Internet Marketing Trends report 2012 UK & Europe

TABLE OF CONTENTS

Executive Summary 2

United Kingdom

Internet Usage 3

Online Activities 4

Advertising Spend 5

Internet Advertising 6

Paid Search 7

Display Advertising 8

Mobile Marketing 9

Social Media 10

Europe

Internet Advertising 13

Social Media 14

France Overview 15

Spain Overview 18

Belgium Overview 21

About WSI 23

Source of all statistics:

Executive Summary

Copyright ©2012 by Research and Management Page 2

Despite Economic Turmoil, Digital Ad Spending on the Rise; Mobile Marketing to Spike in 2012 As Europe continues to struggle with a stubborn sovereign debt crisis, the region’s online ad spending is actually prospering, despite the difficult general economic environment. Given the harsh fiscal climate, however, total media ad spending is not expected to rise substantially. As a result, Europe’s still burgeoning online ad spending market will take a greater share of total ad spending and remain one of the only growing forms of ad spend. Overall, market conditions in Europe highlight the importance of and place more emphasis on forms of Internet marketing and communication. In similar fashion to the past few years, Internet advertising formats such as paid search, display ads and social media marketing experienced an increase in spending among UK and European Marketers in 2011, continuing the shift away from offline advertising like newspaper, radio and television. Recent statistics suggest that this trend will continue through 2012 and beyond. A relative newcomer to online advertising, mobile marketing exploded in 2011 and all signs indicate that it will become one of the leading forms of Internet ad spending in the very near future. The use of smartphones and tablets is increasing so rapidly that, in most European countries, over 90% of the population operates a mobile device. As people get more comfortable searching and interacting on the go, the Internet’s landscape is once again changing, and mobile marketing is certainly at the forefront. This Internet Marketing Trends Report is a brief summary of the current online marketing stats and patterns in the UK and Europe, as well predictions for the next few years. Specifically, the report covers Internet usage and penetration, advertising spending, Internet marketing, social media trends and activities and the expansion of mobile marketing.

WSI Internet Marketing Trends Report 2012

UK & EUROPE

UNITED KINGDOM Internet Usage



UK Internet Users by Age and Gender The majority of the UK’s online population is between the ages of 16-44 (57%) 17% of UK Internet users are between the ages of 16-24, 20% are between 25-34 and another 20% are between 35-44 The third highest share of UK Internet users is the 45-54 age bracket at 19%

UK Internet Users and Penetration The UK’s Internet use is still on the rise, with a projected increase of 1.2 million people from 2011 to 2012 By 2016, the number of UK Internet users is expected to climb to 50.4 million, which would be an increase of 9 million users over the five year period between 2011-2016 The percentage of the UK’s overall population who uses the Internet is also increasing; by 2016, almost 80% of the UK is projected to be using the Internet

UNITED KINGDOM Online Activities

Copyright ©2012by Research and Management Page 4

Online Services Used by UK Internet Users

Facebook is the most popular online activity among Internet users in the UK (65% of respondents) YouTube is the second most popular online activity among Internet users in the UK (50% of respondents in February 2012) Twitter is the distant third most popular online activity among Internet users in the UK (only 23% of respondents in February 2012) Other popular online activities among Internet users in the UK include MoneySavingExpert.com, Windows Live, LinkedIn and Google+


Top Ten Websites Among UK Internet Users Google UK is the most popular site in the UK with 9.67% market share of visits in December 2011 The next most popular site is Facebook (7.58% share) YouTube ranked in third place (3.41%) and eBay UK in fourth (1.81%) Other sites listed in the top ten include Windows Live mail, MSN UK, BBC News and Yahoo! UK and Ireland

0 2 4 6 8

10 12

Top 10 Websites Among UK Internet Users, Dec 2011

%

Source: Experian Hitwise, Jan


UNITED KINGDOM Advertising Spend


UK Ad Spending, by Media Ad spending in the UK is heading into a period of low growth (only 2% change is expected). Internet ad spending in the UK in 2012, however, is projected to climb by 11.3% over 2011’s final ad spend of £3,772 million

