eCommerce is the theme of the Winter 2010 edition of State of the Net. It also covers social media, domain registrations, digital advertising, mobile internet and online TV.

1. State of the Netessential eBusiness intelligence for Irish managers
A quarterly bulletin on online activity in Ireland ISSN: 1649
Compiled by AMAS in association with the Irish Internet Association
w w w . a m a s . i e
issue 19 Winter 2010
compelling to battle-weary
investors, directors and senior
managers.
The scale of the market
opportunities and the ability
of either a start-up or an
established business to
capitalise on them are less
easy to define and articulate.
There is a scarcity of robust
eCommerce data in this
market. However, there are
sufficient clues from the Irish
market and other markets to
provide Irish businesses with
a good starting point on the
journey to creating successful
eCommerce offerings.
We know the broad internet
uptake, the explosion of
social media use, mobile
and particularly smart
phone adoption levels in
Ireland. We know that Irish
businesses are losing out
to overseas eCommerce
providers which have been
aggressively targeting Irish
consumers. And we know
that, by comparison, many
Irish eCommerce offerings lag
behind international ones, in
terms of the user experience,
the richness of the offer and
ultimately how much is taken
at the checkout.
From other markets, we can
understand how Irish businesses
can exploit eCommerce.
Our nearest neighbour,
which has a far more mature
eCommerce market, is a good
starting point. Across sample
areas of eCommerce, as the
graph shows, there is a higher
likelihood that UK consumers will
research and buy online, or buy
online following some offline
research, than Irish consumers.
Data from The Interactive
Media in Retail Group (IMRG)
are revealing:
• 51% of UK’s population buy
online and 15% do so via a
mobile phone
• Online sales were worth £45.6
billion between January and
October 2010, up a comparative
17% and not too far behind the
full 2009 figure of £49.8 billion
• “Multichannel” retailers,
those with traditional and
online outlets, are gaining in
LinkedIn
trends
page 2 USA
38.4m
SA
.4m
353,391
Worldwide 80 million
India
7.4m
UK
4.8m
Other
29m
Ireland
.ie
domains
rule OK
page 5
.info
.com
.eu
.org
.ie
.net
.biz
41%
30%
14%
3%
1%
6%
5%
Aileen O’Toole,
Managing Director,
AMAS
After several false dawns,
eCommerce is firmly
on the agenda of Irish
businesses. From wannabe
entrepreneurs to seasoned
traditional retailers,
eCommerce provides a
much-needed glimmer of
hope in an otherwise grim
economic climate.
Market opportunities
abound, domestically
and internationally, as
consumers turn increasingly
to the internet to research
and buy products.
Established and marketed
correctly, eCommerce
can deliver high-margin
sales, grow the customer
base, increase average
value per customer and
drive down costs. Certainly,
those kind of arguments are
eCommerce lift-off: trends for 2011
Research offline,
purchase online
Research online,
purchase online
0 10 20 30 40 50 60
Ireland
UK
Ireland
UK
Ireland
UK
Ireland
UK
Ireland
UK
BooksCd/DvdCamerasPhonesSoftware
Ireland
UKClothing
11 2
28 17
33 24
13 4
%
8 10
13 3
27 11
16 1
24 8
20 5
39 20
3 2
Source: Consumer Commerce Barometer, compiled
April 2010. Data based on a sample size of 2,000 in both
Ireland and the UK. Base for graph: those who purchased
a product in selected categories within 12 months of survey
Research and online sales
Continued on page 4

2. 1. Social media
LinkedIn’s Irish user base has reached
over 353,000 with an increasing number
of professionals realising its value as a B2B
networking tool. There is a slight gender
bias, with males accounting for 54% of the
Irish users. Globally, LinkedIn’s user base
has grown from 65 million to 80 million in
just six months, with almost half of those
users based in the US.
The social media site is gaining in
momentum, not just in terms of sign-
ups but in how it is being used to
connect or reconnect with business
contacts, promote businesses and
secure new recruits.
Anecdotes abound about how LinkedIn
has helped generate or convert leads,
raise awareness and market companies’
products and services. There are also
some scare stories – spurious contacts,
exaggerated or incorrect claims,
headhunters mining the CVs to poach
people – proving, perhaps, that virtual
networks are no different to behaviours
experienced in the physical world.
What do Irish LinkedIn members do? An
Amárach survey found that it’s the routine
tasks – looking up and staying in touch
with contacts – that are the most popular
activities, with job hunting in third place.
