State of the Netessential eBusiness intelligence for Irish managers

A quarterly bulletin on online activity in Ireland ISSN: 1649

Compiled by AMAS in association with the Irish Internet Association

w w w . a m a s . i e

issue 20 Spring 2011

46157918

4

Agree

Neutral

Disagree%

40

5125

24

6411

25Moreinsight

Costsaving

Reputationrisks

Increasedworkload

Marketing Institute of Ireland (MII), over 400 Irish marketers participated and gave insights into how the internet is affecting them. This is the third such survey conducted by AMAS and the MII and attracted the largest response to date. The sample was drawn from across all sectors of the Irish economy and three out of five participants have budgetary responsibility for the marketing function within their businesses.

Attitudes to social media, both positive and negative, proved to be revealing. Social media is an established part of the marketing armoury and is used primarily for relationship building (84%), to create brand awareness (76%) and for listening to and monitoring online conversations about companies, brands and people (66%). Asked to consider the impact of social media, Irish marketers recognised benefits such as:• The ability to understand audiences better (79%)• Delivering cost savings to the business (46%)• Providing the opportunity to make valuable connections (68%)

There is an acknowledgement, though, that social media can

have downsides such as:• Increasing a marketer’s workload (64%)• Concerns about damage to a company’s reputation (51%)• The challenges of keeping up to date with what is happening

in social media (52%)• A fear of making mistakes on social media sites that cannot be corrected (39%)

Social media is regarded as highly cost-effective, as engagement through these channels does not necessarily mean an investment in a campaign budget. But it has yet to attract significant advertising revenues. In Ireland, as well as globally, social media sites are “under-monetised” – they are not turning the massive scale of their audiences into revenues on the same scale.

Rumours of the death of email are greatly exaggerated. For

the third survey in succession, email is the most popular online marketing format and is used by over two-thirds of participants. This correlates with much anecdotal evidence from Irish eCommerce providers

which report that conversions are highest, and costs are lowest, through email marketing campaigns.

Social networking sites, such as Facebook and LinkedIn, are the second most popular online marketing format at 55%. YouTube, despite its popularity, is still relatively underdeveloped in commercial terms – the entire video/audio online advertising format is used by only 24% of the survey’s sample.

Being found in the maze of online content is a critical requirement for Irish marketers.

Aileen O’Toole, Managing Director, AMAS

Risks as well as opportunities exist in how social media sites such as Facebook, LinkedIn and YouTube are used as marketing channels. This is one of the central findings from the 2011 Irish Digital Marketing Sentiment Survey, the most extensive of its kind undertaken among Irish marketers. It also reveals that marketing budgets continue to move online and that print advertising is losing out to advertising on a range of digital channels.

Conducted by AMAS in partnership with the

Survey: how Irish marketers use digital

Continued on page 4

Irish digital marketing sentiment survey

411

Source: 2011 Irish Online Marketing Sentiment Survey, Marketing Institute of Ireland/AMAS. Data based on 249 responses to question. Figures may not add up to 100% due to rounding.

46157918

4

Agree

Neutral

Disagree%

40

5125

24

6411

25Moreinsight

Costsaving

Reputationrisks

Increasedworkload

Atitudes to social media

1. Children online

Source: Risks and safety on the internet, the perspective of European Children, co-funded by the EU based on interviews with over 25,000 children aged 9-16 and one of their parents across 25 countries. 990 interviews were conducted in Ireland in Summer 2010. For more details, visit www.eukidsonline.net

2. Broadband Mobile broadband accounts for one in three broadband subscriptions, having enjoyed considerable growth in recent years. However, cable broadband is gaining in popularity, with a market share of about 12%, (helped no doubt by UPC’s intensive marketing efforts) and is now recording higher annual growth rates than mobile broadband in the past year.

The latest ComReg data shows that there were close to 1.6 million active internet subscriptions in Ireland at the end of quarter three 2010, a year-on- year increase of 15.8%.

