GWI.6 CONTINUES EXPLORATION OF THE EVOLUTION OF THE INTERNET

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1 W A V E 6 T R E N D S

2 GWI.6 CONTINUES EXPLORATION OF THE EVOLUTION OF THE INTERNET The GlobalWebIndex has evolved significantly in 2011, for the first time providing three waves of data. We surveyed almost 80,000 people in 27 key internet markets, providing the most detailed and current perspective ever compiled on the global impact of the internet. We re clearly filling a market need, with our client base growing over 300% across the year. The most interesting aspect of GWI.6 (fieldwork conducted in November 2011) is the growing localisation of internet behaviour. Far from driving a singular pool of global information and culture, the internet is enabling further localisation and differentiation, this is being driven by social media and being spearheaded by growth markets outside of the US and Europe. STRUCTURAL KEY GWI.6 TRENDS GLOBAL INTERNET BENCHMARK IMPACT We also bring a further perspective on the continuing dominance of Google across our access points to the internet and further updates on the saturation of Facebook growth and continuing falls in user engagement. It is vital for the industry that an independent source of data provide this perspective. In addition it generates crucial insights for marketers, brands and agencies. The other key area is the death of the digital concept. The internet now supports all content across multiple platforms. The view of the internet as a website sitting in a browser is now dead. This focus broadens the impact of the internet and requires us all to re-evaluate how we build our approach to online strategy and product development. These insights will be reflected in how we build our product in 2012, with a new multi-platform social tool scheduled for role out in Q2. Stay tuned. DIFFERENTIATION CHINA V EVERYONE MOBILE PARITY DEATH OF DIGITAL GOOGOPOLY FACEBOOK THE $100bn QUESTION SOCIAL BRAND

3 VIEW FROM THE TEAM Tom Smith CEO For me the most interesting aspect is the extent to which users are consuming internet delivered services and content across multiple devices and platforms, rendering the concept of the internet as a separate media type, completely redundant. We need to rapidly redefine how we think and approach the internet. Brett Petersen Senior Strategy Consultant GWI.6 provides us with ever more convincing data to justify our arguments that brands need to build localized strategies for online and social, rather than diving in head-first. Jenny Armshaw-Heak Group Client Director - APAC Consistently the APAC region driving user growth and yet internet marketing spend here generally still lags. I find that clients here are hungry for GlobalWebIndex insights that help them bridge that gap in a fast, seamless and meaningful way across the entire region. Sebastian Hedencrona Group Client Director - Global The growing demand for a tailored understanding of consumer motivations and behaviour and the delivery of expert online insight such as GWI.5 & GWI.6 Trends has provided a platform for introducing a range of new services including: GlobalWebIndex Consulting, Bespoke Research and Omnibus.

4 GET THE FULL DETAIL The Full Report Data Pack Tool Consulting The full PPT report contains over 70 slides of detailed data and analysis, providing a unprecedented view about the state of the internet in Integrate the insights and ideas into your strategy and trend presentations. You can source from here, or if you are a client from the reports homepage. New for GWI.6 we will be providing raw data packs, which provide full access to key questions by wave and market. These provide non-subscribers with an instant way of accessing detailed global internet data to integrate directly into any analysis or output. These are also available to clients. Find out more and download from here. Our online tool provides a very simple visual point and click analysis that enables you to explore the full data set and customise by over 1500 audience definitions, tailoring the data to your clients, category or business. Engage our consulting team on a project or retainer basis to develop analytical projects that answer key business questions on how you should develop and approach the internet. Recent projects include, identifying the future opportunities for news distribution, developing an organisational framework for global social media approach and providing a full segmentation analysis exploring the complete view of how consumers behave across all platforms.

