State of the net issue 18 - Autumn 2010


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Changing media habits is the theme of the Autumn 2010 edition of State of the Net. It also covers new research on eCommerce, digital advertising, social media and online reputation management

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State of the net issue 18 - Autumn 2010

  1. 1. State of the Net essential eBusiness intelligence for Irish managers A quarterly bulletin on online activity in Ireland ISSN: 1649 issue 18 Autumn 2010 Media habits change - and budgets follow which rely on media, traditional The big Publishers’ ranks in Apple App Store for Ireland and digital, to build their brands question for and transmit their marketing or media is: communications messages. who pays Top paid media apps for online Advertising follows audience – content? advertising budgets in Ireland Not us, say 20 are already on the move from Irish online traditional to digital media. audiences. Digital accounts for 10% of A resounding 27 total advertising spend but 88% of Irish if trends across Europe, as people evidenced by IAB research, are are not 47 a barometer that figure could prepared Aileen O’Toole, double over the coming years. to pay Managing Director, for online Top free media apps AMAS Nowhere is the shift in media content, behaviour more pronounced according to than with news content: international 1 Irish audiences are • Want to catch the 9pm research consuming more media news bulletin when you’re conducted across a varied range of not at home? No need to set by KPMG. This 2 platforms, formats and the DVD player. Just log on to reflects similar studies technologies. The internet the RTÉ Player, as thousands internationally, which is changing the Irish media of viewers do each month show a marked 22 landscape, with profound to catch the TV programmes reluctance to pay for implications for media they miss the type of content organisations and audiences. • Need to catch the latest that traditional 24 Greater and increasingly news headlines when on the publishers, such as free media choices may move? No need to switch newspapers, offer. be a positive, the argument on the radio, or fire up your 26 goes, but the internet may laptop to log on to a news Yet there does not © AMAS graphic ( result in the dumbing down website. Instead, use your seem to be a similar of content, with quality iPhone and access the reluctance to part with 28 journalism being the casualty. headlines and the stories cash to buy high-end through one of the many gadgets or apps to Far from being an insider dozens of news or media apps provide mobile access 30 debate, what’s happening • Want not only to read the to news content. Irish in media is important to news, but to contribute to consumer demand businesses and organisations a debate about a breaking for iPhones, iPads 42 story? You can and other must- Paid content Ireland UK still “call Joe” or have gadgets is write a letter to phenomenal – Source: Apple’s App store for Ireland, a newspaper queues form outside accessed on 31 August 2010 Yes - all 2% 7% editor. But mobile phone shops among Irish iPhone users. News increasingly you’re on foot of rumours that a Yes - some 10% 12% apps from three traditional likely to join the stock of iPhone 4s has landed. news organisations – The Irish conversation about There is no official data on the Times, The Guardian and The No 88% 81% that big story of the number of iPhones in use, but Irish Independent – are in the day on Facebook, informed estimates put it at top 50 paid apps for Ireland on Source: KPMG, Consumers and Convergence IV, Twitter and a galaxy around 350,000 and climbing. Apple’s App Store. The once- July 2010. Global survey covering 22 countries. of other sites where off costs of these apps is Data is based on a sample of 300 respondents in news is shared and News apps – both free and Ireland and 410 respondents in the UK discussed. paid – are proving popular continued on page 5 Compiled by AMAS in association with the Irish Internet Association
  2. 2. 1. Digital advertising Online advertising in Europe 2010 marks a watershed for digital advertising in Ireland, with the publication of the first study Greece 16% from IAB Ireland/PricewaterhouseCoopers. Austria Digital advertising was worth €97.2 million in 14% Poland 2009, or 10.3% of the Irish advertising market. 12% Turkey With advertising spend suffering a 20% fall Year-on-year growth 2009 in 2009, digital is proving to be more resilient 10% Finland Ireland Spain than other categories. 8% Germany Hungary United Kingdom Search – predominately Google AdWords 6% Italy Sweden – was the dominant format, accounting for 4% Belguim Netherlands 46.2% of online advertising spend, followed by Slovenia Norway classifieds (27.2%) and display (26.6%). A variety 2% France of formats, including email, sponsorships and 0% Denmark affiliates, are included in the display category. 