state of the net issue 16 - spring 2010

State of the Netessential eBusiness intelligence for Irish managers

A quarterly bulletin on online activity in Ireland ISSN: 1649

Compiled by AMAS in association with the Irish Internet Association

w w w . a m a s . i e

issue 16 Spring 2010

Buy wisely to get value from Internet

Never has there been so much interest among Irish businesses in the Internet, as a new sales channel, as a way to cut costs or improve customer service or simply as a highly effective marketing and communications platform. Companies cannot afford to ignore the Internet. How much value it offers will vary from business to business and from sector to sector but also by how well internet projects are scoped, developed, delivered and promoted.

New research, illustrated in the graph, shows that Irish companies have a higher proportion of online sales than those of any other EU country. Not every product or service can be sold online, of course, yet a strong online presence influences buyers’

Aileen O’Toole, Managing Director, AMAS

perceptions at different points in the sales cycle.

Not every company will need a complex website that integrates with a back-end system. And not every business will need to develop web applications or launch campaigns on Facebook or Twitter.

What every business needs, though, is clarity around what type of online presence – website(s), other channels, campaigns – supports their commercial or other goals. Many internet projects fail to deliver value because there isn’t that type of clarity. Companies often commission projects without this strategic context and without pinning down the project requirements in the kind of detail required by a web developer or an online marketer or both.

Three stories illustrate the point:• One NGO has been paying over €1,000 each month to

a developer to make routine website updates which should be done in-house. Why? Because site functionality was not properly specified• An organisation had a largescale website developed at a discounted rate, but didn’t consider maintenance requirements so it is now saddled with high on-going costs. Why? Because it is effectively locked into a single supplier with proprietary software which has a de facto monopoly• Another company delivered an ambitious web project at less than a third of the cost that had been quoted by some web developers. How? By using a low-cost piece of software and paying for its deployment, not for custom development

Buying web, IT or online marketing services and software is something of a black art and requires a corresponding combination of IT, marketing and Internet skills as well as

market knowledge. So how can you be a smart buyer?

1. Do your homework: Under-specification cripples online projects 2. Get expert help: It is often more cost-effective to commission a strategy and planning project before going out to market to build a new site or application3. Seek competitive quotes: Get at least three quotes but ensure that project requirements are fully scoped and you can make valid comparisons between proposals4. Don’t assume that cheap is best: Avoid the temptation of automatically selecting the lowest cost vendor. Factor experience, quality, project management and customer service into the process5. Use free stuff: Don’t assume that you need to pay a licence fee for the software that powers your website or drives your campaign. Free tools, like Google Analytics and WordPress, have made life difficult for other analytics and content management providers whose paid products are not as feature-rich 6. Protect yourself: Avoid lock-in to a single supplier, tie payments into deliverables and ensure warranty periods are built into the contract

Visit the AMAS website (www.amas.ie) for a buyers’ guide for Internet projects.

How we score for broadband page 2

Measure

Take up 21.4%0.6%

89%4.9%

Fibre connections

Speed

Cost

Ireland’s score Rank

Broadband Score Card

Broadband subscribers per 100 inhabitants

As % age of total broadband

% age of connections10Mbps and above

Annual cost of 34Mb leased line as % age of OECD 19 average

Current broadband subscriptions 1.36m

1

2

3

4

5

What the young do online page 4

MusicKeeping in touch Research

71%Music

70%

Keeping in touch

44%

Research

71%70% 44%

40%

60%

20%

0%

12%

26%15%

EU 27Ireland

UK

Source: Eurostat Information and Communication Technologies in Enterprises, published January 2010

© AMAS graphic (www.amas.ie)

eCommerce as % of total turnover

0%

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Full online availability in 2007

71% EU Average 2009

59% EU Average 2007

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1. BroadbandImproving, but could do better. Ireland’s broadband scorecard is showing an improvement but it has some distance to go to match the top performers internationally. High-quality, affordable broadband is essential to stimulating economic activity, specifically to creating jobs, earning export revenues, attracting foreign direct investment and supporting regional development.