Conversely, press ad spending, which has been on a steady decline since 2009, is expected to drop from £3,307 million in 2011 to €3,012 million in 2012 (a 9% drop). Radio ad spending is also projected to take a 1% hit in 2012 TV and cinema ad spending project to hold steady, with 1.5% and 0% growth rates UK Display Ad Revenue Share, by Industry According to the Interactive Advertising Bureau UK, the finance industry led 2011 in online display ad revenue, with a 15.6% share Ranked a close second in online display ad revenue for 2011 was the consumer goods industry, which held a 14.5% share Other industries with a significant share of 2011’s display ad revenue included entertainment and the media (12.4%), travel and transport (10.3%) and retail (9.7%)


UNITED KINGDOM Internet Advertising



Internet Advertising to Take Lead Share of Total UK Ad Spend 35% of total advertising spending in the UK is expected to be allocated toward online advertising in 2012, which would give it the leading share by 7% over TV (28%) Press is expected to garner the third largest share of ad spend (25%), while the remainder will be divided among outdoor, radio and cinema

Steady Increase in Online Ad Spending eMarketer predicts that £5.09 billion will be spent advertising online this year in the UK, a 12% increase over 2011 According to the same study, £6.22 billion will be spent advertising online next year (11% increase) This growth is expected to continue into 2014, when £6.72 billion will be spent advertising online (an increase of 10% over 2013)

0

1

2

3

4

5

6

7

2010 2011 2012 2013 2014

UK Online Ad Spending, 2010-2014 (£ billions and % change)

15% 11%

12% 11%

10%

Source: eMarketer, Nov 2011

4.14.5

5.

6.2

6.72

Projected UK Advertising Spend Share, by Media, 2012 (% of total)

Internet

Press

TV

Outdoor

Radio

Cinema

35%

25%

28%

7%

3.5%

1.5%

UNITED KINGDOM Paid Search



Paid Search Remains Top Ad Spend Format Paid search advertising is expected to increase at a compound annual growth rate (CAGR) of 9.7% over the next few years and will climb to nearly $6 billion by 2015 In 2012, paid search advertising spend is projected to reach $4.45 billion, which would be an 11% increase of 2011 Overall, paid search advertising will continue to hold more than a 50% share of total UK online ad spending. By 2015, the next closest share is expected to be held by display advertising (a 27% share)

UK Paid Mobile and Tablet Search Spending on the Rise UK’s paid search spending share is still dominated by one device, with computers holding a share of over 90% A noticeable trend is occurring as both smartphones and tablets are rapidly taking an equal portion of the paid search spending share away from computers As the overall usage of smartphones and tablets steadily rises, more searches will be conducted on these devices, which means the trend is likely continue into 2012 and beyond

UNITED KINGDOM Display Advertising



UK Continues to Spend More on Display Advertising According to eMarketer, display ad’s spending share in the UK will experience small but steady growth in 2012, rising from 23.7% to 24.8% Display ad spending in the UK is expected to increase its share all the way to 26.6% by 2015, nearly a full 3% jump from 2011

Video Advertising

Experiences Rapid Growth Display – more specifically, video advertising – will experience the highest growth rate among all UK online ad spending by a significant margin In 2012, eMarketer forecasts that video advertising spend will experience 70.7% growth, which is more than 50% higher than the second highest projection (email at 17.9%) The growth of video advertising’s spend is predicted to drop slightly over the next few years, but its expected growth rate of 45.2% for 2015 is still extremely high and indicative of a powerful trend

22

23

24

25

26

27

2011 2012 2013 2014 2015

UK Display Ad Spending Share, 2011-2015 (by %)

(%)

