| MP72101 |
| MAPS : Internet Advertising: 2001 |
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This report covers: internet advertising, unmetered, access at home, business users, internet usage, online advertising, providers, agencies, online shopping, advertising banners, cookies, spam E-Mail,
companies covered include: ABC Electronic, Interactive Advertisng Bureau, Adviva, Beyond Interactiv, Mediacom, Carat Interactive, Double Click, Entranet, I-level, Modem Media, NeTTac, Tribal DDB, 27/7 Real Media, Wheel,
EXECUTIVE SUMMARY
| Executive Summary |
| Having displayed very high levels of growth since the late 1990s, the online advertising market slowed down rapidly during 2001. This slowdown is due to a combination of factors, including the contraction of the advertising economy as a whole, as well as problems intrinsic to the online advertising market. |
| The industry needs to address a number of problems, including the reluctance of advertisers to commit budgets to online media due to the perceived difficulty of measuring the success of online campaigns. This is a particular stumbling block in the case of traditional fast-moving consumer goods (FMCG) brands. These brands are normally heavily promoted in more 'transparent' media, such as print and television, which have well-established conventions for measuring audiences. |
| The industry is addressing this issue by trying to increase the level of independent auditing of websites (at least one trade organisation is to introduce auditing by all its members during 2002). To supplement this, a growing number of publishers and advertisers are turning to traditional research methods, such as pre- and post-campaign awareness surveys, to monitor the success of their online activities. |
| As well as resistance among advertisers, there is also some consumer resistance to online advertising, due in part simply to the 'irritation factor'. A number of software products that eradicate advertisements from users' screens are now available. |
| In addition, there is unease among some consumers about privacy, especially since many ad servers track web users' movements to monitor the effectiveness of advertisements. European legislation is currently being proposed that would restrict the use of cookies (files used by websites to record data about users) — a move that is viewed with alarm by many in the industry. |
| The original research commissioned for this report suggests that consumers are tiring of banner advertisements — the standard format for online campaigns — and are now less likely than they were in 1999 to either notice or to click on them. However, this is also being addressed by the industry with the development of new standard advertisement formats. |
TABLE OF CONTENTS
| Executive Summary | 1 |
| 1. Introduction | 2 |
| 2. Strategic Overview | 3 |
| Introduction | 3 |
| Internet Access | 3 |
| Access at Home | 3 |
| Table 1: UK Households with Access to the Internet at Home | |
| (million and %), April 1998-June 2001 | 3 |
| Table 2: Profile of UK Households with Internet Access | |
| by Social Grade (%), January 1999-May 2001 | 5 |
| Figure 1: Profile of UK Households with Internet Access | |
| by Social Grade (%), January 1999-May 2001 | 6 |
| Individual Access | 6 |
| Table 3: Adults Who Have Used the Internet | |
| by Sex and Age (%), July 2000 and 2001 | 7 |
| Reasons for Non-Usage | 8 |
| Table 4: Reasons for Not Using the Internet (%), 2001 | 8 |
| Figure 2: Reasons for Not Using the Internet (%), | |
| 2001 | 9 |
| Business Users | 9 |
| Table 5: UK Small- and Medium-Sized Enterprises with | |
| Internet Access (%), August 2000-February 2001 | 10 |
| Figure 3: UK Small- and Medium-Sized Enterprises with | |
| Internet Access (%), August 2000-February 2001 | 11 |
| Table 6: Penetration of the Internet Among Small- and Medium-Sized Businesses in the UK (%), February 2001 | 12 |
| Figure 4: Penetration of the Internet Among Small- and Medium-Sized Businesses in the UK (%), February 2001 | 13 |
| Type of Access | 13 |
| Metered (’Pay-As-You-Go’) | 13 |
| Unmetered | 14 |
| Access at Home | 14 |
| Table 7: Consumer Access to the Internet at Home | |
| by Method Used (%), May 2001 | 14 |
| Figure 5: Consumer Access to the Internet at Home | |
| by Method Used (%), May 2001 | 15 |
| Business Users | 15 |
| Table 8: Access to the Internet by Small- and Medium-Sized Enterprises by Method Used (%), February 2001 | 16 |
| Figure 6: Access to the Internet by Small- and Medium-Sized Enterprises by Method Used (%), February 2001 | 17 |
| Internet Usage | 17 |
| Table 9: Adults Who Have Accessed the Internet by Purpose | |
| of Internet Usage (%), July 2000 and 2001 | 18 |
| Table 10: Total Value of Goods Purchased on the Internet | |
| in the Past 3 Months (%), 2001 | 19 |
| Online Advertising | |
| Formats | 19 |
| Competitive Structure | 20 |
| Internet Service | |
