UK Digital Ad Spending Rises Despite Economic Turmoil

TABLE OF CONTENTS
Executive Summary 2
United Kingdom
Internet Usage 3
Online Activities 4
Advertising Spend 5
Internet Advertising 6
Paid Search 7
Display Advertising 8
Mobile Marketing 9
Social Media 10
Europe
Internet Advertising 13
Social Media 14
France Overview 15
Spain Overview 18
Source of all statistics:
Belgium Overview 21
About WSI 23

UK & EUROPE Executive Summary

Despite Economic Turmoil, Digital Ad
Spending on the Rise; Mobile
Marketing to Spike in 2012

As Europe continues to struggle with a stubborn sovereign debt
crisis, the region’s online ad spending is actually prospering,
despite the difficult general economic environment. Given the
harsh fiscal climate, however, total media ad spending is not
expected to rise substantially. As a result, Europe’s still burgeoning
online ad spending market will take a greater share of total ad
spending and remain one of the only growing forms of ad spend.
Overall, market conditions in Europe highlight the importance of
and place more emphasis on forms of Internet marketing and
communication.

In similar fashion to the past few years, Internet advertising
formats such as paid search, display ads and social media
marketing experienced an increase in spending among UK and
European Marketers in 2011, continuing the shift away from
offline advertising like newspaper, radio and television. Recent
statistics suggest that this trend will continue through 2012 and
beyond.

A relative newcomer to online advertising, mobile marketing
exploded in 2011 and all signs indicate that it will become one of
the leading forms of Internet ad spending in the very near future.
The use of smartphones and tablets is increasing so rapidly that, in
most European countries, over 90% of the population operates a
mobile device. As people get more comfortable searching and
interacting on the go, the Internet’s landscape is once again
changing, and mobile marketing is certainly at the forefront.

This Internet Marketing Trends Report is a brief summary of the
current online marketing stats and patterns in the UK and Europe,
as well predictions for the next few years. Specifically, the report
covers Internet usage and penetration, advertising spending,
Internet marketing, social media trends and activities and the
expansion of mobile marketing.

Copyright ©2012 by Research and Management Page 2
WSI Internet Marketing Trends Report 2012

UNITED KINGDOM Internet Usage

UK Internet Users by Age
and Gender

 The majority of the UK’s online
population is between the ages of 16-
44 (57%)

 17% of UK Internet users are
between the ages of 16-24, 20% are
between 25-34 and another 20% are
between 35-44

 The third highest share of UK
Internet users is the 45-54 age bracket
at 19%

UK Internet Users and
Penetration

 The UK’s Internet use is still on the
rise, with a projected increase of 1.2
million people from 2011 to 2012

 By 2016, the number of UK Internet
users is expected to climb to 50.4
million, which would be an increase of
9 million users over the five year
period between 2011-2016

 The percentage of the UK’s overall
population who uses the Internet is
also increasing; by 2016, almost 80%
of the UK is projected to be using the
Internet


UNITED KINGDOM Online Activities

Online Services Used by
UK Internet Users
 Facebook is the most popular online
activity among Internet users in the UK
(65% of respondents)

 YouTube is the second most popular
online activity among Internet users in
the UK (50% of respondents in
February 2012)

 Twitter is the distant third most
popular online activity among Internet
users in the UK (only 23% of
respondents in February 2012)

 Other popular online activities
among Internet users in the UK include
MoneySavingExpert.com, Windows
Live, LinkedIn and Google+

Top Ten Websites Among Top 10 Websites Among UK Internet Users,
UK Internet Users Dec 2011
12
 Google UK is the most popular site in 10
the UK with 9.67% market share of 8
6
visits in December 2011 4
2
 The next most popular site is 0 %
Facebook (7.58% share)

 YouTube ranked in third place
(3.41%) and eBay UK in fourth (1.81%)
Source: Experian Hitwise, Jan
 Other sites listed in the top ten
include Windows Live mail, MSN UK,
BBC News and Yahoo! UK and Ireland

Copyright ©2012by Research and Management Page 4

UNITED KINGDOM Advertising Spend

UK Ad Spending, by
Media
 Ad spending in the UK is heading into
a period of low growth (only 2%
change is expected). Internet ad
spending in the UK in 2012, however,
is projected to climb by 11.3% over
2011’s final ad spend of £3,772 million

 Conversely, press ad spending, which
has been on a steady decline since
2009, is expected to drop from £3,307
million in 2011 to €3,012 million in
2012 (a 9% drop). Radio ad spending is
also projected to take a 1% hit in 2012

 TV and cinema ad spending project
to hold steady, with 1.5% and 0%
growth rates

UK Display Ad Revenue
Share, by Industry
 According to the Interactive
Advertising Bureau UK, the finance
industry led 2011 in online display ad
revenue, with a 15.6% share

 Ranked a close second in online
display ad revenue for 2011 was the
consumer goods industry, which held a
14.5% share

 Other industries with a significant
share of 2011’s display ad revenue
included entertainment and the media
(12.4%), travel and transport (10.3%)
and retail (9.7%)


UNITED KINGDOM Internet Advertising

Steady Increase in Online
Ad Spending
UK Online Ad Spending, 2010-2014
 eMarketer predicts that £5.09 billion
Source: eMarketer, Nov
2011
(£ billions and % change)
will be spent advertising online this 7
6.72
year in the UK, a 12% increase over 6 6.2
2011 5.
5 4.5
4.1 10%
 According to the same study, £6.22 4 11%
billion will be spent advertising online 12%
3 11%
next year (11% increase) 15%
2
 This growth is expected to continue 1
into 2014, when £6.72 billion will be
spent advertising online (an increase 0
of 10% over 2013) 2010 2011 2012 2013 2014

Internet Advertising to
Projected UK Advertising Spend Share, by
Take Lead Share of Total Media, 2012 (% of total)
UK Ad Spend 3.5%
1.5% Internet
 35% of total advertising spending in 7%
Press
the UK is expected to be allocated
35% TV
toward online advertising in 2012,
28%
which would give it the leading share Outdoor
by 7% over TV (28%) 25% Radio

 Press is expected to garner the third Cinema
largest share of ad spend (25%), while
the remainder will be divided among
outdoor, radio and cinema


UNITED KINGDOM Paid Search

Paid Search Remains Top
Ad Spend Format
 Paid search advertising is expected
to increase at a compound annual
growth rate (CAGR) of 9.7% over the
next few years and will climb to nearly
$6 billion by 2015

 In 2012, paid search advertising
spend is projected to reach $4.45
billion, which would be an 11%
increase of 2011

 Overall, paid search advertising will
continue to hold more than a 50%
share of total UK online ad spending.
By 2015, the next closest share is
expected to be held by display
advertising (a 27% share)

UK Paid Mobile and Tablet
Search Spending on the
Rise

 UK’s paid search spending share is
still dominated by one device, with
computers holding a share of over 90%

 A noticeable trend is occurring as
both smartphones and tablets are
rapidly taking an equal portion of the
paid search spending share away from
computers

 As the overall usage of smartphones
and tablets steadily rises, more
searches will be conducted on these
devices, which means the trend is
likely continue into 2012 and beyond

UNITED KINGDOM Display Advertising

UK Continues to Spend
More on Display
UK Display Ad Spending Share, 2011-2015
Advertising Source: eMarketer, Nov (by %)

 According to eMarketer, display ad’s
27
spending share in the UK will
experience small but steady growth in 26
2012, rising from 23.7% to 24.8% 25
(%)
24
 Display ad spending in the UK is 23
expected to increase its share all the
way to 26.6% by 2015, nearly a full 3% 22
2011 2012 2013 2014 2015
jump from 2011

Video Advertising
Experiences Rapid
Growth

 Display – more specifically, video
advertising – will experience the
highest growth rate among all UK
online ad spending by a significant
margin

 In 2012, eMarketer forecasts that
video advertising spend will
experience 70.7% growth, which is
more than 50% higher than the
second highest projection (email at
17.9%)

