eCommerce

The popularity of online shopping is continuing to grow rapidly, with over half of the British population aged 15 or older shopping online, according to an IMRG report prepared by the British Population Survey (BPS). The 50% benchmark was achieved for the very first time in February 2010 (50.6%), while March saw further growth in the number of online shoppers to 51%.

Percentage of British population aged 15 and older shopping online 2008-2010:
- March 2008: 43.4%
- March 2009: 46.6%
- March 2010: 51.1%

Of particular significance to the long term growth of online shopping, the survey reveals a narrowing in the gap between those who search for product information online and those who actually purchase: in March 2008, the ratio was 17 Shoppers to every 20 Searchers, and by March 2010 this was 18 to 20.

BPS conducts over 80,000 face-to-face in-home interviews each year with an accurate cross-section of the entire adult population. The report concentrates on the first quarter of 2010 to provide a detailed national view of those who are internet shoppers, who and where they are, how they access the internet, and how they search for products and shop online. (IMRG, April 2010)

Although the final stats are not yet available, eMarketer expects UK online ad spending to show hard-won gains in 2009 and regain momentum in 2010 and beyond.

UK online advertising spending, 2008-2013:
- 2008: £3,350 million / $6,198 million
- 2009: £3,380 million / $6,253 million
- 2010: £3,540 million / $6,549 million
- 2011: £3,880 million / $7,178 million
- 2012: £4,320 million / $7,992 million
- 2013: £4,730 million / $8,751 million
(eMarketer, December 2009)

Commuters in Liverpool are able to use contactless payments on buses since the end of October 2009. This is the first time the technology has come to public transport in the UK. Commuters are able to leave their change in their wallet and pay for their journey just by waving a card. PayPass ‘Tap & Go' tech is being rolled out by Stagecoach Merseyside on its fleet of 200 buses, and enables anyone with a MasterCard PayPass card to wave it near or on a reader to pay for their journey.

The launch is in partnership with RBS WorldPay and is supported by Commidea, a provider of credit card processing systems. According to a study by RBS WorldPay, 76% of retailers believed the technology would be cost effective and efficient. Specifically, 41% believed that it would save time through faster transactions. (IT Pro, October 2009)

Growth in UK business-to-consumer (B2C) e-commerce sales (including travel) slowed in 2008, as the recession became a reality for many consumers. And the financial squeeze is expected to continue to influence online buying activity through 2010.

However, eMarketer estimates that 72.5% of UK Internet users ages 14 and older will buy at least one item online in 2009.  Furthermore, between 2009 and 2013, the number of online buyers will rise from 26.9 million to 31.8 million - over one-half of the UK population.

When the Internet Advertising Bureau UK (IAB UK) and Lightspeed Research asked UK Internet users how the recession had affected the frequency of their visits to Websites, 41% of respondents said the time they spent shopping online had increased but 45% said they were spending more time looking for deals.

When it came to the types of sites visited, price comparison sites were the clear winners, with 33.7% of respondents saying they visited them more often due to the recession. Visits to auction sites and value supermarkets were also up more than 22%.

The biggest drops were for luxury goods sites. While 3.7% of Web users polled said they were visiting these more often, 22.7% said they accessed luxury sites less frequently.

(eMarketer, August 2009)

Of the people not shopping online in the UK, some 30% identified a lack of trust as the main reason, according to a report from the Office of Fair Trading (OFT). Personal security was the problem for 20%, while 15% simply had no faith in online retailers.

The OFT believes that consumer confidence is improving, with more than half (54%) of respondents saying shopping online was as safe as shopping in a store - up from 26% in 2006.

However the government department said that online shopping could never reach its full potential with current attitudes. Of the people who did shop online, almost three quarters (72%) still had concerns, while many users were unaware of their consumer rights. (ITPRO, May 2009)

Online Advertising

Overall, UK advertising spending suffered a double-digit drop in 2009, according to several sources. But the Internet defied this downward trend. UK advertisers spent £3.54 billion ($5.56 billion) online in 2009-5.7% more than in 2008.