5 THE DATA SOURCE ONGOING AND CUSTOMISABLE The GlobalWebIndex is the world s most detailed on-going research project covering the consumer adoption of the internet across all platforms In 2011, the study expanded to 27 markets, 3 waves of research and 122K surveys providing the most complete view of the global internet ever compiled. We interview between 2250 and internet users per market per year, providing a representative reflection of the internet as defined by age, gender and education criteria. In 2012 we will expand to 36 markets and provide further opportunities for clients to customise the data set by adding custom questions or brand data. The world s leading agency, corporate, media and managing consultancy brands use our data to fuel their insight, strategy and delivery across all aspects of the internet. Find out more: globalwebindex.net Engage: globalwebindex@trendstream.net Core Survey 3/year February June November Audience Definitions Online Behaviour Motivations Marketing Implications Client Segmentations Client Re-contacts Detailed client studies Omnibus Re-contacts 3/year Special interest topics Client brand tracking Media Studies

6 COVERING EVERY FEASIBLE MARKET 5M+ Annual Sample size by market 6,000 respondents 3,750 respondents 3,000 respondents 2250 respondents 2012 ROADMAP African markets Egypt Asian markets Taiwan Thailand UAE Vietnam European markets Belgium Hungary Switzerland Latin American markets Columbia Venezuela

7 Global Internet Benchmark social networking will overtake ecommerce activity at a global level in 2012, highlighting the importance that social holds for brands worldwide.

8 SOCIAL NETWORKING AND MICRO-BLOGGING HAVE GROWN FASTER THAN ANY OTHER ACTIVITY Watched a video clip Used Webmail Used internet banking Purchased a product online Reviewed a product or brand online Managed social network profile Uploaded photos online Used Instant Messenger Used online office applications Commented on a story Posted on a forum/bbs Bought an offer on a group-buying site e.g. Groupon Written your own blog Uploaded a video online Asked or answered a question on a Q/A service Edited/managed own website Used a microblogging service Used a social bookmark service Used VOIP/online phone Written a news story/article Subscribed to an RSS feed Used an aggregator 0% 10% 20% 30% 40% 50% 60% 70% 80% GWI.6 GWI.1 Which of the following have you done online in the past month? Have Done (% of internet users globally, GWI.1 V GWI.6 some behaviours added to GWI.3 and GWI.4) Social driving change The GlobalWebIndex has been tracking online activity since July In just the two and a half years since we began, our survey has continued to change along with the online environment. As we can see from the chart to the left, social media is playing an increasingly important role in the lives of internet users around the world. Social networking and micro-blogging are, in fact, the only two online activities that have grown significantly over the past two and a half years. However, passive behaviours still lead with watching video, webmail and internet banking continuing to outstrip any social behaviours. It s also very interesting to see that consumer reviews are in fact the lead form of consumer contribution globally. This is changing though and looking forward into 2012 and beyond, it looks as if social networking activity will overtake ecommerce activity at a global level, highlighting the importance that social holds for brands worldwide.

9 OVERALL, SOCIAL ENGAGEMENT HAS MATURED Japan China 90% 80% Russia The shifting sands of social Netherlands France USA Germany Australia 70% 60% 50% 40% 30% 20% 10% 0% Brazil Spain India Italy Mexico GWI.1 GWI.6 One of the most interesting trends that we re seeing is the significant growth of social networking and micro-blogging worldwide. When this growth is taken in context with other social media activities such as blogging and forum usage, however, we can see that the growth in social networking has come at the expense of these. In other words, the overall level of social engagement has not changed significantly in any market from GWI.1 in July 2009 to GWI.6 in November What has changed is the way that users are engaging with social media, making it ever more important to understand these changes and how it impacts brand engagement. Canada South Korea UK Which of the following have you done online in the past month? Combined Aggregate of Social Networking, Blogging, Video Uploading, Photo Sharing Micro-Blogging and Forum Visitation (% of internet users by market GWI.1 to GWI.6)

10 MARKET MAPPING: THERE ARE DISTINCT BEHAVIOURAL CLUSTERS FORMING Clustering is becoming tighter We re moving from the four broad clusters of markets in GWI.5 to six more compact market clusters in GWI.6. The clusters are formed from analysing overall social media behaviour vs. E-commerce participation. We can see immediately that China stands alone as the social shopping star of the world, proving once again that China strategy needs to be completely bespoke from any other multinational brand or marketing strategy. Following on from that, we see that there is a best fit parabola that shows how E-commerce activity falls as social media activity increases, but then, it begins to rise with extremely high levels of social media activity. Purchase a product online in the past month versus an aggregate score of Manage a Social Network, Write a Blog, Comment in a Forum, Upload a Video, Use a Microblog (% penetration by country. GWI.6, November 2011)

11 #1 Think Local Growing market fragmentation Growth markets will increasingly shape the evolution social media and online services around the world.