0% 5% 10% 15% 20% 25% 30% 35% -2% Croatia Property, recruitment and motoring were the Online Market Share -4% Romania Slovakia © AMAS graphic ( Irish online advertising breakdown -6% Finance © AMAS graphic ( Sources: IAB Europe, AdEx 2009 Internet advertising spending in Europe. IAB Finance Auto Ireland and PwC, Online Adspend Study 2009 Auto 7% 9% Telco 2% 7% 9% biggest spenders, accounting for 45% tested methodology across all markets. Telco Retail 6% 2% Retail 6% of digital advertising spend. FMCG Equivalent IAB research in other 20% FMCG Travel 20% Why is this study so important? Many markets has accelerated the growth Travel large advertisers, notably global in online advertising, at the expense Govt/Public sector 25% Govt/Public sector 25% brands, tend not to commit budgets of traditional media. More mature Recruitment/Property without industry-recognised data. markets, such as the UK and the Recruitment/Property 9% And that’s what they’re getting – Nordic countries, are reporting online Ent & Media 9% Ent & Media the reconstituted IAB Ireland is advertising market shares in excess Technology 5% part of a network of similar industry of 20%. Expect the next IAB Ireland 3% Technology Other 3%5% 10% 5% bodies internationally while Price- study, for the first half of 2010, to start Other 5% 10% waterhouseCoopers uses a tried and plotting that growth curve. 2. Broadband 1,600,000 1,500,000 Broadband growth 1,509,934 A new high point has been reached in Irish broadband 1,400,000 1,443,350 adoption, with the number of subscribers exceeding 1,305,035 1.5 million for the first time. ComReg data for quarter 1,300,000 1,272,166 1,361,254 one of 2010 reveals that broadband demand has 1,200,255 not been dented by the economic downturn, with 1,200,000 1,125,000 quarterly growth at 4.6% and annual growth at 19.3%. 1,100,000 1,055,000 992,000 © AMAS graphic ( Mobile is the fastest growing platform, accounting for 1,000,000 one in three of all broadband subscriptions. Year-on- year, mobile subscriptions grew by 47.2% with the rate of Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 growth tapering off. The quarter one number translates into an increase of 9.7% on a quarter-by-quarter basis. Source: ComReg Quarterly Key Data Report, July 2010
  3. 3. Top Trends 2010 2009 3. Digital 2010 2009 economy 1 Sweden 2 16 Japan 22 2 Denmark 1 17 Ireland 18 3 United States 5 18 Germany 17 4 Finland 10 19 Switzerland 12 5 Netherlands 3 20 France 15 6 Norway 4 21 Belgium 20 7 Hong Kong 8 22 Bermuda 21 8 Singapore 7 23 Malta 23 9 Australia 6 24 Spain 25 10 New Zealand 11 25 Estonia 24 11 Canada 9 26 Israel 27 12 Taiwan 16 27 Italy 26 13 South Korea 19 28 Portugal 28 © AMAS graphic ( 14 UK 13 29 Slovenia 29 Source: Economist Intelligence Unit, 15 Austria 14 digital economy rankings, June 2010 30 Chile 30 At last, an international economic cultural and legal environment – to arrive the 70 countries covered. This heading indicator that has some good news for at the scoreboard. Over the ten years it measures successful implementation and Ireland. The Economist Intelligence Unit has been tracking digital activity, the EIU evaluates “the amount that businesses (EIU) ranks Ireland in 17th place in a global has made changes to keep pace with and consumers spend on accessing ICT scoreboard of digital economic activity. developments, for instance factoring services, the extent and range of internet That’s one place ahead on the previous the share of fibre optic access lines into features used by individuals, their online year’s score, within a whisker of the its broadband scores and looking at 3G purchasing activity, and the extent to UK’s ranking (14) and ahead of leading and 4G mobile subscriptions to arrive at a which individuals and businesses use the European economies such as Germany score for mobile adoption. online public services that have been (18) and France (20). made available.” A breakdown of Ireland’s scorings The EIU uses a number of measures – under the various EIU categories is This stellar result compensated for other connectivity, infrastructure, consumer revealing. In one category, “consumer categories, such as government policy and and business adoption, government and business adoption,” Ireland made the legal environment, where the Irish scores policy, as well as the business, social, it to the premier league – ranking 8th of were lower than Ireland’s overall average. the opportunity to win online
