UK Online
Advertising The
Success Story
Guy Phillipson – CEO
In this presentation

•   Online overtakes TV
•   Audience and Broadband
•   5 reasons for success
•   What next in the UK?
1. Online revenues
overtake TV
It’s
 Big
News
£1,752.1m
                                        market in H1 2009
                                               An incr...
H1 2009 vs. H1 2008



         4.6% increase
                                                                      on a l...
Online advertising reaches record £920m in Q1 2009

                        ‘01               ‘02            ‘03          ...
H1 2009 market share 23.5%
 (18.7% in H1 2008)
% share of revenues for January to June 2009
                              ...
Online only medium showing growth in H1 2009
    Year on year growth for H1 2009

     Total advertising market
     growt...
The largest 6 countries make up 81% of
the total
                      Total by Country 2008 and 2007
                    ...
UK is 10 points ahead of the US
   Online has established itself as a main medium with a share
   of 20% and more in sever...
Audience and
Broadband
infrastructure
Number of internet users* in the UK
                                                36.4m                                 ...
Continuous growth in online audiences and
   broadband penetration
                            35                         ...
Majority of broadband services are now above 2 MB


             2009       7%                                    92%



 ...
Online second only to TV
   % of media time for all internet users

                                                      ...
The broadband leaderboard

                France                               92%


                  Spain             ...
5 Reasons for
success
1. Accountability
   – Online’s Key
   Strength
The digital media mix
   % share of revenues for H1 2009
                                                                 ...
Search is the gateway to brands




                           • Engagement
                           •   Purchase
      ...
Search
More methods of accessing search

Mobile search
• Locations
• Price comparisons
• News
• Sport
• Weather
• Video

 “iPhone...
2. “Early Adopter”
   Categories
Cars, Tech, Mobile, Finance, Travel…
Display Sector Market Shares
                        Technology                                                           ...
And 5 years ago….
                                         Finance                                                        ...
3. Video and Rich
   Media
Video pre-roll spend up 195%




     Up 99%              Up 195%
Mobile and Video are young shooting stars
Audiences Watching Video
Online Video Works!
    Online Ad Effectiveness: Display vs. Video Units
4. TV and Online –
   Better Together
TV Advertising & Online Advertising
Are More Effective When Used Together
Impressions of Uniqueness Are Greatly Improved
               % Agree: ‘This brand offers something unique from other bran...
TV & Online Ads Together Raise
Purchase Consideration
                      % Agree: ‘I am likely to buy/use this brand in...
5. Agency
   Infra-structure
There used to be a digital divide in media
agencies

      1999                   1999
                           The Rest...
Now they’re all doing it!

                2009
Creative comes from specialists

 Traditional Shop    Digital Agency

   Art Director     Creative Director
        +     ...
What next in the
  UK?
The UK Industry Planning System Launches in January 2010
Thank you
UK Online Advertising The Success Story by Guy Phillipson
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UK Online Advertising The Success Story by Guy Phillipson

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l’advertising online supera la televisione in UK
Dallo IAB Forum di Milano 2009

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UK Online Advertising The Success Story by Guy Phillipson