12 BIGGEST CHANGE DRIVEN BY SOCIAL BEHAVIOURS 40% 30% Used a microblogging service Written a news story/article Written your own blog Uploaded a video online Uploaded photos online Managed social network profile Social driving market divergence When exploring the growth of social media behaviours from GWI.1 to GWI.6 in the original 16 markets, we can see clearly that the growth markets, such as China, Brazil, Mexico and India, are driving adoption. 20% 10% China leads growth in all forms of behaviour, in particular the adoption of micro-blogging and social networking, where Sina Weibo, RenRen, Kaixin and Qzone are driving a massive shift from forums and community blogging platforms. 0% The growth rates in mature markets are far smaller, particularly outside of social networking -10% -20% The compound factor is that these markets are also growing the internet universe at a spectacular rate, shifting the balance of power away from the US. South Korea is the one exception where community news platforms such as Ohmynews and blogging have lost out to gaming platforms and communities Which of the following have you done online in the past month? Have Done (% of internet users globally, % point change from Wave 1 Wave 6)

13 NON SOCIAL: CHANGE IS SMALLER Passive activities not driving change 15.0% 10.0% Used VOIP/online phone Used Webmail Watched a video clip Used online office applications Subscribed to an RSS feed When exploring non social actions online, this difference in growth trends is far less marked and there is no clear differentiation between growth and mature markets. 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% The other key observation is that growth rates are far lower than for social activities and there are no clear global trends. For example watched a video clip online has grown in Russia, Mexico, Germany and Australia, but stagnated everywhere else. Again, South Korea shows large net declines in behaviour. This is, again, due to the growth of mass market social gaming. This data shows how open social platforms are key when driving global change and differentiation. Which of the following have you done online in the past month? Have Done (% of internet users globally, % point change from Wave 1 Wave 6)

14 GROWING MARKET DIFFERENTIATION Localised strategy more important Increasing relevance for social and online in all markets IMPACT Growth markets defining new platforms Influencers online are increasingly outside of the USA Social enabling consumers to transform their lives

15 #2 China V Everyone Sina Weibo has twice as many active micro-bloggers than Twitter on a single market user base. This is a staggering example of how China will increasingly sit alongside the rest of the world.

16 CHINA INCREASINGLY DOMINATES ONLINE BEHAVIOURS Million Users Rest of World Estimate 25 Surveyed Markets USA China China up to 50% of active users Looking across a broad selection of behaviours and the number of users on a global basis we see a fascinating trend. For example, when looking at watched a video clip, we benchmark that over 1.1bn internet users aged did so via a PC in the month of November Of that 1.1bn China made up a massive 288m. This dwarfed the US with 149m and not far behind the other 25 surveyed markets, which collectively made up 484m. 0 In the case of video, China made up 26% of global user base. However, in active social channels such as micro-blogging, China represents over 50% of the global user base. This is a trend that is only increasing as the Chinese internet user base continues to explode in scale. We also see a proliferation of highly sophisticated social services in the market. Which of the following have you done online in the past month? Have Done (million users, GWI.6)

17 CHINA S SCALE PROPELS SINA WEIBO TO NO.2 Scale plus massive involvement The result of this massive scale means that Chinese social platforms are now competition in terms of scale with international players. For example, Sina Weibo has twice as many active micro-bloggers than Twitter on a single market user base. This is a staggering example of how China will increasingly sit alongside the rest of the world. The key question here is whether Chinese services will internationalise. In one sense, they don t need to as their home base is huge, growing and frequently protected from international players (at least officially however access through VPN usage is rife). Universe (millions) Sina is set to launch a English language version in 2012 that will be a key indicator of how Chinese social media can move outside its home market. Where do you have a profile? Active Social Network / Micro-blogging Users (million users, GWI.6)