  4. 4. 4. eCommerce 20% 23% Purchasing behaviour 68% Travel Not every business can sell its goods or services online 12% but, increasingly, more and more purchasing decisions 54% are being researched or influenced online. Technology 32% Up to now the evidence has been mainly anecdotal. 15% A consumer walks into a store, tries on a pair of jeans, 26% notes the details and buys the jeans in an online store. Media, Ents 31% Another reads reviews about new smartphones on gadget websites, makes a shortlist, visits a physical 6% phone shop, tests the shortlisted phones and buys one. 42% A third reads reviews on TripAdvisor, compares prices Finance 27% on a range of sites before using a deals website to secure the best rate for a weekend break. 10% Research offline, purchase online 49% The Consumer Confidence Barometer tracks the Retail 19% consumer journey from research through offline Research online, purchase to purchase. 20% The research was commissioned by Google and IAB 23% Europe, and carried out by market research agency Research online, purchase online 1% Travel 68 27% © AMAS graphic ( TNS. It questioned 2,000 Irish consumers about their 12% shopping habits. Automotive 8% 54% Technology 32% It shows marked differences in purchasing behaviours 0% 15% 26% across different sectors. Unsurprisingly, travel is the 18% 31% Media, Ents sector where there is the greatest level of online FMCG, healthcare 4% research leading to online purchasing. 6% 42% 0 10 20 30 Finance 40 50 27% 60 70 What websites or online resources influence consumers? 10% The Irish research show a similar pattern across all sectors, Research offline, purchase online Source: Consumer Commerce Barometer, 49% with search being dominant (73% to 79% depending on which covered 25 countries and 36 product Retail 19% Research online, purchase offline the sector), followed by manufacturer websites (44% to categories, Irish data based on a sample of 1% 55%) and social media sites (21 – 25%) Research online, purchase online 2,000, data compiled April 2010 27% Automotive 8% 5. Social media 0% Facebook users in Ireland 18% FMCG, healthcare 4% 0 10 20 30 40 50 60 Love it, loathe it, can’t ignore it. network and to share favourite internet Facebook is changing online behaviour content, from YouTube videos to news © AMAS graphic ( and is becoming a powerful marketing stories. Internationally, Facebook is closing and communications channel (but not the traffic gap with Google. Facebook was one that suits all brands). ranked as the number one website in June in the US, Canada, New Zealand, Singapore The number of Irish registered users on and Hong Kong, according to website traffic Facebook was 1.7 million in August data gathered by Experian Hitwise. 2010, four times what it was at the start of 2009. An active Irish user is Social networking sites such as Facebook likely to be on the site every day, are winning a greater share of advertising increasingly accessing Facebook budgets, with campaigns being organised over a mobile phone rather than a globally but using local content to reach Source: Facebook, Jan 2009 - Aug 2010 PC, and using the site to socialise, and engage customers in specific markets.
  5. 5. Top Trends continued from front page less than the price of a skinny latte – There is an expectation that Estimated newspaper revenue declines (2007-09) €1.59, €2.99 and €2.39 respectively – established media organisations % -0 -5 -10 -15 -20 -25 -30 -35 and must be considered good value with strong franchises in their USA -30 against the cost of one printed daily respective markets will reinvent UK -21 newspaper (€1.80, €1 and €1.80). themselves in the digital age. Greece -20 Italy -18 There is a healthy demand, too, As for quality journalism, new Canada -17 for free apps which are being collaborative forms of investigative Spain -16 used by traditional and online journalism are emerging through Turkey -16 publishers to boost website traffic the internet. Citizen journalism Japan -15 and engagement. Ironically, the means that authentic video, audio New Zealand -13 top free app, from Sky, comes and other content from a warzone Poland -11 from the same stable as the or the scene of a humanitarian Ireland -10 newspapers that are trying to disaster gets to our screens (TV, Germany -10 pioneer paid online newspaper PC, mobile) within hours. New Hungary -9 content (Rupert Murdoch’s News audiences are being found for Norway -8 International) – with less than “long form” journalism – powerful, Switzerland -8 convincing results. well-written features from the likes Belgium -8 of Vanity Fair – through Twitter and It would be foolish, though, to write a range of other sites. Finland -7 © AMAS graphic ( off traditional media, particularly Sweden -7 newspapers. International studies, How this will all play out in terms of Portugal -7 such as the most recent from audience behaviour and the very Korea -6 the OECD, don’t sugar-coat the survival of many traditional media Czech Republic -6 facts – newspaper circulations are organisations, is too difficult to call. Netherlands -6 in decline globally, advertising One thing is sure – as new media Denmark -6 revenues are under threat and new patterns emerge, the churn and Mexico -5 business models need to emerge. the change will continue. France -4 Australia -3 Source: OECD, the evolution of news and the internet, June 2010 Austria -2 (graph includes both online and offline revenues of traditional newspapers) New skills will be ‘engine room’ For Irish businesses too, there Training and Prosperity their business, helping it to is a critical need for managers Recruitment, has identified become more