Globe and Mail - Internet advertising is expected to grow faster in Canada than anywhere else in the world over the next five years, however countries in Asia and Latin America will begin quickly closing that gap soon after, a report suggests.
The annual Global Entertainment and Media Outlook published by the consulting and accounting firm PricewaterhouseCoopers LLP predicts spending on Internet advertising in Canada will reach $2.03b (U.S.) by 2011.
That represents a compound annual growth rate of 23.5%. It is well ahead of the global rate of 13.4% and higher than in the United States, where Internet advertising revenue is forecast to grow 16.1% during that time.
Canadian ad spending online is being driven by the high percentage of broadband Internet users in Canada, which is higher than in most other parts of the world. Meanwhile, online advertising markets in Canada are not yet as saturated as in the United States.
"We have had higher broadband penetration rates than other countries around the world ... and we're now seeing a bigger shift in advertising revenue," said Tracey Jennings, leader of the entertainment and media practice for PwC in Canada.
Looking beyond 2011, however, countries like India and China are expected to make up a lot of ground on North America in terms of growth, Jennings said.
"What you're going to see over the next five years is the other countries' penetration rates are going to grow quite significantly. It just means we're kind of at the head of the curve."
The report predicts advertising trends between 2007 and 2011. It is watched closely by the broadcasting, print and online sectors each year as a gauge of global ad spending trends.
Over all, Canada's entertainment and media market is expected to grow at a compound annual rate of 5.6% over the next five years, hitting 46.8b in spending by 2011, an increase from $35.7b last year.
While Internet advertising will grow fastest, other industries will continue to expand. Radio and out-of-home advertising, such as billboards, will see revenue increase at a compound rate of 11.7% during that time, to $2.8b in 2011.
Ad spending on TV networks and cable channels in Canada is expected to increase to $4.6b, at a rate of 4.5%.
Print media will see slower rates of growth, with ad spending on magazines expanding at a compound annual rate of 1.8% to $1.5b. The newspaper industry will see compound annual growth of 1% in that time, to $3.2b.
Online ad spending to grow fastest in Canada in next 5 years
User-gen content's ad revenue to surge 4 times in 4 years: report
eMarketer - The days of giant media conglomerates controlling the creation, distribution and monetization of content are fading. An explosion of user-generated content is reshaping the media landscape, shattering the status quo and creating new opportunities for marketers. The User-Generated Content report analyzes the fast-changing new world of content ownership and distribution, where for the first time everyday people determine exactly what is created and consumed—not marketers or publishers. Led by the companies that started the revolution—YouTube, MySpace, Facebook, Photobucket and others—eMarketer estimates that US user-generated content sites will earn $4.3 billion in ad revenues in 2011, up from $1 billion in 2007.
CBCNews Partners with Technorati Bloggers
CBCNews.ca reports it is the world’s first broadcaster website to partner with leading blog and social media search engine Technorati.com.
Technorati currently tracks over 86 million blogs. In a new level of interactivity, CBCNews.ca stories now include direct links to blogs around Canada and the globe that are discussing the news. It is designed, the CBC says, to give Canadians more ways to access comprehensive news coverage of local, national and international stories.
As part of its continuous commitment to enhancing the web experience for users, the new service can be found at http://cbcnews.ca/blogwatch
The announcement comes on the heels of CBC's interactive experiment, carried out through one of Canada’s most popular social networking websites, called The Great Canadian Wishlist, where Canadians are encouraged to share their wish for the nation. CBC News also has its own “wishlist” web page at www.cbc.ca/wish, where visitors can follow the discussions through the CBC blog.
CBCNews.ca also reports launching several new features recently, including: an embedded media player highlighting CBC News audio and video; a much greater emphasis on interactive features; compilations of the most popular news stories, from the most viewed to the most blogged; wider pages allowing for more content; prominent placement showcasing original online feature stories (in-depths, columns and photo galleries) and additional on-air highlights and podcasts.
Online sales lose steam
NYT - Has online retailing entered the Dot Calm era?
Since the inception of the Web, online commerce has enjoyed hypergrowth, with annual sales increasing more than 25 percent over all, and far more rapidly in many categories. But in the last year, growth has slowed sharply in major sectors like books, tickets and office supplies.
Growth in online sales has also dropped dramatically in diverse categories like health and beauty products, computer peripherals and pet supplies. Analysts say it is a turning point and growth will continue to slow through the decade.
The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.
The slowdown is a result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits.
John Johnson, 53, who sells medical products to drug stores and lives in San Francisco, finds that retailers have livened up their stores to be more alluring.
