Bhupendra Kunwar Blog

22 Feb 2007

With the U.S. online travel marketplace approaching $70 billion, Burst Media’s survey of some 2,100 web users 18 years and older who plan to travel in the next three months found that nearly half (47.2 percent) of respondents who will use the web to plan their upcoming travel say the internet will be their primary travel resource.

Among age segments, respondents 25-34 years are most likely to say the internet will be their primary travel resource (53.2 percent); respondents 55 years and older are least likely (41.4 percent). Half (51.8 percent) of respondents reporting household income (HHI) of $75,000-$99,999, and nearly two-thirds (63.1 percent) of respondents reporting HHI of $100,000 or more, say the internet will be their primary travel resource.

Burst found that two-thirds (66.9 percent) of respondents will conduct travel research as well as make an online travel transaction - and 33.1 percent will use the web solely as an information resource. As household income (HHI) increases so does the likelihood that a respondent will use the internet to conduct both travel research and travel transactions: 72.3 percent of those reporting HHI of $75,000-$99,999, and 79.7 percent reporting HHI of $100,000 or more, will conduct both research and transactions.

Of those who will conduct a travel transaction on the web, about three-quarters (74.0 percent) will purchase airline tickets, 72.9 percent will likely make hotel reservations, and over one-third (40.4 percent) will likely rent an automobile. Those who plan to make transactions online will also conduct travel research online - 59.7 percent will research travel destinations, and 28.6 percent will research travel/tour operators.

Among survey respondents who use the internet solely as a research tool, the most popular topics of research are hotel accommodations and prices (50.1 percent), travel destinations (45.8 percent), airline flights and fares (39.2 percent), tour/travel operators (24.4 percent), and car rental availability/rates (12.2 percent).

Respondents were asked what features of a travel resource website make them want to return to it: The most cited were the ability to check flights, hotels and rental car’s rates/availability (55.1 percent), destination information (49.9 percent), and travel promotions and specials (49.7 percent).

Women placed much greater importance than men on travel promotions and specials (55.4 percent versus 44.5 percent). Older respondents placed greater emphasis than younger respondents on destination information:Over half (56.5 percent) of respondents 55 years or older say destination information is essential for a website to continue to draw their attention - compared with 51.8 percent of respondents 35-54 years, and 43.1 percent of the 18-34 year segment.

http://www.marketingvox.com

ComScore Networks says holiday season helped spending increase over the $100 billion threshold.
By Keisha Lamothe, CNNMoney.com staff writer
4 Jan 2007

NEW YORK (CNNMoney.com) — Online shopping jumped this past year as spending accelerated during the last two months of the holiday season, according to the latest report from market research firm ComScore Networks.

For the full year 2006, total online retail spending, excluding travel-related purchases, reached $102.1 billion, marking a 24 percent increase versus 2005, the firm said.

Shoppers waiting until the last minute accounted for the surge in online retail spending during the final three weeks of the season. Spending surged 31 percent from a year earlier, while sales the week before Christmas increased 45 percent.
Online retail spending saw 12 days during the November/December holiday season surpassing the $600 million mark. The heaviest online spending day of the year was Dec. 13 with $667 million spent.

Online holiday e-commerce accounted for $24.6 billion, up 26 percent versus last year. ComScore initially had expected holiday sales on the Internet to grow 24 percent to $24.3 billion.

“2006 was certainly an exceptional year for online retailers as e-commerce spending eclipsed $100 billion for the first time, and growth remained very strong with a 24 percent increase versus last year,” Gian Fulgoni, chairman of ComScore Networks, said in a statement.

“The online holiday shopping season of course played a vital role in the year’s success, as spending accelerated during the final two months of the year, helping push total online retail spending over the $100 billion threshold.”

News Source: http://money.cnn.com

04 Jan 2006

For the full year 2006, online retail spending (non-travel) reached $102.1 billion, a 24 percent increase from 2005, and online holiday (Nov. 1-Dec. 31) e-commerce accounted for $24.6 billion, up 26 percent from last year, according to comScore Networks.

“2006 was certainly an exceptional year for online retailers as e-commerce spending eclipsed $100 billion for the first time,” said Gian Fulgoni, chairman of comScore Networks. “The online holiday shopping season of course played a vital role in the year’s success.”

Twelve days during the two-month holiday season broke the $600 million mark for e-commerce spending. Just six days in 2005 reached $500 million in online sales, with the top day registering $556 million (Monday, December 12, 2005).

Wednesday, Dec. 13, marked the heaviest online spending day of 2006 with $667 million, followed by Monday, Dec. 11 ($661 million) and Monday, Dec. 4 ($648 million). Cyber Monday (Nov. 27) was surpassed 11 times during the subsequent weeks of the holiday season.

Online consumers delayed their holiday buying later than ever. Spending growth during the first third of the season (weeks 1-3) rose a modest 23 percent above 2005 levels, despite spending during the week before Thanksgiving, which grew 30 percent growth versus the corresponding week in 2005.

