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Web 2.0: The Global Impact
Study by Universal McCann Dec 2006
A welcome note

Universal McCann's global research into the impact of Asia is at the forefront of many aspects of Web 2.0
Web 2.0 on frequent Internet users is the largest adoption; in particular user generated content where
exploration of its kind. Interviews from more than 16,000 personal blogging is an obsession for millions across the
online users worldwide has for the first time allowed a true region. China leads the world, where despite decades of
world-wide perspective into to key trends associated with media oppression, millions of Chinese consumers are
the changing Internet. This research focuses on levels of using blogging platforms to express themselves in ways
penetration, the differences by market and the potential unthinkable in years gone by.
universe sizes of Web 2.0 technologies, platforms and
applications; exploring 3 key areas: This research confirms what marketers, advertisers and
media owners should already know. The changing internet
Creation: Blogging, social networks, photo sharing, Wiki's, is radically altering user's media habits the world over;
social news sites and writing comments, reviews and irreversibly altering the media and communications
feedback have all fundamentally changed the web, environment by driving globalisation of media
providing consumers with the tools to drive the consumption, mega fragmentation of media channels and
content agenda. creating a truly international social network. These are
real challenges that brands and media companies
Connection: Social networking, personal blogging, instant regardless of country must face up to now -
messenger and VOIP are all playing a role to revolutionise not in ten years time.
and globalise the way we interact, stay in touch and meet
new people. This research is an ongoing commitment, tracking the
adoption of Web 2.0 platforms and technologies from a
Entertainment: Thanks to the unstoppable rise of global perspective, understanding the evolving impact of
broadband - video, audio, live TV and radio are all central the changing internet. To contact me regarding this and
to the way we use the web today. future research please email:

The results are staggering. From a global perspective Web theresa.houlihan@universalmccann.com


2.0 applications and technology are being adopted in
immense numbers with hundreds of millions creating and
sharing their own content, socialising and communicating
regardless of local culture, demographic, economic
development or local Internet penetration.
There are 40m+ active bloggers, 100m+ blog readers
in the markets surveyed.
Global Web 2.0 Research 3
Introduction

Over the last 18 months the term “Web 2.0” has firmly Of course the hype has been huge; Newspapers the world
entered the mainstream consciousness of the online world; over proclaim the ‘Citizen Journalist’, investors push huge
however the definition and even its existence as a concept sums of money into online start ups, while established
have been hotly disputed. We like to define it in the media companies desperately try to grab a piece of the action.
simplest of terms: “an evolution of the internet to become It’s hard not get caught up in the hype; Technorati claim
a network of interconnected web pages and applications 52 million blogs in existence, with 75,000 added each
that encourage consumer participation, creativity and interaction”. day, Youtube stream in excess of 3 billion videos a
month and MySpace recently breached the 100 million
The really important point behind Web 2.0, particularly for members mark. The media, advertising and communications
advertisers, marketers and media owners is not the name environment shows all the signs of changing as quickly as hype.
or the definition, but the impact. It is clear that these
recent online developments have the potential to transform To understand the real impact, Universal McCann
the media landscape quicker than at any other time in implemented a global study into the adoption of Web
history. The technologies commonly associated with Web 2.0 tools, sites and services to assess the extent to
2.0 such as social networking, RSS, tagging, blogging, which consumers are getting involved, establish how
aggregators, and Wiki's, coupled with the explosion they are adopting and identify the country by country
of broadband enabled services like Instant Messenger, IPTV, differences. The results form the basis for the exploration
Podcasting and VOIP (see glossary for more information) of Web 2.0 that follows, considering the impact for media
mean it has never been easier to create and share owners, advertisers and marketers the world over.
content, meet people and enjoy a personalised multimedia
experience. The tools and channels to create and share
video, images and the written word have never before
been as accessible or democratic - never before has there
been a completely open media and communication
platform available for everyone to contribute to. Controlled
media distribution channels, the need for funding, lack of
access to production technology and the need for industry
contacts have all been eroded as barriers to becoming a
‘media owner’. The only barrier today is a willingness to
create. The potential is clear - if consumers want to they
can be the lead creators of media content.
Key findings 4

• Web 2.0 technologies have made a global impact.


o Internet users in every country are adopting
Web 2.0 applications, platforms and media
o Generally speaking Asia is the most actively involved
in content creation and sharing thanks to their
passion for personal blogging while Europe and the
in vast numbers. US lead with entertainment and social networking.
o In some markets the numbers of users may be o The differences between the regions is magnified
small, but on a global level all these technologies when looking at blogging: In Asia personal blogging
are huge. is key, interacting with your social group, while in

• Adoption does not follow traditional economic lines -


US and Europe its more about individuals making
their opinion heard - often on a broad rang of topics.
online users in less developed markets are as involved
as developed ones, in many cases more involved.
o Asia leads the way - the top 5 markets in terms of
• The large scale global adoption of Web 2.0 means
the impact of these technologies is massive,
not just for media, advertising and telecoms but
adopting Web 2.0 services are China, South Korea,
for wider society and culture. Their role in the
Malaysia, Hong Kong and the Philippines.
inter-connectedness of the world is huge and is
o Spain, Italy and France are driving the Western helping to fuel a global culture of sharing. Technologies
world's usage, up there with Asia in adoption terms. such as photo sharing, video platforms, instant
o This is far from being just a US phenomenon as messenger, VOIP and social networking are truly
often assumed. The sheer size of the US market international and being used everywhere world-wide.
often masks lower than average adoption rates.
o China is vying with the US as the largest volume
market for the adoption of Web 2.0 technologies,
• Media distribution platforms and consumption of
multimedia content is moving to become more global
in outlook, or developing along language lines as
platforms and applications. opposed to market lines - marketing, advertising and

