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2007 UK online adspend study

2007 UK online adspend study. 1. Introduction. Agenda. Introduction Study methodology Market background and trends UK online adspend – headline results Online in context The digital media mix Industry categories Summary Looking ahead… Questions. Background.

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2007 UK online adspend study

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  1. 2007 UK online adspend study

  2. 1. Introduction

  3. Agenda • Introduction • Study methodology • Market background and trends • UK online adspend – headline results • Online in context • The digital media mix • Industry categories • Summary • Looking ahead… • Questions

  4. Background • Census of all major UK online media owners • Official Advertising Association figures since 1997 • Information collected each half year • Analysis available by • Format • Industry category

  5. 2. Methodology

  6. A brief history… • The IAB has been working with PwC since1997to survey the value of the online advertising market • We have run projects in Europe and North America to assess the size of the interactive media markets • These figures have become theindustrystandardfor measuring advertising spend • 118companieshave participated in the survey • Reported figures arenotadjusted to account for other organisations that have not participated • Total advertising revenue is reported on agrossbasis • The figures are drawn up on the basis of site declaration • They cover thousands of UK websites, but by no means all

  7. Research participants Acxiom Ad2-one Adept Scientific Adlink Ad Revenue AdSales4U Advertising.com AdvivaAOLAffiliate Window Ask Associated Northcliffe DigitalAutotraderBBC WorldwideBloombergBlue Lithium BMJ Bolt Blue Bounty BSkyB Buy AssociationBuy.at (Perfiliate)Channel 4ChinwagChrysalis RadioClassic FMCNET Conde NastConfetti Dennis Interactive DGM Dixons Double Fusion E-circle Economist EDR EMAP E-Type Euroclick EveryclickFaversham House GroupFinancial Times Find.co.uk FindapropertyFish4 FiveFriends ReunitedFuture PublishingGCap RadioGoogleGuardianHabboHachette FillpacchiHandbagHaymarket Hello IDG IndependentI.E.T (Institute of Engineering and Technology) IPCMedia IPTi-Points ITN ITV iVillage Jetix Jobs.ac.uk JobsiteJohnston PressLoot Lycos Manchester Online Media BrokersMemediaMivaMonetiseMoneyextraMonsterMSN MySpaceNational Magazines Net Communities Netrecruit News International Orange Oridian OverturePigsback Prime LocationProperty Finder Real Media Reed Business Information Reuters Right MoveScotland OnlineSift Simply Media TV SRHSkupe TeamtalkTelegraphTescoTiscali TMN Media TradedoublerUK Net GuidesUKTV UnanimisUpmystreet U Target Valueclick Viacom Brand SolutionsVirgin Radio WME Workthing Yahoo! Yell …Plus further recruitment sites, courtesy of WARC Representing thousands of UK websites

  8. 3. Market backgroundand trends

  9. At the height of the “boom” online was worth £166m! £ millions Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  10. Where were we this time last year?.. • Online broke through the £2bn barrier in 2006 • The medium grew by 41% from £1.4bn in 2005 • Online overtook National Press • Our initial forecast for 2007 was £2.6bn… • …but we revised that up to £2.75bn (and Prayed!)

  11. 32.5m July 07 3.6m June 96 Meanwhile the audience is still growing Have you used the Internet in the last 12 months? Source: Gfk NOP World, To July 2007

  12. Over half of home broadband services are now above 2 MB 50% have used wireless broadband at home in the last month (February 2007) Q. What is the connection speed of your home broadband? Base: All home broadband users who knew their speed of connection (Nov 06 - 396; Nov 07 - 388) Source: BMRB Internet Monitor Nov 2006; Nov 2007

  13. Young women take over… Women 25-34 now spend more time online than men in the same age group. Source: Ofcom Communications Report 2007

  14. Empty nesters go surfing… One quarter of all Britons online are over 50 and 30% of total time spent on the internet is by the over 50’s Source: Ofcom Communications Report 2007

  15. Toshiba Tecra 8100 £250 inc VAT £4.50 50p per hour Bars, Hotels, Coffee shops, parks… Free at libraries $100 Wind Up It’s never been easier to get online

  16. 4. UK Online Adspend StudyResults for the full year of 2007 Prepared by PricewaterhouseCoopers for the IAB

  17. Have I got news for you…?

  18. £2,812.6mmarket in 2007Anincreaseof£797m year-on-year Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  19. 2007 vs. 2006 38% increase New contributions in 2007 represented£64.9m on a like for like basis Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  20. Up £2bn in 3 years! Online advertising reaches £750m in Q4 ‘01 ‘02 ‘07 ‘03 ‘04 ‘05 ‘06 £ millions Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  21. 5. Online in context… Breaking market trends in the UK ad industry

  22. 2007 market share 15.3% (11.4% in 2006) % share of revenues for January to December 2007 Total advertisingmarket £18.4bn 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  23. Online drives the whole market Year on year growth for 2007 Total advertising market growth = 4.3% Source: PricewaterhouseCoopers / Internet Advertising Bureau, The Advertising Association / WARC: WARC estimate for directories.