efficient and to learn or refresh their skills the core skills for this more profitable. for a knowledge based professional discipline. economy, particularly in The modules cover topics Joan Mulvihill fast-growing areas such Our new Diploma in Digital such as digital marketing CEO, Irish Internet Association as eCommerce, social net- Marketing includes a FETAC strategy, search engine working and mobile internet. accreditation (level 5 minor optimisation, online In today’s rapidly changing award) for participants advertising, mobile web, digital landscape, upskilling Online marketing will who successfully complete website analytics, social and reskilling are very much play an essential role a digital marketing plan, media, online PR and the order of the day. For in leveraging these search engine assignment digital trends. Gareth individuals, this is reflected in new applications and and research plan. Dunlop (Ion Online the major increase in CAO technologies for greater Marketing), Colm Grealy applications by mature return on investment. The The new course builds (, Krishna De students – up by 26% this challenge is to develop on the IIA’s experience ( and year. Ongoing training and courses to enhance over the past decade Conor Pope (Irish Times) education by this group knowledge and skills in this in providing training for are among the speakers. now accounts for 13% of all relatively new discipline. internet practitioners, and college applications, and gives participants a solid For further information on new skills will be the engine The Irish Internet Association, basis on which to build a the diploma, check out room of economic recovery. in partnership with Irish Times digital marketing plan for
  6. 6. Is your reputation being trashed online? BP, Nestlé, Honda, • Almost two United Airlines years on, the top and Dominos search results have something for Irish pork are in common apart still all about the from being big contamination brands – all have and recall in been badly 2008 mauled in the social media People are space. All have spending an taken a battering increasing share from angry users of their media of Facebook and time on the • Who is talking about us some brands have turned Twitter. Fiachra Ó Marcaigh internet. Much online, where and what are social media to their Director, AMAS of that time is they saying? advantage and are using They are not the spent on social • How much influence do these channels to understand first big brands media, where these voices have? customer sentiment, deal with this has happened they express themselves, • What impact is this having customer service queries and to and they won’t be the last. rather than just consume on our business and how it is market their brands. Listening, Other examples include Irish information. perceived? engaging and interacting businesses (big and small) • When should we join in with customers through social and individuals. Social media can focus and when should we ignore media delivers results. and amplify ill-feeling that comment? • The campaign against the is already widespread. But • What allies and assets do Hunky Dorys adverts earlier even one angry person we have to monitor and AMAS: what we do this year had a large online can attract a worldwide protect our reputation AMAS is an internet consultancy aspect, with hundreds of audience for a complaint online? with a simple goal – help our posts on sites like, (sometimes video or musical) • Are our own staff helping clients to exploit the internet. mostly negative that goes viral. or not? Large corporates, government • Supermarkets, telcos bodies and, increasingly, high- and insurance companies The reputations of brands, Experience shows that it is potential businesses retain us to are among those regularly businesses and individuals often a customer, supplier or develop and help implement trashed online by their face many new challenges in staff member who alerts a internet strategies. customers. Expect to see this environment. Among the company to a reputational phrases like “lousy service”, questions business owners and issue on a social media site. We cut through the clutter “I hate” and “rip off” managers must consider are: But it’s not all negative – and the complexity to allow our clients to capitalise on the unlimited opportunities offered by the internet. From the AMAS blog.... Services: • Strategy Manage your social media presence • Research • User experience • Content AMAS has launched Social It combines strategic planning, • Training Media Means Business, a practical implementation and • Marketing programme to empower Irish training for effective use of • Project management businesses to manage their social media. online reputations, launch Contact Aileen O’Toole, campaigns and deliver For more information, contact Managing Director on gains through social media AMAS on or go +353 1 6610499 or channels. to © AMAS Ltd. Published by AMAS Ltd., 38 Lr. Leeson Street, Dublin 2, Ireland. Tel: +353 1 6610499 Email: Web: