End of Year News Round-Up: New Media
Look out for NewsLine’s end of year news round-up on Cinema and a media financial round-up from MediaTel Insight when we return on 2 January 2002.
January
Forecasts for online retailers and e-commerce companies predicted continued growth and increased consumer spend during 2001 (see Feature: Media Growth For 2001 Subdued As Dotcom Fallout Takes Effect). However, Rupert Murdoch’s News Corporation began the year by announcing the closure of its internet arm, News Digital Media, as part of a move to cut costs and the Express Newspaper Group closed four of its websites after failing to find a buyer in the wake of the dotcom downturn. Natmags suspended its internet operations after the new media slump put the frighteners on the publishers and BSkyB wrote off £250m of a £301m investment in the Sports Internet Group.
February
European media groups DirectGroup, Bertelsmann and RTL agreed to work together to develop interactive television and broadband activities to give the UK a “clear competitive advantage” in Europe (see European Media Giants Team Up To Tackle Interactive TV And Broadband Challenges); and Channel 5 signed its first airtime for equity deal taking a stake in online venture Surpriseyourwoman.com in return for advertising. The Financial Times announced plans to start charging FT.com users and online travel company Lastminute.com reported an increase in sales and customer numbers, despite deepening losses.
March
The number of UK home internet users reached 13.5 million, representing an increase of 1 million users since October 2000, according to the February 2001 figures from Jupiter MMXI. NTL embarked on a £5m advertising campaign to educate consumers about broadband technology (see NTL Launches Campaign Highlighting Benefits Of Broadband), while Emap and Chrysalis outlined plans for an industry body to set standards for measuring website user numbers in an attempt to raise the profile of online marketing. ITV kick-started its online and interactive strategy by acquiring the UK internet and interactive rights to Who Wants To Be A Millionaire. Meanwhile, on a gloomier note, Pearson cut investment in its flagship web business, FT.com, by half, following a dip in market confidence and fears of further fall-out in the dotcom sector re-emerged when Yahoo! issued its second profits warning of the year.
April
Research by NetValue found that over a third of all households in the UK have internet access and go online more often and for longer periods. A report by the IAB revealed that internet advertising grew by 203% during 2000 and predicted it would overtake cinema advertising by the end of the year (see Internet Advertising Defies Slowdown With Fast Growth Rate). Pearson cut around 40 jobs from its online division, which includes FT.com, in order to steer its businesses towards profitability by the end of 2002 and Ivillage.co.uk claimed to have become the top women’s website in terms of unique visitors. Elsewhere, Capital Interactive announced a deal to make another.com, BeMe.com and darkerthanblue.com partner websites for its first three narrowcast stations.
May
ITV‘s first major bid to attract large scale web traffic was declared a success after its online Who Wants To Be A Millionaire game achieved 45m page impressions during its first three weeks of operation and over 2.5m people watched Big Brother 2 live over the internet in its first week online (see 2.5 Million Watch Big Brother Online). The Guardian Unlimited became the most popular UK newspaper on the net, while the Times re-absorbed its e-business coverage back from a dedicated page into the general business section, implying that the dotcom bubble had well and truly burst. Meanwhile, the IPA’s Bellwether report for the first quarter of the year revealed that the proportion of companies not allocating any of their budget to internet marketing rose, from 24% in Q4 2000 to 30% in Q1 2001 and the costs of investing in internet development were revealed as Chrysalis announced an operating loss of £4.8 million as a results of its new media activities. Rivals.net launched a campaign to force the online media industry to adopt a recognised auditing system and received backing from Hollinger, Guardian Media, Emap and Chrysalis (see Rivals.net Heads Campaign For Internet Industry Audit).
June
The IPA said that progress had been made towards clear joint-industry standards to provide greater accountability for advertisers using the internet and Jupiter MMXI started releasing data on a weekly rather than a monthly basis (see Jupiter MMXI Launches Weekly Internet Data Release). Jupiter also announced that the return on investment from online advertising may be much higher than most marketers believe, but cut its global online advertising forecasts for 2001 from 47% growth to just 12% due to the extreme uncertainty of the market (see Jupiter Slashes Online Ad Forecasts). IPC Country & Leisure demonstrated that there was life after the dotcom fallout by declaring the launch of its internet magazine Web User a success and Emap Digital Travel was sold to internet-based travel technology and distribution group, Online Travel Corporation for £2.8m.
