IAB Europe Leadership Council Lessons from Christmas eCommerce

IAB Europe Leadership CouncilIAB Europe Leadership CouncilLessons from Christmas eCommerceLessons from Christmas eCommerce

Presented by/Presented by//Alex Burmaster - European Internet Analyst/Alex Burmaster - European Internet Analyst

IAB Europe’s commentsIAB Europe’s commentsThe Christmas period is always a step change in the use of the internet for shopping. We’ve seen this since the mid

nineties and clearly the panic of Christmas shopping, combined with changes in leisure time, create a new opportunity for internet behaviour to evolve quickly.

In this research presentation, Alex Burmaster, European Internet Analyst from Nielsen NetRatings explained what happened this Christmas. His research explores where advertisers fit in the ecosystem of internet marketing and the development of internet commerce.

• We’re seeing people spend 10% more in terms of sessions, 18% in terms of time and a massive 27% in terms of pages.

• Around 2000 pages per month are consumed by the average European internet users, with ‘heavy’ users clocking up more than three times this.

• More then two third of European online visited ecommerce sites at Christmas with more than half the online population visiting the large online shopping services like Amazon and EBay.

It may not be a surprise that Ecommerce is growing rapidly, but with the total internet audience only growing 9% each year in Europe, there’s a much steeper growth in the reach and intensity of the use of internet commerce sites. Shopping directories and guides are proving particularly fast in their growth, although the experience across the different countries varies greatly.

NetRatings can also reveal how display advertising has grown in the number of advertisers and the number of campaigns running across Europe. There are 8% more companies running (which in turn leads to 20% more adverts).

For me the most fundamental point is that the research also reveals deeper lessons from online shoppers and their behaviour which helps explain why firms should advertise online. In the UK 70% of internet users now claim that “the internet is the best source of product information”. 44% of people see the internet as being the place they “do their shopping research before buying online”, a statistic that helps answer the question about how internet advertising drives offline sales. We’re also seeing the more sophisticated third of online shoppers claim that they will spend as much time as possible doing their shopping on the web rather than the highstreet. And the average spend? €352 per person during December. As for why people are shopping online? Convenience and the lack of crowds are now being seen as the leading reasons compared to the discounting and price comparisons of a few years before.

Ask your national IAB team about research they may have for online audiences and spending patterns, and sign up for the IAB Europe Informer research service by emailing your details to [email protected]

IAB Europe Leadership Council

Lessons from Christmas eCommerceLessons from Christmas eCommerce• European eCommerce SectorEuropean eCommerce Sector

– Size, popularity & growthSize, popularity & growth– AdvertisingAdvertising

• Why advertise online?Why advertise online?

• Themes for online advertisingThemes for online advertising

• How effective is advertising onlineHow effective is advertising online

European eCommerce SectorEuropean eCommerce SectorSize, popularity and growthSize, popularity and growth


Use of online media increasingUse of online media increasing

Source: Nielsen//NetRatings European Index, Home and Work Data (CH, ES home data only) November 2005 - 2006

10% 10% 18% 18% 27% 27%


eCommerce is very popular…eCommerce is very popular…European Unique Audience (000's) + Active Reach

70,920

59,354

86,227

49,779 39%

47%

56%

68%All Multi-Category

Commerce

Mass Merchandiser

Classifieds/Auctions

Shopping Directories &Guides

Source: Nielsen//NetRatings European Index, Home and Work Data (CH, ES home data only) December 2006


……and growing!and growing!