18 TWO INTERNETS WILL EMERGE Global brands need a separate China strategy China has the most competitive social internet on the planet IMPACT Officially, Facebook, Twitter & Google+ are banned in China; unofficially, via V.P.Ns and mobile, they are growing. Can they impact local players? Looking for social innovation: follow China. Copy cat platforms will reverse from China to R.O.W Social platforms in China make money. Investors will follow

19 #3 To Mobile Parity Within the next 5 years, mobile device activity will outstrip fixed PC usage in emerging markets

20 YOUR FAVOURITE BROWSER? MASSIVE DEMAND BEYOND PC 14% 0% 1% 2% 9% Tablet device Mobile phone 14% 2% 5% 14% Personal PC/laptop Work PC/laptop 18% E-reader Through my TV 74% 47% Current One Year From Now Which of the following is your favourite device to access the Internet? Now / One year from now (% of Internet users globally, GWI.6)

21 MOBILE INTERNET CONTINUES TO GROW & USAGE IMPACTS HOME 70% 60% 50% 40% Asia Pacific Europe Latin America North America When Accessing Your Mobile, Which is Your Primary Location? Whilst Travelling or Roaming 23% At home 33% 30% Public Place 28% 20% 10% 0% Wave1 Wave2 Wave3 Wave4 Wave5 Wave6 Which of the following have you done on the internet via your mobile phone in the past six months? Browsed the internet (% of internet users globally, GWI.6) At Work 17% (% of mobile internet users globally, Wave 6)

22 MASSIVE GROWTH IN BRIC % Wave1 Wave2 Wave3 Wave4 Wave5 Wave6 +105% MOBILE INTERNET BEHAVIOUR % Million Internet Users % +134% +158% Which of the following have you done on the Internet via your mobile/tablet in the past month? (million Internet users)

23 MOBILE: SLIGHT SEASONAL DECLINES IN THE US Wave1 Wave2 Wave3 Wave4 Wave5 Wave6 Million Internet Users MOBILE INTERNET BEHAVIOUR Which of the following have you done on the Internet via your mobile/tablet in the past month? (million Internet users)

24 APPLICATIONS CONTINUE TO GROW 50% 45% 40% 35% Asia Pacific Europe Latin America North America Apps continue to rocket Mobile users in all markets continue to download an ever increasing volume of applications. Asia Pacific users continue to lead and now over 47% of mobile users download an app on a monthly basis. 30% 25% After stagnation between GWI.3 and GWI.5, internet access via mobiles in Latin America is on the rise once again. 20% 15% 10% 5% 0% Wave1 Wave2 Wave3 Wave4 Wave5 Wave6 The other key interesting observation is how continued platform phones (particularly iphone) has propelled the US above Europe for the first time. In general, the continued shift to consuming internet delivered content and information via apps over browsers is changing the shape of the internet. We have tracked this Packaged Internet shift over time. Which of the following actions have you performed on your mobile phone in the past month? - Installed an application (% of mobile users globally, GWI.6)

25 MOBILE DEVICES WILL REACH PC Mobile should be a central part of comms or product strategy In the next 5 years mobile device activity will outstrip fixed PC usage in emerging markets IMPACT Websites will be replaced by multi-platform content and services Tracking behaviour with cookies/urls is losing value in the era of multi-device usage Mobile will increasingly drive real-time social media usage i.e. uploading photos, video, updates, etc. on the go

26 #4 Death of Digital The fashion in which the Internet and technology have evolved has created a world in which the Internet is infused with much of our everyday lives.