  1. 1. UK Online Advertising The Success Story Guy Phillipson – CEO
  2. 2. In this presentation • Online overtakes TV • Audience and Broadband • 5 reasons for success • What next in the UK?
  3. 3. 1. Online revenues overtake TV
  4. 4. It’s Big News
  5. 5. £1,752.1m market in H1 2009 An increase of £82m year-on-year Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  6. 6. H1 2009 vs. H1 2008 4.6% increase on a like for like basis Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  7. 7. Online advertising reaches record £920m in Q1 2009 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 1000 Outdoor 920.0 846.1 900 Radio 847.0 822.7 834.0 832.0 800 754.2 724.1 £ millions 680.6 700 653.8 583.7 600 514.9 461.2 500 456.0 385.5 400 350.5 TV 327.0 303.5 300 254.6 Press 174.6224.1 Display 200 171.8 152.1 Direct Mail 119.7 105.2 88.0 100 47.442.836.638.936.645.251.163.8 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 01 01 01 01 02 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  8. 8. H1 2009 market share 23.5% (18.7% in H1 2008) % share of revenues for January to June 2009 3.3% Internet 1.0% 11.0% 4.8% Television 4.4% Press Display 11.5% Direct Mail Press Classified Total advertising market 23.5% Outdoor £7.466bn Directories 18.5% Radio Cinema 21.9% 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
  9. 9. Online only medium showing growth in H1 2009 Year on year growth for H1 2009 Total advertising market growth = -16.6% 4.6% -7.8% -15.6% -14.5% -16.1% -22.0% -20.4% -25.0% -37.3% Press Directories Outdoor Press TV Radio Direct Mail Cinema Internet Classified Display Source: PricewaterhouseCoopers / Internet Advertising Bureau, The Advertising Association / WARC: WARC estimate for directories.
  10. 10. The largest 6 countries make up 81% of the total Total by Country 2008 and 2007 € 2,889 UK € 3,441 € 2,501 Germany € 2,975 € 1,537 France € 1,821 € 729 Netherlands € 794 € 667 Italy € 799 € 497 Spain € 628 2007 Sweden € 442 2008 Denmark € 415 € 282 Norway € 345 Belgium € 286 Source: IAB Europe/PwC ©
  11. 11. UK is 10 points ahead of the US Online has established itself as a main medium with a share of 20% and more in several countries Spend on online as a percentage of all media spend by country Denmark 24.4% UK 23.1% Norway 21.1% Sweden 19.5% Netherlands 18.0% USA France 16.1% at Germany 15.2% 12.7% 13% Poland Finland 11.5% Hungary 10.8% Belgium 10.5% Spain 8.9% Italy 8.7% Source: IAB Europe/PwC, WARC Austria 6.8% Greece 2.1% Note: This is based on WARC main media spend data, excluding internet with IAB ad spend added back in
  12. 12. Audience and Broadband infrastructure
  13. 13. Number of internet users* in the UK 36.4m 17.8m 34.7m 15.3m 73% 49% 44% 49% 71% UK Pop 44% online online Online UK Pop Online pop pop Pop Pop Jul- Dec 2008 Jun - Jan 2009 Jul- Dec 2008 Jun - Jan 2009 Internet users going online Number of people online more than once a day Source: NRS UKOM: Jul-Dec 2008; Jan – June 2009; *adults using the internet at least once in the last 12 months
  14. 14. Continuous growth in online audiences and broadband penetration 35 34.1 100% 31.7 93% Users 90% BB Online audience (millions) 30 29.1 80% % Broadband access 27.7 70% 24.6 at home 25 60% 22.9 50% 20.8 20 40% 18.1 30% 15 20% 12% 10% 10 0% Q1 02 Q1 03 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Source: BMRB Internet Monitor
  15. 15. Majority of broadband services are now above 2 MB 2009 7% 92% < 2MB 2008 6% 24% 70% 2 MB >2 MB 2007 19% 34% 47% 0% 20% 40% 60% 80% 100% 56% of home broadband users have used wireless broadband at home in the last month (May 2009) Re-Based: All Internet users aged 15+ who Source: BMRB Internet Monitor May 2007; May 2008; May 2009 know their broadband connection speed
  16. 16. Online second only to TV % of media time for all internet users Weekdays 5 6 35 25 Saturdays Sundays 4 29 7 4 7 TV 18 19 47 45 Internet Radio Newspapers Magazines 24 25 Source: BMRB Internet Monitor, May 2009 Base: All Internet users aged 15+
  17. 17. The broadband leaderboard France 92% Spain 90% Germany 88% United Kingdom 88% Italy 82% Switzerland 69% Source: Nielsen Online, September 2009
  18. 18. 5 Reasons for success
  19. 19. 1. Accountability – Online’s Key Strength
  20. 20. The digital media mix % share of revenues for H1 2009 Display Classifieds 18.1% Paid for search Solus Email 19.2% Half year total 62.6% £1,752.1m 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
  21. 21. Search is the gateway to brands • Engagement • Purchase • Registration • Retention • Awareness • PR
  22. 22. Search
  23. 23. More methods of accessing search Mobile search • Locations • Price comparisons • News • Sport • Weather • Video “iPhone is already driving unheard-of levels of mobile internet usage, and the introduction of flat rate data tariffs is expected to increase this further.” Vivek Dec, O2
  24. 24. 2. “Early Adopter” Categories
  25. 25. Cars, Tech, Mobile, Finance, Travel…
  26. 26. Display Sector Market Shares Technology 19.1% Telecomms 13.3% Finance 13.2% Entertainment & the Media 11.8% Travel & Transport 9.5% Based on 86% of total display ad spend Automotive 9.4% revenues Consumer Goods 8.1% Retail 6.1% * Government, social, poiltical 4.0% organisations H1 2009 Business and Industrial 3.5% 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 85.5% of online revenues in H1 2009. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  27. 27. And 5 years ago…. Finance 19.4% Technology 13.5% Travel & Transport 11.8% Automotive 10.8% Entertainment & Media 8.1% Consumer goods 4.8% Telecoms 4.0% Retail 2.8% Business & Industrial 1.6% Gardening & Agriculture 1.5% Govt & other organisations 1.1% Consumer-to-consumer Classifieds 0.5% Leisure 0.4% IAB estimates for actual ad spend by industry are based on samples of categorised revenue from key IAB members provided by PwC. The ranking now shows Telecoms as a separate category (previously included in Business & Industrial). Data excludes unclassified figures. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  28. 28. 3. Video and Rich Media
  29. 29. Video pre-roll spend up 195% Up 99% Up 195% Mobile and Video are young shooting stars
  30. 30. Audiences Watching Video
  31. 31. Online Video Works! Online Ad Effectiveness: Display vs. Video Units
  32. 32. 4. TV and Online – Better Together
  33. 33. TV Advertising & Online Advertising Are More Effective When Used Together
  34. 34. Impressions of Uniqueness Are Greatly Improved % Agree: ‘This brand offers something unique from other brands’ Seen TV only or Online only Seen Both Seen Neither TV nor Online = Significantly higher = Significantly different to 79 group who’ve seen neither TV nor Online 66 57 52 38 30 23 17 15 Finance category average Car category average FMCG category average Uplift among those exposed to +21% +27% +13% points both TV + Online points points :
  35. 35. TV & Online Ads Together Raise Purchase Consideration % Agree: ‘I am likely to buy/use this brand in the future’ Seen TV only or Online only Seen Both Seen Neither TV nor Online = Significantly different to group who’ve seen neither TV nor Online 77 = Significantly higher 69 56 51 45 25 25 19 18 Finance category average Car category average FMCG category average Uplift among +20% +26% +8% those exposed to points points points both TV + Online : Base : 16-34 ads main shoppers (1,004)
  36. 36. 5. Agency Infra-structure
  37. 37. There used to be a digital divide in media agencies 1999 1999 The Rest! Digital Specialist Traditional Shops
  38. 38. Now they’re all doing it! 2009
  39. 39. Creative comes from specialists Traditional Shop Digital Agency Art Director Creative Director + + Copywriter Technologist
  40. 40. What next in the UK?
  41. 41. The UK Industry Planning System Launches in January 2010
  42. 42. Thank you

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