Source: Nielsen//NetRatings European Index EXC UK, Home and Work Data (CH, ES home data only) December 2005 - 2006

+21%

+19%

+19%

+14%

+11%

+9%

+9%

+4%

All Multi-CategoryCommerce

Mass Merchandiser

Classifieds/Auctions

Shopping Directories &Guides

Unique Audience Growth

Active Reach Growth


eBay and Amazon still dominateeBay and Amazon still dominateRank Brand

Unique Audience (Millions)

Active Reach

1 eBay 53.6 42%

2 Amazon 32.0 25%

3 Quelle 8.5 7%

4 PIXmania 8.1 6%

5 Fnac 8.0 6%

6 Shopping.com Network 7.8 6%

7 preisvergleich 7.5 6%

8 Tchibo 6.6 5%

9 La Redoute 6.0 5%

10 Otto 6.0 5%

Source: Nielsen//NetRatings European Index, Home and Work Data (CH, ES home data only) December 2006

European eCommerce SectorEuropean eCommerce SectorAdvertisingAdvertising


European Online Advertising Activity (Dec 06) + Growth on Dec 05

+8%

+9%

+20%

45,43821,660

126,955

BannersCampaignsAdvertisers

Online advertising activity grows…Online advertising activity grows…

Source: Nielsen//NetRatings AdRelevance, all categories excluding house ads, December 2006


……especially for CD/book retailersespecially for CD/book retailers

Source: Nielsen//NetRatings AdRelevance, ‘Specialised eCommerce’ category, excluding house ads, December 2006

European Online Advertising Specialised eCommerce Activity (Dec 06) + Growth on Dec 05

+41%

+72%

+89%

629365

2,074

BannersCampaignsAdvertisers


eBay is most prolific online advertisereBay is most prolific online advertiser

Source: Nielsen//NetRatings AdRelevance, all categories excluding house ads, December 2006

Why advertise online?Why advertise online?Lessons from online shopper behaviourLessons from online shopper behaviour


Q. Why advertise online?Q. Why advertise online?

Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2006

A. = it’s where shoppers spend their timeA. = it’s where shoppers spend their time

How much more time is spent researching and buying gifts ONLINE compared to the HIGH STREET

38%

53%57%

38% 40%

17%

33%

41%

All 16-24 25-34 35-44 45-54 55+ Male Female




% of respondents researching most of their Christmas shopping online before buying on the High Street

44%

52% 51%45% 46%

35%

All 16-24 25-34 35-44 45-54 55+

A. = it’s where shopping research is doneA. = it’s where shopping research is done




% of respondents believing online is the best way to find comprehensive info about products they might want to buy

70%

60%64%

72% 74% 72%

All 16-24 25-34 35-44 45-54 55+

A. = it’s the best source of product infoA. = it’s the best source of product info




% of respondents intending to make more purchases over the Internet for Xmas 2006 compared to Xmas 2005

62%65% 65% 65%

59% 57%

All 16-24 25-34 35-44 45-54 55+

A. = purchasing online is increasingA. = purchasing online is increasing




% of respondents intending do as much as possible of their Christmas shopping over the Internet

34% 33%36%

39%

32%28% 27%

39%

All 16-24 25-34 35-44 45-54 55+ Male Female

A. = it accounts for much of spendA. = it accounts for much of spend




A. = people spend money there!A. = people spend money there!

Average intended spend on Xmas gifts online per person

352 €

214 €

340 €

413 €

364 €

322 €

346 €

357 €

All

16-24

25-34

35-44

45-54

55+

Male

Female




A. = people click on ads!!!A. = people click on ads!!!

% of respondents who would click on an online advert in order to receive a discount off an online purchase

51%46%

49%54% 52% 51%

All 16-24 25-34 35-44 45-54 55+

Themes for online advertisingThemes for online advertisingWhat online shoppers tell usWhat online shoppers tell us


Convenience still best thing about Convenience still best thing about shopping online…shopping online…

Source: Nielsen//NetRatings UK MegaPanel Xmas Survey, November 2004, 2005 and 2006

34%

23%

17%

12%

5%

0%

5%

10%

15%

20%

25%

30%

35%

2004 2005 2006Christmas

% o

f re

spo

nd

ents

cit

ing

th

is f

acto

r

Convenient

No crowds

No waiting/queue

Cheaper

Wider range tochoose from


……for almost all consumer groupsfor almost all consumer groups


Best thing about shopping online by demographic

34%

23%

17%

12%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Total 16-24 25-34 35-44 45-54 55+ Male Female

