INSIGHTanalysis: Media Healthcheck – November 2006
In November, research from Eurostat, the Statistical Office of the European Communities, revealed that nearly half of all individuals in the European Union used the internet at least once a week in 2006.
The European Interactive Advertising Association (EIAA) also released figures which showed that internet use amongst Europeans was on the up, with 45% of internet users in Europe now going online every day of the week (see Europeans Spending More Time Online).
The EIAA adds that the average European internet user now spends 11 hours 20 minutes a week online compared to 10 hours and 15 minutes a week in 2005, an increase of 11%. With this increase, the average European is now online 5.4 days a week.
However, Screen Digest published research which showed that broadband growth was slowing in the largest European regions.
In a study comprising telcos in the UK, Germany, France, Italy and Spain, Q3 growth was 5%, down on the previous quarter and a substantial decrease from the 11% growth seen in Q3 2005, although there were disparities between markets on a country by country basis, with the UK having the highest growth which, at over 7%, was more than double that of the French market (see Broadband Growth Slowing In Biggest EU Regions).
With regards to broadband internet connections, the UK, which experienced poor second quarter growth, saw the total number of BT DSL lines increased from 8.07 to some 8.49 million during Q3, according to estimates from Point Topic (see Broadband Britain Recovering From Poor Q2).
It was also revealed that in September, broadband connections accounted for 75.2% of all internet connections, up from 72.6% in June 2006, according the Office of National Statistics (see Three Out Of Four Internet Connections Now Via Broadband).
With access to the internet growing, it is inevitable that people will increasingly use the medium to purchase goods, and the Interactive Media in Retail Group (IMRG) forecast that consumers in the UK will spend online an average of £4 million every hour, day and night during the run-up to Christmas.
IMRG, which includes retailers such as John Lewis, Argos, Comet, Tesco and Ikea, said that this average spend will come to £7 billion in total for the 10 weeks leading to Christmas, 40% more than the £5 billion spent online during the same period in 2005, and more than double the £3.3 billion recorded in 2004 (see Online Christmas Spending To Reach £7 Billion).
Meanwhile, Merrill Lynch again raised its US online ad forecasts, to account for the third quarter IAB results and its own higher fourth quarter growth estimate, forecasting Q4 growth of 30% year on year, up from 27% (see Merrill Lynch Raises US Online Ad Forecast).
Moving away from the US, research from Group M said that the UK is Europe’s slowest-growing major ad market in 2006, and were it not for the internet, would be again in 2007.
Group M added that internet advertising will comprise 18% of media investment in 2007, regional newspaper’s 18% and national newspapers 12% (see UK Is Europe’s Slowest Growing Major Ad Market).
In November we also learned that the top 10 advertisers in the UK cut their spending on television by 11% year on year in the third quarter of 2006, with TV expenditure dropping to £857 million this year, down 8.9% from £941 million in Q3 last year.
Nielsen Media Research said that Unilever was the second biggest spender, having increased its spending by 40% year on year. However, in contrast to this there were large reductions from Masterfoods, down 18.4%, and News International Newspapers, down 18.1% (see Top 10 UK Advertisers Cut TV Spending).