• There are clear global trends in the adoption of


different technologies. If you were to order technologies
in terms of popularity it would be as follows:
branding will have to follow to stay relevant.

o 1 - Instant Messenger 2 - Reviewing products and


services / leaving feedback 3 - Photo Sharing 4 -
Streaming live media 5 - Reading Blogs 6 -
Watching video clips on demand 7 -
Social Networking 8 - Creating a Blog 9 - VOIP 10 -
RSS 11 - Podcasting
Methodology 5

The research was conducted amongst a representative European Media Panel, Insight Express in the US and local
sample of frequent internet users (Use the internet every media partners in Asia. Unsurprisingly (Figure 1) relative
day / every other day), who in general now make numbers by market differ hugely both in size and overall
up the majority of the online universe particularly in penetration of online - however it is clear that frequent
developed markets (see Figure1). These users are best usage is becoming the norm. It also worth reflecting on
placed to demonstrate consumer uptake of Web 2.0 these numbers for the results that follow and the relative
services. They are the vast majority of adopters of sizes of the universes that the results indicate.
new products and services online and will be the All universe size estimates are based upon applying the
majority of Web 2.0 adopters. percentages in the survey to the latest universe sizes that
exist from industry surveys such as TGI and Simmons.
The study took place between March and September 2006 As the research audience makes up 60% of frequent
in mix of 15 highly developed and emerging internet online world for 16-44's and as there are consistencies in
markets; France, Germany, Italy, Spain, Russia, UK, US, technology adoption, it allows for robust estimations on the
China, South Korea, Thailand, Malaysia, Hong Kong, global reach of these technologies. It should also be
Singapore, Philippines and Australia. Combined they considered that some Internet markets are less mature
make up 60% of the global Internet universe: than others and so tend to have a younger, male skew,
In every market the sample is representative to the 16-44 whereas markets such as the US, UK, France and South
frequent internet user population with the research con- Korea are more established tend to have normalised
ducted online. Respondents were provided by Ciao profiles. This can be a factor in overall penetration of services.

South Korea

USA
China
France,
Germany, Hong Kong
Thailand
Italy, Spain, Philippines
UK, Russia Malaysia
Singapore
.

Australia

60% of the world’s Internet Population


Figure 1: 16-44 Online Universe - Frequency users V Non Frequent
Source: TGI Europa / TGI Russia / Simmons / Media in Mind / Synovate
Asia
Pacific Media Handbook / Nielsen Media Index
Creating and sharing content 7
Blogging

One of the most exciting outcomes of Web 2.0 is the


possibility for web users to create and share their own Blogs -
content. It has never been easier to create the written
“A regularly updated website in which items
word, photos, video and music; sharing with friends,
are posted in reverse chronological order,
family and the wider world. In the past it was possible,
known as Blogs or Weblogs the act of posting
but it took technical knowledge and determination, preventing
stories is known as Blogging. Blogs usually
these activities from entering the mainstream. Today, thanks
focus on one subject - a typical Blog will
to blogging platforms like Typepad, Blogcn.com and Sky
contain stories in a diary format, pictures,
Blog; social network sites like Myspace, Bebo and Cyworld;
links to other Blogs and web pages and will
video sharing sites such as Youtube.com, Guba and Revver
organise content by category and month of
and photo sharing sites like Flickr, Webpics and Picassa -
posting. The collective universe of blogs is
creating and sharing content has never been simpler.
often referred to as the blogosphere”
Web 2.0 has made media ownership possible for all
propelling it to the mainstream.

Blogging

Blogging has been at the epicentre of the Web 2.0


movement typifying the rise of the shift towards consumer
content. Over the past couple of years there has been an
explosion of blogs covering every topic imaginable.
Companies and media organisations have begun to
integrate blogging into their online activities; however it
is consumer usage that is really exciting, and promises
the biggest potential to shake up the media landscape.
The ever expanding blogosphere has whipped up a fever
of hype about the emergence of the ‘Citizen Journalist’
and the flipping of the media world from top down to
bottom up, with consumers leading the news agenda.
So is this hype justified?
Creating and sharing content 8
Blogging

The results from the study show that Blogging is


making a big impact. The global average (figure 2) for
reading and visiting blogs is an impressive 48%. It has
entered the mainstream as an established online medium
for browsing and reading. There are however large
market differences, with Italy, Spain, France, Russia,
South Korea and China leading the way. Interestingly
the US, the perceived home of the blog lags in
relative terms. Northern European markets and South
East Asian markets also lag; in particular Germany and
Australia are failing to embrace the blog as a media
source. Looking at this in the context of universe sizes
Figure 2: “Visiting / Reading any Blog” - Base = All Respondents (figure 3) it is clear that despite the lower than average
level of overall adoption, the US with its vast universe
of 27m readers, has led the blogosphere in audience
Australia, 0.34 terms. The impact on China's is clear - its 26m readers,
nearly matching the US.
US,27.64

China, 26.01

Russia, 3.48

UK, 4.16 South Korea, 6.18

Singapore, 0.17
Spain, 3.63
Hong Kong, 0.18

Italy, 7.48 Thailand, 0.35


Malaysia, 0.43
Germany, 1.55 France, 5.9
Philippines, 0.46

Figure 3: “Visiting / Reading any Blog universe sizes”.


Base = All Respondents. Figures in Million
Creating and sharing content 9
Blogging

Interestingly the content that is driving readership


(see figure 4) is personal (e.g friends and family),
with most people interacting with blogs as means of
social contact. As the line between social networks
(see figure 12) and blogging platforms narrows
(e.g Live Spaces, Skyblog, Cyworld and Bokee) this is
no surprise. The only markets where there are significant
numbers only reading blogs which are not personal
content are the US, France, Italy, Spain and Russia.

Figure 5 shows the levels of interaction with blogging-


both leaving comments and creating your own blog.
the global average for leaving comments is 31% and
for writing a blog 26%. But again, as with reading, there
are significant differences. Only in Europe is there a
difference between leaving comments and creating a
blog. In terms of writing blogs, Northern Asia clearly
leads the world. South Korea is the world leader where
a staggering 64% write a blog, however there are large
Figure 4: “Reading all blogs versus personal blogs”. numbers in most markets.
Base = All Respondents

Figure 5: “Leaving Comments V Creating Blogs”.


Base = All Respondents
Creating and sharing content 10
Blogging

From a regional perspective Asia has by far the highest


levels of active involvement, a fact that is particularly
clear when looking at the impressive levels of blog
readers who have their own blog as shown in figure 6.
This suggests that web users from Northern Europe,
the US and Australia are far more passive in their
uptake of blogging as a media platform, using it more
as a one way traditional media channel as opposed
to a dialogue.
China makes up just over half of our blogging internet
universe, with a staggering 25 million bloggers, far
exceeding the US, where 10.7m 16-44's have their
own sites. This makes China the world's biggest active
blogging market by some distance, a dramatic finding
with interesting ramifications for China's restricted
media market.

In total there are massive 50 million people blogging


across our research universe. The markets covered in the
research make up 60% of the world's Internet population, Figure 6: “Conversion of blog reader to blog creator -
which would suggest that there are at least 80 million % of blog visitors who have their own blog”.
16-44 active bloggers worldwide. Base = All Respondents
China, 24.83

Australia, 0.26

US, 10.7

South Korea, 5.46

Singapore, 0.14

Hong Kong, 0.17

Russia, 0.5 Thailand, 0.25


UK, 1.07 Malaysia, 0.38
Spain, 1.29 Italy, 2.14
Philippines, 0.43
Germany, 0.47
France, 1.38

Figure 7: “percentage of blog readers who are blog creators.


Base = All Respondents. Figures in Millions
Creating and sharing content 11
Blogging

These numbers are set to grow thanks to consumer


interest translating into major future potential.
Figure 8 below, shows the numbers of users who plan
to create their own blog in the future and the results
are surprisingly consistent across markets, demonstrating
a uniform level of interest and future growth.
All markets fall broadly around the 20% mark with
only Italy, Spain and the South East Asian markets
of Thailand, Malaysia and Philippines showing any
significant upward deviation on the global average.
When translated into numbers (figure 9) it is clear the
blogging universe has potential to almost double with
33m planning to start their own blog. Interestingly Figure 8: “I plan to start my own blog in future”.
potential adoption rates in Northern Chinese Base = All Respondents
influenced Asia are lower than the average, suggesting
some element of saturation. However is also worth
considering the growth potential from the enlarging Australia, 0.3
internet universe and the large number of under US, 9.3
16 bloggers moving into the 16+ category.
Which ever way you look it; blogs are not going
away and set to become the mainstream.
China, 10.3

Russia, 0.9

UK, 1.5 South Korea, 1.4

Singapore, 0.1
Spain, 1.8
Hong Kong, 0.1

Italy, 2.9 Thailand, 0.6


Malaysia, 0.3
Germany, 1.1 France, 1.8
Philippines, 0.4

Figure 9: “I plan to start my own blog in future” universe figures.


Base = All Respondents. Figures in Millions
Creating and sharing content 12
Implications

From a global perspective the numbers of blog owners and


readers shown in this report are huge for a media platform
that is little more than a couple of years old. Sure some of
• The emphasis on personal content is reflected by the
success of platforms such as Cyworld, Bokee and BlogCN
shows that blogging has become an essential social tool.
the markets are small, but combined it is a large platform.
Blogging is living up to some of its hype and it looks set
to grow into a mainstream media platform.
• Blogs in Asia tend to be populated by very short posts
and photos making them easier to maintain and
more accessible.
The differences between Asia and the rest of the world are
interesting with the conversion of readers to active users in Asia
particularly impressive. Compare this to Europe and the US where
• The concepts of Confucianism (which manifests itself as a
strong respect for others and authority) that govern social
conduct in Chinese influenced culture affect blogging in
the blog readership universe is substantial, but conversions to
two ways. Firstly bloggers have strong ideas of responsibility
creating content are relatively low - it is clear that Asia is driving
for what they write, which makes blogging more community
blogging in terms of creating content. There are a number of
focused, and secondly there is an unwritten code of
factors that could explain this difference


conduct - that it is basic manners to comment on friend's
Asian use of blogging is orientated around personal content - blogs - developing the community aspect. (APAC UM)
its use is closer to social networking. The barriers to entry
here are lower and growth is viral thanks to this social aspect. • In China blogging is the first time many have had the


chance for self expression.
The huge uptake in China can be linked to the lack of
uncensored media and a thirst for independent information
and fresh opinions. The blog run by Chinese actress Xu Jinglei
• Blogging in Western Europe and US is more associated
with individualism and sharing your opinion. This is likely
to have channeled social interaction into established
is now the world's most popular blog. (Technorati August 2006)


social networking sites. (see figure 13)
Due to the heavy governmental controls in China, personal
blogging is a safe subject matter. Chinese blogs tend to
avoid political topics and so have little impact on political
• This explains the rise of personality blogs in the US
and Europe, something less evident in Asia
discourse, unlike in Western Europe and the US.
This strengthens the associations of blogging as a social
medium and fuels adoption. (International Herald Tribune
• Blogging in China is popular due to a generation
of only children.

“Battle of the blogs in China” August 2005)

• Asian markets like China, South Korea tend to be more


closed to the outside world for cultural, social and
political reasons that help build the internal focus that
drives person blogging.
Creating and sharing content 13
Implications

• Reading blogs as a media platform is higher in Europe


and there are huge numbers in the US due to the rise
of the professional blog. Blogs are integrated into existing
Despite this variance by market there is clearly global take
up and growth potential. This suggests that there may be
truth in some of the hype around the consumer as the lead
media organisations’ output, used by corporations as a content creators. Two facts are clear; online users read blogs
consumer communication tool and run as full time and increasing numbers are writing them. Although most of
blog sites such as Engadget and Cool Hunting. In the US this will cover personal subjects there is clearly a threat. If
and Europe there is a wider universe of non personal blog just 5% of our 50m bloggers blog about non personal topics,
content to tap into - this is a bigger threat to media owners that is 2.5m new media sources - obviously not all of these
than the personal blogging of Asia. It also means the will be able to maintain an audience or have compelling
perceived barriers to entry are higher. content, but when amplified through blog search engines

• The huge usage of blogs as a media platform in Spain,


France, Italy and Russia is influenced by language.
The huge amount of English language content on the
and aggregators like Technorati and Google Blog search,
it is clearly a potential threat.

web means US and UK readers are already overwhelmed


with choice and there is less of a personal urge to create.

• Some of these markets have a younger profile than others


- Spain, Italy and China have a younger and more male
profile than the more established markets of the US, UK
and South Korea. This will be a factor in higher levels of usage.

• South Korea has an exceptionally well developed broadband


market. Hong Kong and Singapore are also very developed
internet markets that have led to strong adoption of
online as a core social medium.
Creating and sharing content 14
Sharing photos

The way we take and share photos has transformed Figure 10 below demonstrates the impact of these
thanks to the combination of broadband, the availability changes - photo sharing is clearly a mainstream form
of digital cameras and camera enabled mobile phones. of content creation and sharing in all markets.
When photos are in a digital format there is clearly a The global average is 68% but the variation is small
demand to share them. Thanks to the rise of simple compared to blogging - even in France, the market of
online photo management and sharing tools such as lowest adoption 48% have shared. These numbers are
Flickr.com, Ringo.com and Photobucket.com it has never consequently vast (see figure 11). The total universe for
been easier. These new services have changed photo photo sharing is 122 million in our research universe -
sharing by making your photos publicly searchable with a massive 43 million in the US and 41 million
through the introduction of tagging (labelling a photo in China alone.
with a searchable keyword) and social networking
aspects. Also as users have become more sophisticated, Tags / Tagging
photos have also become an integral part of social
networking profiles and personal blog pages. “A series of keywords assigned by users to cat-
egorise web pages, products and services or
content by subject or category. Pages can also
be scored or ranked allowing search for content
based on Social Recommendation rather than
traditional algorithm based search engines.”

Australia, 1.05

US, 43.23

China, 40.67

South Korea, 6.6


Figure 10: “Sharing Photos Online”.
Russia, 2.74
Base = All Respondents Singapore, 0.35

UK, 6.03 Hong Kong, 0.35

Spain, 3.72 Thailand, 1.09


Italy, 5.74 Malaysia, 0.91
France, 3.73
Germany, 3.95 Philippines, 1.13

Figure 11: “Sharing Photos - Universe”.


Base = All Respondents. Figures in Millions.
Creating and sharing content 15
Implications

Sharing photos online is the most mainstream of content


sharing. It is easily accessible and a natural step for digital
photos and images. Interestingly users are very willing to
share these images publicly through services such as Flickr,
who report that 70% of photos uploaded are made public
(.Net Magazine September 2006). It's the popularity of
sharing images which is changing the internet to a much
more personal and connected medium and its impact is
huge in terms of how users interact online. Photo sharing
is changing concepts of privacy, openness and connection
with strangers on an unprecedented scale in part thanks
to its reach into the mainstream. The fact that 40m+
people in China have uploaded photos online provides an
amazing internal perspective that would have never existed
just a few years ago. Photo sharing is in effect making
the internet into a mass storage device for the world's
experiences and memories - making the whole world
visible and visually accessible.
Reviewing products and services 16
Implications

Although there has long been the facility to review The role of online as a commerce tool is firmly entrenched,
products and services, in a Web 2.0 enabled space this both in terms of purchasing through online channels and as
has become more central to shopping online and a source of information for products and services. In a Web
researching purchases. Reviews have become easier to 2.0 world where social interaction and personal content are
create and due to integration with tagging and profiles, central, the role of the consumer review will hold huge weight.
now carry more weight than they did. Reviews matched As web users become more comfortable with interacting with
with social profiles allow you to search for products people they do not know personally and become more familiar
and services that will interest you from people you with the concepts of tagging and consumer powered recommendation
trust. Regular reviewers are often rewarded for their systems, the role of the consumer review will increase in
work with a higher status and often users become importance, changing the nature of “word of mouth” as a
habitual reviewers. communication channel. It will be the primary source of
information in the purchase process for all online consumers.
For many users, writing reviews is one of their primary
Also it is clear that online helps cement consumer societies
contributions to the Internet and this can be seen in
in all markets where online is active.
the level of usage as shown in figure 12.
All markets show a very high level of involvement and
the global average is 74.1%, making it the second
highest reaching activity in the survey. France and
Spain lead the way, however it is interesting to see
that some of the more developed markets show lower
adoption rates than may be expected, in particular the
US, UK, Germany and Italy. Russia is the one market
with significant lag, but, in the main, reviewing products
and services online is a mass market phenomenon and
the adoption in less developed consumer markets is
very significant - particularly marked is usage in
Thailand and Malaysia. Again, as with blogging
adoption of online services does not follow
traditional economic lines.

Figure 12: “Reviewing products and services online”.