Source: LinkedIn, November 2010
USA
38.4m
SA
.4m
353,391
Worldwide 80 million
India
7.4m
UK
4.8m
Other
29m
Ireland
© AMAS graphic
(www.amas.ie)
0 10 20 30 40 50 60
%
59
50
49
45
33
10
Look up new contacts
Stay in touch with contacts
Browse for possible jobs
Update my work/projects status
Browse contacts’status updates
Browse for possible people to hire
© AMAS graphic (www.amas.ie)
LinkedIn tasks
Source: Amárach, Social Networking in
Ireland report, published August 2010.
Data based on 850 online interviews
LinkedIn
2004 2006 2008 2010 2012 2014
40%
Read the newspapers each week Use the internet once a week
60%
70
64
70%
80%
50%
Newspaper readership and internet use
2. Newspapers vs online For newspapers, the internet
continues to have a profound impact.
Readers are turning increasingly to the
internet for their news, but for many it
is not a case of ‘either or’. More than
half of European consumers read a
newspaper or magazine and also
use the internet at least weekly.
In 2010, more consumers are reading
a newspaper than use the internet
but by 2014 this is expected to be
reversed. Quality does not seem to be
a factor with online news, with fewer
than one in ten internet users who also
read newspapers saying that news in
print is “any more reliable” than what
they read on the internet.
Source: IAA Mediascope 2004-2010, 10-market average.
2012 and 2014 figures estimated on best-fit trend line

3. Top Trends
the opportunity to win online
Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10
0.2
0
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
RTÉ
TV3
TG4
Millions
A further tranche of data confirms
what everyone involved in digital
advertising in Ireland is saying – that
digital continues to grow and is set
to become a leading category.
Research for the first half of 2010 from
IAB Ireland/PricewaterhouseCoopers
shows that, despite a bruising
advertising market, digital advertising
spend increased by just over 12% to
€53.9 million.
Google continues to be the primary
beneficiary, with paid search
accounting for 45% of digital spend.
The broad display category was
also a strong performer accounting
for 29% of share, with advertising
networks (including Google’s) and
social media campaigns on sites
like Facebook becoming a more
common feature on advertising
schedules. Online classifieds constit-
ute the balance of the digital spend.
This IAB/PwC research will be
repeated every six months and
within a few months of its launch
has become the industry
benchmark, just as its equivalent
research has become in other
more mature markets.
Separately, PwC has conducted
some forecasting about media
and entertainment trends globally.
For the Irish market, it describes
the advertising market as “fragile”,
and expects an overall decline of
5.1% this year. Digital will buck the
overall ad market trend this year
and in the years ahead, with PwC
forecasting compound growth
in Irish internet revenues of 16.3%
over the next five years.
3. Online TV
More indicators of how the internet is changing consumers’
media habits. Online TV has become an established
medium in Ireland, with consumers playing catch up on
their favourite TV programmes through the websites of Irish
television stations. The number of streams varies according
to the broadcasting schedules, with peaks being recorded
for major sport occasions and hit TV shows.
RTÉ Player was at its busiest in June with 2.3 million streams,
thanks in no small measure to the World Cup. TV3’s
highpoint was in October at 1.2 million streams, with X
Factor and The Apprentice being online crowd pullers.
October was also the best month for TG4 at 343,000
streams, with the Aussie Rules series and Oireachtas Festival
helping to boost the numbers.
Millions of streams per month
Source: Data supplied by RTÉ, TV3 and TG4. Note: TG4 Beo
Player streams Irish language programmes only
4. Digital advertising
Jan - June 2009 Jan - June 2010
40%
60%
80%
20%
0%
100%
27.6%
25.7%
46.6%
26%
29%
45%
€48m €53.9m
Search Display Classifieds
Source: IAB PwC Online Adspend Study for first half of 2010,
and PWC Global entertainment and media outlook 2010–
2014, both published in November 2010
Forecast Irish
advertising
market
2010
5.1
12.2%
%
Total market
Digital
Irish digital advertising market

4. Economic mayhem does not
seem to have dampened
demand for top-notch
mobile phones among Irish
consumers. Smart phones
which allow users to access
emails, Facebook accounts
and multimedia content are
“must haves” and not just for
the Christmas stockings.
Ireland is slightly ahead of the
European average when it
comes to the mobile internet:
with 35% of Irish mobile phone
users reporting that their
mobiles are internet-enabled.
But, as with many trends online,
there is a big gap with our
nearest neighbours – UK mobile
internet adoption is the second
highest in Europe at 49%.
On the European leader-
board, it’s a typical north v.
south divide. In Romania and
Bulgaria, only one in seven
has an internet-enabled
mobile phone, compared
with almost three out of every
five people in Sweden.