Convenience

No crowds

No waiting/queues

Cheaper

How effective is advertising online?How effective is advertising online?What online shoppers tell usWhat online shoppers tell us


General surfing dictates which sites General surfing dictates which sites are chosen…are chosen…


64%

58%

48%

46%

40%

35%

35%

30%

30%

30%

23%

General surfing

Same site buy from regularly

Search engine

Personal recommendation

Online recommendation/review

Saw special offer

Same store buy from offline

Online advertising

Shopping comparison website

Same place buy from last Xmas

Offline advertising

Most popular factors for deciding which sites to use for Xmas shopping



64 %

48 %

30 %

46 %

30 %

23 %

15%

25%

35%

45%

55%

65%

75%

2004 2005 2006Christmas - all respondents

% o

f re

spo

nd

ents

cit

ing

th

is f

acto

r General Surfing

Search engine

Shoppingcomparison site

Personalrecommendation

Online advertising

Offline advertising

……however, ‘triggers’ are changinghowever, ‘triggers’ are changing


……however, ‘triggers’ are changinghowever, ‘triggers’ are changing


Change in % of respondents citing this factor between Christmas 2004 & 2006

-28%-31%

+6%

+22%

+62%

-11%

-35%

-15%

5%

25%

45%

65%


Onlineadvertising

General Surfing Offlineadvertising

Shoppingcomparison site

Search engine


Triggers differ in importanceTriggers differ in importance


Selected factors in choosing sites by demographic

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

Total 16-24 25-34 35-44 45-54 55+ Male Female

General surfing

Search engine


Onlinerecommendation/review

Saw special offer

Online advertising

Shoppingcomparisonwebsite


Email marketing increasingly a driver…Email marketing increasingly a driver…


% of respondents who would accept emails from retailers in return for discounts on online purchases

44%

45 %

51 %

49%

53 %

60 %

48 %

46%

57 %

40%

44%

48%

52%

56%

60%

Xmas 2004 Xmas 2005 Xmas 2006

% o

f re

spo

nd

ents

Men

Women

All


……and mobile Internet becoming a factorand mobile Internet becoming a factor


11%

26%

17%

11% 11%

4%5%

13%

8%

4% 4% 3%

All 16-24 25-34 35-44 45-54 55+

% of respondents w ho'd receive info fromretailer via mobile phone to get discountoff an online purchase

% of respondents w ho'd use mobilephone internet/WAP service toshop/check prices


Lessons from Christmas eCommerceLessons from Christmas eCommerce• Use of online media is increasing – consumers view 27% more Internet pages Use of online media is increasing – consumers view 27% more Internet pages

than a year agothan a year ago

• Over two-thirds of online Europeans visit eCommerce sites and growingOver two-thirds of online Europeans visit eCommerce sites and growing

• More companies are advertising online; their campaigns are more in-depthMore companies are advertising online; their campaigns are more in-depth

• Advertisers should be online – its where shoppers spend their time researching Advertisers should be online – its where shoppers spend their time researching and buying and it accounts for more of spend and buying and it accounts for more of spend

• People are open to receiving marketing materials in return for discounts – they People are open to receiving marketing materials in return for discounts – they will click on ads / open emails and receive info through their mobile!will click on ads / open emails and receive info through their mobile!

• People shop online mostly because its convenient but factors differ in People shop online mostly because its convenient but factors differ in importance between different groupsimportance between different groups

• General surfing dictates which sites are chosen but personal recommendations General surfing dictates which sites are chosen but personal recommendations and online ads are growing in importance – search is no longer the dominant and online ads are growing in importance – search is no longer the dominant triggertrigger

• Triggers vary in relevance between the different groups – particularly for newer Triggers vary in relevance between the different groups – particularly for newer technologies such as mobile Internettechnologies such as mobile Internet

Lessons from Christmas eCommerceLessons from Christmas eCommerceThank youThank you

Alex Burmaster/Alex Burmaster//European Internet Analyst/European Internet AnalystTel/Tel//020 7014 0590/020 7014 0590

Email/Email//[email protected]/[email protected]