See the rest of the reasons here.

If content oriented categories, such as Entertainment (including YouTube & iPlayer), Computers & Internet (including Facebook, Twitter, etc) or News & Media (BBC, ITV, Sky, etc) have increased their share of online visits, the more transaction oriented categories (Shopping & Classifieds, Business & Finance and Travel) have slowly declined in web traffic.

Content vs Transactional Web Sites

If the above web site categories were grouped into content vs. transactions, the trend becomes much more clear. If around 2006 content and transactional websites were driving similar amounts of web visits, the gap between the two categories grow more and more with content oriented web sites  driving almost double the amount of web traffic as compared to transactional web sites.

What this tells us is that people spend more time online browsing for information, networking with other people or having fun rather than buying things, a trend probably also augmented by the global economic crisis and the decrease in consumer spending in the past year.

While we can say that Internet usage has not significantly changed in terms of volume, the paradigms of how people use the Internet appear to be changing continuously. One of the testimonials to support this is a recent BBC article (based also on Hitwise UK data) that shows that social networks have overthrown the porn web sites domination in terms of consumer time spent online.

Social Networks vs. Adult Websites (source: BBC)

Although the information above depicts trends and data related to the UK market, these trends do picture how the things look or will look like in the near future for other markets, such as Central and Eastern Europe ones. Of course, working in these respective markets, one has to account for all the peculiarities of the countries in discussion, since almost all of them are, in a way or another, “atypical.”

US Online Video Advertising (source: eMarketer.com)

Online video advertising is still a small percentage of the total online advertising expenditure in US, an eMarketer study shows, and even a smaller percentage of TV advertising expenditure. However, the good news is that video advertising is growing and will increase its proportion in comparison with both total online, as well as TV advertising.

However, if in 2007 and 2008 the growth was quite explosive (over 70% and 126% respectively), the estimated growth rate for 2009-2013 will drop to below 50%. Even though modest, if compared to 2008′s growth rate, the 40-50% growth rates estimated for the following 3-4 years will still be bigger than the growth rate of TV advertising expenditure, making the online video advertising market an interesting market to be in (nothing new here, right?).

Despite the fervent opinions that TV will soon lose to online, the numbers show that there will still be years to come in which TV will remain the crowned king of advertising budgets. “In 2009, for example, for every $100 advertisers spend on television, they will spend only $1.60 for video ads. Even by 2013, that number will only reach $5.50,” said David Hallerman, eMarketer senior analyst and author of the new report, Digital Video Advertising: Where’s the Money?.

So, if you’re looking at doing it right in regards to video advertising, you should be looking at integrating TV, online and mobile platforms since these are the three main screens that the user is connected to.

Microsoft & Yahoo! (source: techcrunch.com)

Yesterday, Microsoft & Yahoo! officially announced their search deal in which Microsoft will benefit from the Yahoo! search technology to improve its own, while, in turn, Yahoo! will run its own searches through Microsoft’s Bling search engine. In the same time, Yahoo! will become the search engine sales force of both companies.

What this means is that the numbers two and three on the search engine market are merging their efforts in order to better fight with Google‘s supremacy on the search engine market. However, the deal also means that a compromised has been reached between the two companies, a compromise that allows Yahoo! to avoid being bought out by Microsoft (a deal that was considered like a rape by many business analysts), while in the same time saving its ass from a financial failure based on the money that Microsoft is actually putting in through this deal.

However, as Radu Georgescu mentions, through this deal Yahoo! gives up its core technology, their very first competitive advantage in the beginning of the Internet age. In a sense, giving up their core technology makes them dependent on Microsoft (at least for 10 years, in theory, but in fact it could be forever) and makes their long term strategy a pretty uncertain one.

Radu considers that the whole reason why this deal took place today was because of the sentimentalism of Yahoo!’s owner, Jerry Yang. He could have exited with glory six months before the crisis, when he had a pretty good deal from Microsoft, but he refused, failed another deal with Google and eventually the shareholders pushed him out of his own company.

In his place as a CEO, the outsider Carol Bartz did what had to be done, all feelings left aside. “Only a Yahoo outsider like Ms Bartz could do such a deal” said Tim Weber, business editor of the BBC News website. “She has no sentimental attachment to what was once the core of Yahoo, its search business.” (BBC article)

For a short timeline of Microsoft and Yahoo! deal, check out this BBC article.

Via TechCrunch (official press-release & image) & Radu Georgescu (analysis and links).

Why People Go Online (source: eMarketer.com citing Ruder Finn)

According to Ruder Finn, in the second quarter of 2009, 100% of US Internet users that they surveyed went online to pass time. The other top destinations were education, connecting with others, research and sharing.

Ironically, among the least common intentions of Internet users going online were making a purchase, managing finances, comparison shopping or joining a cause.

There is no doubt, knowing your customers and their behavior as much as possible is one of the most important keys to success in the current economy, since the product driven markets are long gone, being replaced with the customer driven markets.

Thus, if you want to be successful online, identify a niche that is sizable, marketable and potentially profitable, focus on solving a problem of that niche, under promise and over deliver and you might just strike gold.

There’s not even that many types of activities that people perform online, Ruder Finn listing a mere six of them, ordered from most common to least common:

• Learn
• Have fun
• Socialize
• Express oneself
• Advocate
• Do business
• Shop

In terms of gender interests, the study showed that more men went online to do business or have fun as compared to women, while the later group was more interested in advocating over the Internet, express themselves or socialize. What is interesting is that 69% of young adults have been active on social networking sites, while 55% of them went online to play games.

via eMarketer.com.

What People Trust on the Internet (Nielsen Global Online Consumer Survey April 2009)

I was reading earlier today a post written by Seth Godin about the CPM gap and how advertisers are pushing for interruption advertising (through display advertising, mainly), when they should be aiming for building online communities in which advertising is integrated with the needs and wants of those communities, where “attendance is a choice [made] by the consumer” and not an “in your face” overlayer.

Somehow in sync with this idea, Ionut Oprea just published on his blog the forms of advertising in which consumers trust “somewhat” or “completely,” based on a Nielsen Global Online Consumer Survey from April 2009.

The study shows clearly that the CPM league is actually trailing at the bottom of the list, with consumer trust level running in the 30-40% range. If we look at the top tier, recommendations, consumer opinions, brand websites, editorial content and brand sponsorships are still the top factors that influence consumers’ trust in advertising.

It’s funny thus how clients still ask for display advertising (considering online advertising options) and then are disappointed by the poor results generated when instead, advertising clients should focus on engaging their customers inside their communities. And ironically, even though online advertising is still a minor fraction of total advertising budgets, two out of top three customers information and trust sources are online.

Update: More info about the Nielsen study on their blog.

F5WebCorp - Digi Cafe

This week there will be a new session of Digi Cafe, at the usual location in Club Loggia, but this time talking about Advertising 2.0 and the efficiency of online advertising campaigns.

During this session, there will also be a prize ceremony for the Advertising 2.0 competition – Best online advertising. The categories explored in this competition are: online ads, online campaigns, rich media banners, e-mail campaigns, campaign sites (landing pages, microsites) and interactive applications.

The guest speakers of this session will be the following, with the note that the Google representative will be present via a Skype conference call:

Via Dragos Stanca .

The course will dwell into themes such as:

• Online advertising market in Romania, its mechanics and its tendencies for the next few years
• Online campaigns, various types and formats of online advertising and concrete examples of their synchronization
• Online media planning techniques, optimizing prior, during and post campaign
• Online ad serving, technologies and their efficient use for optimizing online campaigns
• Micro sites and their correct usage, beyond the banner project, contextual projects, viral marketing and cross media campaigns

As I mentioned before, I took the course this year and I think it’s really worth for all those who run marketing departments and teams or who are part of these teams, because it will give you a complete overview of the ways and means to be successful with online marketing in Romania and not only. Highly recommended!

I’ve seen a lot of entrepreneurs working on new online business ideas who actually had no idea about their target market, not to mention its estimated size. I find this strange, because we always had numbers related to the Internet, as well as the mobile market size in Romania. Yes, segmenting these numbers to the niches that one or another are interested about, it’s a different discussion, but at least the general digital market size is known.

