Marketing in the Digital Age Market Assessment 2006: Industry Report

Marketing in the Digital Age Market Assessment 2006

Product Type: Market Research Report
Published by: Key Note Publications Ltd
Published: September 2006
Product Code: R310-1355

Description

The advertising world has been undergoing a seismic shift in the past decade. First advertisers and marketers saw the ground shifting beneath them as their tried and trusted media fractured and fragmented, leaving them wondering just where to put their money in order to reach their target markets. Then they developed strategies to identify and classify consumers and then follow them online onto the sites on which they were most likely to be found. However, it is now all about convergence. TimesOnline, for example, launched Times Online TV in June 2006; this includes clips from a number of content providers, including the news agency Reuters across the world, and it is expected that the service will develop to include live-stream television.

Technology is advancing at a rapid pace and all single-play content providers are increasingly looking to bundle other technologies to increase their range. The service providers of television, telephony and the Internet are combining to offer triple-play services and, with mobile telephony — quad-play — to consumers.

One example is BT’s development with Microsoft of new set-top box technology (the BT Home Hub), which combines a digital terrestrial television (DTT) receiver with a broadband receiver. This kind of converged technology allows much more flexibility in the kind of services that providers can deliver and more choice for consumers in terms of how and when they manage their communications and media content.

One of the key drivers behind the acceleration in technological developments is the countdown to digital switchover. In September 2005, the Government announced its switchover timetable, which will roll out region by region until analogue switch-off in 2012.

A fully digitalised world — analogue signals will be switched off across the globe, although each territory is developing its own programme — affords a much greater degree of flexibility in the way in which content is presented and consumed. The move will see people accessing the kind of content they want, when they want it, using the device of their choice from the location of their choice. People will no longer need to rush home to watch their team in the World Cup finals or finish supper before the latest episode of their favourite drama is broadcast, for example. People will be able to choose how and where they watch; they will be able to talk to their friends on the other side of the world for free while doing so, storing clips of the goals or other programme highlights in their own personal video library to share with others.

To a certain extent, this is already happening. Home broadband is the Internet connection now used by more than 40% of Great Britain (as at February 2006 — see Table 29 of this report: Internet Usage in Great Britain by Platform, from BMRB’s Internet Monitors for February 2005 and February 2006). Not only does broadband afford faster Internet connectivity to allow better television and video streaming, but it also enables voice calls to be made from computers which are of a quality that is equal to fixed-line telephony, and at a much lower cost.

