Marketing in the Digital Age

Published by: Key Note Publications Ltd

Published: Mar. 1, 2009 - 134 Pages

Table of Contents

Executive Summary

1. Introduction

OVERVIEW

DEFINITION

2. Strategic Overview

BACKGROUND

MARKET DYNAMICS AND SEGMENTATION

Market Sectors

Total Industry Value and Growth

Table 1: UK Advertising Expenditure at Current Prices (£m), 2003-2007

Table 2: Media Share of Advertising Expenditure (£m and %), 2007

Table 3: UK Internet Advertising by Format by Value (£m and %), 1st January 2008 to 30th June 2008

Table 4: Outdoor Digital Screen Advertising Expenditure by Value (£), First Quarter 2007 to Third Quarter 2008

THE CONSUMER

Demographic Data

Table 5: UK Communications Take-Up by Type (% of adults), 2007 and 2008

Table 6: Media Convergence Take-Up in the UK by Location (% of adults), 2003-2008

Table 7: Take-Up of Bundled Telecommunications Services in the UK by Region (% of adults), 2008

Consumer Attitudes Towards Advertising

COMPETITIVE STRUCTURE

Broadband Providers

3

AOL Broadband

Be Broadband

BT Home Broadband

Demon Broadband

Direct Save Broadband

Eclipse Internet

Madasafish

O2 Broadband

Opal

Orange

Pipex

PlusNet

Sky

TalkTalk

Tiscali

T-Mobile

Toucan Surf

UKOnline

Virgin Media

Vodafone

Agencies

Marketing

Table 8: The Top 20 Digital Marketing Agencies by Fee Income (£), 2008

Technology

Table 9: Leading Technical Agencies by Fee Income (£), 2008

Design and Build

Table 10: The Top Ten Design and Build Agencies by Fee Income (£), 2008

Awards

Winners of the Revolution Awards 2008

Winners of the BIMA Awards 2008

Outdoor Advertising

INDUSTRY ISSUES

Financial Crisis

Fragmentation/Convergence

Social Networking

Table 11: The UK's Top Ten Social Networks by Market Share (% of networks), June 2007 and 2008

Table 12: Top 25 Properties by Number of UK Unique Visitors (000), September 2008

MARKET FORECASTS

3. Digital Television

BACKGROUND

Digital Switchover

Table 13: Digital Switchover in the UK by Television Region

Channels

Table 14: Channels Broadcasting on Freeview by Broadcasting Period, December 2008

Digital Platforms

Sales Networks/Channel Owners

Sky Media

Bauer Consumer Media Ltd

Table 15: Bauer Brands' Advertising Platforms, December 2008

iDigital Sales

Setanta Sports

INDUSTRY DEVELOPMENTS

Internet Protocol Television

Joint Video-On-Demand Project

Interactive Advertising Developments

MARKET SIZE

Digital Television Uptake

Table 16: Ownership of Digital Devices in the UK (% of households or individuals), 2008

Table 17: Proportion of Adults Living in a Household That has Used the Internet to Watch Television or Video Content by Region (% of adults), March 2008

CONSUMER TRENDS

Table 18: Trends in Audience Share by Channel (% of individuals), as at Third Quarter 2006-2008

Table 19: Audience Share of Non-Terrestrial Television by Sex, Age and Social Grade (%), 13 Weeks to Week Ending 28th September 2008

ADVERTISING

Main Media Advertising Expenditure

Table 20: Main Media Advertising Expenditure by the Top 20 Digital Channels (£000), Years Ending September 2007 and 2008

Advertising Revenues

4. Digital Radio

BACKGROUND

Digital Radio Migration

Technology and Licensing

National Commercial Multiplex Operators

Digital One Ltd

4Digital Group Ltd

National Digital Radio Owners

Global Radio

Planet Rock Ltd

UTV Media PLC

TIML Radio Ltd

Market Movements

MARKET SIZE

Table 21: Digital Radio Share of the Total Radio Audience (% share of radio listening), First Quarter 2008

CONSUMER TRENDS

Table 22: Proportion of Adults Living in a Household That Has Used the Internet to Listen to Radio by Region (% of adults), May 2008

Table 23: UK Radio Access by Platform by Frequency of Listening (%), First Quarter 2008

ADVERTISING

Main Media Advertising Expenditure

Table 24: Main Media Advertising Expenditure by Radio Companies (£000), Years Ending September 2007 and 2008

5. Marketing on the Internet

BACKGROUND

Increasing Market Share

Table 25: Internet Share of Total Advertising Expenditure (£m and %), 2003-2007

Social Networking

Table 26: The Top Ten Social Media Websites by Unique Audience Size (000), January 2008 and 2009

