The Online Audience October 2007

The online audience
• • • • • •

Today's online audience Online behaviour Broadband Media usage eCommerce The European market

Today’s online audience

Over 32m people now online
used in last 12 months
29.3 29.8 30.9 32.0 28.1

27.2

Millions of people
21.1 17.5 12.7 10.7 6.2 7.2 8.7 14.2 19.1 22.0

23.6 24.0

24.6 25.1

4.6

June Dec June Dec June Dec June Dec June Dec June Dec June Dec June Dec June Dec Jun Dec 1997 1997 1998 1998 1999 19992000 2000 20012001 20022002 2003 2003 2004 2004 20052005 2006 2006
Source: Gfk NOP World, To December 2006

Current/Future Usage
Intend to use in next 12 months Used in last 12 months Home Internet use Broadband at home Dial-up at home
33% 28% 20% 22% 15% 14% 16% 24% 23% 19% 7% 9% 13% 2%
Dec June Dec June Dec June Dec June Dec June 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001

61% 50% 52% 54% 55% 50% 57% 57% 54% 58%

65% 60%

66%

67%

69% 71% 67%

45% 39% 38% 31%

48%

51% 53% 44%

49%

47% 45% 41% 44% 41%

45%

47%

62% 63% 59% 60% 55% 52% 54% 52% 48% 42% 35%

65%

28%

27% 19% 11% 9%

10%

4%

Dec June Dec 2001 2002 2002

June Dec June 2003 2003 2004

Dec June Dec June Dec 2004 2005 2005 2006 2006

Base: All adults (15+) in Great Britain Source: NOP FRS Survey n=15,471, To December 2006

UK online households
Millions

6.5

7.8

10.3

12.5

12.5

14.0

14.2

15.4

56%
% of UK Households

57%

60%

50% 41% 31% 26%

50%

Source: Continental Research Autumn Internet Report 2007

2000

2001

2002

2003

2004

2005

2006

2007

Number of internet users
Used in last month
All
35

Work

Home

Academic

Number of users (millions)

30 25 20 15 10 5

30.7 29.1

10.6

2.3
0
Q2 96 Q4 96 Q2 97 Q4 97 Q2 98 Q4 98 Q2 99 Q4 99 Q2 00 Q4 00 Q2 01 Q4 01 Q2 02 Q4 02 Q2 03 Q4 03 Q2 04 Q4 04 Q2 05 Q4 05 Q2 06 Q4 06 Q2 07

Source: BMRB Internet Monitor, Wave 41, August 2007

Internet Profile vs. GB profile
34%

22% 17% 13% 17%

23% 19% 17%16% 19%

2% 1% 15 - 17 18 - 24 25 - 34 35 - 44 45 - 54 55+

Estimated 15+ Internet user population (32.0m) Estimated total GB 15+ population (48.0m)
Source: Gfk NOP World, December 2006

Internet Profile vs. GB profile
52% 49% 48% 51%

35% 24% 19% 30% 21% 21% 20% 30%

Male

Female

AB

C1

C2

DE

Estimated 15+ Internet user population (32.0m) Estimated total GB 15+ population (48.0m)
Source: Gfk NOP World, Internet User Profile Study, December 2006

Summary
• • •

15.4m households now online in the UK In the last year, internet penetration has risen by more  than 7% to 32m people Women 25­34 now spend more time online than men  in the same age group (Ofcom Communications  Report Aug 2007) One quarter of all Britons online are over 50 and 30%  of total time spent on the internet is by the over 50’s  (Ofcom Communications Report Aug 2007) The online audience is now far more representative of  the population as a whole.

Online behaviour

Activities used internet for in past six months
Number of users (millions)
Using e-mail Info on a particular activity Travel plans Look at listings To listen to music Job opportunities Use Instant Messaging Downloading Music Play games Business Purposes Listen to Radio Info on a TV programme Academic Work
Source: BMRB Internet Monitor, Wave 41, August 2007

28.2 24.3 18.1 16.5 13.6 13.1 10.9 10.8 10.7 10.4 10.0 8.7 8.2
Base: All Internet users aged 15+

People visit numerous sites
Number of websites visited in the last month % of users in the last month
Average = 30 sites
25 24 20 28

1 to 9 sites

10 to 19 sites

20 to 50 sites

50+ sites
Base: All Internet users aged 15+

Source: BMRB Internet Monitor, Wave 41, August 2007

Types of site visited in last month
Number of users (millions)
A Site Where You Can Buy a Product or Service Map/Direction Sites Weather Sites Local Info Services Music Sites Price Comparison Sites Auction Sites Local Governement/ Council Education Sites Other Online News Site

18.3 18.0 14.5 13.4 11.6 11.0 10.9 10.7 9.0 8.8
Base: All Internet users aged 15+

Source: BMRB Internet Monitor, Wave 41, August 2007

Summary

58% of internet users are now going online  everyday  As people become more experienced online,  they are visiting an increasing variety of  websites for a broadening range of activities. Whilst the internet is now a mass reach  medium, diverse surfing habits mean that it is  equally effective at targeting niche audiences.