Table of Contents

Executive Summary
1. Introduction: OVERVIEW; DEFINITION
2. Strategic Overview: BACKGROUND; MARKET DYNAMICS AND SEGMENTATION5; Market Sectors; Table 1: Cross-Ownership of Mobile Telephones, Digital Television and Access; to the Internet in the UK Among Adults Aged 16+ by Region (%), 2005; Total Industry Value and Growth7; Table 2: Marketing Budget Revisions for UK Businesses (%), All Quarters 2005; and Quarter 1 2006; Table 3: Share of Marketing Expenditure by Media (%), Years Ending; December 2004 and 2005; Table 4: Advertising Expenditure at Current Prices by Medium (£m),; Year Ending December 2005; The Consumer; Table 5: Percentage of People Wanting to Watch Television; on their Home Computer (% of respondents), 2005; Table 6: Reasons for Wanting to Watch Television on Home Computer; (% of definite/possible watchers), 2005; Table 7: Other Activities Conducted While Watching Television; (% of all respondents and teenagers), 2005; Table 8: Selected Devices Identified by Respondents as Being Very Important/; Desirable (% of respondents), 2005; COMPETITIVE STRUCTURE; Multi-Play Service Providers; Table 9: Comparison of Services Offered by NTL and Those Offered; by its Competitors,; Digital Television; Agencies; Table 10: Top Ten Digital Marketing Agencies by Declared Turnover, Number; of UK Staff, Year Founded and Owner (£ and number of staff), 200516v; Table 11: Top Ten Digital Media Buying Agencies by Declared Turnover,; Number of UK Staff, Year Founded and Owner (£ and number of staff), 2005; COMPETITOR PROFILES; Aegis Group PLC; Brilliant Ltd; Carlson Digital; Dare Digital; Digitas Inc; DNA; Equi=Media Ltd; Grand Union; Guava Ltd; i-level Group; LB Icon Group; Media.com; Media Contacts; Media Square PLC; MVi; Online Media Group Ltd; Profero Ltd; TEQUILA\London; Unique Digital Marketing Ltd; Zed Media; INDUSTRY ISSUES; Fragmentation; Recruitment; User-Generated Content; Table 12: Selected Social Networking Properties by Unique Visitors (000),; May 2005 and 2006; New Payment Models; MARKET FORECASTS; Table 13: High and Low 12-Year Forecast Options by Display and Classified; Expenditure at Constant 2000 Prices (£m), 2005 and 2017
3. Digital Television: BACKGROUD; Digital Switchover; Digital Switchover Timetable; Table 14: UK Digital Switchover Dates by Television Region; Channels; Table 15: Channels Broadcasting on Freeview, June 2003 and 2006; Media Mergers; MARKET SIZE; Digital Television Uptake; Table 16: Platform Viewing Figures (number and %),; Fourth Quarter 2005 and First Quarter 2006; Table 17: Digital Take-Up in UK Homes (% of households), First Quarter 2005 and 2006; CONSUMER TRENDS; Television Audiences; Table 18: Annual Percentage Shares of Viewing by Channel; by Individuals, 2001-2005; Table 19: Multi-Channel Percentage Viewing Summary by Selected Channels; (hours: minutes and %), Week Ending 11th June 2006; Table 20: Terrestrial Top Three Programmes by Channel by Number of Viewers; (million), Week Ending 11th June 2006; Table 21: Top Ten Digital Programmes by Channel by Viewers (000),; Week Ending 11th June 2006; TELEVISION PLATFORMS; Digital Satellite Television; Digital Terrestrial Television; Freeview; BT Vision; Top Up TV; Digital Cable Television; Asymmetric Digital Subscriber Line; It’s Television — But Not As We Know It; Enhanced T43; High-Definition Television; Integrated Digital Television; IPTV; On Demand; Personal Video Recorders; Interactive Advertising; ADVERTISING; Advertising Expenditure; Table 22: Top Twenty Digital Channels by Advertising Expenditure,; Years Ending March 2005 and 2006; Advertising Revenues; Table 23: Terrestrial Channel Advertising and Sponsorship Revenue; (£m and %), 2000-2005
4. Digital Radio: BACKGROUD; NEW TECHNOLOGY; MARKET SIZE; Table 24: UK Radio Listening by Digital Platform as Percentage of Total; Listening Radio Hours (%), Quarter 4 2004 and Quarter 3 200550; CHANGES TO RADIO ADVERTISING RESTRICTIONS50; Restricted Service Licences; Community Audio Distribution Systems; Audio Distribution Systems; Unused Special; DISTRIBUTION; Table 25: Availability of Digital Radio in the UK by Platform (%), September 2005; CONSUMER TRENDS; DIGITAL RADIO MULTIPLEX OWNERS53