 The growth of video advertising’s
spend is predicted to drop slightly over
the next few years, but its expected
growth rate of 45.2% for 2015 is still
extremely high and indicative of a
powerful trend

UNITED KINGDOM Mobile Marketing

UK Mobile Ad Spending
Set to Explode
 eMarketer forecasts mobile ad
spending in the UK will grow 63.7% to
$314.7 million in 2012, as more
consumers use their mobile phones
for online entertainment on the go

 Moving forward, mobile ad
spending in the UK will continue to
rise, jumping to $503.1 million in
2013 and then $792.3 million in 2014

 By 2015, eMarketer predictions that
mobile ad spending in the UK will
reach a staggering $1.2 billion, an
overall increase of $1 billion since
2010

UK Mobile Ad Spending,
by Format

 Total ad spending on the mobile
platform in the UK will post a 57%
CAGR between 2010 and 2015

 Impressive growth confirms the
importance of search in the UK’s
mobile economy. Advertisers will
spend $212 million on mobile search
ads in 2012, or 67% of all mobile ad
spending

 In the UK, 81% of adult smartphone
users polled in Q2 2011 by Google
and the Mobile Marketing Association
said they run local searches on their
devices, which highlights the
importance of having a mobile ad
spending budget

UNITED KINGDOM Social Media

Social Network Use in the
UK Continues to Rise
 This year, more than 55% (26
million) of the UK’s Internet users will
be active on social networks, an 8%
increase over 2011

 In 2013, 57.7% or 27.7 million people
will be using social networks in the UK,
and by 2014, that number will climb to
29.4 million people (60% of Internet
users)

Social Network Users
Divided About Being
Served Ads

 54% of respondents who were asked
"I don't mind seeing adverts on social
media services that are based on my
profile activities: To what extent do you
agree or disagree with the following
statements?" gave a neutral or positive
answer

 18% of respondents either agreed or
agreed entirely, while 30% neither
agreed nor disagreed

 47% of respondents indicated that
they were not happy about being
served ads based on their social media
activities



Facebook Used by the
Majority
 eMarketer forecasts that 2 million
more people in the UK will begin using
Facebook in 2012, a growth of 9.8%
from 2011

 The 22.9 million users projected to
be on Facebook in 2012 represents
88.6% of UK social network users, 49%
of Internet users and 36.4% of the
population

 By 2014, 26 million people in the UK
are expected to be using Facebook,
which would be more than half of all
Internet users

Leading Social Networks

 Facebook is the leading social network
site accessed on both classic web (75.7%
reach) and mobile (41.6% reach)
browsers

 Twitter is the distant second leading
social network site accessed on classic
web (19.5% reach) and mobile (4.8%
reach) browsers

 Other social networks being accessed
are LinkedIn, Myspace and Tumblr

 The overall numbers for social
networks being accessed via a mobile
device have a higher % reach, since this
particular survey does not include
mobile users who access social networks
via mobile applications



Top Social Display
Advertising Industries

 As of September 2011, the top social
display advertising industry in the UK –
ranked by socially enabled display ad
impressions – was consumer goods at
58.6 million impressions

 The travel industry ranked a distant
second with 39.3 million impressions,
while the finance industry was third
with 35.9 million impressions

 Other top display ad industries in the
UK include health (13.9 million
impressions), telecom (10.3 million
impressions and online media (10.1
million impressions)

UK Internet Users
Sharing Brand
Information

 33% of UK Internet users said they
share brand or product information
on social networks, with over 20%
claiming they do so on a daily,
weekly or monthly basis

 67% of UK Internet users said they
never share brand of product
information on social networks, but
with the overall use of social
networks still on the rise, it is
reasonable to assume some of these
people will begin sharing


EUROPE Internet Advertising

Online Ad Spending in
Europe to Increase

 Barclays Capital forecasts that online Online Ad Spending in Europe, 2011-2015
ad spending in Europe will swell to (USD, billions)
$28.6 billion in 2012, an increase of
12% over 2011 Western Europe Eastern Europe

