Archive for August, 2007

The value of pan-European online advertising is set to reach £10.8 billion by 2012 - close to double what it is currently worth, a new report states.

A study form research firm Forrester says that online advertising will have an 18 per cent share of the total advertising market, up from nine per cent currently. This growth will be fuelled by the fact that 52 per cent of people are now regularly going online, with the majority spending more time looking at the internet than watching TV.

"Firms will raise their online budgets primarily to better reach the growing net audience that relies on the web for a widening range of decisions," the report states.

"After five years of dipping their toes into the online marketing waters, firms have come to realise that the Net is a valuable medium for client acquisition, retention, and market expansion," it adds.

The UK will experience the greatest growth in online advertising, followed by Germany and then France, the study claims.

Despite the fact that internet use usually declines over the summer, the number of people surfing the web actually peaked during July of this year, a new report reveals.

Research from comScore revealed that around 31.8 million unique British users went online during the month, gaining exposure to paid search and other forms of online ad. This was a marginal increase on June’s figure of 31.7 million.

Close to 90 per cent of those who used the web went via Google, with 28.2 million visitors. Microsoft had 26.9 million unique users, while eBay had 22.1 million. Social media site Facebook had the strongest increase in traffic, up 26 per cent to 7.6 million users in July.

The success of travel and holiday sites mirrors the seasonal trends in the offline world, with July being a popular month for holiday, retail and entertainment sites," comScore’s Bob Ivins said.

"However, with the weather in the UK being so poor this summer it’s clear that - for domestic recreation activities at least - people have been surfing the internet for indoor entertainment."

Businesses must invest in search engine optimisation (SEO) if they want to increase the number of visitors to their webpages, it has been claimed.

David Thorpe, chief executive of the Chartered Institute of Marketing (CIM), claims that SEO is key to small and medium-sized enterprises’ (SMEs) quest to gain a greater presence on the internet.

"For many SME businesses, investment in search engine optimisation is vital, and without it most businesses will struggle to generate the traffic needed to justify its creation and maintenance," Mr Thorpe said.

"Although there will always be those who accidentally stumble across your web site, if you are looking to attract new customers you need to invest in search engine optimisation to drive customers to your web site."

A recent report from the Federation of Small Businesses revealed that only 18 per cent of SMEs currently sell online - despite the fact that 66 per cent of the UK population regularly uses the internet.

Employers shouldn’t go as far as altogether banning social media site Facebook from their offices, a leading UK workers’ organisation has said.

The Trades Union Congress (TUC) says that firms are within their rights to outlaw use of social networking sites during the day - but adds that a total ban on access to such web pages is an unnecessary "over reaction".

Organisations should work with staff and unions "to devise a sensible conduct policy" which would allow use during lunch breaks and at other times, the TUC says.

"Simply cracking down on use of new web tools like Facebook is not a sensible solution to a problem, which is only going to get bigger," General secretary Brendan Barber said.

"It’s unreasonable for employers to try to stop their staff from having a life outside work, just because they can’t get their heads around the technology.

"Better to invest a little time in working out sensible conduct guidelines, so that there don’t need to be any nasty surprises for staff or employers."

Search engine optimisation and other drivers of online advertising should become increasingly important over the years ahead, with new statistics revealing that internet and broadband take-up is on the increase in the UK.

According to figures from the Office of National Statistics, over 61 per cent of British homes are now connected to the internet, with close to 51 per cent using a broadband connection - an increase of seven per cent on last year.

The south-east of England is the most wired up region in the UK, with internet usage standing at 69 per cent. Northern Ireland has the lowest proportion of households connected to the internet at 52 per cent however.

Wales has seen the largest increase in the number of homes installing broadband, with 49 per cent now having a fast internet connection, compared to 32 per cent last year. Digital TV is said to be behind the rise, with consumers signing up to combined broadband, TV and phone packages before the switch next year.

Firms situated in the Arabian Gulf are not taking full advantage of the opportunities offered by online advertising techniques such as pay-per-click and paid search - and are falling behind their European and North American competitors in these fields, an expert has claimed.