5. The Internet: BACKGROUD; MARKET SIZE; Internet Usage by Age; Table 26: UK Internet Take-Up by Region and Age (%), 2005; Internet Usage by Socio-Demographic Profile; Table 27: UK Internet Take-Up by Region and Socio-Demographic Profile (%), 2005; Amount of Internet Usage; Table 28: UK Average Weekly Hours of Use of the Internet by Region; (number of hours and sample size), 2006; Internet Usage by Platform; Table 29: Internet Usage in Great Britain by Platform (% of adults),; February 2005 and 2006; Non-Usage; CONSUMER TRENDS; Brands; Table 30: UK Usage of Internet Brands by Age (% of Internet population),; January 2006; Table 31: The Top Ten Brands Most Likely to Be Used by UK Kids; and Teenagers (% and 000), January 2006; Table 32: Top Ten Brands Most Likely to Be Used by UK Adults; in Their 20s (% and 000), January 2006; Table 33: Top Ten Brands Most Likely to Be Used by UK Adults; in Their 30s (% and 000), January 2006; Table 34: Top Ten Brands Most Likely to Be Used by UK Adults; in Their 40s (% and 000), January 2006; Table 35: Top Ten Brands Most Likely to Be Used by UK Adults; in Their 50s (% and 000), January 2006; CONTENT; Table 36: Types of Programmes to Which Respondents Might Subscribe,; to Watch on PCs or Personal Portable Devices (% of respondents), 2005 INTERNET ADVERTISING — HOTSPOTS AND HOLY GRAILS; Table 37: Key Growth Areas in Online Marketing (% of respondents),; 2005 and 2006; DISTRIBUTION; Table 38: UK Broadband Availability by Region by Connection; (% of all premises), 2005
6. Mobile Technology: BACKGROUD; MARKET SIZE; Mobile Telephone Ownership and Usage by Age; Table 39: Adults Who Personally Own and Use a Mobile Telephone; by Region by Age (%), 2006; Mobile Telephone Ownership/Usage by Socio-Demographic Profile; Table 40: Adults Who Personally Own and Use a Mobile Telephone; by Region by Socio-Demographic Profile (%), 2006; Non-Ownership of Mobile Telephones; CONSUMER TRENDS; Functionality of Mobile Telephones; Table 41: Mobile Telephones — Functions Possessed and Their Importance; (% of mobile telephone owners), 2005; Table 42: Percentage of Mobile Telephone Owners Who Want to Watch; Live Television on Their Mobiles, or to Purchase Television Programme; Downloads for Their Mobiles by Sex and Age (%), 2005; TALK IS CHEAP; DISTRIBUTION; Third-Generation Mobile Telephone Coverage; Table 43: Third-Generation Mobile Telephone Geographic Coverage; by Postal District (% of postal districts), 2006; New Spectrum Licences
7. An International Perspective: OVERVIEW; MARKET DEVELOPMENTS; COMPETITOR ENVIRONMENT; Table 44: Comparison of Advertising Expenditure at Constant Prices ($bn), 2005; CONSUMER BEHAVIOUR; Table 45: Mobile Telephone Use as Primary Camera/MP3 Player/for Daily; Internet Access by Country(% of respondents in each country), 2006; Table 46: Mobile Telephone Functions Most Likely to Be Used in the Future; by Country (% of respondents in each country), 2006; Table 47: Preferred Method of Content Transfer and Control by Country; (% of respondents in each country), 2006
8. PEST Analysis: POLITICAL FACTORS; Switchover; Cross-Promotion Rules; ECONOMIC FACTORS; SOCIAL FACTORS; TECHNOLOGICAL FACTORS
9. Digital Marketing Roundtable: ROUNDTABLE DISCUSSION; Interviewees; Richard Dance — Head of Strategy, Unique Digital Marketing Ltd; Rachel Harker — Co-Founder/Head of Marketing and Sales, Hypertag Ltd; Paul Harrison — Managing Partner, Carve Consulting.com Ltd87; James Henry — Chairman, Digital View Ltd/Director General, The Screen Association; Mark Kuhillow — Managing Director, R.O.EYE Ltd; Gray Sycamore — Director of Digital Europe, The Marketing Store Ltd; Robert Thurner — Commercial Director, Incentivated Ltd; Questions and Answers; What Are The Three Most Important Developments; For