| Providers | 20 |
| Access at Home | 20 |
| Table 11: Number of ISPs Used by Households with | |
| Internet Access (%), January-May 2001 | 21 |
| Figure 7: Number of ISPs Used by Households with | |
| Internet Access (%), January-May 2001 | 21 |
| Table 12: Share of UK Residential Homes with Internet Access Taken by Internet Service Providers (%), July 2000- | |
| May-01 | 22 |
| Business Internet Access | 22 |
| Table 13: Internet Service Providers Used by Small- and Medium-Sized Enterprises (%), May 2000-February 2001 | 23 |
| Agencies | 23 |
| Table 14: Top Ten Interactive Agencies by Turnover and Number of Staff (£m and number), 2001 | 24 |
| Advertising Sales | 24 |
| Research and Audience Measurement | 25 |
| Industry Organisations | 25 |
| ABC Electronic | 25 |
| Interactive Advertising Bureau | 25 |
| Joint Industry Committee for Web Standards in the UK | 26 |
| Periodical Publishers Association interactive | 26 |
| 3. Market Analysis | 27 |
| Market size | 27 |
| Table 15: UK Internet Advertising Expenditure by Value | |
| (£m), 1997-2001 | 27 |
| Table 16: The UK Internet Advertising Market by Volume | |
| (number and %), December 2000-September 2001 | 28 |
| Market segmentation | 29 |
| Number of Advertisers | 29 |
| Table 17: Number of Advertisers by Type of Site (%), | |
| December 2000-September 2001 | 29 |
| Number of | |
| Advertisements | 29 |
| Table 18: Number of Advertisements by Main Type of Site (%), December 2000-September 2001 | 30 |
| Top Sites | 30 |
| Table 19: Top UK Advertising Sites by Number | |
| of Advertisements (number and %), | |
| December 2000-September 2001 | 30 |
| Top Advertisers | 31 |
| Table 20: Top Online Advertisers by Number of Campaigns | |
| and Advertisement (number and %), September 2001 | 32 |
| Issues And Problems | 32 |
| Measuring Effectiveness | 32 |
| Site-Centric Measurement | 33 |
| User-Centric Measurement | 33 |
| Ad Effectiveness Research | 34 |
| Consumer Resistance | 34 |
| Maximising the Impact of Online Campaigns | 34 |
| 4. An International Perspective | 36 |
| The US experience | 36 |
| Online Advertising in | |
| Europe | 37 |
| Table 21: European Online Advertising Market by Country, | |
| January-June 2001 | 37 |
| Regulatory Issues | 38 |
| 5. Consumer Dynamics | 39 |
| Overview | 39 |
| Table 22: Agreement with Statements Concerning Internet Advertising (% of respondents), 1999 and 2001 | 39 |
| Internet Access | 41 |
| Table 23: Internet Access in the Home and at Work or Place | |
| of Education (% of respondents), 2001 | 41 |
| Lack of Interest in the Internet | 43 |
| Table 24: Lack of Interest in the Internet | |
| (% of respondents), | |
| 2001 | 43 |
| Online Shopping | 45 |
| Table 25: Attitudes Towards Buying Goods or Services Online | |
| (% of respondents), | |
| 2001 | 45 |
| Concerns over Quality | 46 |
| Table 26: Concerns About the Quality of Internet | |
| Purchases (% of respondents), 2001 | 47 |
| Advertising Banners | 48 |
| Table 27: Those Who Have Noticed and Those Who | |
| Have Clicked on Internet Advertising Banners | |
| (% of respondents), | |
| 2001 | 48 |
| Sponsored websites | 49 |
| Table 28: Awareness of Sponsored Internet Sites | |
| (% of respondents), | |
| 2001 | 50 |
| Classified Advertising | |
| on the Internet | 51 |
| Visiting Websites with Classified Advertising | 51 |
| Table 29: Those Who Have Visited Internet Sites That Include Classified Advertising (% of respondents), 2001 | 51 |
| Responding to and Placing Classified Adverts | 52 |
| Table 30: Those Who Have Responded to or Placed Classified Advertisements on the Internet (% of respondents), 2001 | 53 |
| Advertising of Websites | 54 |
| Table 31: Those Who Have Used Internet Sites Advertised in Offline Media/Other Websites (% of respondents), 2001 | 54 |
| Marketing by E-mail | 55 |
| Table 32: Attitude Towards Hearing About New Products and Services by E-Mail (% of respondents), 2001 | 56 |
| 6. Company Profiles | 58 |
| Adviva | 58 |
| Beyond Interactive/ | |
| Mediacom | 58 |
| Carat Interactive | 58 |
| DoubleClick | 59 |
| Entranet | 59 |
| I-level | 60 |
| Modem Media | 60 |
| NeTTac | 60 |
| TRibal DDB | 61 |
| 24/7 Real Media | 61 |
| Wheel | 61 |
| 7. The Future | 62 |
| Internet access and technology | 62 |
| legislation | 62 |
| Cookies | 62 |
| Spam E-Mail | 62 |
| The Need For | |
| Accountability | 62 |
| The consumer | 63 |
| A Richer Mix in Future | 63 |
| Forecats 2002 TO 2006 | 63 |
| Table 33: Forecast UK Internet Advertising Expenditure | |
| (£m), 2002-2006 | 64 |
| 8. Glossary | 65 |
| 9. Further Sources | 68 |
| Trade Organisations | 68 |
| General Sources | 69 |
| Bonnier Information | |
| Sources | 69 |
| Government Sources | 70 |
| Other Sources | 71 |
| Key Note Research | 72 |
| The Key Note Range of Reports | 73 |
Text © 2001 Key Note
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Last updated by Amanda Porteous 2001
