Google’s UK gross revenue jumped an impressive 25% YoY in Q3 to £651 million, with its paid search business continuing to outperform the advertising market

We have raised our YoY growth estimate for Google’s UK revenue to 22% for 2011, pushing our growth forecast for UK internet ad spend this year to 15% (up 3ppts). Our forecast for 2o12 is unchanged at 13% YoY growth

UK revenue growth fell shy of Google’s global revenue growth of 33% YoY, with Asia, India and Brazil particularly strong, and mobile increasingly significant

In the context of his Inquiry, Lord Leveson invited Claire Enders, as “one of the UK’s foremost media business analysts”, to kick off the seminar series on the 6 October with a synoptic presentation on “Competitive pressures on the press”. The Inquiry is interested in understanding the market economics of the mainstream media, including the impact of technology

This presentation brings together our existing work on the newspaper and consumer magazines industry, with an emphasis on the former, highlighting the challenges to the print media of the internet

A video transcript of Claire’s presentation and the debate on the session’s subject of “Competitive pressures on the press and the pressures on journalism”, may be accessed on the site of the Leveson inquiry, at www.levesoninquiry.org.uk

Internet advertising rose strongly in H1 2011, according to the latest IABUK/PwC figures, increasing 13.5% YoY compared to 1% growth in spend on other media

Search grew 12.6% YoY while display was up 18.6%, in line with our forecasts, but classifieds slowed, up just 3% YoY, with recruitment and other sectors stagnating

Our internet advertising forecasts for 2011 and 2012 remain unchanged at 12% and 13% respectively

The UK is now entering a period of intense discussion of the regulation and ownership of news outlets. In this context it is revealing to look at a case study of news viewing online

Livestation is an online service which aggregates several dozen TV news channels and makes them available online. Two of the most prominent are Al Jazeera and Al Arabiya. These channels experienced explosive growth during the ‘Arab Spring’ events, and this was reflected in the statistics for access to their online streams, which we analyse here

In the course of these events, the live video streams for Al Jazeera and Al Arabiya went from 150,000 and 50,000 monthly uniques to 3.3m and 1.3m. Their audience online switched from a tiny base of largely expatriate viewers outside the Arab world to millions of viewers in the Arab world. Even after the most dramatic events subsided, traffic remains 10 times what it was in late 2010

Nearly a year after rolling out Google TV in the US, Google has confirmed plans to launch its ‘smart TV’ operating platform in Europe and the UK by early 2012

To date, Google TV in the US has been a disappointment, with little broadcaster support and, until recently, expensive devices, resulting in low adoption

The content issue is likely to dog Google TV, both here and in other European markets; access to key broadcaster TV and video programming will be a major challenge

This presentation details our assessment of the UK travel market to 2015, covering the package holiday, flight, accommodation and cruise sectors. UK consumer spending on holidays has been hit hard by the recession, but should bounce back as household finances recover, though the macro risk is still on the downside. We project that the internet will account for 60% of bookings by 2015, up from 45% in 2010, with growth fuelled by increased bargain hunting, as well as improving choice and functionality. Suppliers will continue to generate the lion’s share of internet sales, but online travel agents will take share, particularly for accommodation, which remains highly fragmented. New devices such as tablets and smartphones will increasingly be used to book and manage consumer travel, though the potential for incremental sales seems limited.

Whilst UK GDP growth crawls along at a snail’s pace in 2011, (real) private consumption, its principal component, has been in sequential decline since Q4 2010, dragging consumer facing industries down

UK media are not equally affected. The internet continues to grow through search as well as display, but we expect TV NAR to be flat in 2011

Press advertising is worst affected by the downturn due to its exposure to retail advertising on top of the structural shift of classifieds to the internet

UK classified advertising in print and digital media fell -9% in 2010 to £2.76 billion, and we expect a further decline of -7% in 2011.

Our annual review and outlook concerns the classified advertising categories of recruitment, property, autos (used) and directories, across all media. We assess the continuing structural shift from print formats to less expensive digital media, in the context of prolonged recessionary pressures on local economies in the UK (bar London), which have reduced annual transaction volumes in 2010 by -28% in recruitment, -45% in property and just -16% in used cars, in relation to the peak in 2007.

A key development in recent quarters has been the rapid adoption of smartphones and tablets as emerging platforms for classified advertising by the industries serving them. Consumers are enjoying the additional benefits of on-the-move data (e.g. in the forecourts of auto dealers) and instantaneous updates (e.g. for property rentals), which advertisers are keen to exploit, providing additional revenue opportunities for classified media. B2B classified platforms also monetise integrated brand and listings solutions, plus marketplace tools. New models are evolving that will have implications for other media and in some cases, industry supply chains.

This presentation details our assessment of the UK prospects for video-on-demand advertising through to 2015, covering through-the-middle and over-the-top services

While video-on-demand consumption is set to grow strongly, particularly to the TV, linear broadcast services, supported by PVR timeshift, will continue to account for over 90% of viewing to the TV and PC/ tablet over the next five years. As a result, we forecast that VOD advertising will equate to 7% of TV NAR by 2015, with current high prices for in-stream video ads falling as it becomes more integrated with TV airtime sales

VMed’s Q2 results were respectable, but quirky, with resilient underlying revenue and strong cash flow, but exceptionally weak cable volumes

Virgin Mobile is performing better than ever, but steam continues to seep from the cable cash flow boiler

A TiVo push and further progress at Virgin Media Business are still to come, but we expect a trend of gradual decline in fundamental cash flow growth