Ionut has recently mentioned the size of the online Romanian market as being 8.3 mil users, citing Google Ad Planner numbers. This is a bit more than 1/3 of the total population of Romania, which was estimated at around 21.5 mil people in 2008, as well as more than the last numbers cited in 2008, which were 7.5 mil Internet users.

In terms of mobile users, the situation is quite different. VoxLine announced recently the ANCOM numbers for Romania and the results are impressive: we have 28.6 mil mobile users, out of which 24.5 mil active sim cards. Of course, we cannot really have more mobile users than population in Romania, thus these numbers are actually attributed to about 16 mil unique mobile users.

Despite the fact that the mobile market is twice the size of the Internet market, mobile marketing in Romania is still in a very incipient stage, even more so as compared to online marketing. The interesting thing is that, despite the numbers showing quite a significant Internet and mobile market in Romania, advertisers are still reluctant to move some of their advertising budgets on these channels, although they are better performers than the traditional media channels (more measurable, thus better ROI).

Just think about how you are startled every time your mobile phone rings or vibrates. We almost always rush to pick up the phone and check out who has contacted us, be it via voice call, SMS, MMS or e-mail. There is no other medium that has such a powerful customer journey interruption, and maybe this is also one of the reasons while mobile marketing is so sensitive.

Anyways, the idea is that these media channels are here, are measurable, are reachable, perform well and are all yours to take advantage of. Some of your competitors have already taken advantage, and thus you should be at least considering these channels for your marketing budget. If I were to talk about the automotive market, I can tell you Jaguar has been the first automotive company targeting me via an MMS.

These days, IAB Europe released the online advertising market size numbers at European level, the 19 markets that they analyzed, including Romania, I assume, since it doesn’t appear on their graphs. The cumulated size of the European online advertising market in 2008, as counted by IAB Europe in collaboration with PwC, amounted to 12.9 billion Euro. As mentioned before, the Romanian online advertising market size was around 20 million Euro in 2008, a figure extremely small even compared with the average size of a European country (if we were to simply divide 12.9 billion Euro to the 19 countries involved in the study).

However, as mentioned before, the growth of the Romanian online advertising market in 2008 was short of 50% as compared with 2007, growth rate that would have placed Romania in top 5 across Europe in terms of growth levels, if only IAB Europe would have included Romania in their graphs (Ionut? Was Romania so insignificant?).

IAB - Online Advertising Market Growth Across Europe (image source: TechCrunch)

If we are to look at the growth of online advertising formats, the IAB Europe study shows search marketing to be the highest growth format, with a year to year growth of 26% in 2008 as compared to 2007.

IAB Europe - Growth of Formats 2008 (image source: TechCrunch)

Also, in terms of share of voice, search marketing remains the top format, occupying almost 50% of the total European online advertising market.

IAB Europe - Formats Share 2008 (image source: TechCrunch)

Taking into account the data at European level, I think it is safe to make some assumptions for the Romanian market as well. If we assume that search marketing is on average 50% of the total online advertising market at European level and if Romania exhibits a similar behavior, we could probably say that in Romania, the search marketing market size was somewhere around 20 mil Euros, with Google owning most of it.

For those not willing to accept this number as a possibility (thus bringing the total Romanian online advertising market size to a sum around 40 mil Euro), I can also tell you that a Google official firmly stated in a public event in Bucharest this week that, in his opinion, the total Romanian online advertising market is definitely bigger than 30 mil Euro.

Thus, if aside the 20 mil Euro clients have been spending in the Romanian online advertising market in 2008 (mainly display advertising, probably more than 90% at least) there were also 20 mil Euro more spent in search marketing, I believe that interactive agencies not fiddling already with Google SEM should definitely look in this direction. Right now, it seems there are only 2 Google AdWords certified companies, thus there is enough room for growth for other companies that want to take advantage of the SEM market in Romania.

Update: Looking also at the classifieds market size, which is almost the same as display, at least on average at European level, we can also assume that there is probably somewhere in between 10 and 20 mil Euro (at least as potential) in the Romanian online classifieds market as well, search and classifieds not really being present in the Romanian IAB study.

Via TechCrunch.