Market Developments

Broadband Speeds

MARKET SIZE

By Advertising Expenditure

Table 27: Internet Advertising Expenditure at Current Prices (£m), 2003-2007

Table 28: Share of Internet Advertising Expenditure by Sector (%), Second Half 2007

By Consumer Demographics

Table 29: Households in Great Britain and the UK with Internet Access (% of households and million), Mid-Year 2002-2008

Table 30: Household Internet Connections in the UK by Type (% of households), 2006-2008

Figure 1: Household Internet Connections in the UK by Type (% of households), 2006-2008

Table 31: Reasons for UK Households Not Having an Internet Connection (% of non-connected households), 2006 and 2008

Table 32: Internet Usage in Great Britain by Location (% of adults), February 2006 and August 2007 and 2008

CONSUMER TRENDS

Table 33: Frequency of Use of the Internet in the UK by Recent Internet Users by Sex and Age (% of Internet users), 2006-2008

Table 34: Internet Activities of Recent Internet Users in the UK by Age (% of Internet users), 2008

Table 35: Communication Over the Internet by Recent Users in the UK by Sex (% of Internet users), 2008

Table 36: Audio-Visual Content Over the Internet by Recent Users in the UK by Sex (% of Internet users), 2008

Consumer Power

Table 37: The Top 20 Brands' Share of Voice in Social Media by Ranking, 2007 and 2008

Online Publishers

6. Mobile Marketing

BACKGROUND

Mobile Potential

Mobile Network Operators' Coverage

Table 38: Availability of Mobile Coverage (% of UK), 2008

Mobile Handsets

PROBLEMS FOR ADVERTISERS

OPPORTUNITIES FOR ADVERTISERS

Emerging Technologies for Mobile Broadcast Television

MARKET SIZE

Table 39: UK Advertisement Requests by Manufacturer (% of requests), December 2008

Table 40: UK Smartphone Advertisement Requests by Manufacturer (% of requests), December 2008

Table 41: The Top Ten Handset Models (% of advertisement requests), December 2008

Table 42: Adults who Personally Own and Use a Mobile Telephone by Age and Social Grade (% of adults), End June 2005-2008

CONSUMER TRENDS

Table 43: Proportion of Adults who Have Used a Mobile Telephone to Watch Audio-Visual Content by Region (% of adults), First Quarter 2008

Table 44: Adults in the UK who Have Accessed the Internet in the Past 3 Months by Mobile Devices (% of adults), 2007 and 2008

Table 45: UK Mobile Telephone Users' Activities in the Past 3 Months Excluding Voice Calls and SMS by Sex (% of adults), 2008

INDUSTRY AWARDS

7. An International Perspective

MOBILE MARKET DEVELOPMENTS

Table 46: Selected Broadcast Mobile Television Offers

ADVERTISING ENVIRONMENT

Table 47: Actual and Forecast Advertising Expenditure in the Eurozone and Selected Countries at Current Prices (% change year-on-year), 2007-2009

CONSUMER BEHAVIOUR

Table 48: Reach of Social Networking in Selected Countries (% of Internet users), September 2007 and 2008

8. PEST Analysis

POLITICAL FACTORS

ECONOMIC FACTORS

Table 49: Forecast UK Rate of Inflation (%), 2008-2012

Table 50: Forecast Actual Number of Unemployed Persons in the UK (million), 2008-2012

SOCIAL FACTORS

TECHNOLOGICAL FACTORS

9. Industry Dynamics

INDUSTRY ROUNDTABLE

The Interviewees

Questions and Answers

What Would You Say Were the Three Most Important Trends in Digital Marketing in the Past 12 Months?

Graham Darracott

Dan O'Donoghue

Robert Marcus

Adrian Nicholls

What are the Three (or Four) Main Issues Marketers are Facing Today?

Graham Darracott

Dan O'Donoghue

Nigel Gwilliam

Robert Marcus

Adrian Nicholls

What Advice Would You Give to Marketers to Make the Best Use of their Budgets in an Economic Recession?

Graham Darracott

Dan O'Donoghue

Nigel Gwilliam

Robert Marcus

Adrian Nicholls

Which Medium Would You Say Will Show the Most Resilience During an Economic Recession?

Graham Darracott

Dan O'Donoghue

Nigel Gwilliam

Robert Marcus

Adrian Nicholls

What is the Best Way for Brands to Create a Positive Image on Social Networking Sites?

Graham Darracott

Dan O'Donoghue

Nigel Gwilliam

Robert Marcus

Adrian Nicholls

What Will be the Most Important Trend for Marketers in the Next 3 Years?