Source: Eurobarometer,
eCommunications
Household Survey, published
October 2010; Irish sample
size 1,014 out of total EU27
sample of 26,761
©AMASgraphic(www.amas.ie)
5. Mobile
Internet
Sweden 58%
United Kingdom 49%
Slovenia 47%
Czech Republic 45%
Poland 44%
Latvia 43%
Estonia 42%
Denmark 38%
Austria 38%
Slovakia 38%
Finland 36%
Ireland 35%
France 35%
Luxembourg 34%
EU27 33%
Netherlands 32%
Spain 30%
Germany 30%
Hungary 28%
Lithuania 23%
Portugal 21%
Belgium 20%
Greece 20%
Italy 20%
Cyprus 18%
Malta 18%
Bulgaria 15%
RO 12%
50% - 100%
40% - 49%
21% - 39%
0% - 20%
Non EU
50% - 100%
40% - 49%
21% - 39%
0% - 20%
Non EU
50% - 100%
40% - 49%
21% - 39%
0% - 20%
Non EU
50% - 100%
40% - 49%
21% - 39%
0% - 20%
Non EU
50% - 100%
40% - 49%
21% - 39%
0% - 20%
Non EU
market share against the
internet “pureplays”
• Sophisticated online
consumers are driving
innovation and using tools and
market knowledge to secure
the best deals across both
online and traditional channels
Casting the net further, the
global trends are also worth
considering
• Women spend 20% more
time on retail sites than men
(comScore)
• Average sales value per
customer are higher for
multichannel retailers - $900
a year, compared with $160
for online-only and $200 for
store-only (JC Penney channel
value analysis)
• Only a third of UK retailers
perform shopping cart
analysis although such
analysis improves conversions
(eConsultancy)
• Consumers take their time
to make online purchase,
with 65% waiting a day or
more to complete a purchase
(McAfee)
• Mobile commerce is
becoming serious business, with
10 million using their iPhones to
buy from eBay in 2009
• Social commerce will
become big business,
particularly with younger
audiences, with 28% of US
retailers reporting that sales
through social media sites are
already significant (Shop.org)
Irish businesses are waking up to
eCommerce. The opportunities
are definitely there but so too
are risks. Upfront investment
in strategy and planning
pays considerable dividends.
Continued from page 1
www.amas.ie

5. Top Trends
Mobile, location technologies
and social media for the
retail sector are set to be key
themes in the Irish Internet
Association’s next “8Ways”
eCommerce conference
in 2011. It builds on the
phenomenal response to
the IIA’s initial “8Ways” conf-
erence earlier this autumn,
which had 120 delegates and
reflects a significant increase
in interest in eCommerce
during the past year.
The first “8 Ways to Sell More
Stuff” conference was
designed specifically for
eCommerce traders and
focused on the basics of
sales conversion and loyalty
techniques for members’
websites. The conference
found that while Irish
consumers out-shop their
European counterparts
online, Irish retailers are under-
selling online compared
with their international
counterparts. Irish consumers
are clearly shopping online
for value and/or product
range that cannot be found
easily in the Irish market.
Broadband is still prohibitively
slow in many areas, and is
not only a disincentive for
retailers to developing their
eCommerce offerings but is
also a barrier to consumers.
The final challenge is cost-
effective product fulfilment:
unless the product is truly
unique or exceptionally
less expensive, customers
overseas or indeed on the
other side of Ireland are
unlikely to be willing to absorb
the cost of shipping.
Within the grocery sector, some
of Ireland’s largest domestic
brands are still not trading
online. Smaller independents
have been more aggressive
and creative in adopting
online strategies to boost
sales. For these organisations,
eCommerce presents an
opportunity to expand the
business without the need
for capital expenditure. SMEs
and sole traders operate
lean and nimble operations
that allow them to respond
quickly to customer requests.
This was again evidenced by
the delegate profile at the
“8Ways” conference.
Such was the level of interest
in the conference and the
positive feedback from
delegates, the IIA will be
heading into 2011 with a
continued focus on this sector
and future “8Ways” events.
eCommerce conference puts spotlight
on mobile and social media
Joan Mulvihill
CEO, Irish Internet Association
6. Domains
What’s in a name and more
particularly a domain name?
An awful, awful lot if you
want to launch a new brand,
protect an existing one and
target different audiences
and markets. Increasingly,
businesses realise how
essential domains are to
their brand armoury.
Decisions about what type
of domain .com or .ie for
instance – often rest with the
aspirations of the business or
the brand and particularly the
market focus. Companies with
global ambitions often opt for
.com or .net but then try to
mop up the relevant market-
specific domains .co.uk for the
UK or .fr for France – to allow
for more market-specific focus.
As the IEDR celebrates
its tenth birthday, new
statistics shows that .ie is
performing strongly. The Irish
domain market accounts
for approximately 355,000
of the world’s total of
196 million domains. .ie
accounts for around 41% of
the Irish market, compared
with 29.5% for .com.