Source: eMarketer, Nov

UNITED KINGDOM Mobile Marketing



UK Mobile Ad Spending Set to Explode eMarketer forecasts mobile ad spending in the UK will grow 63.7% to $314.7 million in 2012, as more consumers use their mobile phones for online entertainment on the go Moving forward, mobile ad spending in the UK will continue to rise, jumping to $503.1 million in 2013 and then $792.3 million in 2014 By 2015, eMarketer predictions that mobile ad spending in the UK will reach a staggering $1.2 billion, an overall increase of $1 billion since 2010

UK Mobile Ad Spending, by Format Total ad spending on the mobile platform in the UK will post a 57% CAGR between 2010 and 2015 Impressive growth confirms the importance of search in the UK’s mobile economy. Advertisers will spend $212 million on mobile search ads in 2012, or 67% of all mobile ad spending In the UK, 81% of adult smartphone users polled in Q2 2011 by Google and the Mobile Marketing Association said they run local searches on their devices, which highlights the importance of having a mobile ad spending budget

UNITED KINGDOM Social Media



Social Network Use in the UK Continues to Rise This year, more than 55% (26 million) of the UK’s Internet users will be active on social networks, an 8% increase over 2011 In 2013, 57.7% or 27.7 million people will be using social networks in the UK, and by 2014, that number will climb to 29.4 million people (60% of Internet users)

Social Network Users Divided About Being Served Ads 54% of respondents who were asked "I don't mind seeing adverts on social media services that are based on my profile activities: To what extent do you agree or disagree with the following statements?" gave a neutral or positive answer 18% of respondents either agreed or agreed entirely, while 30% neither agreed nor disagreed 47% of respondents indicated that they were not happy about being served ads based on their social media activities




Facebook Used by the Majority eMarketer forecasts that 2 million more people in the UK will begin using Facebook in 2012, a growth of 9.8% from 2011 The 22.9 million users projected to be on Facebook in 2012 represents 88.6% of UK social network users, 49% of Internet users and 36.4% of the population By 2014, 26 million people in the UK are expected to be using Facebook, which would be more than half of all Internet users

Leading Social Networks

Facebook is the leading social network site accessed on both classic web (75.7% reach) and mobile (41.6% reach) browsers Twitter is the distant second leading social network site accessed on classic web (19.5% reach) and mobile (4.8% reach) browsers Other social networks being accessed are LinkedIn, Myspace and Tumblr The overall numbers for social networks being accessed via a mobile device have a higher % reach, since this particular survey does not include mobile users who access social networks via mobile applications




Top Social Display Advertising Industries

As of September 2011, the top social display advertising industry in the UK – ranked by socially enabled display ad impressions – was consumer goods at 58.6 million impressions

The travel industry ranked a distant second with 39.3 million impressions, while the finance industry was third with 35.9 million impressions

Other top display ad industries in the UK include health (13.9 million impressions), telecom (10.3 million impressions and online media (10.1 million impressions)

UK Internet Users Sharing Brand Information 33% of UK Internet users said they share brand or product information on social networks, with over 20% claiming they do so on a daily, weekly or monthly basis 67% of UK Internet users said they never share brand of product information on social networks, but with the overall use of social networks still on the rise, it is reasonable to assume some of these people will begin sharing

Internet Advertising


EUROPE


Online Ad Spending in Europe to Increase Barclays Capital forecasts that online ad spending in Europe will swell to $28.6 billion in 2012, an increase of 12% over 2011 In 2013, Western Europe’s online ad spending is predicted to reach $29 billion and Eastern Europe’s spend will climb to $3 billion, pushing Europe’s total online ad spend to $432 billion By 2015, Europe’s online ad spend is expected to total $38.8 billion, which is an overall growth rate of 54% from 2012-2015

Mobile Ad Spending in Western Europe Set to Explode eMarketer predicts that mobile ad spending in Western Europe will climb up over $1 billion in 2012, a 59.9% increase from 2011 In 2013, mobile ad spending in Western Europe is expected to grow by 54.8% to $1.6 billion By 2015, mobile ad spending in Western Europe will reach $3.6 billion, which would represent a four-year growth rate of 82%

