28 Oct 2010

The UK Internet Economy

Measuring the impact of the internet on the UK economy is notoriously hard.  Boston Consulting Group have made a brave stab at giving it a go.   The results?   That the internet contributes at least £100 billion to the UK economy, about 7.2% of GDP.   There are regional differences and it comes as no suprise that London leads the way.   That said, the East of England and Scotland aren't far behind. 

According to the report, commissioned by Google, if the internet was an economic sector it would be the fifth largest and outweigh the construction, transport and utilities industries in the UK  Around 60 per cent of the £100bn figure is due to internet consumption according to the report.   The remainder of the money is from the UK's internet infrastructure, government IT spending and net exports.  For every £1 spent online to import goods, £2.80 is exported helping to make the UK the world's leading nation for e-commerce, according to the report - this compares to exports of 90p for every £1 imported in the offline economy.

It's a great report so do take a look.

Leadership in a Socially Networked World

The world of social networking is still viewed as a frontier, a dangerous one at that.   It shouldn't be.    

Proactive business leaders who are dealing with the issue and helping employees, are finding that social media is well within their comfort zone.   How and why?   This great piece from CIO.com tells it like it is.    

In an earlier post I referred to the importance of treating social media as part of the marketing mix and ensuring that tracking and ROI were paramount.    Together these pieces reflect my view of what social media can do for organisations and how.   To enable it to happen of course, you need to get the experts in.   We, at Creative Nation, can help.

In related news it looks as though MySpace has finally woken up to the basic principles of SEO, user centred design and usability.   A major re-design of MySpace will roll out in the next few months, get a sneak preview here.

27 Oct 2010

Google soars: Digg and The Times wither

Hot on yesterday's post came a comment to Paid Content from someone naming themselves 'Times Worker'.   It may be someone being mischievous, it may be someone with a grievance OR it may be someone telling something close to the truth.

As Google accounts for a record amount of web traffic (6.4%), Digg expires . . . or at least withers away.    Digg's demise has been put down to the departure of the founding members on large payouts and the re-design.   But I'd question that.   The rise of Twitter may also have something to do with it.   Digg's social bookmark model seems 'quaint' by comparison  with Twitter.   I was an early adopter of Digg, but I also confess to having gradually stopped using it in favour of Twitter and other social media over the last couple of years . . . and the thing is, I didn't miss Digg.

26 Oct 2010

The Times' Paywall: A Health Warning

Nielsen estimate The Times has just over 360,000 unique users behind it's paywall (these are people who have registered and been through the payment gateway to the other side of the wall).   The Nielsen figures include traffic generated by users who were given free online trials, or get free web access thrown in with their print subscription to the Times' publications.

A health warning in terms of the accuracy of the figures is appropriate. Nielsen measures these things slightly differently to, say, a report from the pay engine or conventional web analytics services. In addition you should bear in mind that some 'users' are people who have paid for one-off access (£1 to access The Times sites for one day) and therefore of little value down the line.   

  • Nielsen state that The Times and Sunday Times websites experienced an 88% drop in unique users (UK only) since the erection of the paywall
  • The Times had 3.1 million UK unique users in the second quarter of 2010 according to Nielsen. This figure has fallen to 1.78 million overall now, and it is on the basis of this differential that Nielsen estimates the number of paying subscribers
  • Nielsen estimate that one in five subscribers have paid a £1 (or one days' access).

Clearly the initial figures will include many who have trialled it (me included). We don’t know how many of these people go on to become subscribers (I know I didn't).

The 362,000 unique users figure Nielsen has reached seems to be quite high, in my view. News International has yet to release any data. It would be interesting to know how they pitch their reach to advertisers for example. Targeting and personalisation have been mentioned. After all, signing up to the Times paywall online involves nine required fields of personal data.

The Times' argument is that the very act of subscribing online suggests a more engaged audience. Nielsen attempt to corroborate this by suggesting that in Q3 Times paywall visitors averaged 42% more pages per person a month than the average Q2 pre-paywall visitors .

Whilst the argument that subscribers' data enables better targeting and value might be true for, say, FT.com (where the scale is subscribers is indisputable) I suggest it has dubious value based on the figures we are discussing here. I doubt that the fall-off in ad revenues is matched by an uplift in subscription revenues – the product just isn't that unique.

According to Nielsen, the over 50s account for 52% of the paywall group; the over 65s account for 16%. The footprint of the over 50s group has increased whilst that of the 25-34 year old age group is now 13% of the paywall group compared to 22% of the general audience - a big fall. Nielsen goes on to say that households earning between £50,000 and £80,000 make up a larger part of the paywall group at the expense of those earning less than £20,000 and that paywall audience also tends to be older.

So, an older and wealthier audience is always good (look at the success of the Telegraph and Mail). However, this audience is also very demanding of quality, a lack of gimicks and faultless customer service . . . they want a Rolls Royce. As we all know, Rolls Royces cost. Add to this the advertising campaigns The Times has engaged in and the sweeteners it has doled out, more costs. The door on social media sharing is firmly closed, so there is no low-cost marketing effort designed to bait (younger?) users with targeted content. It just doesn't stack up in my view.

This suggests what we all probably knew anyway, that young people will not pay for this type of content. It is freely available everywhere. 'Opinion' pieces from a right-wing commentariat will not attract young audiences.

Advertisers and agencies are right to be concerned. According to John Baylon, group digital trading director at Starcom MediaVest, of most concern will be the dip in the number of those 25- to 34-year-old visitors.

  • Where is the future audience? 
  • Where is the diversity in The Times' appeal? 
  • Should advertisers looking at broad based brand campaigns really spend the big bucks with The Times?

14 Oct 2010

Building a brand

In a perfect world, there would be no boundaries within companies and organisations.   The practice often falls far short of the ideal theory.

Creative Nation (the creative production consultancy I am part of) address just that in their latest post.   It also brought to mind the discussions which took place at yesterday's Jump event organised by the lovely people at eConsultancy.   We talked about how the silos need to be broken down to create the seamless experience that customers expect.   How true. 

Why should consumers expect to receive a different message or customer experience when dealing with the online off-shoot of an offline company, servive, product or organisation?   The obvious media issues aside, the message should be the same.   Companies, organisations, service providers and product development and sales need to start having conversations with customers.

In a world where ROI is king, we all need to start thinking about how we can dissolve barriers and work together.   Digital remains in the vanguard of these moves and many companies are starting to make moves in the right direction. 

Tomorrow sees the AoP summit where simlar issues have long been discussed.   In addition, there will be round tables on subjects like the place of content in the digital world, ROI and monetisation and how organisations can work better internally to deliver ROI.

We live in interesting times!