A new report from Forfás aggregates all the international benchmarking data for broadband and shows how Ireland stacks up against its international competitors. The

result is mixed. There have been improvements in the speed and the cost of broadband offerings, with coverage and take-up rates converging to the OECD average. The latest ComReg data shows 1.36 million subscriptions.

But, Forfás warns, Ireland is at least three to five years behind competitor countries in term of rolling out the infrastructure to deliver high speed, next generation broadband. In Ireland only 0.6% of connections are fibre, compared with 21% for Sweden, a whopping 51% for Japan and an OECD-28 average of 11.3%.

Scorecard sources: 1 Take up – OECD, June 2009 (based on 30 OECD countries)2 Fibre connections – OECD, June 2009 (based on 28 OECD countries)3 Speed – Forfás Ireland’s Broadband Performance and Policy Actions January 2010 (based on 24 EU countries)4 Cost – Forfás Ireland’s Broadband Performance and Policy Actions January 2010 (based on 19 OECD countries)5 ComReg Quarterly Key Data Report, December 2009

Measure

Take up 21.4%0.6%

89%4.9%

Fibre connections

Speed

Cost

Ireland’s score Rank

Broadband Score Card

Broadband subscribers per 100 inhabitants

As % age of total broadband

% age of connections10Mbps and above

Annual cost of 34Mb leased line as % age of OECD 19 average

Current broadband subscriptions 1.36m

1

2

3

4

5

Online availability of services 2. eGovernmentAt last, a boost in an international benchmarking study, with Ireland making it to the top ten within the EU for eGovernment delivery. Ireland is categorised as “fast growing” and has closed the gap with our European neighbours on key eGovernment indicators, according to a European Commission benchmarking study.

We earned a score of 83%, compared with an EU average of 71%, for what the study calls “full online availability”. By comparison, the previous study showed Ireland lagging the then EU average of 59%. “Full online availability” is a measure that scores the maturity of 20 online services across all EU member states. Ireland is ranked as a top performer for eProcurement, with over 95% of all published Official Journal of the European Union (OJEU) contracts advertised through the eTenders website.

Source: European Commission, 8th eGovernment Benchmark Measurement, published November 2009



Source: Billetts Ireland 2010 Media Forecasts analysis, published December 2009

Sleek new smartphones, with the latest business apps and a host of other online services, are an essential tool in the executive toolkit. They are the most popular mobile data device offered to employees – with 70% of large corporates providing them to employees compared with 30% of SMEs.

Remote working has also been facilitated by other mobile data devices, such as 3G datacards, netbooks and wireless LAN cards. Larger Irish corporates are much more likely to offer such devices to their employees than SMEs.

New ComReg data shows that 87% of corporates – those employing 100+ – were providing some type of mobile data device to some of their employees, compared with just 45% of SMEs, defined as those employing 100 or less.


Source: ComReg SME & Corporate ICT Research conducted by Millward Brown IMS, March – April 2009. Based on a sample of 400 SMEs and 65 Corporates. There was no research conducted in 2007.

3. Smart phones

4. Digital advertising

Search

Display

Classifieds

Sponsorship

€35m

€30.6m

€13.5m

€7.2m

Search

Display

Classifieds

Sponsorship

€35m

€30.6m

€13.5m

€7.2m

Digital advertising will be the third largest medium in Ireland in 2010 and grow by 9% compared with an overall advertising market decrease of 7%, according to management consultancy Billetts.

As forecasters go, Billetts has a better class of crystal ball than others, as it audits budgets for major advertisers. The consultancy puts a value of €86 million on Irish digital advertising in 2009 giving it a market share of 10.6%, on a par with radio. Billetts reports

that online classifieds took a “huge hit” last year, with revenues halved, but search performed well and is now the largest category within online.

In the UK, the most recent IAB statistics for the first half of 2009 show online as the largest single category, with a 23.5% market share. Similar research is to be commissioned in Ireland this year from PricewaterhouseCoopers by the relaunched Interactive Advertising Bureau Ireland

(IAB Ireland). This is widely predicted to accelerate the growth of digital advertising in Ireland at the expense of traditional media.