 In 2013, Western Europe’s online ad 2015 35 3.8
spending is predicted to reach $29 2014 32 3.4
billion and Eastern Europe’s spend will
climb to $3 billion, pushing Europe’s 2013 29 3
total online ad spend to $432 billion Source: Barclays
2012 26 2.6
2011 23 2.2
 By 2015, Europe’s online ad spend is
expected to total $38.8 billion, which
is an overall growth rate of 54% from
2012-2015

Mobile Ad Spending in
Western Europe Set to
Explode

 eMarketer predicts that mobile ad
spending in Western Europe will climb
up over $1 billion in 2012, a 59.9%
increase from 2011

 In 2013, mobile ad spending in
Western Europe is expected to grow by
54.8% to $1.6 billion

 By 2015, mobile ad spending in
Western Europe will reach $3.6 billion,
which would represent a four-year
growth rate of 82%


EUROPE Social Media

Social Network Use in
Western Europe Still on
the Rise

54.4% of all Internet users in
Western Europe will use social
networks

 Spain projects to have the highest
percentage of their Internet users on
social networks with 58.7% in 2012,
while Italy is second with 56.9%

 By 2014, 60.8% of all Internet users
in Western Europe are expected to
be active on social networks, with
Spain continuing to lead the way
(65.9% of their Internet user
population)

Social Network Use Soars
in Eastern Europe

 Eastern Europe enjoys one of the
highest social network penetration
rates among Internet users, as social
networking is a key driver of online
usage in the region

157 million people in Eastern Europe
will be active on social networks,
which represents 74.6% of Internet
users and 37% of the region’s
population

 By 2014, 192.7 million people in
Eastern Europe are expected to use
social networks (78.6% of Internet
users and 45.4% of the population)

EUROPE France

France to Steadily
Increase
 France’s online ad spending is
expected to grow by 12% in 2012,
reaching a total of $3.1 billion

 In 2013, that number projects to
$3.3 billion and then to $3.6 billion for
2014

 By 2015, France’s online ad spending
will spike to $3.9 billion, which would
be a four-year growth of 44%

Internet Ad Spend
Remains Second Highest in
France

 Internet advertising spending in
France has consistently increased over
the years and the trend is expected to
continue into 2012 and 2013

 According to ZenithOptimedia, $2, 473
million was spent advertising online in
France in 2011

 Second to only TV advertising,
Internet ad spend in France will see $2,
931 million in spending by 2013,
remaining well ahead of magazine,
outdoor, newspaper, radio and cinema
ads


EUROPE France

Mobile Phone
Subscriptions Trending
Upwards

 According to the Autorite de
Regulation des Communications
electronique des Postes, 57.4 million
people in France had mobile phone
subscriptions as of December 2009,
which represented 92.4% of the
country’s population

 By September of 2011, 62.59 million
people in France had mobile phone
subscriptions; a staggering 99.7% of
France’s population uses a mobile
device, which underscores both the
rapid growth and importance of the
mobile market

Mobile Ad Spending
Grows Quickly

 Mobile ad spending in France is
expected to reach $134.7 million in
2012, a very significant 48.7% increase
over 2011

 According to eMarketer, mobile ad
spending will then jump 53% in 2013
to $206 million, and a further 49.1% in
2014 ($307.1 million)

 By 2015, mobile ad spending is
predicted to hit $434 million, a four
year growth of 379%


EUROPE France

Social Network
Demographics

 According to comScore Inc.,
Facebook is the most used social
network in France, totaling 31.3
million unique visitors (Aug 2011)

 The survey revealed that, in general,
males between the ages of 15-34 are
the leading social network user
demographic

 Skyrock is the second most used
social network in France, with 8 million
total unique visitors (53% male and
37% between the ages of 15-24)

Internet Users Start to
Follow Brands on Social
Networks

 According to a survey, 16% of
Internet users in France who responded
said they follow brands or companies
on a social network

 Of those who responded yes, 15% said
they follow only one brand or company,
27% said they follow two and 58%
indicated that they follow more than
three

 84% of respondents said they do not
follow brands or companies on a social
network, but with the overall use of
social networks on the rise, it is
reasonable to expect that more people
will begin to change their minds about
doing so

