Internet Marketing Trends Report 2012

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 Usage 14

Internet Advertising 15

Social Media 16

France Overview 17

Spain Overview 20

Belgium Overview 23

About WSI 26

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.

For more information about WSI’s Internet marketing services, please contact your local WSI Consultant.

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

02468

1012

Top 10 Websites Among UK Internet Users, Dec 2011

%

Source: Experian Hitwise, Jan 2012

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, 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)

2010 2011 2012 2013 20140

1

2

3

4

5

6

7

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

15%11%

12%11%

10%

Source: eMarketer, Nov 2011

4.10

4.55

5.09

6.22

6.72

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

InternetPressTVOutdoorRadioCinema

35%

25%

28%

7%

3.5% 1.5%

UNITED KINGDOM Paid Search



Paid Search Remains Leading UK Online 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)

Industries Using Search Advertising in the UK 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 will 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

2011 2012 2013 2014 201522

23

24

25

26

27

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

(%)

Source: eMarketer, Nov 2011

UNITED KINGDOM Mobile Marketing



Mobile Advertising Takes a Larger Budget Share In 2011, 29% of UK marketers will

spend 6-10% of their total digital budget on mobile advertising

This is a considerable increase over the 13% that said they would allocate that share toward mobile advertising in 2009

13% of marketers will spend 11-20% of their total digital budget on mobile advertising this year, while 6% of respondents said that 21-40% of their budget will be spent on mobile

Mobile Advertising Spending Will Soar in the Next Few Years Mobile advertising spending saw

a slight increase between 2009 to 2010 but is expected to jump even more over the coming years

In 2010, £49.8 million was spent on mobile advertising in the UK, a £12.2 million increase over 2009

This number is expected to surge by 2014 with an estimated £285 million to be spent on mobile advertising in the UK

UNITED KINGDOM Social Media



More People Using Social Networks in the UKThis year, more than half of all

Internet users (52.6%) in the UK will be on the social networks totaling to 24 million people

In 2012, 55.3% of the online population will be using social networking sites (25.9 million)

27.7 million people will use social networks in 2013 and by 2014, almost 60% of the UK online population will become social network users

Social Networks Are Being Used Several Times a Day Social network usage is becoming

a daily activity in the UK

69% of UK social network users said they use social network sites several times or at least once a day

21% of respondents use social networks several times or once a week, whereas 7% use social networks several times or once a month




Most Popular Social Networks in the UKThe #1 social network in the UK is

Facebook with 33.1 million unique visitors, reaching 76.3% of the population

The 2nd most popular social site is Windows Live with 6.8 million unique visitors (15.8% reach)

Twitter came in 3rd place with an 11.6% reach (5 million visitors)

Other popular social networks include LinkedIn (4th), MySpace (5th) and Bebo (6th)

Trust for Social Networks, Forums, Blogs & Reviews19% of consumers between the

ages of 18-34 in the UK, Canada and USA said they trust information found on social networks

Meanwhile 14% of those in the same age bracket said they trust online forums, blogs, reviews and chat rooms

Overall, consumers agreed they had more trust in social networks (12% of respondents) than online forums, blogs, reviews or chat rooms (8% of respondents)




Brand Categories That Social Media Users Are Interested In23% of Internet users in the UK

are interested in engaging with entertainment, film and music brands using social media

Clothing brands is the second most popular category for social media users to engage with (17%)

16% of respondents said they are interested in engaging with food and drink brands, while 14% said the same about sports brands

Other industries mentioned in the study are retail, leisure, travel, technology and cosmetics

Reasons People Follow a Company or Brand OnlineReceiving discounts and special

offers is the most popular reason people follow a company on social media sites (50% of respondents)

48% of respondents said they follow companies/brands to receive news about them

Loyalty is another major reason with 39% saying they follow a company because they are a customer of that brand




Companies Using Social Media for EngagementAccording to eMarketer, more

than half of UK companies (53%) use social media to a certain extend to engage audiences

More than a quarter of respondents (26%) said they aggressively use social media to engage customers

Goals for Social Media Branding was a top objective for

UK companies to use social media marketing in 2010, according to 72% of respondents

53% of UK companies said they use social media to drive more traffic to their web properties

Lead generation (35%) and direct online sales (19%) were other social media objectives