Source: ComReg Quarterly Key Data Report, December 2010

Age first used internet 9 8 9

Use the internet daily or almost daily 53% 70% 60%

Use the internet in own bedroom 37% 52% 49%

Access the internet using a mobile phone 29% 33% 22%

Access the internet using a handheld device* 23% 26% 12%

Have social networking profile 59% 67% 59%

Social networking profile is public 12% 11% 26%

Social networking profile shows address or phone number 8% 7% 14%

Social networking profile shows incorrect age 24% 21% 16%

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

1,000,000

1,100,000992,000

1,055,000

1,200,000

1,300,000

1,125,000

1,200,255

1,272,166

1,305,0351,400,000

1,361,254

1,500,000

1,600,000

1,509,934

1,443,350

1,518,349

1,548,625

Broadband growth

© AMAS graphic (www.amas.ie)

The internet is embedded in Irish children’s lives, as it is across Europe. New EU data shows that Irish 9-16 year olds are typically online from the age of nine, a year older than in the UK and two years older than children in Denmark and Sweden. More than half of Irish children are online every

day and use the internet at home and at school. However, Irish children are less likely to have a PC or other internet-enabled device in their bedrooms – only 37%, compared with 52% for the UK and the EU average of 49%.

While school work and playing games are cited as the most popular online activities, three out of five Irish children

who are online have social networking profiles on sites like Facebook or Bebo. Irish children and their parents appear to be more safety conscious than their European counterparts. Eight per cent of Irish children say that their social network profiles show their address or phone number, compared with a 14% average across the EU.

However, Irish children are more inclined not to give their true age online, with one in four of the Irish children surveyed admitting that the ages shown on their social network profiles are incorrect. The reason? Most likely, it’s because of Facebook’s rule which forbids registrations from under 13s.

Children online

*Handheld device refers to any internet enabled device that is not a mobile phone e.g. an iTouch or Nintendo DS

Top Trends

the opportunity to win online

Irish traditional media may be suffering commercially against digital media but its content continues to be highly trusted among Irish people for company information. Electronic media – TV and radio – are the top two trusted information sources in Ireland, with newspapers third, a shade ahead of search engines. Social media, from blogs to Twitter, performs poorly, reflecting the trend shown internationally

in Edelman’s Trust Barometer 2011. Bloggers should not lose too much sleep, though – they are more trusted than bankers.

The top information source, however, is a digital company. When asked to name the source that they relied on most for company information, the top response at 39% was Google, followed by The Irish Times (35%) and RTÉ (26%)

3. Businesses online How Irish businesses use the internet

Source: Information Society Statistics, Enterprise Statistics 2010, Central Statistics Office; results based on survey of 7,000 enterprises employing 10 or more employees in the manufacturing, construction and selected services sectors. Graphic is based on businesses with broadband connectivity only

4. Trust onlineTrusted information sources

Broadband may be ubiquitous. Interest in internet technologies and digital marketing has never been greater. Yet, curiously, the latest official data do not show as much change in how Irish businesses are using the internet as would be imagined.

The Central Statistics Office’s enterprise statistics for 2010 report that 87% of businesses have broadband access while 92% use the internet. No surprises there. However, just 68% of businesses say they have a website or web page, a figure that seems remarkably low --

the internet has become an online replacement for hard copy business directories like the Golden Pages for many people.

The eCommece numbers, and others shown in the graphic, are also low. Just 23% of those with broadband sell electronically (through the internet or through Electronic Data Interchange) and 49% report that they make a purchase electronically.