Digital advertising mix

© A

MA

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Top Trends

the opportunity to win online

www.amas.ie

10%

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MusicKeeping in touch Research

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Keeping in touch

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5. Young people online

Source: Eurostat Internet usage in 2009 - Households and Individuals, published December 2009

It’s what most parents of teenagers want to know – what are they up to on the Internet? One teenager – award-winning blogger Tommy Collison – got some answers when he polled his fellow teens for a project for this year’s BT Young Scientist & Technology Exhibition. Collison, now 15, has been a blogger for a couple of years and decided to test the attitudes of secondary school students to blogging.

In the process, he got insights into their online behaviour. Some 1,781 students from ten secondary schools completed the survey, two-thirds of whom were 15 or younger and half of whom use the Internet from home each day.

Music was the top internet choice, followed by socialising and research. All but 18% of the sample had “at least one” account on a social networking site. Interestingly, Bebo is shown to have the widest reach, followed by Facebook (other social networking data shows Bebo on the wane, losing out to Facebook). How many of these social networking accounts lie dormant is known only to the social networking sites themselves.

As for the blogging, the teens gave a lukewarm response. Around a third of the sample read blogs and only 7% of the sample contribute to blogs. Why? Tommy speculates that it’s to do with lack of familiarity, the time it can take and, also, concerns about parental approval.

Current number of social networking sites

At least one82%

None18%

Facebook29%

Bebo45%

Gaia Online1%

Myspace 5%

Twitter7%

Other13%Source: BT Young Scientist project by Tommy Collison which examined secondary school students’ use of the Web. Based on a sample of 1,781 secondary school students

Main use of Internet

At least one82%

None18%

Facebook29%

Bebo45%

Gaia Online1%

Myspace 5%

Twitter7%

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Myspace 5%

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6. Online shopping% ordering online by age

Young adults are more likely to shop online than older or younger Irish consumers, according to new Eurostat figures. 43% of those between the ages of 25 and 34 said that they had bought something online in the previous three months, nearly double the proportion in the same age bracket back in 2005. The second-highest group are the 35 to 44-year-olds, at 35%, followed by 16 to

24-year-olds (29%).

This longitudinal study of online shopping trends also reveals that Ireland is bang on the European average for online shopping, with 37% of the population buying online. The survey found that UK shoppers are more frequent shoppers, with a comparative figure of 66%, the second highest to Norway (70%) in the EU-27.


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Top Trends

7. Online TV

This year’s IIA Congress will have a dual focus: what’s good in 2010 and what’s possible for 2020. It will

critically assess the next wave of opportunities for the industry, as well as more immediate benefits for businesses in terms of improving their processes, productivity and profitability.

The Congress will see the return of the popular “Web strategy clinics”. Delegates will be able to book a one-on-one 30-minute slot with industry experts, who will

analyse their online strate-gies and give confidential advice on the best course for their businesses.

Breakout sessions during the conference will also cover a wide range of themes that reflect the tough environ-ment we are going through. In the evening there will be the presentation of the an-nual Net Visionary Awards.

The past 12 months have also been a busy time for the IIA Working Groups, and a full programme of activity is planned for 2010.

For example, the Social Media Working Group is currently examining the business use of online video and audio, while the Cloud Computing Working Group is preparing a white paper on attitudes to cloud com-puting among SMEs.

The Online Marketing Working Group is studying the Irish business use of blogs within the international marketplace, and is interested to hear from member organisations about their experiences in using blogs to expand their global reach.

The Web Development Working Group is producing procurement guidelines for businesses on web development services, based on a recent survey of purveyors and purchasers.

Other groups include:• The Infrastructure Working

Group• The Legal Working Group• The User Experience Working Group• The International Strategy Working Group

The IIA Working Groups cover a wide range of issues, from usability to the legal implications of doing business online. They focus on areas that add value for IIA members and advance the internet industry and online business in Ireland, and bring together experts across a wide range of areas, alongside members who bring a valuable business perspective.

IIA Congress looks at 2020 vision

Watching Coronation Street or the main evening news on your laptop or PC is getting to be big business in Ireland. Catch-up TV has still to celebrate its first birthday on Irish TV, but the numbers are already very impressive.