27 THE OLD MEDIA MODEL IS DYING: BUT MEDIA THRIVES New thinking is needed When the Internet emerged, it was frequently positioned as a separate media because it was a text driven ecosystem dominated by PC access and websites viewed in a browser; this, in a sense, was true. TV Radio Press However, as our research continually demonstrates the internet is now dominated by video, cross-device usage, packaged web services, portable content and consumer created and distributed media. Despite these trends, this thinking remains today, with Digital or Internet siloed in most organisation structures, budget lines and business models. Outdoor Digital This may sound trivial or a matter of semantics, but consider the following. From a marketing point of view, thinking of internet platforms as a singular media form restricts the opportunities that the Internet presents and focuses thinking on activities like banners, search, etc and underestimates the transformative impact of internet technology. The internet in its various forms will increasingly deliver all content, information and services. And this is precisely the reason why it cannot be considered a separate medium any longer. There is no such thing as a digital business or non digital business. Are you prepared?

28 TV EXAMPLE: THERE IS NO DIGITAL LINE. JUST CONTENT Analogue Digital Internet Browser Social Platform Internet Application Packaged Internet Platform e.g. Smart TV Linear TV Programming On Demand Streaming TV Downloads UGC

29 CONSUMERS GLOBALLY ARE TRANSITIONING TV CONSUMPTION ACROSS PLATFORMS Watch TV 1+ hour of TV per day Watch On-Demand TV Online Stream Live TV Online Stream Live TV Mobile USA 194m (90%) 58m (27%) 21m (10%) 7m (3%) BRAZIL 47m (89%) 17m (32%) 15m (28%) 5m (11%) Which of the following have you done online in the past month? Have Done (% of internet users globally, GWI.6) CHINA 259m (65%) 211m (53%) 161m (40%) 56m (26%)

30 NOT JUST TV: FILMS, RADIO AND MUSIC ALL GROWING ONLINE Downloaded free TV shows/film Watched a full length film Listened to LIVE radio online Listen to music on streaming service Watch on demand TV shows online Listened/Watched a podcast Downloaded music via P2P Streamed a LIVE TV show Paid to download legal music Watched a sports program Download TV show/film via P2P Paid TV show/film download Rich content consumption increasing Most forms of rich content, such as TV, film, sports programming and music are growing online. The most dramatic observation is that TV and film now both lead listening to radio online and streaming music. Watching on demand TV is nearly at parity with streaming music. This demonstrates how multi-platform TV consumption has become and how the internet has transitioned from the written word, to audio and now video. The other key aspect in this data is how much piracy is over played. Downloading of TV or music via P2P all lag legal streaming and downloading services. Paid for downloads are still smaller than free, however the demand for streaming demonstrates how future revenue models will exist. 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% GWI.6 GWI.5 GWI.4 Which of the following have you done online in the past month? Have Done (% of internet users, GWI.4 > GWI.6)

31 THINKING BEYOND DIGITAL Think content types not media channel Digital thinking underestimates the impact of the internet IMPACT Agencies and budgets should be arranged in content types Content should be platform agnostic In the future, the internet of things will put every object online. New business and marketing opportunities will emerge

32 #5 Googopoly Never before has one company controlled the distribution of so much information

33 GOOGLE CONTINUES TO CEMENT ITS SEARCH POSITION 90% 80% 70% 60% 50% 40% 30% 20% Wave1 Wave2 Wave3 Wave4 Wave5 Wave6 Google is the leading global web property The number of users who visit Google on a monthly or higher frequency continues to climb and by GWI.6 it reached over 85% of global internet users. Facebook and Twitter are also growing substantially, however they significantly lag Google in terms of monthly reach and as an access point to the internet. As a testament to the ubiquity of the web brand in everyday life. The term Google has become more than a brand in itself. It is now a commonplace verb throughout the English language world; as opposed to saying search for it online, we now say Google it. 10% 0% Even the second most visited property in GWI.6, YouTube, is owned by Google and shows just how dominant the search giant is online. The question that we re beginning to ask at GWI is what effect Google s dominance is having on the market and how will this play out in the future? On average how often do you visit the following websites / services? Daily OR Weekly OR Monthly (% of internet users, GWI.1 > GWI.6)

