We Are Social - Advertising 2.0

Robin Grant

The CBI have just released a new survey of internet trends.

There's some really good stuff in here, both for optimists and those that wish we could bring the debate back down to earth. I've picked out a few things below, but you should print out the whole thing and see for yourself.

Consumer Internet Usage - Online Advertising
TV advertising is most noticed by 63% of [UK Internet users], newspaper advertising is most noticed by a third (34%) and online advertising is close behind (29%). Mobile advertising has yet to make an impact.

Looking specifically at online advertising, 74% agree that they only want to receive adverts for products that they are interested in. 90% agree that pop-up adverts are annoying and they ignore them, whilst three quarters (76%) agree that most email adverts go straight into their spam folder. Four in every five (80%) said that the only adverts they take interest in are those relevant to what they are searching for or doing online. One half of [UK Internet users] (52%, dropping to 40% amongst females) agreed that they are prepared to accept advertising in exchange for a service being free, with 19% disagreeing.

Consumer Internet Usage - Tools for shopping online
[UK Internet users] are most likely to use search engines when looking online for information about products and services (83%), and a large percentage also go directly to familiar retailer sites (61%). 47% look at price comparison websites, and 22% consult review sites. Other sources included online business directories (9%), online community websites (4%), media sites (4%) and blogs (1%).

80% agree that search engines are a necessary tool when looking to buy a product, whilst almost three-quarters (72%) agree that search engines help them find products and brands they haven't thought of before. A third (29%) have bought more products than originally planned due to information they obtained using a search engine. Google was the search engine chosen by 73% of Internet users.

Consumer Internet Usage - Online Purchasing
The single most popular method of purchase [amongst UK Internet users] is still simply to go into a shop (27%). However, Internet-influenced purchases are a rising trend - 18% prefer to make the purchase in a shop only once they've researched the product online. 19% prefer to go straight ahead and buy online, whilst another 13% prefer to make the online purchase once they've looked at the product in a shop.

Women are keener on the traditional shop environment (33%), and less likely to buy straightaway online (11%), as are purchasers aged 45+ (12%). More consumers who work full-time prefer to purchase online (24%), than visit a shop (23%).

The online shopping boom is being driven mainly by the twin factors of convenience (80%) and cost saving (54%). Financial factors are particularly important to 18-34 year olds, 70% of whom said that cost saving was a main motivation.

The key restraints on online shopping are the inability to try before you buy (44%), particularly amongst females (52%), and the difficulty/expense of returning goods (40%). The more familiar people are with the Internet the more likely they are to trust it, and 39% of respondents as a whole said there was nothing in particular holding them back from making further online purchases.

Consumer Internet Usage - Brands Online
The key factors influencing trust in an online brand [amongst UK Internet users] are timely delivery (56%), provision of clear and upfront pricing information (52%), good visible online security (46%), and provision of comprehensive product/service information (46%). Also important to respondents was having an order and delivery tracking service (32%), and a helpful telephone customer support service (26%). Only 4% of people said that there was nothing online sites could do to win their trust.

The more trusted online brands are financial service providers and the supermarkets. Timely delivery, clear and up front pricing and good, visible security are seen as the most effective ways companies can win consumers’ trust.

Business Internet Usage - Online Marketing
The average (mean) proportion of business' total marketing and advertising budgets spent on Internet marketing and advertising is 11.68%

The average proportion of Internet marketing and advertising spend varies as follows by company size:

• 50-99 employees: 12.12% (£19,150)
• 100-249 employees: 11.79% (£39,379)
• 250-499 employees: 9.94% (£66,797)
• 500-999 employees: 7.37% (£35,302)
• 1,000+ employees: 14.21% (£520,370)

58% expect to increase their spend on Internet marketing and advertising in the next 3 years; only half of one per cent expect to decrease it. Almost a quarter (23%) of those anticipating an increase expects their Internet marketing budget to at least double. The average expectation for Internet marketing spend increase over the next 3 years is 57%.

The most common form of online advertising and marketing is email marketing (45% overall - rising to 96% in Hospitality/Travel/Tourism and 79% in Leisure/Entertainment). Search marketing (34% overall - 58% in Professional/Business Services, 54% in Hospitality/Travel/Tourism) came in second and online community websites (29% overall - 49% in the Public Sector) third. Viral marketing (8%), podcasts/vodcasts (6%) and blogs (6%) are currently most prevalent in the Technology/Media/Telecoms sector (13%, 23% and 24% respectively) and Financial Services (12% blogs). Usage of podcasts/vodcasts (22%) and blogs (21%) is expected to more than triple to almost one quarter of businesses within the next 3 years, while viral marketing will be trailing behind at 15%.

34% of businesses noted that they do not currently use any form of online advertising and marketing (against 22% of companies with 500-4999 employees and 20% with 5,000+ employees).

The most widely cited reason for engaging with customers via the Internet was to develop new sales channels (78%). 67% cited competition from business rivals as a driver, 64% said operational efficiencies, and 61% said they valued the ability to quantify the response to their efforts. 62% said online engagement with customers had improved operational efficiencies. Almost 80% of respondents noted an extension of customer reach after online advertising and marketing. Similarly, over 70% benefited in terms of better customer engagement.