Base = All Respondents
Social interaction online 18

Communication online has never been simpler. Not only


have a wealth of new social networking sites emerged Social Networking
such as Myspace, Tagworld and Bebo that encourage “Virtual communities of users who have their
interaction through personal profiles and message boards; own online profile of personal information and
but technologies such as Instant Messaging and VOIP have content. The social network technology allows
become essential online tools that have opened up whole them to associate, communicate and share
new channels of real time peer to peer communications. content with other users based on their personal
These two platforms could potentially revolutionise profiles - thus building a network of individuals.”
telecoms and could transform the Internet into the
key communication medium, spelling trouble for the
fixed line telecoms world.

Social Networking
Instant Messenger
The first clear observation on the uptake of dedicated
Social Networking platforms (figure 13) is that usage is “Software that allows real time email type
higher than blogging, with a global average of 28.6%. conversations with messenger buddies. Popular
Again as with blogging there are some differences by programmes include MSN Messenger, Yahoo
market, with South Korea leading the way on 51.5%, Messenger and Google Talk”
however Asia does not dominate as it does with blogging.
The other interesting point is that Russia, with its younger
online profile has the highest usage in Europe, far exceeding
that of Western Europe. The US, often seen as the home
of social networking thanks to Myspace, Friendster and
Facebook amongst others, actually lags other markets in
VOIP (Voice Over Internet Protocol)
percentage reach but in terms of numbers (see figure 14) ”Voice telephone calls conducted over the
remains the largest market - its 17.8m users representing internet. The most well known service is Skype”
nearly half the global research universe.

Figure 13: “Usage of Social Networking Sites / Platforms”


Base = All Respondents
Social interaction online 19
Implications

Social networking is outperforming blogging in Western Australia, 0.31


Europe and the US. Why? Well mainly because it is very
simple to use and interact with, but also because it has US, 17.87
become an essential part of maintaining social status for
a certain generation. It is now a core tool, along with the China, 15.64
mobile phone to both to stay in contact with friends but
also as a way of meeting new people. Blogging in its
traditional sense is more demanding, even when writing
about personal topics. However, increasingly it will become
difficult to pick the two apart as the big social networks
increasingly make blogging a core component.

South Korea, 4.39


It is also worth considering that mass usage of Social
Networking is a fairly new concept and many users of Singapore, 0.14
these sites are populated by under 16's (hence outside Russia, 1.81
Hong Kong, 0.11
our research). Dramatic growth should be anticipated as UK, 1.85
Thailand, 0.4
Spain, 1.32
they move into the 16+ bracket. That said there are Italy, 1.01 Malaysia, 0.51
France, 1.1
already huge numbers using Social Networks between Germany, 1.77 Philippines, 0.64
the ages of 16-44, with our research estimated at least
49m - suggesting a worldwide figure of almost 90m. Figure 14: “Social Networking Universe Sizes”
These are massive numbers and its impact is big in Base = All Respondents
terms of socialising the web - in particular changing
concepts of privacy, by making every one and everything
public and searchable. It is also making users comfortable
with the idea of meeting people online and using online
as a social tool.

Also we should not forget the role that Social Network


sites play in content creation and sharing. Users are
becoming more sophisticated in the creation of their
personal pages with the integration of graphics, photos,
blogging, music and video. For many people online this
is where they create most content. The social networks
have embraced this, integrating music and video
streaming, blogging platforms and full html support.
As personal blogging and social networking continue
to merge this is a trend set to continue.
Social interaction online 20
Instant Messenger (IM)

The number of IM users is vast, one that could only be


rivalled by email. Figure 15 below shows how mass
market Messenger has become, with a global average
penetration of 78.4%. There are small market
differences, with Asia marginally ahead of Europe,
US and Australia. China leads the way with near
universal usage at 97% and (see figure 15 and 16)
43m users, tied with the US also on 43m.
The only exception is Germany, where strangely it has
failed to take off. The interesting difference with other
platforms is that usage is consistently high across the
whole of Asia, regardless of market development.
Figure 15: “Instant Messenger”
Base = All Respondents

Australia, 1.14

US, 43.1

China, 43.35

Russia, 3.87 South Korea, 6.89

Singapore, 0.38
UK, 7.74
Hong Kong, 0.35
Spain, 4.35 Thailand, 1.65
Italy, 6.53 Malaysia, 0.98
France, 6.58
Germany, 3.78 Philippines, 1.24

Figure 16: “Instant Messenger Universe Sizes”


Base = All Respondents
VOIP (Voice Over Internet Protocol) 21

As a technology VOIP could be one of most revolutionary Australia, 0.27


online developments in the past few years. The ability to
China, 16.04
make phone calls for free anywhere in the world could
completely revolutionise not just the online experience but
the telecoms model. VOIP is becoming more consumer US, 6.73
centric with services such as Skype and retailers like Tesco
making it easier to set up and operate while existing online
platforms like Ebay are beginning to integrate it as a form
of buyer / seller communication. Understandably telecom
companies the world over look at VOIP with a sense of
Russia, 0.66
foreboding and figure 17 will show why. For such a new
and relatively complex technology the growth in VOIP users is UK, 1.36
South Korea, 1.54
impressive. The global average is 23.4% with less developed
markets leading the way; embracing a service that bypasses Spain, 0.95 Singapore, 0.12
unreliable, expensive and bureaucratic fixed line services. Hong Kong, 0.08
Malaysia has the highest level of usage with 39%, while Thailand, 0.47
interestingly the US and the UK which are two of the most Italy, 2.92
Malaysia, 0.44
France, 2.06
developed telecoms markets, rank last with just 12%. Germany, 1.87 Philippines, 0.48
This suggests that VOIP may grow more slowly in more
developed markets. Once again, adoption of online Figure 18: “VOIP universe”
services is not linked to economic development. Base = All Respondents

Figure 17: “Usage of VOIP”


Base = All Respondents
VOIP (Voice Over Internet Protocol) + (IM) 22
Implications

It is clear that IM is changing the nature of global communication.