Social Network Ad Spend£185 million will be spent

advertising on social networks this year, taking 5% of total ad budgets

By 2012, marketers will spend £275 million on social network advertising (6% of total budget)

Internet Usage


EUROPE


European Online Population Growing In 2010, 429 million people were

online in Europe, and this year this number is expected to increase to 457 million

This growth is projected to continue next year, as 483 million people in Europe will become Internet users

The European online population is expected to reach 509 million in 2013, 530 million in 2014 and 547 million by 2015

Internet Users in Select European CountriesAccording to eMarketer, half of the

entire European population were Internet users in 2010

Internet user penetration in Europe will increase to 55% this year and 58% in 2012

As the European online population continues to grow in 2013, user penetration will increase to 61%

This trend will continue as Internet user penetration reaches 63% in 2014 and 65% in 2015

Internet Advertising


EUROPE


Marketers Plan to Spend More Advertising Online In 2010, 94% of respondents said

they planned to increase their online advertising spending

This year, 93% of marketers plan to spend more money advertising online over previous years

Online Ad Spend in Europe In 2011, $18.7 billion will be spent

advertising online in Western Europe, while Eastern Europeans will spend $3.2 billion on the same

Next year, marketers will spend $20.9 billion (Western Europe) and $3.7 billion (Eastern Europe) advertising online

The Growth Continues In 2012, online ad spending growth

will reach its highest in the last few years (17.5% in Eastern Europe and 12.1% in Western Europe)

Online advertising is expected to increase by 12.9% and 8.1% in Eastern and Western Europe respectively in 2013

By 2014, online ad spend growth will reach 20.5% in all of Europe

Social Media


EUROPE


Social Network Users in Europe IncreasingThis year, 100.1 million people in

Europe will become social network users (half of all European Internet users)

In 2012, 54.5% of Internet users in Europe will become social network users (112.1 million)

By 2013, 123.1 million people will use social networks in Europe (58.2% of the online population)

Social network users will continue to grow to 133.1 and 141.9 million in 2014 and 2015 respectively

Top 2 Social NetworksFacebook appears to be the #1

social network in major European countries (60-96% of respondents)

In the Netherlands, Hyves is the #1 social network according to 82% of respondents

The 2nd most popular social networks in Europe range between several region-specific sites such as TuentiAdictos, Copains d’avant, Nasza-klasa.pl and studiVZ

France


EUROPE


Internet Ad Spending Share in FranceTV and press advertising still take

up a fair share of total advertising dollars in France

Internet advertising took a 12% share of total advertising budgets in 2010, surpassing outdoor and cinema ad spend, as reported by the Interactive Advertising Bureau France (IAB France)

Internet Ad Spend Grows to Become Second Highest Internet advertising spending in

France has consistently increased over the years and the trend will continue in 2012

According to ZenithOptimedia, $2,125 million was spent advertising online in 2009 in France

As the 2nd strongest channel in terms of ad spend, Internet advertising will see $2,778 million in spending in 2012, surpassing magazine, outdoor, newspaper, radio and cinema ads

France


EUROPE


More Dollars Spent on Paid Search and Display In 2010, $1,510 million was spent

on paid search advertising in France, while $894 was allocated toward online display ads

This year, paid search ad spend will reach $1,624 million, while display ad spend will decrease slightly to $870 million

However, display advertising will rise again in 2012 to $920 million

Next year, social media and mobile advertising will increase as well to $162 and $118 million respectively

Online Ad Spend IncreaseseMarketer has similar predictions

regarding online ad spending increases in France

According to an eMarketer study, this year, €2.05 billion will be spent advertising online, a 7% increase over 2010

Online ad spend will increase by 8% in 2013 (€2.42 billion)

eMarketer predicts that by 2014, €2.61 billion will be spent advertising online in France

France


EUROPE


Social Network Users in France Increases20.4 million people in France will

become social network users this year, a 14.6% increase over 2010

This equates to 51.2% of all Internet users and 31.3% of the country’s entire population

In 2012, the social network population will increase to 22.7 million (11.4% change and 55.9% of all Internet users)

By 2015, an estimated 43.9% of the country’s entire population (29.1 million people) will become social network users

Most People Use Social Networks on a Daily BasisVisiting social networking sites is

becoming a daily activity in France

The majority of social network users (68%) said they use social sites several times or once a day

23% of respondents said they use social networks several times or at least once a week

