nike Photo ID – click image
Be integrated
Integration is not matching luggage
Topical messages
Fosters – click on image
What to do?
Be social
O2
Challenging the norms of marketing
Be seen
Huggies
Google Insights
Nappies
Post natal
Nappies
React
News
Pace: Search results for “scrappage”1 week before the Budget1 day before the Budget
Be innovative
http://www.statravelblogs.com/
Mobile integration – click on image
Trends summary
1. Be less personal
2. Be integrated
3. Be social
4. Be seen
5. Be innovative
Thank you