The middle third of the season (weeks 4-6), during which the greatest share of holiday e-commerce spending occurred, was consistent with the 26 percent growth demonstrated during the course of the season as a whole. The final three weeks of the holiday season (weeks 7-9) saw a major surge in spending as the procrastinators came out in full force, driving a 31 percent increase versus the corresponding weeks in 2005.

The week leading up to Christmas (week ended December 24) saw the biggest surge with a 45-percent increase versus the corresponding week a year ago, with consumers relying on online retailers’ ability to deliver the goods in time for Christmas.

http://www.marketingvox.com

2 Jan 2006

What to watch for in 2007….

* Online Ad Spending Will Hit $20 Billion
* Some Money and Lots of Hype for Online Video Advertising
* Social Networks Are Set for a $1 Billion Windfall
* Downloadable Games Will Get Hotter
* Thirty-Seven Million Strong: A ‘Minority’ Bigger than Canada
* Mobile TV Arrives
* US B2C E-Commerce Will Cruise Past $200 Billion
* The Retail Power of Word-of-Mouth
* Broadband Services Will Matter as Much as Speed
* DVRs Pump Up TV Viewing

Online Ad Spending
Total US spending on Internet advertising will reach at least $19.5 billion in 2007. This is 19% more than total spending in 2006. This rate of growth is sharply down from the 30% or more that has been the norm for several years. However, even this reduced level of year-on-year growth would be considered spectacular for most industries. With total US advertising spending projected to grow by a mere 1.4% in 2007, the shift to the Internet is clearly set to maintain its heady momentum in 2007.

Online Video Advertising
Internet video advertising will get more media play than dollars in 2007. eMarketer projects that spending on this format will total $775 million in 2007. To put this figure in perspective, remember that it represents only 4.0% of projected US online ad spending. Although marketers are increasingly keen on including video in their online ad campaigns, they will continue to face a shortage of appropriate premium placements.

Social Networks
Worldwide ad spending on online social networks should top $1 billion in 2007, up from an estimated $445 million this year. Fueling this growth will be factors such as international expansion, “niche” networks and Google’s deal to supply search technology to MySpace.

Video Game Downloads
Digital downloading of video games will take off in 2007, and by 2010 this distribution method will account for 22% of all worldwide game software revenues. Besides online stores pushing the new generation of games consoles, look for Time Warner’s GameTap service to position itself as the HBO of PC gaming, focusing on original content to drive its subscription service. Video-on-demand (VOD) marketers may find their skills in demand for promoting these platforms, which play on subscriber taste for instant gratification via download.

Hispanic and African-American Internet Users
The number of African-American and Hispanic Internet users in the US will rise to 37 million, from 35 million in 2006. This market will continue to grow faster than the total US online population for several more years, giving advertisers with the imagination to reach out to them fresh opportunities. (The population of Canada is 33 million.)

Mobile TV
Mobile TV took its first baby steps in 2006 with professional content. The World Cup offered a first glimpse of what the broadcasting future for mobile might look like, and in 2007 another crucial element will be added to the mobile-TV mix — user-generated content (CGC). Given the impact the Web equivalent of this development has had in 2006, advertisers and marketers are likely to face a dizzying array of new choices.

US B2C E-Commerce
US B2C online sales will comfortably pass the $200 billion mark in 2007, reaching a new record total, which eMarketer projects will be $223 billion. Online retail sales will account for $132 billion of this, with online travel accounting for $91 billion. Some of the impetus for this growth will come from existing online buyers increasing their spending. A significant force driving online travel sales is the demand from travel-loving and relatively affluent baby boomers.

Word-of-Mouth
The influence of consumer generated content (CGC) on US consumers’ purchase decisions will continue to grow in 2007. A recent study from market research firm Compete found that consumers were more likely to be swayed by CGC than by information coming directly from brand advertisers and marketers.

Broadband Services
When broadband emerged, it was distinguished from dial-up by its always-on nature and the greater bandwidth available to users. These characteristics were seen as reason enough to trade up from dial-up. Now, however, broadband is about value-added services and is driven by providers bundling voice, video and data together. Services such as voice over Internet protocol (VoIP) are approaching the 30% penetration range. eMarketer predicts that one in four broadband households in 2007 will subscribe to a VoIP service, rising to nearly 40% of broadband households by 2010.

DVRs and TV Viewing
The alarmist claims that digital video recorders (DVRs) and video-on-demand (VOD) would cause the death of TV and the loss of billions of dollars worth of advertising dollars are increasingly looking just plain wrong. TV distribution and access are changing and audiences are increasingly fragmented. However, every challenge presents an opportunity. More people will watch more TV and video content in the future, not less. They will just be doing so in different ways — via the TV, the Internet, the PC and their portable devices. eMarketer predicts that VOD will be in 30% of US TV households by the end of 2007 and that DVRs will be in 30% of TV households by 2009.

http://www.emarketer.com

21 Nov 2006

comScore Networks released its U.S. e-commerce sales estimates for the third quarter of 2006 and forecast for the full year, estimating that non-travel e-commerce will break the $100 billion threshold for the first time.