Its stealth growth has made IM a main stream form of
communication. Its impact is much underrated, enabling real-time
global communication for no cost above the price of the internet
connection. Anyone with friends and relatives abroad will tell you
how important it is. Thanks to these factors it is universally
embraced in all markets (except strangely Germany) and plays
a big role in globalising and connecting the web.
It is a much untapped platform and more could be done to integrate
it into social network platforms, ecommerce or as a real time
method of customer service and site assistance. It is however
clearly acting as a catalyst for VOIP, with growing availability of
video and voice via webcams through Instant Messenger platforms.
Most VOIP services are not much more than enhanced Messenger
services and it's this similarity that could propel it into the
mainstream and potentially revolutionise telecoms.
It could have bigger ramifications for an existing business model
than consumer content creation could have on the established
media world. It is also interesting to see that growth of VOIP
is driven by less developed markets suggesting that this technology
could help level the playing field and play a role in creating
an increasingly globalised and connected world.
Personalised multimedia experience 24
Watching video clips online

Fuelled by Web 2.0 technology and the massive growth


in broadband the Internet has taken real steps towards
becoming an entertainment medium. The much quoted
rise of youtube.com and its 3 billion streams a month
sum up the rise of multimedia content online.
There are signifiers of the multimedia nature of the
Internet everywhere you look, for example: all Champions
League football is now broadcast online; Warner Music
signing a deal to make all their music videos available
through youtube.com; MTV launching MTV flux an
online video portal. It's a clear shift - not only for
video, but podcasts, online radio, music, aggregators
and personalised homepages. It is also easier for Figure 19: “Watching Video clips online”
consumers to get involved: creating video and audio Base = All Respondents
thanks to the wealth of low cost and increasingly
high quality digital cameras and mobile phones which
offer live recording.

Figure 19 shows the extent to which watching online


video is now beginning to enter the mass market - with
a global average penetration of 32%. There are however
some interesting distinctions by market. China leads the
way with a massive 56.2%, fuelled by the opportunity to
consume independent and relatively un-censored media.

The next two markets are Malaysia and Philippines, again


demonstrating the global appeal of new Internet services.
The other interesting point within Asia is the relatively
low take up in South Korea - a market normally at the
forefront. Within Europe, Italy, Spain and the UK are more
entertainment oriented, while France and Germany lag.
The US hits the global average which for such a mature
market shows the real impact of online video.
Personalised multimedia experience 25
Podcasts

Podcasts
Compare watching video clips to Podcasts (figure 20), and
it's clear that on demand video is beating audio hands Podcasts
down. The global average is just 17.4%, well beneath video
“A method of delivering audio files over the net.
clips. Interestingly France and South Korea have the highest
Podcasts are typically half and hour to an hour
reach, but the pattern across all markets is similarly low.
in length and usually recorded in the style of a
Why? There are a number of clear reasons that could
radio show. Podcasts available to today cover
explain this: copyright limits the musical content that
every imaginable topic from unsigned bands to
Podcasts can include so the vast majority are voice and
technology. You can subscribe to Podcasts via
special / niche interest; video clips are shorter, more
RSS, through services like iTunes or downloaded
interactive and easier to share virally; it is easier to create
directly from the publishers website. Once you
video clips that are entertaining - Podcasts require more
have subscribed you automatically receive the
equipment and radio production skills to make engaging
next installment when it is published” individuals.”
content; the distribution platforms for video clips are more
consumer friendly and easier to make part of your
day to day surfing. Distribution platforms for Podcasts
are improving, in particular the integration with the Itunes
music store, however until copyright issues are resolved
then the Podcasts in the future are still likely to lag video.

Figure 20: “Listening to Podcasts”


Base = All Respondents
Personalised multimedia experience 26
Streaming

Comparing these figures to Figure 21 for Streaming Live


Video / Audio and some interesting differences emerge.
Firstly the levels of streaming live are much higher in
all markets, secondly live streaming is driven by Western
Europe and the US - whereas watching video clips is
driven by Asia. This suggests a different relationship to
media, with established Western Europe and US markets
orientated around delivery in a more conventional live
form. One reason is that the majority of live streaming
is likely to be audio, hence far more likely to be
Internet radio streams. Radio has a stronger heritage in
Western Europe and the US and higher levels of online
listening have been inherited from traditional broadcasters.
Also developed media markets have better resourced
organisations such as the BBC, Canal+, CBS who have
the resource to deliver live content and have promoted
it. The one Asian market that matches Europe and the
US is China, whose figures again indicate the appeal
of external new sources of media.

Figure 21: “Streaming Live Music / Video”


Base = All Respondents
Personalised multimedia experience 27
Streaming

Australia, 0.4 Comparing the universe sizes for streaming to those


for watching video clips on demand (figure 22 /23)
US, 19.17
makes these differences even more obvious.
Asia has a much larger share of watching video clips
China, 25.2
versus streaming and China is marginally the largest
market. The other interesting comparison is within
Western Europe, where France, Germany and the
UK lead in terms of volume for streaming but only
the UK has a large take up of watching clips.
The enthusiasm with which Europe and the US embrace
streaming is an interesting difference and one that is
South Korea, 2.53 likely to be a result of the legacy of well resourced
Russia, 1.03 and established media organisations that are more
Singapore, 0.15
likely to stream live and more likely to promote it.
UK, 3.52 Hong Kong, 0.15