23

26

29

32

35

2.2

2.6

3

3.4

3.8

2011

2012

2013

2014

2015

Online Ad Spending in Europe, 2011-2015 (USD, billions)

Western Europe Eastern Europe

Source: Barclays

Social Media


EUROPE


Social Network Use Soars in Eastern Europe Eastern Europe enjoys one of the highest social network penetration rates among Internet users, as social networking is a key driver of online usage in the region In 2012, eMarketer forecasts that 157 million people in Eastern Europe will be active on social networks, which represents 74.6% of Internet users and 37% of the region’s population By 2014, 192.7 million people in Eastern Europe are expected to use social networks (78.6% of Internet users and 45.4% of the population)

Social Network Use in Western Europe Still on the Rise In 2012, eMarketer forecasts that 54.4% of all Internet users in Western Europe will use social networks Spain projects to have the highest percentage of their Internet users on social networks with 58.7% in 2012, while Italy is second with 56.9% By 2014, 60.8% of all Internet users in Western Europe are expected to be active on social networks, with Spain continuing to lead the way (65.9% of their Internet user population)

France


EUROPE


Online Ad Spending in France to Steadily Increase France’s online ad spending is expected to grow by 12% in 2012, reaching a total of $3.1 billion In 2013, that number projects to $3.3 billion and then to $3.6 billion for 2014 By 2015, France’s online ad spending will spike to $3.9 billion, which would be a four-year growth of 44%

Internet Ad Spend Remains Second Highest in France Internet advertising spending in France has consistently increased over the years and the trend is expected to continue into 2012 and 2013 According to ZenithOptimedia, $2, 473 million was spent advertising online in France in 2011 Second to only TV advertising, Internet ad spend in France will see $2, 931 million in spending by 2013, remaining well ahead of magazine, outdoor, newspaper, radio and cinema ads

France


EUROPE


Mobile Phone Subscriptions Trending Upwards According to the Autorite de Regulation des Communications electronique des Postes, 57.4 million people in France had mobile phone subscriptions as of December 2009, which represented 92.4% of the country’s population By September of 2011, 62.59 million people in France had mobile phone subscriptions; a staggering 99.7% of France’s population uses a mobile device, which underscores both the rapid growth and importance of the mobile market

Mobile Ad Spending Grows Quickly Mobile ad spending in France is expected to reach $134.7 million in 2012, a very significant 48.7% increase over 2011 According to eMarketer, mobile ad spending will then jump 53% in 2013 to $206 million, and a further 49.1% in 2014 ($307.1 million) By 2015, mobile ad spending is predicted to hit $434 million, a four year growth of 379%

France


EUROPE


Social Network Demographics According to comScore Inc., Facebook is the most used social network in France, totaling 31.3 million unique visitors (Aug 2011)

The survey revealed that, in general, males between the ages of 15-34 are the leading social network user demographic

Skyrock is the second most used social network in France, with 8 million total unique visitors (53% male and 37% between the ages of 15-24)

Internet Users Start to Follow Brands on Social Networks According to a survey, 16% of Internet users in France who responded said they follow brands or companies on a social network

Of those who responded yes, 15% said they follow only one brand or company, 27% said they follow two and 58% indicated that they follow more than three

84% of respondents said they do not follow brands or companies on a social network, but with the overall use of social networks on the rise, it is reasonable to expect that more people will begin to change their minds about doing so

Spain


EUROPE


Online Ad Spending in Spain Increases Spain’s online ad spending is expected to grow by 15.3% in 2012, reaching a total of $1.4 billion In 2013, that number projects to $1.6 billion and then to $1.8 billion for 2014 By 2015, Spain’s online ad spending will spike to $2 billion, which would be a four-year growth of 66%

Broadband Subscriptions Increase Broadband subscriptions in Spain, which have bean steadily on the rise over the last four years, reached 10.57 million in December 2010, up from just over 8 million back in 2007 According to La Comision del Mercado de las Telecomunicaciones, by December 2011 broadband subscriptions reached 11.15 million, a 39% increase