“They’re working a lot harder,” he said as he shopped at Book Passage in downtown San Francisco. “They’re not as stuffy. The lighting is better. You don’t get someone behind the counter who’s been there 40 years. They’re younger and hipper and much more with it.”
He and his wife, Liz Hauer, 51, a Macy’s executive, also shop online, but mostly for gifts or items that need to be shipped. They said they found that the experience could be tedious at times. “Online, it’s much more of a task,” she said. Still, Internet commerce is growing at a pace that traditional merchants would envy. But online sales are not growing as fast as they were even 18 months ago.
Forrester Research, a market research company, projects that online book sales will rise 11 percent this year, compared with nearly 40 percent last year. Apparel sales, which increased 61 percent last year, are expected to slow to 21 percent. And sales of pet supplies are on pace to rise 30 percent this year after climbing 81 percent last year.
Growth rates for online sales are slowing down in numerous other segments as well, including appliances, sporting goods, auto parts, computer peripherals, and even music and videos. Forrester says that sales growth is pulling back in 18 of the 24 categories it measures.
Jupiter Research, another market research firm, says the growth rate has peaked. It projects that overall online sales growth will slow to 9 percent a year by the end of the decade from as much as 25 percent in 2004.
Early financial results from e-commerce companies bear out the trend. EBay reported that revenue from Web site sales increased by just 1 percent in the first three months of this year compared with the same period last year. Bookings from Expedia’s North American Web sites rose by only 1 percent in the first quarter of this year. And Dell said that revenue in the Americas — United States, Canada and Latin America — for the three months ended May 4 was $8.9 billion, or nearly unchanged from the same period last year.
“There’s a recognition that some customers like a more interactive experience,” said Alex Gruzen, senior vice president for consumer products at Dell. “They like shopping and they want to go retail.”
The turning point comes as most adult Americans, and many of their children, are already shopping online.
Analysts project that by 2011, online sales will account for nearly 7 percent of overall retail sales, though categories like computer hardware and software generate more than 40 percent of their sales on the Internet.
There are other factors at work as well, including a push by companies like Apple, Starbucks and the big shopping malls to make the in-store experience more compelling.
Nancy F. Koehn, a professor at Harvard Business School who studies retailing and consumer habits, said that the leveling off of e-commerce reflected the practical and psychological limitations of shopping online. She said that as physical stores have made the in-person buying experience more pleasurable, online stores have continued to give shoppers a blasé experience. In addition, online shopping, because it involves a computer, feels like work.
“It’s not like you go onto Amazon and think: ‘I’m a little depressed. I’ll go onto this site and get transported,’ ” she said, noting that online shopping is more a chore than an escape.
But Ms. Koehn and others say that online shopping is running into practical problems, too. For one, Ms. Koehn noted, online sellers have been steadily raising their shipping fees to bolster profits or make up for their low prices.
In response, a so-called clicks-and-bricks hybrid model is emerging, said Dan Whaley, the founder of GetThere, which became one of the largest Internet travel businesses after it was acquired by Sabre Holdings.
The bookseller Borders, for example, recently revamped its Web site to allow users to reserve books online and pick them up in the store. Similar services were started by companies like Best Buy and Sears. Other retailers are working to follow suit.
“You don’t realize how powerful of a phenomenon this new strategy has become,” Mr. Whaley said. “Nearly every big box retailer is opening it up.”
Barnes & Noble recently upgraded its site to include online book clubs, reader forums and interviews with authors. The company hopes the changes will make the online world feel more like the offline one, said Marie J. Toulantis, the chief executive of BarnesandNoble.com. “We emulate the in-store experience by having a book club online,” she said.
The retailers that have started in-store pickup programs, like Sears and REI, have found that customers who choose the hybrid model are more likely to buy additional products when they pick up their items, said Patti Freeman Evans, an analyst at Jupiter Research.
Consumers are generally not committed to one form of buying over the other. Maggie Hake, 21, a recent college graduate heading to Africa in the fall to join the Peace Corps, said that when she needs to buy something for her Macintosh computer, she prefers visiting a store. “I trust it more,” she said. “I want to be sure there’s a person there if something goes wrong.”
Ms. Hake, who lives in Kentfield, Calif., just north of San Francisco, does like shopping online for certain things, particularly shoes, which are hard to find in her size. “I’ve got big feet — size 12.5 in women’s,” she said. “I also buy textbooks online. They’re cheaper.”
John Morgan, an economics professor from the Haas School of Business at the University of California, Berkeley, said he expected online commerce to continue to increase, partly because it remains less than 1 percent of the overall economy. “There’s still a lot of head room for people to grow,” he said.