Graham Darracott

Dan O'Donoghue

Nigel Gwilliam

Robert Marcus

Adrian Nicholls

10. Company Profiles

BACKGROUND

THE CARPHONE WAREHOUSE GROUP PLC

Corporate Information

Strengths and Weaknesses

New Product Development

Brand Development

Innovations

Appointments

Profitability

Table 51: Financial Results for Carphone Warehouse Group PLC (£000), Years Ending 1st April 2006, 31st March 2007 and 29th March 2008

Future Company Developments

CHAT MODERATORS LTD

Corporate Information

Strengths and Weaknesses

Brand Development

Innovations

Appointments

Profitability

Future Company Developments

GRAPHICO NEW MEDIA LTD

Corporate Information

Strengths and Weaknesses

New Product Development

Brand Development

Innovations

Appointments

Profitability

Table 52: Financial Results for Graphico New Media Ltd (£000), Years Ending 31st December 2005 and 2006 and 65 Weeks Ending 31st March 2008

Future Company Developments

GOOGLE INC

Corporate Information

Strengths and Weaknesses

New Product Development

Brand Development

Innovations

Appointments

Profitability

Table 53: Financial Results for Google Inc ($000), Years Ending 31st December 2006-2008

Table 54: Financial Results for Google UK Ltd (£000), Years Ending 31st December 2004-2006

Future Company Developments

GT LONDON LTD

Corporate Information

Strengths and Weaknesses

New Product Development

Brand Development

Innovations

Appointments

Profitability

Table 55: Financial Results for GT London Ltd (£000), Years Ending 31st December 2005-2007

Future Company Developments

SPECIFIC MEDIA UK LTD

Corporate Information

Strengths and Weaknesses

Brand Development

Innovations

Appointments

Profitability

Table 56: Financial Results for Specific Media UK Ltd (£000), Years Ending 31st December 2005-2007

Future Company Developments

11. The Future

MARKET FORECASTS

Table 57: High and Low 12-Year Forecast Options at Constant 2000 Prices (£m), 2010 and 2020

12. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Key Note Sources

Abstract

Roadside billboards are probably the oldest form of advertising and the oldest form of information. The digital revolution has ensured that billboards have come full circle, with the November 2008 launch of a network of 16 roadside screens broadcasting live news feeds from Sky News.

Digital billboard networks are increasingly available to advertisers in many locations — railway and underground stations, airport terminals, shopping centres and on-street locations. Many are interactive, which signifies digital marketing's leap from the PC-accessed Internet into the real world.

However, the PC remains key to digital marketers. Despite high hopes of next-generation mobile telephones providing the same kind of networking services as are available online, mobile marketing has not moved in any significant way from text marketing, and mobile network operators are now including laptops as part of their deals to encourage users to expand their network usage.

Mobile marketing barely features as a percentage of overall advertising expenditure, where the Internet continues to take market share from print and television. Marketing budgets are being cut across the board as the economic situation worsens, but online budgets are still growing, albeit at a slower rate than in previous years.

However, both the print and television sectors are also embracing the online medium as an extension of their reach. Most media owners also have a Web presence and the computer is being increasingly chosen as the device upon which to watch television, whether it is `catch-up' recorded television or live television over broadband.

Broadband service offerings — traditionally the domain of Internet service providers (ISPs) delivered via cable, telephone and satellite connections — are now also offered by mobile telephone network operators using wireless connections via plug-in universal serial bus (USB) devices. This has freed users, enabling them to access the Internet from a much wider range of locations and no longer having to find wireless `hotspots' where they might have to purchase access.

Radio remains the poor relation in the digital arena, with advertising spend continuing to decline despite efforts from radio sales networks to promote a wider take-up of digital audio broadcasting (DAB) radio sets. There has been much consolidation in this industry, with a number of takeovers during 2007 and 2008, most notably Emap selling all of its radio holdings to Bauer Publishing during 2008.

The Internet is the undisputed leader in the digital marketing arena and it is here where the digital marketing agencies find more opportunities to practise their creativity, engaging with consumers in a way that is not possible through other media. Despite its early promise, interactive television advertising has failed to move much beyond being a mere direct response offering, but the Internet finds true interactivity.

Social networking has flourished in the UK, which has the third-highest percentage of users in the world.

Marketers counsel a gentle approach when entering this space. As one of the respondents to Key Note's virtual roundtable, created for this report to provide industry insight from key industry practitioners, stated: brands have to earn the right to be there.

This report cannot examine every aspect of digital marketing, which now reflects the entire marketing spectrum. However, it does discuss market developments and profiles some of the leading agencies and players operating within it, as well as providing an insight into how digital media are used by marketers.

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