July
UK home internet use continued to rise and a survey commissioned by Oftel found that four million homes in the UK were connected to the net in the last 12 months bringing the total number of homes with internet access to 10 million. The IAB endorsed guidelines for eight new advertising formats and research commissioned by Starcom IP revealed that consumers are disappointed at the lack of sophistication and invention displayed by advertisers within the medium (see Advertisers Lose Interest In Internet). The PPA‘s interactive arm said that low demand from advertisers was preventing the widespread adoption of auditing for the online media industry and News International announced plans to impose charges for websites of the Times and Sunday Times.
August
The IAB launched a six month study into the effectiveness of web advertising to investigate the power online ads have in altering brand awareness (see IAB Launches Study Into Web Advertising), and unveiled a set of auditing standards to accelerate the pace of adoption for website auditing. The latest figures from Jupiter showed that over 33 million people in the UK used the internet between April and June and a report by Continental Research revealed that the number of blue collar workers using the internet is growing (see Blue Collar Web Use Rises). Meanwhile, IPC closed Beme.com, unmissabletv.com and uploaded.com and made 90 staff redundant following a review of its online business and GWR cut 46 jobs from its online division as part of a plan to concentrate on selling radio. Scoot.com sold its classified advertising business, Loot, to the owners of the Daily Mail newspaper for £45m, while Rivals.net was visited by over a million unique users in July, according to an ABC Electronic audit of the site.
September
Allegra Strategies forecast that new media advertising is set to boom over the next few years, despite its rocky fortunes in the last 18 months. The market research firm predicted that while the difficult market will mean a downturn this year, the average rate of growth for the next few years for new media ad revenues will be 51.8% per annum, expanding the sector’s share of total UK revenue to 6.7%, or £1.3bn by 2005 (see New Media Ad Revenue To Rise). The internet struggled to cope with demand for access as as millions of users logged on to visit news sites following the terrorist attacks in the US and according to press reports 80% of the worldwide web was suspended due to over demand. According to Lemonad, the online advertising market was in “full retreat” following the events of 11 September as advertisers started pulling their campaigns to avoid courting controversy in the delicate climate (see US Attacks Hit UK Online Ad Sales).
October
The latest quarterly figures from the July 2001 Office of National Statistics’ Omnibus Survey found that over half of the UK adult population accessed the internet in the last year bringing the number of UK households with internet access to 9.4 million across the country. UK internet users turned away from chat rooms, e-commerce sites and entertainment portals during September in favour of news and official government sites, according to web monitoring company, Hitwise; and the IAB launched a set of guidelines to encourage creative agencies, advertisers and media owners to use interactive online adverts (see IAB Launches Interactive Web Ad Guidelines). Internet research group, NetRatings, acquired its main rival, Jupiter Media Matrix, in a deal worth £50m and NTL launched a high speed broadband internet service priced at the same level as the existing dial-up services available on the market (see NTL Launches Mass Market Broadband).
November
The number of UK homes connected to the internet remained static at 39% during the three-month period ending in August 2001, according to the latest quarterly report from Oftel (see Internet Uptake Flattens In Quarter Three). However, according to research carried out for the IAB, internet advertising revenue in the UK exceeded £90m in the first half of 2001, showing an increase of £26m or 42% on the same period last year. ISBA and the IPA began lobbying the UK’s e-commerce minister in response to EU proposals on internet cookies, which the organisations believe could severely damage the fledgling e-commerce industry (see Protests At Cookie Cutting Proposals); while research into advertising using email, the internet and SMS revealed a fine line between effectiveness and irritation (see Research Reveals Attitudes To Online Ads). Telewest rebranded as Telewest Broadband in order to strengthen its position in the UK broadband market and Freeserve and MSN signed e-commerce deals with major retail brands in anticipation of an increase in online shopping in the run up to Christmas. Meanwhile, Yahoo! cut around 400 jobs worldwide as part of a move to restructure the business in the face of the worsening economic climate.
December
The Government unveiled a series of initiatives designed to boost the uptake of broadband services in the UK (see Government Unveils Broadband Initiatives) and the 6th wave of VIPer research found that a much higher percentage of the affluent in Britain are likely to have internet access at home than the national average. The latest figures from Lemonad showed that online advertising in the UK increased 66% year on year in the run up to Christmas, with the number of online shopping campaigns rising from 271 during November 2000 to 449 in November this year (see Online Ads Increase In Christmas Run-Up). Meanwhile, the IAB succeeded in convincing Ministers to reject an explicit opt-in regime for cookies that could have cost UK businesses hundreds of millions; and Excite UK announced plans to close with the loss of all of its 48 staff after failing to find a buyer.
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