IAB Europe Leadership Council Lessons from Christmas eCommerce

1. IAB Europe Leadership CouncilLessons from Christmas eCommerce Presented by//Alex Burmaster - European Internet Analyst

2. IAB Europe’s comments The Christmas period is always a step change in the use of the internet for shopping. We’ve seen this since the mid nineties and clearly the panic of Christmas shopping, combined with changes in leisure time, create a new opportunity for internet behaviour to evolve quickly. In this research presentation, Alex Burmaster, European Internet Analyst from Nielsen NetRatings explained what happened this Christmas. His research explores where advertisers fit in the ecosystem of internet marketing and the development of internet commerce. • We’re seeing people spend 10% more in terms of sessions, 18% in terms of time and a massive 27% in terms of pages. • Around 2000 pages per month are consumed by the average European internet users, with ‘heavy’ users clocking up more than three times this. • More then two third of European online visited ecommerce sites at Christmas with more than half the online population visiting the large online shopping services like Amazon and EBay. It may not be a surprise that Ecommerce is growing rapidly, but with the total internet audience only growing 9% each year in Europe, there’s a much steeper growth in the reach and intensity of the use of internet commerce sites. Shopping directories and guides are proving particularly fast in their growth, although the experience across the different countries varies greatly. NetRatings can also reveal how display advertising has grown in the number of advertisers and the number of campaigns running across Europe. There are 8% more companies running (which in turn leads to 20% more adverts). For me the most fundamental point is that the research also reveals deeper lessons from online shoppers and their behaviour which helps explain why firms should advertise online. In the UK 70% of internet users now claim that “the internet is the best source of product information”. 44% of people see the internet as being the place they “do their shopping research before buying online”, a statistic that helps answer the question about how internet advertising drives offline sales. We’re also seeing the more sophisticated third of online shoppers claim that they will spend as much time as possible doing their shopping on the web rather than the highstreet. And the average spend? €352 per person during December. As for why people are shopping online? Convenience and the lack of crowds are now being seen as the leading reasons compared to the discounting and price comparisons of a few years before. Ask your national IAB team about research they may have for online audiences and spending patterns, and sign up for the IAB Europe Informer research service by emailing your details to iabeurope@iabeurope.ws

3. Lessons from Christmas eCommerce • European eCommerce Sector • Size, popularity & growth • Advertising • Why advertise online? • Themes for online advertising • How effective is advertising online

4. European eCommerce SectorSize, popularity and growth

5. Use of online media increasing 10% 18% 27% Source: Nielsen//NetRatings European Index, Home and Work Data (CH, ES home data only) November 2005 - 2006

6. eCommerce is very popular… Source: Nielsen//NetRatings European Index, Home and Work Data (CH, ES home data only) December 2006

7. …and growing! Source: Nielsen//NetRatings European Index EXC UK, Home and Work Data (CH, ES home data only) December 2005 - 2006

8. eBay and Amazon still dominate Source: Nielsen//NetRatings European Index, Home and Work Data (CH, ES home data only) December 2006

9. European eCommerce SectorAdvertising

10. Online advertising activity grows… Source: Nielsen//NetRatings AdRelevance, all categories excluding house ads, December 2006

11. …especially for CD/book retailers Source: Nielsen//NetRatings AdRelevance, ‘Specialised eCommerce’ category, excluding house ads, December 2006

12. eBay is most prolific online advertiser Source: Nielsen//NetRatings AdRelevance, all categories excluding house ads, December 2006

13. Why advertise online?Lessons from online shopper behaviour

14. Q. Why advertise online? A. = it’s where shoppers spend their time Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

15. Q. Why advertise online? A. = it’s where shopping research is done Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

16. Q. Why advertise online? A. = it’s the best source of product info Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

17. Q. Why advertise online? A. = purchasing online is increasing Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

18. Q. Why advertise online? A. = it accounts for much of spend Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

19. Q. Why advertise online? A. = people spend money there! Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

20. Q. Why advertise online? A. = people click on ads!!! Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

21. Themes for online advertisingWhat online shoppers tell us

22. Convenience still best thing about shopping online… Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2004, 2005 and 2006

23. …for almost all consumer groups Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

24. How effective is advertising online?What online shoppers tell us

25. General surfing dictates which sites are chosen… Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

26. …however, ‘triggers’ are changing Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2004, 2005 and 2006

27. …however, ‘triggers’ are changing Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2004, 2005 and 2006

28. Triggers differ in importance Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

29. Email marketing increasingly a driver… Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2004, 2005 and 2006

30. …and mobile Internet becoming a factor Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

31. Lessons from Christmas eCommerce • Use of online media is increasing – consumers view 27% more Internet pages than a year ago • Over two-thirds of online Europeans visit eCommerce sites and growing • More companies are advertising online; their campaigns are more in-depth • Advertisers should be online – its where shoppers spend their time researching and buying and it accounts for more of spend • People are open to receiving marketing materials in return for discounts – they will click on ads / open emails and receive info through their mobile! • People shop online mostly because its convenient but factors differ in importance between different groups • General surfing dictates which sites are chosen but personal recommendations and online ads are growing in importance – search is no longer the dominant trigger • Triggers vary in relevance between the different groups – particularly for newer technologies such as mobile Internet

32. Lessons from Christmas eCommerceThank you Alex Burmaster//European Internet Analyst Tel//020 7014 0590 Email//aburmaster@netratings.com