INSIGHTanalysis: Media Healthcheck – January 2006
January saw a number of key forecasts made about the state of the advertising market, both UK and worldwide. The consensus of opinion from industry sources was that the internet would continue to make its presence felt in the media world, with the medium expected to enjoy a surge in popularity throughout 2006.
Unlike other industry forecasts, TNS Media Intelligence has estimated a relatively moderate rate of growth for online adspend during 2006, expecting the media to rise at 9.1%. However, the media body pointed out that its internet predictions exclude paid search, which is one of the fastest growing segments of online advertising (see TNS Forecasts US Adspend To Rise By 5.4% In 2006).
According to Pipar Jaffray, paid search is expected to generate more than $14 billion globally in 2006, enjoying an increase of 41% from the estimated $10 billion that it made in 2005 (see TNS Forecasts US Adspend To Rise By 5.4% In 2006).
This trend is mirrored in the UK, with estimates from Initiative Media predicting online to be the fastest growing medium in 2006. Internet adspend is expected to be up by 26.3% year on year in 2006, with the strong performance attributed to the increasing take-up of broadband (see UK Adspend To Rise By 3.7% In 2006).
The IPA’s latest Bellwether Report also signalled the internet’s dominance, with budget increases seen in Q4 2005 for direct marketing and internet related activities. Direct marketing enjoyed a modest rise, while internet related marketing continued to record strong growth, now accounting for 4% of spend (see Q4 2005 Bellwether: Marketing Budgets Forecast To Rise In 2006).
e-Commerce was a hot topic of industry conversation during the first month of 2006, with record online sales over the Christmas period enjoyed worldwide.
Figures from the Interactive Media in Retail Group (IMRG), revealed that internet shopping in the UK rose by almost 50% during the ten week run-up to Christmas 2005, with shoppers spending £5 billion online, compared with £3.33 billion during the same period in 2004 (see UK Online Shopping Up By 50% Over Christmas).
Figures released earlier this month from online monitor, Hitwise, revealed a rise of 14% year on year in visits to UK retail websites over the Christmas month (see Visits To UK Retail Websites Up 14% In December).
The strong performance seen in the UK’s online retail sector was mirrored in the US, with the recent Holiday eSpending Report from Goldman Sachs, Nielsen//NetRatings and Harris Interactive showing online shopping spend to have reached $30.1 billion during the holiday season, up 30% year on year (see Visits To UK Retail Websites Up 14% In December).
Elsewhere, mobile phone television came into the forefront in January, with results from the Oxford Mobile TV trial (see BT Reveals Consumer Interest In Mobile TV) and a similar study from BT both revealing a high level of interest from consumers in a commercial mobile TV service (see UK Consumers Keen For Mobile TV).
Mobile phones are also increasingly being used for picture messaging and the mobile internet, with the latest findings from the UK Mobile Media Monitor study showing that 36% of mobile phone owners now use their phones to send and receive picture messages, up from 21% at the same time last year (see UK Mobile Users Embrace Picture Messaging).