Broadband

Broadband access at home
100% Percentage of home users 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 01 01 01 02 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07

90%

Source: BMRB Internet Monitor, Wave 41, August 2007

Base: All who have used the Internet at home on a computer in the last month

UK broadband households
Total Households with Internet Households with Broadband

UK Households (millions)

14 12.6 10.3 8.0 4.2 2.4 0.75 2002 2003 2004 2005 12.6

14.2 10.2

15.4 13.2

2006

2007

Source: Continental Research Autumn Internet Report 2007

Comparison of narrowband and broadband users
%
92 88 88

Narrowband
99 93

Broadband
93 89 89 94 89

83

8

9

8 1

6

6

10

15

9

6

9

Male

Female 15-19

20-24

25-34

35-44

45-54

55+

AB

C1

C2DE

Source: BMRB Internet Monitor, Wave 41, August 2007 NB – those not a total of 100% are ‘Don’t Know’ responses

Base: All home internet users with broadband, All home internet users without broadband

Half of home broadband users services are now above 2 MB

Aug. 07

16%

37%

47% < 2MB 2 MB >2 MB

Aug. 06

35%

37%

28%

0%

20%

40%

60%

80%

100%

38% have used wireless broadband at home in the last month
Q. What is the connection speed of your home broadband? Source: BMRB Internet Monitor Aug 2006; Aug 2007 Base: All home broadband users who knew their speed of connection (Aug 06 - 359; Aug 07 - 396)

Summary

The take­up of broadband is continuing apace,   90% of home users are now using a broadband  connection compared with 84% a year ago. Wireless remains on the increase with 38% using  a wireless broadband connection in the home in  the last month Almost half of home broadband users services  are now above 2 MB

Media usage & attitudes

Online second only to TV
% of media time for all internet users
7 6

Weekdays
35

25

Saturdays
7 4 21 45
27
TV Internet Radio Newspapers Magazines

7 18

5

Sundays

48

23
Source: BMRB Internet Monitor, Wave 41, August 2007

22

Base: All Internet users aged 15+

Attitudes to online advertising
• • • • • •

I like to receive emails from companies Banner ads help me find interesting things on  the web I have researched a brand seen advertised  online Online sponsorship is an effective way of  advertising a product or service I prefer to see online ads that relate to the  content of the sites viewed I pay more attention to adverts on sites I trust

16% 21% 41% 46% 53% 53%

Source: BMRB Internet Monitor August 2007. Strongly/slightly agree shown.

Base: All Internet users aged 15+

Internet TV viewing is growing
Numbers watching internet TV in last 12 months 15% 11% 7% 5%
1.9m 1.3m 3.0m 2.9m 2.4m

10% 8%
4.3m

W ched T programme at V broadcas via t int t he ernet (s reaming) t Downloaded a programme via t int he ernetand wat ched it lat er Netint ernetT V (s reamed/downloaded) t

Internet Users 2006
Source: Continental Internet Report, Autumn 2007

Internet Users 2007

Social Networking

The average UK visitor to social networking sites spent  5.8 hours per month on those sites and made 23.3 visits  in August – significantly heavier than in France and  Germany. Heavy users of social networking sites devoted 22 hours  each to their favourite sites, averaging 71 visits per  person. Light users spent significantly less time engaged.  They  made 4.6 visits per person and consumed 47 pages of  social networking content over the course of the month.

Source: ComScore Segment Metrix, August 2007

Summary

Internet users are spending more time online than they do listening to  the radio and reading newspapers and magazines.  Online is a great  way to reach audiences in the middle of the day. The internet is having a significant influence on people’s consumption  of traditional media Online advertising is more effective if seen in the right context.   Audiences say they prefer advertising that relates to a site’s content,  and pay more attention to ads on sites they trust. Overall 26% of internet users have listened live or to a previously  broadcast radio show via the internet The number of people watching shows that they have previously  downloaded from the internet has doubled in the last year

• •

• •

eCommerce

Number of eshoppers & ebankers
eShoppers
25 22.0 Number of users (millions) 20 16.9

eBankers

15

10

5

0

Apr 99

Aug Dec 99 99

Apr 00

A ug Nov Feb M ay Aug Nov Feb M ay Aug Nov Feb M ay Aug Nov Feb M ay Aug Nov Feb M ay Aug Dec 00 00 01 01 01 01 02 02 02 02 03 03 03 03 04 04 04 04 05 05 05 05

Feb M ay Aug Nov Feb- M ay- A ug06 06 06 06 07 07 07

Source: BMRB Internet Monitor, Wave 41, August 2007

£30.2bn
spent online during 2006
Up 57.3% on 2005
Source: IMRG, January 2007

eCommerce growing at rapid rate
quarterly ecommerce spend
16 14 12

14.0

£ billions

10 8 6 4 2 0

Nov Feb May Aug Nov 00 01 01 01 01

Feb May Aug Nov 02 02 02 02

Feb May Aug Nov Feb 03 03 03 03 04

May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb- May- Aug04 04 04 05 05 05 05 06 06 06 06 07 07 07