34 CHROME LEADS IN THE KEY GROWTH MARKETS Chrome dominates key growth markets 100% 90% 80% 70% 60% 50% 40% Every market has a very different distribution of browser usage with varying levels of adoption. Chrome dominates in some leading growth markets, particularly the Philippines, Turkey, Argentina, India, Brazil and Malaysia. Based on the breakdown by market, we can see that Chrome leads in some of the countries that are newer to the internet. IE tends to dominate in countries where there is entrenched legacy behaviour online. 30% 20% 10% 0% Internet Explorer Firefox Google Chrome What browser do you use on your main computer to access the web? (% of internet users globally; GWI.4 to 6) Data collected automatically not survey based

35 ANDROID HAS EXPLODED TRANSFORMED THE MOBILE MARKET 35% Android transforming the mobile market 30% 25% Android has shown dramatic growth and effectively made the smartphone market a two horse race. In the 4 months between GWI.5 in June and GWI.6 in November, Android penetration grew by 8 percentage points, an immense shift in such a short time period. 20% 15% This growth has clearly been at the expense of Symbian, Blackberry and Windows platforms. Furthermore, a very large proportion of smartphone users still have no idea what operating system they run. 10% 5% ios, despite the hype, has not shown any growth in the same time scale. This is a great vindication of Google's position of building an open operating system that multiple manufacturers can adopt. 0% MeeGo webos Windows Phone 7 Other Wave5 BlackBerry OS Wave6 ios (for iphone) Symbian Don't Know Android With the huge growth in mobile internet and tablets, Android is critical to Google's future and give it control of the other main access point to the internet. What operating system runs on your mobile? (% of smartphone users globally; GWI.5 6, June and November 2011)

36 GOOGLE+ IS ALREADY THE NUMBER 2 SOCIAL NETWORK 70% 60% 50% 40% 30% 20% 10% 0% On which of the following social networks do you have an active profile? (% of active social networkers globally; GWI.6, November 2011)

37 ALL ACCESS POINTS TO THE WEB BECOMING GOOGLE Search Browser Location Social Mobile Googopoly Our data shows that Google is growing in all the key access points to the Internet, from their dominate position in search, web browsers, operating systems and now social. The simple fact is that no other organisation has ever had so much control over the flow of information, content or data at such a global scale. While this is a position that has been driven by products that work and internet users love, there are some growing concerns about such an aggregation of control over the online experience. The obvious concerns relate to how Google integrates its services into its search results, a point that particularly became clear when Google+ results were integrated into search results with the Google Plus My World initiative. This makes you realise how easy it would be to dictate the flow of information and services that any given internet user can gain access to. The other potentially larger concern is the growing personalisation of search results to the individual, which mean that no one user sees the same internet. In this increasingly personalised web, there is greater potential to impact the flow of information. No longer will there be any shared context or shared information, but we ll be increasingly living within our own bubble of information that is unique to us, thus removing us from that shared media experience that has persisted for centuries. We at the GlobalWebIndex believe that social curation, when your friends recommendations, likes, bookmarks, etc. guide you to content, should be the way forward rather than an omnipresent Google algorithm deciding what you would like to read.

38 PLAYING THE GOOGOPOLY Google+ is a must for brands. It is already a key social platform Google will likely be embroiled in anti-trust investigations for the foreseeable future IMPACT Paid search will be more important to guarantee reach In more personalised web distributable content will be key to drive mass exposure and shared experience Expect war against Google to be increasingly carried out in the courts

39 #6 Facebook The $100bn Question Facebook Fatigue is something that could derail even the best made plans and will be a key trend to watch throughout 2012.

40 USER GROWTH NOW DEPENDENT ON EMERGING MARKETS. US PEAKED AND DECLINING GWI GWI.2 GWI.3 GWI.4 GWI.5 GWI Which of the following social networks do you currently have a profile? Facebook (Universe Figures of Social Network Users (via PC) with accounts on Facebook. GWI.6) (China data still in validation phase)

41 GROWING COMPETITOR PRESSURE: GOOGLE+ ALREADY NO.2 GLOBALLY 70% PROPORTION OF SOCIAL NETWORKERS WITH ACCOUNTS 60% 50% 40% 30% 20% 10% 0% On which of the following social networks do you have a profile? (% of active social networkers globally; GWI.6, November 2011)