RTÉ Player had almost 400,000 unique users in January, more than a three-fold increase on its first full month of operation last May. The number of streams is also on the rise – hitting a record 1.6 million in January alone.

So what are we watching online? The top 10 streams

since the RTÉ launch include The Late Late Show, news, Desperate Housewives, Operation Transformation, Flash Forward and The Frontline. RTÉ was one of the first broadcasters in the world to launch extensive international access to a version of its catch-up service.

Now that online TV is earning decent audiences, advertisers will start to use the medium more. Consultancy Billetts expects video advertising to rise and for consumers to interact more with such advertising.

Joan Mulvihill CEO, Irish Internet Association

Irish Internet Association Congress and Net Visionary Awards

Date: 20 May 2010Venue: Crowne Plaza Northwood, Santry, DublinTheme: “2020 Vision”Book now: www.iia.ie/congress

Source: RTÉ, February 2010


Growth in catch-up TV

© AMAS Ltd.Published by AMAS Ltd., 38 Lr. Leeson Street, Dublin 2, Ireland. Tel: +353 1 6610499

Email: [email protected] Web: www.amas.ie

AMAS has completed significant online strategy projects for Bord na Móna and the Houses of the Oireachtas.For Bórd na Mona (www.bnm.ie), the objective was to map how the Internet could support commercial, marketing and communications objectives at a time of considerable change. The company aims to reposition itself as a key player in renewable energy, environmental products

and services and reduce its dependence on peat and fossil fuels. It sees the Internet as a critical platform in achieving these objectives. Following a competitive tendering process, it retained AMAS to:• Evaluate its current use of the Internet• Audit ten websites in Ireland, the UK and the US• Identify requirements with stakeholders• Research relevant online

trends • Develop a strategy and roadmap for its online channels, including social media and Web 2.0

The Houses of the Oireachtas (www.oireachtas.ie) recently launched the first phase of its redeveloped website. AMAS was retained to:• Conduct a strategic review • Research audience usage • Support the communications

team in defining requirements and procuring design and development services• Create a new easy-to-use information architecture• Help specify and create new site contentThe Oireachtas website is one of the largest in Ireland, with over 800,000 pages. The scope of this redevelopment phase excluded databases for debates and bills and other legacy content.

AMAS completes two strategy projects

Find out what AMAS can do for you. Contact Aileen O’Toole, Managing Director, on + 353 1 6610499 or [email protected].

AMAS: what we do

AMAS is a consultancy specialising in online channels. The company is retained by businesses and government bodies to plan, manage, evaluate and market their online channels.

Services include:

• Strategy• Research• Audits• Content

• Marketing• Project management• Outsourcing

Remember the browser wars of the 1990s? No? As Microsoft and Netscape fought to dominate the PC

web browser market they added new, non-standard features to their browsers. Websites often had notices saying that they were “best viewed with” one browser version or another.

It was frustrating for users and maddening for web publishers who had to create several browser-specific versions of a site. Web standards promise to end those problems.

One piece of good news is

that Google is winding down support for Microsoft Internet Explorer 6. From 1 March, key functions in Google Docs and Google Sites will no longer work with IE6. The need to cater for non-standard features of IE6 has long been a pain for web publishers.

Flash bashing And there’s Apple. Its much-hyped iPad does not support Adobe Flash. (Neither do the 44 million iPhones out there, but people expect pocket devices to behave a bit differently.)

Flash is extremely widespread on the Web, to play video and create animation and interactivity. It lies behind the rise of YouTube and the success of the RTÉ Player. Flash is proprietary to Adobe. It is not an official web standard, but it is close to being a de

facto one, or was.

Apple’s move essentially demands that publishers recode sites that use Flash to suit its technology. This will matter less as the latest web standards are adopted, such as HTML5, which allows video to be included in web pages without requiring Flash.

Standards-basedNow more than ever, publishers cannot assume that their audiences are sitting in front of a computer monitor, with a keyboard and mouse to hand. To succeed, online communications will have to: • Be user-focused• Cater for mobile users• Use web standards to the greatest degree possible• Avoid browser wars

Here’s to HTML5 and a standards-based Internet!

‘This document is best viewed with...’

Fiachra Ó Marcaigh, Director, AMAS