Internet advertising will gain momentum in 2010 as the economy inches into recovery, reaching £3.79 billion ($5.95 billion). Slower growth is expected in 2011, but the London Olympics and greater financial stability should bring higher rises in 2012. By 2014, online ad spending will approach £4.84 billion ($7.60 billion).

Search accounted for 60.7% of Internet ad spending in 2009. Display claimed 20% and classified ads 19%, while less than 1% was spent on e-mail sent to purchased lists. Search will increase its share of the pie in 2010 and beyond, as classified ads lose ground. Spending on video and mobile ads will boost the display category.

Telecoms, finance, technology, and media and entertainment firms topped the UK's Internet spending league in 2009. On mobile devices, however, entertainment companies led with roughly 60% of all ad spending.

(Emarketer, June 2010)

The financial crisis has brought the progress of the UK's digital marketplace almost to a halt. Growth in online ad spending in the UK will be minuscule in 2009, just 0.9%, according to estimates by eMarketer.

UK online advertising spending, 2008-2013:
- 2008: £3,350 million (+19.1%)
- 2009: £3,380 million (+0.9%)
- 2010: £3,540 million (+4.7%)
- 2011: £3,880 million (+9.6%)
- 2012: £4,320 million (+11.3%)
- 2013: £4,730 million (+9.5%)

In 2010, online spending should recover more quickly than spending in other media, according to eMarketer. (eMarketer, July 2009)

The largest percentage of UK internet users in all age groups said they were most likely to pay attention to an online advertisement after 6 in the evening, according to a study by Lightspeed Research and the Internet Advertising Bureau (IAB UK).

Time of day when UK internet users are most likely to pay attention to online ads, by age, November-December 2008 (% of respondents):
- 18-24: before 9am (4%) / 9am-12pm (10%) / 12pm-2pm (17%) / 2pm-6pm (24%) / after 6pm (46%)
- 25-34: 5% / 12% / 13% / 17% / 54%
- 35-44: 3% / 13% / 10% / 15% / 59%
- 45-54: 5% / 15% / 11% / 15% / 54%
- 55+: 6% / 21% / 6% / 23% / 45%

The likelihood of users paying attention to advertising at other times varied slightly depending on age.

Attention to ads also varied based on the activities users were engaged in. The greatest proportion of UK internet users said they were very likely to process an ad while "researching the best deals," followed by shopping, gambling and searching online. Most people said they were not at all likely to notice online ads while e-mailing or instant messaging, followed by watching online video and playing online games. (eMarketer at , May 2009)

More than half (51%) of UK users said that they pay attention to an online ad when the ad is relevant to them, according to findings from the UK Internet Advertising Bureau (IAB UK), based on polling data from Lightspeed Research.

Reasons that UK internet users pay attention to an online ad, November-December 2008 (% of respondents):
- If it is relevant to me: 51%
- If it is useful to me: 43%
- If it gives me money off: 33%
- If it gives me new and/or exclusive information: 16%
- If it is entertaining: 15%
- If it adds something to my online experience: 9%
- I don't notice online ads: 25%

Along with confirming the belief that people like to save money, the most popular answers showed an openness on the part of consumers to more targeted advertising. The results varied in some cases by age. Younger audiences were more interested in special offers, exclusive information and entertainment value. For ads to resonate with younger baby boomers, they needed to be more relevant and useful.

Certain ad formats had a higher rate of recall than others. Respondents remembered paid search, display, e-mail and pop-up ads more than social network or pop-under ads. The research has found that even though not all consumers click on ads, they are now fully acquainted with most forms of advertising online. (eMarketer, March 2009)

UK advertisers substantially reduced their budgets in the final three months of 2008 according to the IPA's Q4 Bellwether report, published today. Just 7% of the companies questioned reported an increase in overall Q4 ad budgets, while 49% said they had cut spending during that period.