Spain, 1.46 Thailand, 0.58

Italy, 3.29 Malaysia, 0.44


France, 1.83
Germany, 1.57 Philippines, 0.56

Figure 22: “Universe of users viewing video clips online”


Base = All Respondents

Australia, 0.44

US, 32.84

China, 25.39

Russia, 1.63

UK, 5.52 South Korea, 2.96

Singapore, 0.15

Spain, 3.42 Hong Kong, 0.12


Thailand, 0.59
Italy, 4.09
Malaysia, 0.5
Germany, 4.23
France, 5.33 Philippines, 0.61

Figure 23: “Universe of users streaming live music / video


online”
Base = All Respondents
Personalised multimedia experience 28
Implications

Multi-media online is now the norm for our online universe In summary the internet clearly is evolving into a global
in all markets. This is particularly case for streaming entertainment platform, which, for content producers both
media via online in the traditional live sense. Watching consumer and professional, is a massive opportunity.
clips on demand has a much smaller reach but its growth It is also a big boost for the advocates of convergence
is significant. The idea of trawling pre made and user and the idea of internet delivered content being made
generated video is a fairly new concept. Podcasting is also available through your main TV set in the living room.
relatively new and, although its take up is markedly lower, It is surely only a matter of time before this is the norm
thanks to the global nature of online there is still an and many companies will benefit substantially: online
audience of millions. Streaming live media is more popular distribution channels like Yahoo Go; technology companies
particularly in developed media markets mainly due to such as Sony who will connect the PC and the TV and
existing media organisations moving their radio and, content producers themselves. The barriers to creating
increasingly, TV delivery online. This has been promoted globally recognised and appreciated content are falling
heavily and has been made available through existing and a golden age of video could emerge.
media organisations' online properties. In the main it is The industries who should be really concerned are the
an easier point of entry for consumers wishing to utilise networks, cable companies and satellite broadcasters
their PC as an entertainment medium. It is also a more who have historically controlled distribution within
familiar concept, with media delivered in real time. markets very tightly.
On-demand media is newer, requiring more consumer
input and sifting of content.

Despite this, on demand is clearly set to grow and


become the preferred method of receiving content online.
Video will lead the way especially as established media
content producers start distribution of new productions in
an on-demand format and see the value of monetising
their archives. Podcasting is likely to continue to lag and
will only compete if copyright issues are resolved -
currently the record industry is holding this back.
Personalised multimedia experience 29
RSS (Really Simple Syndication)

RSS at face value may seem somewhat unexciting,


however it is a very important concept in enabling the RSS Feeds
on-demand multimedia internet that is taking shape. - “A web technology which allows you to
RSS essentially brings content to you rather you having subscribe to content from a particular web
to search for it - hence its importance in a world of page or blog. When new content is published
seemingly infinite media choice. RSS technology is gradually it is send directly to you, rather you having to
becoming integrated into various online applications, visit the web page or blog. As well as specialist
including email systems, web browsers, personalised home reader products aggregator technology is
pages, news aggregators and media centre software. It gradually being built into portals, search
delivers new stories from blogs and news sites, Podcasts engines, and email programmes.”
and videocasts. However as figure 24 shows RSS has really
failed to take off across all markets. Just 20% have ever
used it with the developed markets of Europe and US
lagging Southern Europe and Asia. Mirroring Germany's low
use of blogs, just 5% have ever used RSS. In all markets
the low use is far below the adoption of platforms such
as blogging, online video platforms, Podcasts etc that have
RSS as an integral technology. This makes it clear that
RSS has not resonated as a concept with consumers.

Figure 24: “RSS Usage”


Base = All Respondents
Personalised multimedia experience 30
Implications

RSS clearly has a bit of image problem and its


adoption lags the technology it helps consumers find,
use and subscribe to. The concept of subscribing to
content is not yet consumer friendly enough and has
not been promoted or packaged correctly. It needs
simplifying and needs clearer integration into the tools
everyone uses online, such as web mail and instant
messenger. Once RSS has been integrated properly
across all platforms, particularly home media centers,
it will inevitably become a core mass market technology,
even if it is not known as RSS. As more and more
web users immerse themselves in user generated content
and the world of near infinite media choice, RSS will
become required to navigated the wealth of content choice.
Overall summary - what is the impact? 31

It's clear that Web 2.0 technologies are being adopted


on a global scale regardless of internet penetration,
region of the world and economic development.
It is a global phenomenon and web users are showing
signs of living up to the hype. The summary of adoption
as shown in figure 23 demonstrates how wide-scale overall
adoption levels are, while figure 24 demonstrates the size
of these potential audiences. Consumers are creating and
sharing content, connecting socially and increasingly using
the internet as a multi-media experience.
The numbers are huge (see figure 24) and it is happening
now, not in the future. Interestingly adoption is not along
the traditional economic lines. Figure 25 reveals the extent
to which online is going to be driven by Asia, with the top
five markets all being from Asia, with only Thailand falling
into the bottom half. Spain and France lead the rest of
the world, including the US.