42 FACEBOOK FATIGUE SPREADING BEYOND EARLY ADOPTERS 10% 5% 0% -5% Global USA US College Educated >30 Most marked in the US In GWI.5 (June 2011) we saw that declining Facebook activity was most pronounced among US college educated 20 to 30 year olds. While there is still significant declines in most activities for that segment in GWI.6 (Nov. 2011), the broader Facebook Fatigue trend is spreading away from the early adopters towards the general US population. -10% -15% -20% -25% Declines in social networking activity among Facebook users in the US is much more pronounced from GWI.1 to GWI.6 than it was when comparing GWI.1 to GWI.5. This proves that Facebook Fatigue is a real phenomenon and is not limited to early adopters. Furthermore, it looks as if the trend is even spreading beyond the US to markets that adopted Facebook later in the cycle. In the GWI.1 to GWI.5 comparison, nearly all social networking activities were still growing at the global level. In GWI.6, we can see growth of most activities has stagnated as well. Which of the following have you conducted on your social network service in the past month? Facebook Users (% point change in active social networking penetration from GWI.1 (July 2009) to GWI.6 (November 2011))

43 USER BASE IS INCREASINGLY MULTI PLATFORM Mobile usage exploding We calculate that mobile access to Facebook is now a significant portion of total activity, with 307m users visiting on a monthly basis from across the 27 GWI markets. These are consistent with Facebook s internal figures when scaled beyond GWI markets. As Facebook have referenced in their IPO filing, mobile access currently represents a challenge to their future revenue growth as they don t currently have a display advertising offer on their mobile product. What they can t tell from internal data is the level of crossover between platforms. Our research confirms that the vast majority of mobile users are still accessing from a PC/laptop as well. However, there is a movement towards mobile, particularly in emerging markets which are also Facebook s main growth markets, so it will be crucial for Facebook to build their mobile advertising capabilities. On average how often do you visit the following websites / services in the past month? (% of internet users via PC, Mobile, Tablet device GWI.6)

44 THE $100bn QUESTION: THE CHALLENGES AND ADVANTAGES FOR FACEBOOK IN 2012 CHALLENGES Saturation of user growth in most markets. User growth only in low value advertising markets Big shift in usage to mobile devices which are more difficult to monetise Facebook Fatigue is very real: Most present in high value advertising markets Decline in contribution and sharing questions the value of the consumer data Competitive Pressure: Growing consumer adoption of Google+ ADVANTAGES Complete Domination of the Social Network market Growth in markets where is was previously weak i.e. Russia Recent shift to advertiser friendly focus on entertainment and professional content Continual consumer adoption and usage of third party applications Decline of local networks and failure of Twitter to break the mass market The Future of Facebook The data in GlobalWebIndex represents the most detailed and comprehensive independent view of the platform ever compiled. This data provides a unique perspective to assess Facebook s market position. Facebook has many strengths from a social media point of view, but from a business point of view, it seems as if it will be hard for the social network to realise its potential within its current business model. We don t believe that Facebook can generate the advertising revenue necessary to justify its $100 billion valuation, particularly with the shift to mobile. Display advertising rates are in decline and consumer opposition to advertising in social environments is growing. Besides, brands primarily benefit from the earned media value of Facebook, which is near impossible to monetise. The only way we see Facebook truly capitalising on the size of its user base is if it starts to charge brands to literally set up shop within its ecosystem. Furthermore, it should give brands more tools to build presence on the network. Facebook Fatigue, however, is something that could derail even the best made plans and will be a key trend to watch throughout 2012.

45 #7 Social Branding I HEART BRANDS No matter where you go or who you speak to about what drives them to engage brands on social networking, they always respond that it is getting something back from brands.

