The Internet is now used at home by 68% of UK adults according to the latest market review from Key Note. The fact that 68% of those adults who use the Internet `go online' at least once a day shows how quickly the internet has become part of everyday life in the typical UK household. The last decade have brought with it significant improvements in the Internet experience for the consumer: fast broadband connections, interactive Web 2.0 technologies, and remote access using portable computerised devices (e.g. mobile phones). E-mail is used by 87% of those with home Internet access, but communicating through websites, particularly `social networking' websites such as Facebook and MySpace has become very popular.
Highlights from the report:
Online shopping is also increasing in popularity and changing the face of retailing. Travel is the largest online market and has underpinned the rise of the budget airlines, with companies such as easyJet and Ryanair relying almost entirely on the Internet for bookings. In contrast, online grocery shopping has yet to become a mass market. Generally, any business involving detailed information is suited to e-commerce (e.g. travel, house buying, insurance, books and tickets for events).
Information is itself a large part of the Internet market, ranging across government, education, health, job seeking, family history, weather forecasts and many other areas. Wikipedia has become the world's largest online encyclopaedia. With the exception of a few operators, the funding mechanism for websites has shifted over the years from subscription fees to advertising. In 2007, the Internet accounted for 15.6% of all UK advertising expenditure (from a mere 2.9% in 2003). The market divides between advertisements on websites and `paid-for searches', where companies pay search engines such as Google to give their websites prominence.
Looking to the future, key Note predict that the current economic crisis is likely to reduce the growth rate for Internet advertising, but the medium itself will continue to play an increasingly important role in commerce and in consumer lifestyles. Key Note identified three main future trends: convergence between the television and the computer in home entertainment and information; the fragmentation of mass markets as the Internet offers tailor-made options for entertainment; and a stimulus to live events and `socialising' generally, as the likes of networking, blogging and organising events via the Internet spread from the youth market to older consumers.
The full report is available to current London Business School staff, students & faculty via Key Note Online which can be found on the A-Z list of library databases in Portal. The hardcopy version of this report is also available and can be found in the market reports collection on the first floor of the library
Picture from Creative Commons: Flickr: Kryptyk