Figure 24: “Global Research Universes” (Figures in millions)


Base = All Respondents

Figure 23: “Global reach” Figure 25: Global Web 2.0 adoption index (average take up by
Base = All Respondents: Average usage across all markets market across all technologies and activities in the questionaire)
- All Respondents
Overall summary 32
Implications for media owners

Online is progressively becoming the core medium for interaction, In order to survive this onslaught of user generated content,
creativity and entertainment across the world. Although it goes existing media brands must try to involve consumer interaction and
without saying that internet users are not yet entirely bypassing content creation within their digital platforms, while at the same
regular media sources in favour of creating, sharing and consuming time opening up communication with users to become more
user generated content there are clearly massive implications for conversant. They must be comfortable at releasing their content
all media owners, in terms of near and far future trends. in channels not controlled by them, while delivery should evolve
into short regular feeds in order to remain relevant in an age
If offline media owners have not already put online at the heart of RSS feeds, aggregators and personalised home pages.
of their product, they must do so regardless of the market they
operate in. Media brands need stretch across a variety of digital Anyone that produces video and audio content is provided a
platforms if they are going to survive this world of unlimited massive opportunity if they embrace Web 2.0 properly: broadcasters,
fragmentation and the demise of tightly controlled market production companies, record labels, movie production companies
orientated distribution platforms. Web 2.0 technologies are and TV stations could potentially distribute their new and archived
increasingly shifting media distribution platforms to a global content across the world - directly controlling distribution and
scale - presenting media owners both with opportunities to access rather than relying on the satellite, cable and TV networks
reach new audiences, but also the some key challenges: or the DVD and CD store. This should be seen as a massive
remaining relevant to their audience; increased competition; opportunity rather than a threat. Also the potential to make
growing issues with copyright and rights ownership. Also, media revenue from old content currently sitting in dusty boxes is vast -
owners will have to produce more as the delivery of basic news it can be monetised through sponsorship, adverts, subscription or
will increasingly become commoditised due to the wealth of pay per view. Why TV networks, movie studios and record
sources and the always switched on nature of online. Editorially companies cannot see this currently is baffling. Rather than
there will be more demand for expertise and niche content as threatening to sue the users and channels who use their content
people increasingly mix and match expert content with a distinct illegally they should be embracing the potential to reach hundreds
voice and point of view via their personalised page or content aggregator. of millions of consumers in new markets with recycled content.

As well as an increasingly competitive professional environment, Media in this on-demand format will change revenue structures
there is going to be huge competition from consumer content, meaning that retaining revenue through traditional interruptive
which as demonstrated has a big future in all markets. Asia is advertising formats, such as the 30 second commercial will
leading the way with content creation and interaction, but the become more difficult. Live broadcasting and event TV will
other regions will follow along the path from passivity to become more important to deliver any kind of significant mass
interactivity. Although vast majority of this content is of personal audience. However the rights to screen live events will become
interest and clearly not everyone will start creating content, the more difficult to source as rights owners may in the future
scale is alarming for established media companies. Supposing that increasingly wish to distribute coverage themselves rather than
10% of users create content and 10% of these produce sell their rights to the TV networks and Satellite broadcasters.
something of wider interest, millions of new media sources will
emerge to challenge established media owners. The threat is The real threat is to the existing controllers of the distribution
magnified by the new online platforms that are emerging: video channels. The appetite online users across the world show for
sites, photo sharing, aggregators and personalised homepages all consuming audio and video media online is a real long term
sift and sort the best of user generated content bringing together threat to the cable, satellite and TV networks. When online links
user created media into a viable channel. to the main screen in the household as will happen inevitably
in the near future, services such as Youtube and Itunes, or the
future as yet to emerge equivalent could be the distribution
channels of the future.
Overall summary 33
Implications for advertisers

Advertisers and marketers who embrace the changes that Web


2.0 is delivering have massive opportunities to connect with
consumers as never seen before. The number of new channels of
• Embrace sponsorship and new online formats, such as
Podcasts and Videocasts. Consumers like online because
access is generally free and will happily trade commercial
communication are huge and the possibilities are endless. It also intrusion for access.
opens up new revenue streams, and links communications and
sales in ways that were never previously possible. E.g Visa and Dell sponsoring “This week in technology”
Future communications can work as revenue earner for Web 2.0 and “Inside the Net” Podcasts
embracing brands. There is also a major opportunity to build
global brands and access new markets in ways and at a cost
never previously possible. As culture becomes more intermixed
• In an on-demand content world there are huge opportunities
for brands to create experience for customers by providing
free content and media.
and accessible it is likely that existing established international
brands many of which are European and American will be well E.g Free iTunes downloads with Coca-Cola.
placed to benefit.

Marketers and agencies that continue view this as a threat and


• Encourage consumers to interact with your brand
E.g Lynx Boost - Shower boy blog and myspace site
refuse to adapt from the old interruptive model will see their tracking their on street event activity
communications lose effectiveness over time and their brands
and sales suffer. The clear global trends of adoption show this
is taking off now so it is not something to plan for in ten to
• Be comfortable distributing your brand in channels you cannot
control. In a world orientated around consumers creating
content anything could happen. Good brands will benefit,
twenty years. This is a current reality and as more and more bad brands with false promises will be found out
people move online and embrace Web 2.0 services it will
grow and grow. E.g Mentos and Diet Coke fountains competition on youtube

There are a number of things that marketers, advertisers and


communications agencies need to do to survive in a world of
• Do not try to control the channels of creativity -
consumers have too many options. They will go somewhere else
consumer generate media and infinite channel fragmentation. E.g. Land Rover’s ‘go beyond’ video platform.

• Ensure online is central to all brand communications -


linking all elements together
• In the new world of online, everything is inter-connected.
This also applies to branded websites - siloed sites will

• Shift from thinking about interruptive advertising to creating


content and services available across multiple digital platforms
that offer genuine consumer benefit.

struggle to engage in the future online space.
Web 2.0 is globalising media consumption - online media
platforms work across markets, really only limited by language.
The conventions of working within a market will lose
E.g Pampers.com which offers a full online resource for relevance and increasingly, a global perspective will be needed.
parents with young children. Brands will have to have global identities and positioning

• Brands have the same opportunities as consumers -


it's never been easier to create and share content
and they should embrace it.
universal, executed through global strategies by agencies who
can deliver on a worldwide basis. Conflicting local positioning
in a Web 2.0 world is likely to create confusion in the eyes
of consumers.
E.g BMW video casts on iTunes
For more information contact

Tom.smith@universalmccann.com