Worldwide Internet User's Including Mobile User's

Worldwide Internet Advertising Spending to Surpass $106 Billion in 2011

Worldwide spending on internet advertising will total $65.2 billion in 2008, or nearly 10% of all ad spend across all media, and grow 15-20% a year to reach $106.6 billion in 2011, or 13.6% of total ad spend, according to IDC’s Digital Marketplace Model and Forecast.

The United States will lead the world in both total advertising spending and online ad spending throughout the forecast period, with expenditures in 2011of more than $265 billion and $45 billion, respectively, IDC projects (via BtoB).

“By the end of the forecast period, spending for internet advertising will trail direct mail - the third-largest form of advertising - by more than $30 billion, while spending on TV and print ads will each be nearly twice as great as for online ads,” said John Gantz, chief research officer at IDC.

Nevertheless, the long-term opportunity for internet advertising is evident in terms of per capita spending, he said: “Total advertising revenues equate to more than $105 per inhabitant of the planet, while internet advertising revenues are less than $50 per active internet user.”

Among the key findings:

• Keyword (search) ads will remain the dominant type of internet advertising throughout the forecast period, capturing more than one-third of annual online ad spending worldwide.
  Display ads will be the next largest type of internet advertising, capturing more than 20% of worldwide spending annually through 2011, followed by classified ads with nearly 19% of all online ad spending per year.


• Spending in both categories will be pressured by rich media ads, which are expected to grow at a compound annual growth rate (CAGR) of more than 50% during the 2007-2011 forecast period.

“Marketers already recognize that online advertising must be incorporated into any comprehensive ad strategy. This will continue to drive growth in online ad spending well beyond the forecast period,” said Karsten Weide, program director, Digital Media and Entertainment.
“However, there is still a lot of experimentation underway within the category as marketers seek the optimal mix of ad types to reach their target audience. This will fuel spending for all types of online ads.”

Additional highlights from IDC’s Digital Marketplace Model and Forecast:

• Central and Eastern Europe (CEE) and the Middle East and Africa (MEA) will experience the fastest growth in Internet ad spending during the forecast period with a CAGR of 42.1% for CEE and 29.8% for MEA. Online advertising in Asia/Pacific (excluding Japan) will also experience dramatic growth with a 2007-2011 CAGR of 25.4%.
• Internet advertising will make the greatest gains relative to total ad spending in Western Europe, where online ad spending will capture 18.2% of total ad spending in 2011. This compares with a 16.3% share for online ad spending in Japan and 14.6% in the United States.
• More than $5 billion will be spent worldwide in 2008 in each of the top four categories of online ads - adult content and gambling, information, electronics, and computing. These will continue to be the leading categories in 2011.

About the report: IDC’s Digital Marketplace Model and Forecast provides worldwide and regional data for a wide range of internet categories and activities. Traditional Web 1.0 categories include internet users, devices using the internet, internet buyers, and B2C and B2B eCommerce. Web 2.0 categories look more closely at what internet users are doing online, with breakouts by activity and gender. The database also includes a detailed look at online advertising spending worldwide. Forecast data for the 2008-2012 period is supplemented by historical data from 2006 and 2007. The Web 1.0 categories include detailed information on more than 40 individual countries.

Related topics: Integrated/Cross-Media/Convergence, Signs of What's to Come, Online, Europe, Asia Pacific, Print, Direct, Interactive, Television

China Ranks #1 Worldwide with 253 Million Internet Users
Fri, Jul 25, 2008 internet

Chinese-government backed research institute CNNIC (China Internet Network Information Center) announced at a news conference in Beijing that the number of China’s netizens now numbered 253 million, surpassing the US. In its newly published report, "The 22nd CNNIC Development Statistics Report", CNNIC reported that 84.7% or 214 million of Chinese netizens had access to broadband. However, China's internet penetration rate (19.1%) was still lower than the worldwide average of (21.1%).

As of July 22nd, the number of .cn domain names reached 12.2 million; surpassing the number German ".de" sites to become the world’s largest number of national domain names.According to the report, the number of Chinese netizens increased by 91 million from last year, the largest in history (56.2%). In the first half year of 2008, Chinese netizens increased by 43 million.

Chinese-government backed research institute CNNIC (China Internet Network Information Center) announced at a news conference in Beijing that the number of China’s netizens now numbered 253 million, surpassing the US. In its newly published report, "The 22nd CNNIC Development Statistics Report", CNNIC reported that 84.7% or 214 million of Chinese netizens had access to broadband. However, China's internet penetration rate (19.1%) was still lower than the worldwide average of (21.1%).As of July 22nd, the number of .cn domain names reached 12.2 million; surpassing the number German ".de" sites to become the world’s largest number of national domain names.According to the report, the number of Chinese netizens increased by 91 million from last year, the largest in history (56.2%). In the first half year of 2008, Chinese netizens increased by 43 million.