In the third quarter, online retail (non-travel) spending increased to $23.1 billion (up 23 percent from a year earlier), while travel spending reached $18.2 billion (up 9 percent), despite a slowing rate of growth, comScore reports. Overall, total online spending by consumers reached $41.3 billion in the third quarter - a 16 percent increase from the year-earlier period.

Some retail categories far outperformed the average year-over-year growth of 23 percent, including consumer electronics (excluding PC Peripherals), which rose 42 percent, and apparel & accessories, up 32 percent; the sport & fitness and computer software (excluding PC games) categories rose 29 percent and 27 percent, respectively.

Year-to-date online spending (travel and retail) remains strong and is on pace to reach $170 billion in 2006. Through the first three quarters of 2006, total e-commerce spending rose 19 percent compared with last year, reaching $122.1 billion. Retail spending increased 24 percent, reaching $69.1 billion; online travel spending increased 13 percent, to $52.9 billion.

News Source: http://www.marketingvox.com

07 Nov 2006

Online advertising spend from companies in the media and entertainment, financial services, and travel and automotive categories will account for the majority of online advertising spending within five years.

Online advertising spend in those four categories will total $11.5 billion in 2011, according to a new JupiterResearch report, “US Online Category Advertising Forecast, 2006 to 2011.” That amount will account for 57 percent of all online ad spending that year. “Media & entertainment and financial services advertisers benefit from business models that work well online,” said Emily Riley, JupiterResearch analyst and lead author of the report.

In 2011, automotive and travel advertisers will be the third and fourth largest contributors, respectively, to online spending, following financial services in second place, according to Jupiter. The largest online advertiser category will be media & entertainment, and it will also account for over one quarter of search spending overall.

“Audience fragmentation and ecommerce patterns will continue to drive brand and direct response advertisers to shift off-line budgets online,” said David Schatsky, president of JupiterKagan. “With consumers spending as much time going online as watching television - a median of 14 hours per week - the shifting of budgets to online advertising is inevitable.”

News Source: http://www.marketingvox.com

23 Oct 2006

Some 75 percent of the 80 million U.S. online households have made purchases online, according to a new report from Forrester Research.

More than two-thirds of U.S. online households have made an online purchase within the previous three months, writes Internet Retailer, citing a Forrester report. Some 19 percent of web shoppers spent $500 online in the previous three months, 16 percent spent $250-$499, 26 percent spent $100-$249, and 39 percent spent up to $99, according to Forrester.

Those who spent at least $500 in the previous three months comprise about 10 percent of the U.S. online population. Online commerce, excluding travel and auctions, is expected to exceed $270 billion by 2011, Forrester estimates.

News Source: http://www.marketingvox.com

Google’s third-quarter profit nearly doubled from a year ago as sales of keyword-related advertising continued to grow for the world’s top Web search engine.

“Business is very, very good here at Google. We had an excellent quarter in all respects, especially in international,” Google Chief Executive Eric Schmidt said in a conference call Thursday after the results were released.

During the quarter, Google saw strong user growth and improvements in search quality and ad sales, Schmidt said.

The news sent Google’s stock up shares rising nearly 8 percent to $459.51 in after-hours trade, after closing at $426.06. The earnings announcement was made right after the market closed.

Net earnings for the quarter ended Sept. 30 were $733 million, or $2.36 a share, including one-time items such as stock-based compensation, compared with $381.2 million, or $1.32 a share. Excluding those items, earnings were $812 million, or $2.62 a share.

Total revenue for the third quarter rose 70 percent to $2.69 billion, compared to $1.58 billion a year ago. Excluding traffic acquisition costs, or commissions paid to content partners, revenue was $1.87 billion.

Analysts polled by Thomson Financial were expecting Google to post earnings per share of $2.42 excluding items, and revenue of $1.81 billion excluding traffic acquisition costs.

Paid search represents nearly all of Google’s revenue.

Last week, at the start of the fourth quarter, Google sent shock waves through the industry when it said was purchasing popular video-sharing site YouTube for $1.65 billion in stock.

“We’re relying on the Digital Millennium Copyright Act as it is being imposed by law. There are not a lot of shades of gray in how it works,” he said. “If you operate under this, companies have safe harbor. We do our very best to implement it as it is prescribed…It’s the law of the land and we absolutely operate by it.”

On Tuesday, Yahoo reported disappointing third-quarter results. Ranked second in Web search, Yahoo cited lower than expected ad sales from some of its large advertisers, in posting net income that dropped by nearly a third from a year ago. To offset the bad news, Yahoo said its delayed search advertising platform “Panama” was finally live.

It was the latest, and biggest, of a series of deals Google has made recently, including one in August with News Corp.’s MySpace. Google guaranteed it would pay $900 million over three years in exchange for being the provider of Web search and advertising listings on the popular social network.

Schmidt said the YouTube deal represented “the ultimate partnership.” