Internet Quarterly - UK

• How do users access the Internet?
• Which ISP's and browsers are used?
• Where do they visit when online?
• When do they surf? At home or at work?
• What do they purchase online and how often?
• Who is the most likely to make a purchase?

• Updated, fresh data in a rapidly-moving sector
• Monitor and track trends on a quarterly cycle
• Extensive coverage of all key product sectors
• Comparison and analysis of the main online areas
• Change your offer to meet consumer demands
• Build an historical document with quarterly live data

INTRODUCTION

Definition

Research methodology

ABBREVIATIONS

MARKET IN BRIEF

Penetration rises marginally as festive season arrives

PC access still most popular

Almost all forms of usage down

Digital device usage down

Browsing for information undergoes an untimely slip…

…as does browsing with the intent of buying…

…but actual purchasing is a lot healthier

Festive rush not yet arrived for books, music and groceries

Figure 1: Online product purchasing, by category, 2005-07

WHO’S INNOVATING?

MySpace ads target users

BBC readies global assault

MySpace backs Google's anti-Facebook play

Mobile Internet axis takes shape

Google launches YouTube video-blocking facility

The mobile Internet gains momentum

Philips to build video database fingerprinting service

Publishers unveil Web crawler blocking standards

INTERNET PENETRATION

Quarterly highlights

Penetration manages slight climb…

Just under 30 million now online

Digital divide remains

Pervasive use may mean penetration levels are higher

Broadband is not deepening the divide

Long-term growth penetration levels appear to have plateaued

Figure 2: British Internet penetration at home/work/place of study or elsewhere, 2002-07

Cold comfort for digital divide

Concern for government

Long-term growth rate stagnates

Figure 3: Growth rates, British Internet penetration at home/work/place of study or elsewhere, 2002-07

Detailed consumer demographics

Figure 4: British Internet penetration at home/work/place of study or elsewhere, by gender, socio-economic

group, age, region and working status, 2001-07

Figure 5: British Internet usage profile, by gender, socio-economic group, age and working status, October

2007

INTERNET ACCESS METHOD

From PC to universal access

Quarterly highlights

Figure 6: Internet access methods used in the last three months, October 2007

PC at home vs PC at work

Figure 7: Profile of Internet access, by PC at home against PC at work, by gender, age and socio-economic

group, October 2007

Laptop at home vs laptop at work

Figure 8: Profile of Internet access, by laptop at home against laptop at work, by gender, age and socioeconomic

group, October 2007

Mobile vs Wi-Fi

Figure 9: Profile of Internet access, by mobile phone against Wi-Fi at home, by gender, age and socioeconomic

group, October 2007

Detailed consumer demographics

Figure 10: Types of Internet access methods used in the last three months, by gender, age, socio-economic

group, region, working status, household income and presence of children, October 2007

Figure 11: Types of Internet access methods used in the last three months, by gender, age, socio-economic

group, region, working status, household income and presence of children, October 2007

INTERNET USAGE EXPERIENCES

Quarterly highlights

Usage levels down

Email leads the way

The Internet saves money

Technology opens up possibilities

Figure 12: Types of activity undertaken on the Internet in the last three months, 2003-07

Young still the driving force behind IM

Figure 13: Usage of Internet for instant messaging, by age group, 2005-07

AB usage of Internet telephony remains steady despite overall fall

Figure 14: Usage of Internet for Internet telephony, by socio-economic group, 2005-07

Email by gender - gender gap gone

Figure 15: Usage of Internet to send email, by gender, 2003-07

Picture sending tied with income

Figure 16: Usage of Internet to send pictures from a digital camera to friends or family by email, by

household income, 2003-07

Detailed consumer demographics

Figure 17: Types of activity undertaken on the Internet in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 18: Types of activity undertaken on the Internet in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 19: Types of activity undertaken on the Internet in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 20: Types of activity undertaken on the Internet in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

TECHNOLOGY USAGE

Quarterly highlights

Digital device usage falters

Portable music players and Wi-Fi display early adopter profiles - still

Digital device usage dips

Figure 21: Digital device usage, July and October 2007

Interactive digital TV services struggling to make an enduring mark

Figure 22: Profile of usage of interactive digital TV services, July and October 2007

Overall Wi-Fi growth marginal but strong amongst typical early adopters

Figure 23: Profile of usage of Wi-Fi, by gender, age and socio-economic group, July and October 2007

Despite a slip portable digital music player usage

driven by the young

Figure 24: Profile of portable digital music player usage, by gender, age and socio-economic group, July

and October 2007

Detailed consumer demographics

Figure 25: Technology usage of digital devices, by gender, age, socio-economic group, region, working

status and media usage, October 2007

Figure 26: Technology usage of digital devices, by gender, age, socio-economic group, region, working

status and media usage, October 2007

Figure 27: Technology usage of digital devices, by gender, age, socio-economic group, region, working

status and media usage, October 2007

BRAND ELEMENTS - SEARCH ENGINES

BRAND MAP

Figure 28: Usage and attitudes to search engine brands, October 2007

GOOGLE

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 29: Attitudes towards the Google brand, October 2007

YAHOO!

What the brand is trying to achieve.

Background

Positioning

What the consumer thinks

Figure 30: Attitudes towards the Yahoo! brand, October 2007

WINDOWS LIVE SEARCH (FORMERLY MSN SEARCH)

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 31: Attitudes towards the Windows Live Search brand, October 2007

ASK

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 32: Attitudes towards the Ask brand, October 2007

ALLTHEWEB

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 33: Attitudes towards the alltheweb brand, October 2007

ALTA VISTA

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 34: Attitudes towards Alta Vista brand, October 2007

AOL SEARCH

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 35: Attitudes towards the AOL search brand, October 2007

HOT BOT

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 36: Attitudes towards the Hotbot brand, October 2007

LYCOS

What the brand is trying to achieve

Background

Positioning

What the consumer thinks

Figure 37: Attitudes towards the Lycos brand, October 2007

BRAND QUALITIES OF SEARCH ENGINE BRANDS

Google most accurate, relevant and speedy

Figure 38: image of various search engine brands, October 2007

Experience of search engine brands

Google is most popular, followed by Yahoo! and Ask

Figure 39: Consumer usage of various search engine brands, October 2007

Brand consideration for search engine brands

Google has best customer retention

Figure 40: Consideration of various search engine brands, October 2007

Brand satisfaction for search engine brands

HotBot shows most dissatisfaction

Figure 41:Satisfaction of various search engine brands, October 2007

Brand commitment to search engine brands

Google top for all sorts of customer loyalty and recommendation

Figure 42: Commitment to various search engine brands, October 2007

ROUND UP

BROWSING THE INTERNET FOR INFORMATION PURPOSES

Quarterly highlights

Overall trend is down

Travel declines but remains top

Weather proves very popular

Background

Why should businesses go online?

The purchasing cycle

Technical developments

Figure 43: Websites browsed for information purposes in the last three months, 2002-07

Travel important to the older users

Figure 44: Travel websites browsed for information purposes in the last three months, by age, 2002-07

Weather by socio-economic group

Figure 45: Weather websites browsed for information purposes in the last three months, by socio-economic

group, 2002-07

The young a fading force in driving entertainment sites

Figure 46: Entertainment websites browsed for information purposes in the last three months, by age, 2002-

07

Women key drivers of health site browsing, children less so

Figure 47: Health websites browsed for information purposes in the last three months, by gender and

presence of children in household, 2002-07

Detailed consumer demographics

Figure 48: Websites browsed for information purposes in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 49: Websites browsed for information purposes in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 50: Websites browsed for information purposes in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 51: Websites browsed for information purposes in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

BROWSING WITH THE INTENTION OF BUYING

Quarterly highlights

Figure 52: Websites browsed for information purposes with a view to possibly buying in the last three

months, 2002-07

DVDs go flat

Figure 53: Profile of DVD websites browsed with the intention of buying in the last three months, by socioeconomic

group, 2002-07

Toys and games showing little sign of festive cheer…

Figure 54: Profile of toys and games websites browsed with the intention of buying in the last three months,

by gender and presence of children in household, May, July and October 2007

…and neither do gifts

Figure 55: Profile of gift websites browsed with the intention of buying in the last three months, by socioeconomic

group, May, July and October 2007

Auctions well off the pace of a year ago

Figure 56: Profile of auction websites browsed with the intention of buying in the last three months, by age,

2002-07

Detailed consumer demographics

Figure 57: Websites browsed with the intention of buying in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 58: Websites browsed with the intention of buying in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 59: Websites browsed with the intention of buying in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

Figure 60: Websites browsed with the intention of buying in the last three months, by gender, age, socioeconomic

group, region, working status, household income and presence of children, October 2007

ACTUAL PURCHASING ON THE INTERNET

Quarterly highlights

Figure 61: Websites actually purchased from in the last three months, 2002-07

Purchasing recovers as penetration bounces back

Figure 62: Internet penetration and purchasing behaviour in the last three months, 2002-07

Media products best at converting intentions to purchases

Figure 63: Websites actually purchased from in the last three months, October 2007

Travel sites improve conversion of browsers to buyers

Figure 64: Consumer use of travel websites in the last three months, 2002-07

Entertainment regains lost ground in converting browsers

Figure 65: Consumer use of entertainment websites in the last three months, 2002-07

Huge decline in incidence of 25-34-year-olds buying DVDs

Figure 66: Actual purchasing from DVD websites in the last three months, by age, 2002-07

Detailed consumer demographics

Figure 67: Websites actually purchased from in the last three months, by gender, age, socio-economic

group, region, working status, household income and presence of children, October 2007

Figure 68: Websites actually purchased from in the last three months, by gender, age, socio-economic

group, region, working status, household income and presence of children, October 2007

Figure 69: Websites actually purchased from in the last three months, by gender, age, socio-economic

group, region, working status, household income and presence of children, October 2007

TRENDS IN ONLINE PRODUCT PURCHASING

Quarterly highlights

Average expenditure on books, music, groceries and financial services up…

…but clothing, computers, travel and auctions all down

Entertainment unchanged

Figure 70: Trends in average spend per online buyer in the previous three months, 2002-07

Figure 71: Trends in average spend per online buyer in the previous three months, 2002-07

Figure 72: Trends in average spend per online buyer in the previous three months, 2002-07

Figure 73: Trends in average spend per online buyer in the previous three months, all categories, 2002-07

INTERNET USER TYPES

Types of Internet user

Figure 74: Different Internet user types, by gender, age and socio-economic group, October 2007

CHRISTMAS PURCHASING INTENTIONS

Quarterly highlights

Good deals still important - but not quite so important

Inspiration for gift ideas and avoiding the crowds also drive online festive shopping

Growth in Christmas shoppers remains steady

Security fears easing but still very real

Figure 75: Statements agreed with when thinking about buying Christmas gifts online this year, 2004-07

Young are most price-conscious for Christmas

Figure 76: Analysis of those who like to compare prices for Christmas gifts online in order to get the best

deal, by age, 2004-07

Men with kids keenest to avoid Christmas crowds

Figure 77: Analysis of those who shop online for gifts in order to avoid the Christmas crowds, by gender and

presence of children, 2004-07

Security concerns easing for all but C2s

Figure 78: Analysis of those who are concerned about security issues regarding the Internet which has put

them off Christmas shopping online, by socio-economic group, 2004-07

Detailed consumer demographics

Figure 79: Most important factors in deciding whether to buy a Christmas gift over the Internet this year, by

gender, age, socio-economic group, region, working status, household income and presence of children,

