UK internet advertising powers ahead
According to IABUK/PwC, internet advertising grew 14.4% like-for-like in 2011 to £4.8 billion, overtaking press to become the single largest advertising medium
Search was again the main growth driver, surging 17.5% to £2.7 billion last year, while display rose 13.4% and classifieds increased just 5.2% on the weak economy
We now forecast internet advertising will increase 14% in 2012 and 12% in 2013, taking spend to £6.1 billion or 36% of UK advertising, up from 30% in 2011 |
Media, Mobile, Internet, Telecoms |
April 2012 Access this report
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Facebook, Instagram and $1 billion
On 9 April Facebook bought the 547-day-old Instagram for about $1 billion in cash and shares, acquiring 40 million users, strengthening its positioning in mobile and photo sharing and preventing anyone else from buying it first
That Instagram could grow to be so big, so quickly, and with just 13 staff and $7 million of funding shows how precarious Facebook’s market leadership might still be. This is not a one-off – many more companies will use cloud services, mobile and social to achieve similar growth in future |
Media, Internet |
April 2012 Access this report
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The Netflix tightrope
Netflix resumed strong growth in domestic US streaming subscriptions in Q1 2012, but weak Q2 guidance and high churn reinforce doubts about long term profit growth in an increasingly competitive market. Netflix has embarked on a global expansion strategy in the belief that achievement of global scale will improve its bargaining power, but the rationale is questionable and the prospects of incremental profits at best long term. |
Media, TV, Internet |
May 2012 Access this report
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Facebook: the monetisation challenge
Facebook will confirm its status as an internet superpower on 18 May when it goes public at a valuation now expected to be between $93-104 billion
The social network’s revenue fell quarter-on-quarter for the first time in Q1 2012, partly due to seasonal effects, amidst a broader slowdown in annual revenue growth on the shift to mobile consumption
Investor interest is being fuelled less by current performance than longer term potential for growing Facebook’s audience of 901 million and improving monetisation |
Media, Internet |
May 2012 Access this report
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Facebook display ad volume down in key markets in April
Analysis of comScore data suggests that ad volumes fell in April on Facebook’s PC-based website in the US and UK, which we estimate account for 60% of ad revenue Seasonal effects may account for some of the decline, but increasing pressure on ad performance and pricing, due to the tough economic climate, and slowing growth in PC usage of Facebook are other probable factors As a result we expect Facebook’s ad revenue growth slowdown to continue in Q2, with audience saturation in key internet markets and increasing mobile substitution limiting future growth potential from display advertisin |
Media, Internet |
June 2012 Access this report
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UK internet advertising forecasts for 2012/2013
Recent news flow and feedback from media buyers indicates that growth in UK internet advertising is slowing due to the ongoing weakness in the economy
Paid search, buttressed by its link to e-commerce and measurable ROI, is suffering less than internet display, with growth in spend on social media slowing and price deflation especially for non-premium inventory
Online classifieds are also being hit by the economic woe, resulting in some sectors growing more slowly and non-advertising communications taking a larger share of spend; the secular shift to the internet continues |
Media, Internet |
June 2012 Access this report
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YouView: better late than never
YouView, the hybrid DTT/IPTV service backed by the public service broadcasters, is here, but with an initial retail box price of £300 it will be heavily dependent on the subsidies offered by ISP distributors BT and TalkTalk The TV market has evolved since YouView’s conception in 2008, with many other internet-enabled options now available; its managed and integrated approach gives it some advantages but doesn’t make it a ‘must have’ We expect YouView to mainly appeal to Freeview and BT Vision upgraders and project take-up between 1-3 million TV homes by 2015, though if the product improve |
Media, TV, Internet, Technology |
July 2012 Access this report
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NOW TV: Sky disrupts itself?