Pearl Research Releases Analysis of Xiaonei and Social Networking in China Tue, May 27, 2008 internet

Consulting firm Pearl Research today released “Xiaonei: The Growth of Social Networking in China” a market brief focused on the growing social networking phenomenon in China. Pearl Research’s analysis examines the appeal of the site based on feedback from Chinese consumers. Pearl Research also provides analysis of the social networking landscape including Myspace China and discussion of potential competitors including Facebook.

In May 2008, Oak Pacific Interactive (OPI) received an investment totaling $430 million from Softbank for approximately 35% stake in the company. The investment will be used to grow OPI's Xiaonei.com, a social networking site that has accrued 23 million registered users in China, with 90% of these being students.

While the Xiaonei site has been accused of copying Facebook’s look-and-feel, the company has been able to develop a following through localization and pervasive marketing.

Some of Pearl Research’s key findings include:

• The site resonates with users because the design is clean and simple, and devoid of overstuffed advertisements and scattered links as in other Chinese websites. This allows Xiaonei to avoid the lag problems that have plagued other social networking sites targeted at university students.


• Xiaonei has gained the trust and established brand credibility with Chinese university students because initially it was a closed system. One of the consumers interviewed in our study, a 21-year-old, male from Beijing stated, “The great thing about Xiaonei is that I know that 95% of the information I see about others is real. It would be stupid to lie because many of your friends who know you will know that you are lying.”

While Xiaonei has accrued a significant user base, its dominance is not secured as the site must develop monetization methods. In addition, Xiaonei currently lacks social applications that are currently found on Facebook.

Press Release
comScore Publishes the First Comprehensive Review of Asia-Pacific Internet Usage

Region Accounts for One-Third of World’s Online Population with Country Internet Penetration Rates Ranging from 3 percent to 65 percent

Yahoo! Sites Are the Most Popular in the Region

Panel-Based Measurement Facilitates Comparisons Across Countries

Tokyo, Japan, July 9, 2007 – comScore (NASDAQ: SCOR), a leader in measuring the digital world, today released the first comprehensive review of Internet behavior covering 10 countries in the Asia-Pacific region. The comScore World Metrix study reveals that in May there were nearly 284 million people age 15 or older who accessed the Internet from either a home or work computer in the region. This represents 10 percent of the Asian-Pacific population 15 years of age and older. The average person in the Asia-Pacific region visited the Internet on 13.8 days in the month and spent 20.2 hours viewing 2,171 pages. This compares to the global averages of 17.1 usage days per month, 25.2 hours per month, and 2,519 pages per month, indicating that the Asia-Pacific region’s PC-based Internet usage is somewhat lower than the rest of the world.

The comScore study compares activity across the 10 countries where comScore reports on Internet usage with a consistent panel-based measurement ensuring harmonized cross country comparisons. Significant findings from the study include:

• South Korea boasts the greatest rate of Internet usage, with 65 percent of its population using the Internet in May (home and work locations, age 15 or older), followed by Australia (62 percent), New Zealand (60 percent) and Hong Kong (59 percent). India has the lowest penetration at just 3 percent.


• China clearly has the largest online population with 91.5 million people (age 15 or older accessing the Internet from either a home or a work computer in May 2007), but this translates to a penetration of only 9 percent of the country’s population. Japan has 53.7 million users (49 percent penetration) and South Korea 26.3 million (65 percent penetration). Combined, these 3 countries account for 60 percent of the region’s Internet population.
  

Monday, May 12, 2008
Worldwide Internet users vs social networking users [Corresponding Advertising Markets]

There are some interesting numbers that I am always looking for - so I decided to bring them together and post them on my blog, as I am sure others will also find them useful.

These numbers are taken from three sources: The Economist, USA Today, and eMarketer with some extrapolation of course.

• Worldwide Internet users: 1.2 Billion
• Worldwide social networking site users: 506 Million
• % of Internet users registered on at least one social networking site: 42%
• Worldwide online advertising spending: $40 Billion
• Worldwide social networking advertising spending: $500 Million
• % of online advertising dollars spent on social networking sites: 1.25%

Seems to be quite a discrepancy however, I expect advertising spending on social networking sites to increase steadily over the next few years as marketers become more comfortable with the concept and more aware of the benefits.