33% 23%

31% 28%

28% 21%

27% 31%

29% 22%

18% 17%

11% 8%

9% 2%

9% 4%

7% 6%

18% 9%

11% 6%

33% 23%

31% 28%

28% 21%

27% 31%

29% 22%

18% 17%

11% 8%

9% 2%

9% 4%

7% 6%

18% 9%

11% 6%

Source: Edelman Trust Barometer 2011, based on survey of 5,075 people in 23 countries of which 200 were in Ireland. Sample reported to be in top 25% of household income per age group in each country

33% 23%

31% 28%

28% 21%

27% 31%

29% 22%

18% 17%

11% 8%

9% 2%

9% 4%

7% 6%

18% 9%

11% 6%

TraditionalDigital

© AMAS graphic (www.amas.ie)

Online search engines

RSS feeds

Blogs

Content sharing sites

Social networking sites

Mircoblogging sites

Newspapers

Television

Magazines

Radio

© AMAS graphic (www.amas.ie)

www.amas.ie

Cloud computing, digital marketing and eCommerce look set to be key themes for the Irish Internet Association and the industry as whole this year. There’s a real buzz in the air about these areas, with so many people upskilling and “up-teching”.

Meanwhile a second year of start-ups are graduating

from the Enterprise Ireland Internet Growth Acceleration Programme (iGAP), the intensive management development programme aimed exclusively at high-potential internet companies.

Other businesses are also embracing digital marketing like never before, and we’ve witnessed this at first hand in response to our Diploma in Digital Marketing. “8 More Ways to Sell Even More Stuff” is the theme for

conferences planned for spring and autumn, which follow on from our 2010

eCommerce conference.

Since our first “Digitise the Nation” week in 2010 we’ve been contacted by many

members about running their own events for 2011 under the Digitise the Nation banner. The initiative will run again this year to coincide with our Annual Conference in May, where the main

theme is being “Open for Business”. Recognising the range of interests across the industry, the morning session will focus on doing business online. The afternoon session will be for the “purists”, concentrating on open source and open data.

To reflect the ever-changing digital landscape we’ll also be taking a fresh look at the categories in the Net Visionary Awards. The awards ceremony has been separated off from the annual conference for the first time, and will take place in September.

Open source, open data and open for business

Joan Mulvihill CEO, Irish Internet Association

5. Online bankingWhile turmoil continued to affect the banking sector, positive news was reported for one important metric – electronic payment processing. All banks want to move more customers to online self-service, for cost and efficiency reasons, and customers are generally receptive, once the user experience and online customer service meets an acceptable standard.

The latest statistics show that Irish businesses and consumers are doing more of their banking online. Some 10.1 million payments were

processed through online banking services in the third quarter of 2010, an increase of almost 17% on the same period the previous year and a near doubling of the numbers recorded three years ago.

Domestic payments are by far the largest category, accounting for about eight in every ten online banking transactions and showing 20% growth year-on-year. Two other categories of online banking services – mobile top-ups and international payments – have remained fairly constant in the past two years.

Source: Irish Bankers Federation/Irish Payment Services Organisation, quarterly report, December 2010 based on data supplied by eight financial institutions

International payments Mobile top-ups Domestic payments

2

3

4

5

6

1

0

7

8

9

10

Millions

Online banking payments

© AMAS graphic (www.amas.ie)

MAY

12JUNE

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Save the date IIA Annual Conference and “Digitise the Nation” weekFor updates check out www.iia.ie/events

Top Trends

Source: 2011 Irish Online Marketing Sentiment Survey. Data based on 249 and 332 responses to questions respectively

Search engine optimisation – the process by which sites can maximise free or organic rankings – is the third most popular online marketing format (52%) with search engine marketing (most likely Google AdWords) being favoured by 36%.

Marketing budgets continue to migrate online. As the pie chart shows, a third of the respondents are likely to spend between 1-10% of their budgets online, the largest single category of spend. Cumulatively, more than a third of the respondents say they are spending over 21% of their budgets on digital marketing.

Why the shift from traditional to digital channels? The ability to engage with customers (75%), optimising reach for campaigns (62%) and value for money (61%) are the most common reasons given. Digital’s gain is at the expense of print. Some 43% of the sample said that they have moved their marketing spend away from newspapers, while 41% have moved it away from direct mail. TV, radio, cinema and outdoor have proved to be more resilient.