46 CONSUMERS ARE INTERACTING WITH BRANDS ON AN UNPRECENDENTED LEVEL 70% 60% 50% 40% 30% 20% 10% 0% Websites are still key for brands No matter how enveloped brands become in social media, the one thing they have to remember is that their own websites are still going to be the first point of online interaction with most consumers. Interaction with brands via social media is growing quickly, however, particularly in emerging markets. Nonetheless, branded websites are critical because it is one of the only online properties of which brands have full control. Brands should use social media as an extension of their website rather than driving consumers to their social properties in the first place. When it comes to social engagement online, there are nearly a third of users worldwide that have like a brand or product online and a quarter that have visited a branded page/group. Which of the following brand related actions have you done in the past month? (% internet users globally, GWI.5 (June 2011 and GWI.6 (November 2011))

47 SOCIAL IS AN EXTENSION OF THE BUSINESS BUT CONSUMERS WANT SOMETHING IN RETURN Give something back 16 to to to to to 64 Discounts for future purchases 63% 66% 65% 63% 58% Customer service 44% 49% 47% 50% 48% Personalised purchase recommendations 40% 38% 32% 27% 19% A feature that enables me to track my delivery 31% 31% 28% 29% 28% Access to new products prior to release on the main site The ability to interact and talk to people at the company Exclusive insight or information about the retailer/brand 31% 31% 28% 28% 22% 28% 29% 26% 29% 26% 25% 26% 23% 22% 17% Being able to connect with other fans of the shop 24% 24% 17% 14% 10% Details of what my friends have bought 23% 22% 16% 13% 8% Be asked to come up with ideas for products or services The ability to purchase products without visiting the main site Competitions 23% 23% 20% 17% 12% 22% 23% 22% 23% 18% 22% 22% 19% 18% 14% Details of what my friends would like to buy (wish list) 20% 19% 13% 10% 7% No interest in any of the above 9% 8% 13% 17% 24% No matter where you go or who you speak to about what drives them to engage brands on social networking, they always respond that it is getting something back from brands that is most important to them. The answer option that we ask in the GWI survey relates specifically to discounts, but the idea holds that consumers know that brands benefit from them when they engage them online and they want them to give something back. Of course, this induces lots of hit and run consumers that will be unwilling to engage and participate in branded conversations after getting their discount. Nevertheless, there are still a large proportion of consumers, nearly half, that do expect more from brands on social networks, and it is important that brands indulge these expectations. Motivations to follow a branded page on a social network? (% of each age group; GWI.6, Nov. 2011)

48 EMERGING MARKET CONSUMERS ARE MORE MOTIVATED TO FOLLOW BRANDS ON SOCIAL NETWORKS 80% 70% 60% 50% 40% 30% 20% 10% 0% Be asked to come up with ideas for products or services Customer service Motivations to follow a branded page on a social network? (% of each age group; GWI.6, Nov. 2011)

49 NEW BRANDING Don t neglect brand websites; they are still the main engagement point for consumers online and should be the hub of any brand s online activity Social media is continually increasing in importance and there are four distinct levels of social engagement for them online IMPACT Determining which of the four levels of brand interaction your target consumers associate with should be the cornerstone of social strategy Another key element is determining the best way to reward those consumers that engage with brands in ways that foster lasting relationships Thus, it is necessary to understand what your consumers value most about your brand and turn it into something that is tangible to be shared

50 WANT MORE? The Full Report Data Pack Tool Consulting The full PPT report contains over 70 slides of detailed data and analysis, providing a unprecedented view about the state of the internet in Integrate the insights and ideas into your strategy and trend presentations. You can source from here, or if you are a client from the reports homepage. New for GWI.6 we will be providing raw data packs, which provide full access to key questions by wave and market. These provide non-subscribers with an instant way of accessing detailed global internet data to integrate directly into any analysis or output. These are also available to clients. Find out more and download from here. Our online tool provides a very simple visual point and click analysis that enables you to explore the full data set and customise by over 1500 audience definitions, tailoring the data to your clients, category or business. Engage our consulting team on a project or retainer basis to develop analytical projects that answer key business questions on how you should develop and approach the internet. Recent projects include, identifying the future opportunities for news distribution, developing an organisational framework for global social media approach and providing a full segmentation analysis exploring the complete view of how consumers behave across all platforms.

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