Benchmarked against other
similar countries, the Irish
share is ahead of the global
average of 39% for other
equivalent country code
top-level domain (ccTLDs).
Source: IEDR,
Domain Industry
Report 2010;
comparisons
based on data
from Directi
(webhosting.info),
Eurid and IEDR
.info
.com
.eu
.org
.ie
.net
.biz
41%
30%
14%
3%
1%
6%
5%
The IEDR is on a mission to promote the
value of the .ie domain to Irish businesses
and has launched a new site – and of
course a catchy domain, Why.ie. It has
also launched a publication, the Domain
Industry Report, which provides a wealth
of statistics on domains and the Irish
internet “ecosystem”.
AMAS Managing Director Aileen O’Toole
has written a piece for this publication
on how Ireland’s digital economy has
matured over the past ten years. It is
available for download on www.iedr.ie
.ie on a mission
Ireland’s
domain name
registrations

6. © AMAS Ltd.
Published by AMAS Ltd., 38 Lr. Leeson Street, Dublin 2, Ireland. Tel: +353 1 6610499
Email: info@amas.ie Web: www.amas.ie
Think Irish SMEs
are behind
the curve in
terms of online
adoption?
And that they
fear the effects
of the internet
on traditional
business
models. Then
think again.
There is
growing
evidence that
the digital
divide is
narrowing and
that SMEs are deriving much
business value from using the
internet. AMAS had a role in
producing such evidence in
tourism, which more than
any other economic sector
has been transformed by
the internet.
Three years ago, AMAS
research for the Irish Tourist
Industry Confederation
(ITIC) concluded
that there was a
digital divide in
tourism, with many
businesses missing
out on bookings
because of slow
internet adoption.
This year, AMAS was
in the field again for
ITIC. In collaboration
with CHL Consulting,
we canvassed the
views of more than
600 Irish tourism
businesses as part
of a broad study on
travel distribution.
This time, the tourism industry
had a different story to tell:
• Over 90% of Irish tourism
businesses say that the
internet has been very positive
or positive for their businesses
• 88% of business say it has
increased sales
• 71% say it has led to
improved yields
• 60% believe it has improved
capacity utilisation
Challenges remain. Word
of mouth reputation has
gone online, and gone
viral. The authoritative view
of tourism destinations and
facilities has moved to
sites like TripAdvisor, which
serves up over five million
pages about Ireland each
month. Also the pace of
change is breathtaking.
Mobile technology, for
instance, is becoming
increasingly important in
tourism distribution and will
be the platform of choice
for many visitors to Ireland
within a short few years.
And, in these battered
economic times, it is
difficult for many SMEs to
secure capital investment
for complex internet
integration projects.
Our experience, in tourism
and in other economic
sectors, is that many SMEs are
meeting those challenges
head on. Many are hungry
for knowledge and, in some
cases, have become self-
taught, highly motivated
online marketers. Many are
becoming more informed
buyers of web design, tec-
hnology and online marketing
services. And many, have
set their sights on full-scale
integration between their
websites and back-end systems.
Digital divide is narrowing for SMEs
AMAS: what we do
AMAS is an internet consultancy
with a simple goal – help our
clients to exploit the internet.
Large corporates, government
bodies and, increasingly, high-
potential businesses retain us to
develop and help implement
internet strategies.
We cut through the clutter
and the complexity to allow
our clients to capitalise on
the unlimited opportunities
offered by the internet.
Services:
• Strategy
• Research
• User experience
• Content
• Training
• Marketing
• Project management
Fiachra Ó Marcaigh
Director, AMAS
1%
%
100
90
80
70
60
50
40
30
20
10
0
90.5%
8.6%
Positive /
Very Positive
Neutral Negative
Tourism industry
perceptions of
the internet’s
impact on
business
Tourism and Travel
Distribution in a
Changed World
is a largescale study
on the impact of the
internet on Ireland’s tourism
industry and on traditional
distribution channels. It
involved extensive Irish and
international research by
CHL Consulting and AMAS
on behalf of ITIC.
The study’s recommen-
dations will be used by
industry bodies, state
agencies, policy makers and
tourism businesses to ensure
that the Irish tourism product is
well distributed across existing
and new
channels
globally.
For tourism
SMEs,
the study
includes
a series of
practical
resources
on repu-
tation
mana-
gement, online marketing and
maximising their own websites.
The research study can be
downloaded in the research
areas of either the ITIC website
(www.itic.ie) or the AMAS
website (www.amas.ie)
Follow us:
For digital research and insights,
follow AMAS on Twitter@AMASinternet
Contact Us:
Aileen O’Toole,
Managing Director on
+353 1 6610499 or info@amas.ie