Khamis Al Muqla, Gulf Saatchi and Saatchi chief executive and head of the Bahrain chapter of the International Advertising Association (IAA), says that firms who don’t take notice of the latest developments in online advertising need to wake up.

"If we are talking about the region, and comparing ourselves to leading countries in the West or even developing countries like China and India, then we are very much behind when it comes to online advertising," he told the Gulf Daily News.

"It is a one-to-one medium where you can reach your potential customer or client. In addition, it allows you to have a lot of information about them - so really it is one of the best mediums there is," he added.

A recent study from Madar Research revealed that less than one per cent of total spend on advertising in the Gulf goes towards online ads.

Despite the fact that social media sites are increasingly been viewed as prime host pages by advertisers, the majority are failing to capitalise on their new-found status, a new report claims.

Research from IDC claims that sites such as YouTube, MySpace and Facebook have yet to realise their potential as advertising media. Despite this, their revenues should rise to $1 billion this year, up from $400 million in 2006.

In the future they will use a mixture of business models, including advertising, subscriptions and e-commerce, to drive growth, the report says. But when attracting advertisers, social media sites will have to solve one difficult problem, according to IDC’s Karsten Weide.

"Social networks cannot guarantee a brand-safe environment. Advertisers don’t want to see their ads displayed alongside illicit content, for example," she comments.

"The dilemma for social networks is if they start to control what content users can post, they will lose popularity, which is what attracted advertisers in the first place."

The amount of money spent on online advertising in the US is set to dwarf the equivalent outlay on radio ads, a new report claims.

A study from eMarketer says that US online ad spend will outweigh radio ad spend for the first time this year. Online ad outlays will total $21.7 billion in 2007, while the amount forked on radio ads will be $20.4 billion, according to the research company’s figures.

And next year spend on online advertising will reach $28.2 billion, while outlays on radio ads will remain relatively stable, reaching $21 billion, says the study. Growth in online advertising will see spend rocket to $44 billion by 2011, while the amount spend on radio advertising will remain relatively stable at $22.6 billion.

"Internet radio, satellite radio, podcasting, high-definition radio and mobile audio services are revolutionising a radio industry that had remained virtually unchanged for a century," said Ben Macklin, eMarketer senior analyst and author of the new report, Radio Trends: On Air and Online.

"Traditional radio is rapidly being subsumed into a new, broader sector called ‘audio.’"

CNN.com and Google have announced a deal that will see Google deliver targeted advertising to CNN.com through its AdSense programme.

The deal will allow both small and large advertisers to target CNN.com specifically. Google will be the "exclusive provider of auction-based text advertisements throughout CNN.com", as part of the deal.

"At CNN.com, our mission is laser-focused on providing up-to-the-minute news and information to our users," David Payne, senior vice president and general manager of CNN.com, commented.

"Our new relationship with Google will deliver relevant ads to our users, enhancing their overall experience on CNN.com. We look forward to a successful partnership."

Marc Leibowitz, Google’s director of strategic partnerships, was similarly enthused: "CNN.com is an important and respected news source, and we’re pleased to enhance the reader experience through the targeted placement of relevant ads.

"By connecting CNN.com to our valuable base of advertisers, our AdSense program provides an effective and efficient way to monetise quality online content, ultimately benefiting readers, advertisers, and CNN.com."

Market competition regulators in the US have cleared Time Warner’s purchase of online advertising company Tacoda, a recently-released notice has revealed.

The document, sent out by the Federal Trade Commission, failed to disclose the terms of the deal. Tacoda is a company based in New York that delivers advertising based on a surfer’s browsing habits. It will become a subsidiary of Time Warner’s AOL unit.

When the purchase was first announced last month, Time Warner executives said that the transaction would allow it to deliver more relevant adverts. The new system will pick up on browsers’ web habits, so someone keen on visiting pages about cars might view an automotive advert while looking at a non-related site.

The takeover comes at a time of increasing industry consolidation in the internet advertising world, with Yahoo, recently acquiring Right Media and Microsoft buying out aQuantive.

The FTC is also currently investigating a proposed deal that will see Google take over DoubleClick, with critics saying that the deal will stifle competition in the sector.