Advertisers And Marketers Today?; Richard Dance; Rachel Harker; Paul Harrison; James Henry; Mark Kuhillow; Gray Sycamore; Robert Thurner; What Are The Main Issues Facing Advertisers/Marketers Today?; Richard Dance; Rachel Harker; Paul Harrison; James Henry; Mark Kuhillow; Gray Sycamore; Robert Thurner; What Will Be The Main Driver Of Change In The Next 5 Years?; Richard Dance; Paul Harrison; Rachel Harker; James Henry; Mark Kuhillow; Gray Sycamore; Robert Thurner; Will Online/Mobile Marketing Ever Command Higher Spends; Than Traditional Television/Print Advertising?; Richard Dance; Rachel Harker; Paul Harrison; James Henry; Mark Kuhillow; Gray Sycamore; Robert Thurner; If Yes — When? If No — Why Not?; Richard Dance; Rachel Harker; Paul Harrison; James Henry; Gray Sycamore; Robert Thurner; Do You Think That, At The Rate Technology Is Converging, We Will Eventually; Consume All Digital Content From Just One Device?; Richard Dance; Rachel Harker; Paul Harrison; James Henry; Mark Kuhillow; Gray Sycamore; Robert Thurner
10. Company Profiles: INTRODUCTION; CHANNEL 4 TELEVISION CORPORATION; Corporate Information; Strengths and Weaknesses; New Product Development; Brand Development; Innovations; Appointments; Profitability; Table 48: Financial Results for Channel Four Television Corporation (£m),; Years Ending 31st December 2004 and 2005; Future Company Developments; THE CLOUD NETWORKS LTD; Corporate Information; Strengths and Weaknesses; Brand Development; Innovations; Appointments; Profitability; Future Company Developments; GOOGLE INC; Corporate Information; Strengths and Weaknesses; New Product Development; Brand Development; Innovations; Appointments; Profitability; Table 49: Financial Results for Google Inc ($000), Years Ending; December 31st 2004 and 2005; Future Company Developments; NTL INC; Corporate Information; Strengths and Weaknesses; New Product Development; Brand Development; Innovations; Appointments; Profitability; Table 50: Financial Results for the Reorganised NTL Inc (£m),; Years Ending 31 December 2004 and 2005; Future Company Developments; SKYPE LTD; Corporate Information; Strengths and Weaknesses; New Product Development; Brand Development; Innovations; Appointments; Profitability; Future Company Developments; TANDBERG TELEVISION LTD; Corporate Information; Strengths and Weaknesses; New Product Development; Brand Development; Innovations; Appointments; Profitability; Table 51: Financial Results for TANDBERG Television (NKr000),; Years Ending 31st December 2004 and 2005; Future Company Developments
11. The Future: OVERVIEW
12. Glossary
13. Consumer Confidence: METHOLOGY; KEY FINDINGS THIS QUARTER; THE WILLINGNESS TO BORROW; Confidence Declines Again; Table A: The Average Amount Consumers Are Willing to Borrow in Order; to Purchase Expensive Items at Current and Constant November 2004 Prices; (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006; Signs That the Decline Could be Bottoming Out; Table B: The Number of Adults Willing to Borrow in Order to Purchase; Expensive Items (000 and %), May 2005, August 2005, November 2005,; February 2006 and May 2006; THE WILLINGNESS TO SPEND FROM SAVINGS; Sharp Decline in Spending from Savings; Table C: The Average Amount Consumers Are Willing to Spend from Savings; in Order to Purchase Expensive Items at Current and Constant November 2004; Prices (£ and £bn), May 2005, August 2005, November 2005,; February 2006 and May 2006; Table D: The Proportion of Adults Without Any Savings (%), May 2005,; August 2005, November 2005, February 2006 and May 2006; Borrowing Grows in Relative Importance; Table E: The Average Amounts Adults are Confident Spending to Purchase; Expensive Items (£ and %), May 2005, August 2005, November 2005,; February 2006 and May 2006
14. Further Sources: Associations; Publications; Government Sources; General Sources; Other Sources; Bisnode Sources; Key Note Research; The Key Note Range of Reports

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