Continued from page 1

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Audio / video (e.g. podcasts)

Banner advertising

Blogs / social networking

Classifieds

Email campaigns

Games

Mobile advertising

Online PR

Search engine marketing

Search engine optimisation

Website sponsorship

Viral marketing

Other

24%

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55%

13%

67%

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Proportion of

survey sample

Proportion of

marketing

budgets spent

online

© AMAS graphic (www.amas.ie)

© AMAS graphic (www.amas.ie)

How marketing budgets are spent online

Why social media is used Preferred online formats

© AMAS graphic (www.amas.ie)

The full survey is available for download on AMAS’s SlideShare channel (www.slideshare.net/amasinternet)

Source: 2011 Irish Online Marketing Sentiment Survey, Marketing Institute of Ireland/AMAS. Data based on 239 responses to question

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© AMAS Ltd.Published by AMAS Ltd., 38 Lr. Leeson Street, Dublin 2, Ireland. Tel: +353 1 6610499

Email: info@amas.ie Web: www.amas.ie

It is too soon to rewrite Descartes’ “I think, therefore I am” as “iPad, therefore I am”. Or is it? Can one device really change the media landscape?

Well yes, it can. That’s what the iPod and iTunes combination did after their launch in late 2001. There had been digital music players before this, but the iPod changed the game.

Is the iPad doing it again? Since its launch in April 2010, the iPad has created a world-wide firestorm of interest, particularly among hard-pressed media companies, such as newspapers. Consider the numbers: • The iPad was hailed as the

fastest device to reach $1 billion in sales after its launch in April 2010• Morgan Stanley predicted sales of 16 million units for the first full year• But almost 15 million were sold in its first nine months

Print media were quick to zoom in on the iPad as a platform of the future, especially magazine publishers.

By summer 2010 leading US magazines like Wired, the New Yorker and Vanity Fair had produced iPad app editions. In most, the model was a free or low-cost app for which the user would buy and load content edition by edition.

Initial uptake was high, but quickly fell. Famously, Wired sold 100,000 copies of its first iPad issue, but this dropped to

30,000 and then 23,000.

The Daily As the iPad heads towards its first birthday – and the widely expected announcement of iPad 2 – there are more heavyweight entrants to the iPad publishing fray. Rupert Murdoch has spent $30 million developing The Daily, an iPad-only publication with an emphasis on video and photography.

There were complaints about slow-loading content. But the reaction to its launch on 2 February has been largely positive. With the goal to “provide the best news experience by combining world-class storytelling with the unique interactive capabilities of the iPad”, The Daily makes better use of the new platform than many previous online forays by traditional media.

The real question, as for those previous ventures, is how the

costs and revenues stack up. At 99c per week or $39.99 annual subscription (plus advertising and other revenue streams) does the The Daily have a viable business model?

It now seems clear that the iPad is shifting the media landscape, especially in gaming and eBooks. But it is not certain that it will allow print media to transform (and to save) themselves.

Can iPad change the game for print media?

AMAS: what we doAMAS is an internet consultancy with a simple goal – help our clients to exploit the internet. Large corporates, government bodies and, increasingly, high-potential businesses retain us to develop and help implement internet strategies.

We cut through the clutter and the complexity to allow our clients to capitalise on the unlimited opportunities offered by the internet.

Services:• Strategy• Research• User experience• Content• Training • Marketing• Project management

Fiachra Ó MarcaighDirector, AMAS

Digital advertising and its impact on traditional publishers is a research study on how the internet is impacting on advertising models globally, as well as in Ireland, and the effect this is having on traditional media companies. AMAS was commissioned by RTÉ to establish how the media market has changed and how the Irish newspaper sector has responded to changes in audience behaviours and in the advertising market.

One of the conclusions is

that advertising networks are winning a greater share of Irish digital advertising revenues at the expense of traditional media companies

The research formed part of RTÉ’s formal response to the National Newspapers of Ireland’s call for controls to be placed on the broadcaster’s digital revenues.

The study is published on the RTE.ie website and is available for download in the research section of the AMAS website (www.amas.ie)

Follow us:For digital research and insights, follow AMAS on Twitter@AMASinternet

Contact Us: Aileen O’Toole, Managing Director on +353 1 6610499 or info@amas.ie