  24. Online’s share growth accelerates to 16% Market Share Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC

  25. Television Press - Display Direct Mail Press - Classified Internet Outdoor Radio Online slices through the media market £ millions N.B. WARC Recruitment data included from 2003 Source: PricewaterhouseCoopers / Internet Advertising Bureau / Advertising Association / Radio Advertising Bureau / WARC

  26. Online overtakes Press Classifieds (Just!) Full year 2007 £m Directories are estimated Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC / Radio Advertising Bureau.

  27. Summary – Full year 2007 • Online advertising driving growth of the entire media market • Internet advertising reaches £2,812.6m in 2007 • Online achieved a share of 15.3%, up nearly 4 points from 2006 (11.4%) • The market grew on a like for like basis by 38% year-on-year, maintaining the strong growth of previous waves • Online overtakes Regional Newspapers and press classifieds (15% and 15.1% respectively)

  28. Summary – H2 2007 • In the second half of the year, online advertising was worth £1,478.2m • The internet’s share of all advertising expenditure actually reached 15.9% • Revenues for Q4 over £750m

  29. 6. The digital media mix The developing mix of ad products

  30. The digital media mix % share of revenues for the full year 2007 Full year total £2,812.6m 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  31. The digital media mix All online formats have experienced strong growth +39% +31% +54% £ millions 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  32. The digital media mix % share of revenues for the full year 2007 £467.1m £23.1m £15.1m £23.4m £44.1m £19.2m £16.2m £286.8m £296.5m £1.9m £1,619.1m Full year total £2,812.6m 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  33. The digital media mix Year on year comparison £ millions 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  34. Strong growth of Search continues £m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  35. Almost 90% use search every month • In January 2008, 29m people visited a search engine and 27.7m of these clicked through onto a site. • This equates to 89% of the internet population visiting a search engine and 84% clicking through. • There were 1.7bn search queries carried out in the UK in January 2008. • On average, there are 3.4 click throughs per search session. • PPC Search revenues in 2007 reached £1,619.1m. In H2 2007 this was £856.8 Source: Nielsen Online, MegaView Search UK, January 2008, Home and Work, Netview January 2008, IAB/PwC Online Ad Spend H2 2007

  36. Growth in further classifieds £m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  37. Classifieds led by key players

  38. Display: formats dominated by banners & rich media £m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  39. Embedded formats up over 100% in the last two years +45% £ millions -40% +22% +159% +15% +8% 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  40. 40% of display spend through networks IASH sales houses represent thousands of sites Source: Internet Advertising Bureau

  41. Formats summary – 2007 • Revenues increased across all formats, except for tenanciesand solus e-mail • With revenues of £1619.1m in 2007, search maintained its dominant position • YoY, display was up 31% to £592m while search increased by 39% and classifieds were up by 54% to £585.3m • Core “embedded” display rose45%YOY • Classifieds: recruitment increased by 33% to £286.8m and other classifieds grew by 82% to £298.4m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  42. 7. Industry categories

  43. Recruitment continues to lead the market 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 41% of online revenues in H2 2007. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  44. Technology overtakes Finance • Property enters top 5 * Sector Market Shares 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 41% of online revenues in H2 2007. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  45. Sector Market Shares Retail gains share ! 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 41% of online revenues in H2 2007. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  46. Spotlight on Retail • Online spend beginning to grow, reflecting a buoyant and competitive e-commerce market (46.6bn 2007) • 46.6bn ecommerce spend up 54% on the £30.2bn recorded for 2006

  47. Finance and Travel spend has increased over time, but share of categories has declined * Are Finance and travel maturing? H2 2004 H2 2007

  48. Industry sectors summary – H2 2007 • Property is the share point winner (+3.3 points) however, recruitment retains the pole position and Technology overtakes Finance for the first time to take the third spot. • Retail (+1.7), Business and Industrial (+2.1) and Telecoms (+0.7 points) strengthened their positions whilst Finance (-3.8 points) and Technology (-3 points) continued to showed a decline. • Share for Consumer Goods, though remains mid tier, increased by 0.9 point - there is still room for growth in this sector.

  49. 8. Summary

  50. Have I got news for you…

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