EUROPE Spain

Spain Increases

 Spain’s online ad spending is
expected to grow by 15.3% in 2012,
reaching a total of $1.4 billion

 In 2013, that number projects to
$1.6 billion and then to $1.8 billion for
2014

 By 2015, Spain’s online ad spending
will spike to $2 billion, which would be
a four-year growth of 66%

Broadband Subscriptions
Increase

 Broadband subscriptions in Spain,
which have bean steadily on the rise
over the last four years, reached 10.57
million in December 2010, up from just
over 8 million back in 2007

 According to La Comision del
Mercado de las Telecomunicaciones,
by December 2011 broadband
subscriptions reached 11.15 million, a
39% increase


EUROPE Spain

Mobile Phone
Subscriptions Trending
Upwards

 According to La Comision del
Mercado de las Telecomunicaciones,
52.89 million people in Spain had
mobile phone subscriptions as of
December 2009, which represented
114.6% of the country’s population

 By December 2011, 56.19 million
people in Spain had mobile phone
subscriptions; a staggering 121.7% of
Spain’s population uses a mobile
device, which underscores both the
rapid growth and importance of the
mobile market

Mobile Ad Spend Grows

 Mobile ad spending in Spain is
expected to reach $59.1 million in 2012,
a very significant 64.1% increase over
2011

 According to eMarketer, mobile ad
spending will then jump 58% in 2013 to
$93.3 million, and a further 54.3% in
2014 ($144 million)

 By 2015, mobile ad spending is
predicted to hit $214.7 million, a four
year growth of almost 500%


EUROPE Spain

Facebook is Top Social
Network

 According to comScore Inc.,
Facebook is the most used social
network in Spain, totaling 16, 630
thousand unique visitors (Dec 2011)

 The survey revealed that Facebook
garnered a 77.8% reach and visitors
spent a total of 290.3 minutes each on
the site

 Tuenti came in a distant second,
receiving 7,016 thousand unique
visitors with a 32.8% reach, but a
marginally more significant 316.5
minutes per visitor

 The top five was rounded out by
Windows Live (4, 491), Twitter (3,604)
and LinkedIn (2,245)

Social Network Use, by
Age and Gender

 According to a survey conducted by
Elogia, 61% of social network users in
Spain are male, while 39% are female

 The age of social network users in
Spain is spread evenly, with 34% falling
between the ages of 18-30, another
34% between the ages 31-39 and a
slightly lower 32% between the ages of
40-55


EUROPE Belgium

Internet Usage in Belgium

 According to comScore Inc., as of
November 2011 Belgium’s Internet
usage was generating 6.1 million
unique visitors

 Internet users in Belgium were
averaging 20.8 hours per visitor and
2,286 average pages per visitor

 At the time of the survey, Sweden, a
similar sized country to Belgium,
generated 6.2 million unique visitors,
and 25.9 average hours per visitor
with 2, 697 pages per visitor

Belgium Ranks 7th for
Growth of Mobile App
Usage Sessions
 The small country of Belgium landed
in the top ten countries for growth of
mobile app usage sessions (seventh,
with a growth rate of 363%)

 Other top countries experiencing
rapid growth of their mobile app usage
sessions included Argentina (527%),
Israel (427%) and India (398%), but
considering Belgium’s small population,
their presence in the top ten is
significant


EUROPE Belgium

Social Media Users in
Belgium

 48% of respondents from Belgium
said they were participating in social
networks, with 8% indicating that they
were active in professional social
networks

 According to Eurostat’s December
2011 survey, Belgium’s 48% mark
compares favorably to even the top
ranked country (the UK has the highest
number of people participating in
social networks, with 58% of
respondents – of which 13% are active
in professional social networks)

Broadband Households in
Western Europe

 Belgium, which had the second
highest percentage of broadband
households in 2006 (48%), jumped
26% to 74% broadband households in
2011

 The Eurostat survey, conducted in
December 2011, showed that Belgium
ranked alongside the Netherlands and
the UK (83% each) as the leading
nations of Western Europe for
broadband households


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UK Digital Ad Spending Rises Despite Economic Turmoil

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