Only 9% of users said they visit social networks several times or once a month

Spain


EUROPE


Internet Advertising Surpasses Newspaper Ad Spend in Spain Internet advertising spending will

almost double over 3 years from $916 million in 2009 to an estimated $1,674 million in 2012

Next year, online advertising will surpass newspaper ad spend by $122 million, making it the 2nd strongest advertising channel

Overall, more money will be spent on Internet advertising over newspaper, radio, magazine and outdoor advertising

Online Ad Spend Continues to IncreaseSimilarly, eMarketer reports that

Internet advertising spending will increase by 10% next year to reach €0.88 billion

According to the same study, online ad spend will rise again by 8% in 2013 to reach €0.96 billion

By 2014, €1.02 billion will be spent on Internet advertising, a 7% increase over the previous year

Spain


EUROPE


Paid Search and Display Ads Remain a FocusThis year, marketers in Spain will

allocate $589 million toward paid search advertising and $289 million for online display ads

Next year, both numbers are projected to increase to $672 million for paid search and $376 million for display ads

Interestingly, mobile ad spending will see a considerable increase next year, from $78 million in 2011 to $121 million in 2012

Social media advertising will also see increase though incrementally

Industries Leveraging Online Display Advertising14% of total display ad spend share

in Spain comes from travel and tourism companies

Companies within the telecom industry take up a 13% share of total online display ad spend, while automotive companies consume a 12% share of the same

Other industries using display ads include educational businesses, financial services and public/private services

Spain


EUROPE


Social Networking Grows in Popularity in SpainThis year, 15.5 million people in

Spain will use social networking sites (33.1% of the population)

In 2012, 2 million more people will become social network users and in 2013, another 2 million will use social networking sites

By 2015, almost half (46.9%) of the population will use social networks (22.6 million people)

Approximate Time Spent on Social Network Sites26% of social network users in

Spain spent about 1-3 hours on Badoo, while 37% spent the same amount of time on Facebook in September 2010

23% spent 1-3 hours on hi5 and MySpace each, while 35% spent 1-3 hours on LinkedIn

The majority of those surveyed in this study (ranging between 32-84% of respondents) spent under 1 hour on social networking sites in general


EUROPE


Netherlands

The Netherlands Has the Most Daily Internet Users in Western EuropeAccording to eMarketer, 76% of

respondents in the Netherlands said they use the Internet on a daily basis, an increase over the 53% that stated the same in 2005

This places the Netherlands as the #1 country in Western Europe for daily Internet usage with the UK in 2nd place (66% of respondents)

Popular Online Activities in the NetherlandsAs of September 2010, portals

were ranked as the #1 web category among Internet users in the Netherlands with an average of 433.7 minutes per visitor

Instant messenger was another popular online activity (410.8 minutes per visitor)

Approximately 209 minutes were spent on social networking sites by a visitor during September 2010

Email came in 4th place with an average of 209 minutes per visitor


EUROPE


Netherlands

Internet Ad Spend Will Surpass TV Ad SpendBetween 2005 and 2009, Internet

advertising in the Netherlands drastically soared with an increase of $954 million (from $136 million to $1,090 million)

Next year, online advertising spending is expected to increase again to $1,269 million surpassing TV ad spending ($1,103 million)

More money will be spent advertising online over TV, outdoor, radio and magazine ads

More Money Will Be Spent on Search AdvertisingThis year, €356.4 million will be

spent on search advertising, a 3.2% change over 2010

Meanwhile, €294.6 million will be spent on other Internet/digital advertising in the Netherlands

In 2012, search advertising revenues will rise by 6.5% to reach €379.7 million

By 2013, an estimated €416.3 million will be spent on search advertising (9.6% increase)


EUROPE


Netherlands

Social Media Activities in the NetherlandsAmong the online population in

the Netherlands, 47% said they are members of a social network

Meanwhile, 30% of respondents uploaded a video to YouTube during a one-month period

5% of Internet users said they update their social networking status or profile daily

Social Networks Used for Customer AcquisitionCompanies are finding successful

use of business social networks to get new customers

Almost half (48%) of companies in the Netherlands said they successfully use business social networks for customer acquisition

Other European countries mentioned in this study include UK with 33% of companies using social media to acquire customers, France (33%) and Spain (50%)

ABOUT WSIWSI 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.

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©2011 RAM. All rights reserved.

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Internet Marketing Trends Report 2012

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