October 2007

AMOUNT SPENT ON ONLINE BOOK PURCHASING

Highlights

Figure 80: Amount spent on books purchased over the Internet in the last three months, 2002-07

RECENT ONLINE BOOK DEVELOPMENTS:

Harry Potter fails to impact Amazon profits

New Borders site ready for feedback from customers…

…as it terminates Amazon deal

HarperCollins launches new book excerpts link for iPhone users

AMOUNT SPENT ON ONLINE CDS/TAPES/DVDS/VIDEOS PURCHASING

Highlights

Figure 81: Amount spent on CDs/tapes/DVDs/videos purchased over the Internet in the last three months,

2002-07

RECENT ONLINE MUSIC AND FILM DEVELOPMENTS:

Blank media levy breaches should be criminal, say authors

Prince stomps on unofficial websites

P2P music not harming Canada

AMOUNTS SPENT ON ONLINE CLOTHING AND FOOTWEAR PURCHASING

Highlights

Figure 82: Amount spent on clothing and footwear purchased over the Internet in the last three months,

2002-07

RECENT ONLINE CLOTHING AND FOOTWEAR DEVELOPMENTS:

Tesco plans to sell clothing online

New online shop vows to become the amazon.com of branded accessories

Oasis and Coast link up with asos.com

AMOUNT SPENT ON ONLINE COMPUTER HARDWARE AND SOFTWARE PURCHASING

Highlights

Figure 83: Amount spent on computer hardware and software purchased over the Internet in the last three

months, 2002-07

RECENT ONLINE COMPUTER SOFTWARE AND HARDWARE DEVELOPMENTS

Dell PCs added to Staples diet

Apple to allow outside developers to make add-on iPhone software

AMOUNT SPENT ON ONLINE ENTERTAINMENT TICKET PURCHASING

Highlights

Figure 84: Amount spent on entertainment tickets purchased over the Internet in the last three months,

2002-07

RECENT ONLINE ENTERTAINMENT TICKET DEVELOPMENTS:

Olympic ticketing system crashes under demand

Led Zeppelin promoter piles into eBay

UK promoters feel heat from secondary ticketing

Boost for online booking

AMOUNT SPENT ON ONLINE TRAVEL PURCHASING

Highlights

Figure 85: Amount spent on flights/holidays purchased over the Internet in the last three months, 2002-07

RECENT ONLINE TRAVEL DEVELOPMENTS

Chiltern Railways completes mobile phone ticketing circle

Ryanair ad banned for slating lastminute.com

AMOUNT SPENT ON ONLINE GROCERY PURCHASING

Highlights

Figure 86: Amount spent on grocery shopping purchased over the Internet in the last three months, 2002-07117

RECENT ONLINE GROCERY DEVELOPMENTS:

Delivery bans hit home

Sainsbury's widens by-the-case choices

We will make it says Ocado's boss

Asda becomes first grocer to offer online pharmacy

AMOUNT SPENT ON ONLINE AUCTION SITE PURCHASING

Highlights

Figure 87: Amount spent on products from an auction site purchased over the Internet in the last three

months, 2002-07

RECENT ONLINE AUCTION SITE DEVELOPMENTS

FSA investigates Internet brokers

Skype sends eBay deep into the red

PayPal and eBay partner with Yahoo! to enhance anti-phishing protection

AMOUNT SPENT ON ONLINE FINANCIAL SERVICES PURCHASES

Highlights

Figure 88: Amount spent on financial services-related products purchased over the Internet in the last three

months, 2002-07

RECENT DEVELOPMENTS IN ONLINE FINANCIAL SERVICES:

Web banking risk down to human error

Online bank says it will scrap the payment of interest on current account balances

Number of Web banking users soars to 17 million

Online security report

APPENDIX: RESEARCH METHODOLOGY