Sky has launched NOW TV, an unbundled internet video service offering non-Sky households pay-as-you-go access to select Sky content, starting with movies, with sports added later in the autumn and TV shows to follow NOW TV addresses the growing opportunity for broadband TV, primarily appealing to the 8 million non-pay-TV households that have broadband – the same target audience as Netflix, LoveFilm, BT Vision and YouView We expect NOW TV to have only incremental impact on Sky’s financials, but it has the potential to put Sky in pole position in the nascent market for over-the-top TV |
Media, TV, Internet |
July 2012 Access this report
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Netflix House of Cards
Netflix returned to profit in Q2 2012 with results that were largely in the middle to upper range of its Q2 guidance estimates Underlying concerns remain about the ability of Netflix to deliver profit growth as it expands its international business due to weaker than anticipated growth in its core business of domestic US streaming subscriptions Reaching one million subscriptions since the January launch of Netflix’s streaming service in the UK and Ireland points to a marked slowdown during Q2 2012, suggesting breakeven will occur during 2014 at the earliest |
Media, TV, Internet |
July 2012 Access this report
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Google winning battle for internet display
Search remains the main engine for Google’s core business, but display is rising fast: we estimate display gross revenue will reach $9.2 billion in 2013, representing 16% of projected gross revenue (excluding Motorola)
Gross revenue from YouTube looks set to more than double to nearly $4 billion by 2013. Revenues from Google’s ad networks and platforms are also growing strongly, mainly to the benefit of publishers
We project Google’s net revenue from display next year will amount to $4.2 billion, equal to 10% of net revenue from its total advertising business |
Media, Internet |
August 2012 Access this report
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First BT PL, now BT top drawer rugby
BT’s acquisition of Premiership Rugby rights underlines its intentions to create a solid premium sports channel with expected launch in summer 2013
BT’s entry into the sports arena is part of a wider TV platform/content strategy that embraces the launch of a much enlarged basic channel offer, integration with YouView and fibre roll-out
Although expected to post significant losses on its sports channels over the next three years, BT’s commitment appears long term |
Media, TV, Fixed line, Internet, Telecoms |
September 2012 Access this report
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Facebook – the only way is mobile
Facebook now has more than one billion users but future commercial success depends on monetising the growing consumption via mobile devices, which are replacing the PC as the main method of access
Facebook’s new mobile ads are newsfeed based Sponsored Stories and Promoted Posts rather than banners; early agency performance feedback is positive
Rapid growth in mobile ads will not be sufficient to offset slowing growth from PC-based advertising in 2012 and 2013, but revenue growth should pick up in 2014 as mobile ad volumes ramp up and other initiatives kick in |
Media, Mobile, Internet, Telecoms |
October 2012 Access this report
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UK classifieds overview and recruitment outlook
Since the onset of the recession in 2008-09, the revenues and profitability of the recruiters, auto dealers and estate agents which purchase print and online advertising media have been impaired by lower transaction volumes, putting pressure on advertising budgets. New digital marketing and communications requirements have further claimed budgets previously allocated to print, which will continue to decline in absolute and relative terms |
Media, Press, Internet |
October 2012 Access this report
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Rightmove, ZPG and property classified outlook
The second of our four reports on specialist advertising focuses on the property sector, and specifically assesses the implications for Rightmove and the sector generally of the merger of Zoopla with DMGT's property portfolio, which includes Find a Property and Prime Location The merger creates a market duopoly that will put print media under further pressure, though Estate Agents remain attracted to the lead-generation and attractive branding benefits of print distribution and layout Meanwhile, the sector has rebased in scale: while house prices are in aggregate very stable, transaction |
Media, Press, Internet |
October 2012 Access this report
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AutoTrader and auto classified outlook
The third of our four reports on specialist advertising focuses on the automotive sector and AutoTrader's role at the heart of the dealer ecosystem
The used car market has been remarkably resilient in recent years, but as with many classified categories the core trend in digital is diversification to a suite of services from a core listings model
AutoTrader's owners Apax Partners and Guardian Media Group will of course be considering their options in terms of an exit from their investment |
Media, Press, Internet |
October 2012 Access this report
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Google: mobile hits margin
Google’s income in Q3 was hit by fx headwinds and a rise in traffic acquisition costs (TAC) for its ad business as well as by higher than expected losses at Motorola
Headline growth in gross advertising revenue continued to slide, primarily due to the effect of the strong dollar; of more concern, rising TAC cut gross margin by 3 ppts
Mobile now accounts for the majority of growth in ad revenue, which should improve as mobile ad yields rise, though net margin could decline if Google has to pay out a greater share to partners such as Apple |
Media, Internet |
October 2012 Access this report
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Hibu and directory classified outlook
The last of our four reports on specialist advertising focuses on business directories, probably the most rapidly changing marketplace of them all
The transition from listings to marketing services seems to be unfolding as quickly as the transition from print listings to digital listings that preceded it
While listings advertising expenditure is collapsing, the 'marketplace' for local business communications is expanding and being competed for by a much wider range of businesses. Hibu (Yell) has positioned itself well as a '360 degree' solution |
Media, Press, Internet |
October 2012 Access this report
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TV, non-linear and disruption
The linear TV broadcast industry has kept its oligopolistic structure remarkably intact over the last 50 years against a background of much technological innovation and re-regulation, but now faces a new wave of innovation that promises growth of non-linear at the expense of linear True disruption can only occur by solving the device challenge of developing on a mass scale new, compelling and innovative ways to access content, but so far non-linear has achieved a very small share of total viewing while linear viewing levels are as high as ever Although non-linear viewing may become substa |
Media, TV, Internet, Technology |
October 2012 Access this report
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UK local media: a holy grail?
This report explores and quantifies expenditure in the local media landscape. Flat disposable income and the rise in e-commerce continue to force many retailers from the high street, though we argue first-rate small and medium enterprises (SMEs) have the opportunity to grow share of the local market, despite these pressures |
Media, Press, Internet |
December 2012 Access this report
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YouTube’s Original Channels venture
YouTube continues to evolve away from user-generated content with the expansion of its native Original Channels initiative in the US, Europe and Japan
Professional and semi-professional content is key to increasing YouTube’s sellable video inventory, raising advertising yield and attracting brand advertisers
Whilst YouTube is the leading global distribution platform for professional short-form video, it poses little immediate threat to TV viewing or revenues |
Media, TV, Internet |
January 2013 Access this report
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