Source: BMRB Internet Monitor, Wave 41, August 2007

Products bought online
% of internet users who have bought products online in last 6 months
Any DVDs, Music, Videos Books Clothes/jewellery Any Holiday or Travel Electrical household products Toys and Games Airline Tickets Computer hardware Holidays Groceries Computer software or programme Tickets for events Furniture Sports Equipment 4% 4% 4% 3% 6% 5% 7% 7% 7% 13% 13% 19% 18% 24%

Source: TGI.net, wave 13, October 2005-September 2006

Base: All Internet users aged 15+

Buying products after researching online
Bought online Visited shop Telephone Post Through TV Other 1 1 2
Base: All Internet users aged 15+ who have bought a product that they Source: BMRB’s Internet Monitor, Wave 41, August 2007 sourced information about on the internet

70 18 8

%

73%
of internet users who have sourced information online bought the last product they researched

Type of advert that has prompted an online purchase in past month
Promotional emails Online ads Direct mail Transport Adverts on Products Purchased Magazines Sunday papers Fliers or postcards Daily papers TV Posters Radio Teletext Mobile Phones

127 124 121 118 117 116 115 114 114 112 111 110 104 101
Those who intend to shop online are more likely to say that promotional emails, online ads, direct mail ads and transport advertising has prompted them to make an online purchase, compared to other forms of advertising

Indexed again all internet users
Source: TGI.Net Wave 13, Oct 2005 – Sept 2006 Base: Those intending to shop online in the next 6 months

A strong eChristmas in 2006
• •

Shoppers spent £7.7bn online in the lead up to Christmas 2006, up from  almost £5bn the previous year (54% rise). Online Sales exceeded £3 billion a month for the first time in November  2006 as Britain’s 25 million online shoppers reaffirmed their affinity with  online Christmas shopping. E­retail sales worth 3.6 billion were recorded for December, half a billion  more than IMRG’s forecast of 3.1 billion. Online sales were strong across all sectors – from toys to televisions,  food to fashion. “Consumers just couldn’t get enough of internet shopping at Christmas –  it seems to match their mood and aspirations…. Sales demand  outstripped supply capacity by a significant margin. Otherwise sales  would have been higher still.” ­ Jo Tucker, Managing Director IMRG

• • •

Summary
• •

E­commerce spend experienced a slight drop in Q2 2007 but picked  up in Q3 and is expected to continue rising across the festive period. 3 in 4 internet users shop online.  Online shoppers buy on average  5.7 times a month, and buy an average of 5.8 items.  On average  shoppers spend £200 a month online (NOP IUPS June 2006). Websites where people can buy products and services are still the  most popular destinations for people online. 41.7% of adults have used the internet in the last 12 months to  purchase products/services (NRS/JICIMS Pop Survey Jul 06­Jun 07) Online information plays a crucial role in people’s purchase decision  making process. The internet is an invaluable resource to consumers when  researching purchases and is often more trusted than other sources.   The majority then move on to make the purchase online.

• • • •

The European market

170m Europeans access the Internet at home
Germany UK millions France Italy Spain Switzerland
5.3 21.8 30.4 29.6 35.9 47.4

YoY -1% +6% +14% +6% +23% +18% +4%

Source: Nielsen//NetRatings global internet trends, Q2 2007

Almost half of European Internet users come from Germany and the UK
Spain 13% Switzerland 3% Germany 28%

France 18%

Italy 17%
Source: Nielsen//NetRatings global internet trends, Q2 2007

UK 21%

Broadband is booming
88% of those online in the UK in Sept 06 were using a high speed connection Italy Switzerland Germany Spain UK France 28% 28% 25% 15% 12% 8% 72% 72% 75% 85% 88% 92% Proportion of the active home universe
Source: Nielsen//NetRatings NetSpeed report, September 2006

up to 128k >128k

Europeans Spend Over 11 Hours Online Per Week
12.6

2005: 10.2, + 11% Year-on-Year
12.1 12.1 12 11.4 11.3 11.3 11 10.9 10.4 10.3

Average Number of Hours Per Week

Ita ly

K

Sp ai n

el gi um

ar k

en

ds

ay or w N G

Fr an ce

Sw ed

ve ra ge

et he rla n

en m

D

an

A

B

Source: EIAA Mediascope Europe 2006

[Base: All European internet users]

Eu ro pe

N

er m

an y

U

Summary

Germany and UK continue to lead the market in  terms of total audience connected, with 83m  between them High growth rates continue among most  countries for ‘at home’ user population People connected are also spending increasing  amounts of time online Areas like cybercafe, wireless and other shared  access points increase this further, but remain  hard to measure

• • •

The Online Audience October 2007