Spain


EUROPE


Mobile Phone Subscriptions Trending Upwards According to La Comision del Mercado de las Telecomunicaciones, 52.89 million people in Spain had mobile phone subscriptions as of December 2009, which represented 114.6% of the country’s population By December 2011, 56.19 million people in Spain had mobile phone subscriptions; a staggering 121.7% of Spain’s population uses a mobile device, which underscores both the rapid growth and importance of the mobile market Mobile Ad Spend Grows Mobile ad spending in Spain is expected to reach $59.1 million in 2012, a very significant 64.1% increase over 2011 According to eMarketer, mobile ad spending will then jump 58% in 2013 to $93.3 million, and a further 54.3% in 2014 ($144 million) By 2015, mobile ad spending is predicted to hit $214.7 million, a four year growth of almost 500%

Spain


EUROPE


Facebook is Top Social Network According to comScore Inc., Facebook is the most used social network in Spain, totaling 16, 630 thousand unique visitors (Dec 2011) The survey revealed that Facebook garnered a 77.8% reach and visitors spent a total of 290.3 minutes each on the site Tuenti came in a distant second, receiving 7,016 thousand unique visitors with a 32.8% reach, but a marginally more significant 316.5 minutes per visitor The top five was rounded out by Windows Live (4, 491), Twitter (3,604) and LinkedIn (2,245) Social Network Use, by Age and Gender According to a survey conducted by Elogia, 61% of social network users in Spain are male, while 39% are female The age of social network users in Spain is spread evenly, with 34% falling between the ages of 18-30, another 34% between the ages 31-39 and a slightly lower 32% between the ages of 40-55

Belgium


EUROPE


Internet Usage in Belgium According to comScore Inc., as of November 2011 Belgium’s Internet usage was generating 6.1 million unique visitors Internet users in Belgium were averaging 20.8 hours per visitor and 2,286 average pages per visitor At the time of the survey, Sweden, a similar sized country to Belgium, generated 6.2 million unique visitors, and 25.9 average hours per visitor with 2, 697 pages per visitor

Belgium Ranks 7th for Growth of Mobile App Usage Sessions The small country of Belgium landed in the top ten countries for growth of mobile app usage sessions (seventh, with a growth rate of 363%) Other top countries experiencing rapid growth of their mobile app usage sessions included Argentina (527%), Israel (427%) and India (398%), but considering Belgium’s small population, their presence in the top ten is significant

Belgium


EUROPE


Social Media Users in Belgium 48% of respondents from Belgium said they were participating in social networks, with 8% indicating that they were active in professional social networks According to Eurostat’s December 2011 survey, Belgium’s 48% mark compares favorably to even the top ranked country (the UK has the highest number of people participating in social networks, with 58% of respondents – of which 13% are active in professional social networks)

Broadband Households in Western Europe Belgium, which had the second highest percentage of broadband households in 2006 (48%), jumped 26% to 74% broadband households in 2011 The Eurostat survey, conducted in December 2011, showed that Belgium ranked alongside the Netherlands and the UK (83% each) as the leading nations of Western Europe for broadband households

ABOUT WSI

WSI leads the global Internet industry offering best of breed digital marketing solutions to suit the needs of multiple industries. The company has the world’s largest Internet Consultants’ network across 80 countries with its head office in Toronto, Canada. WSI Consultants have helped thousands of businesses realize their online marketing potential. By using innovative Internet technologies and advanced digital marketing strategies, businesses can have a WSI Digital Marketing Plan tailored to their individual needs to elevate their Internet presence and profitability to new levels. With the support and cooperation of its customers, franchise network, employees, suppliers and charitable organizations, WSI aims to help make child poverty history through its global outreach program (www.makechildpovertyhistory.org). For more information about WSI’s offerings and business opportunities, please visit our website at www.wsiworld.com. The information herein is the property of Research and Management Corporate (RAM). Each WSI franchise office is an independently owned and operated business.

©2012 RAM. All rights reserved.

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Internet Marketing Trends report 2012 UK & Europe

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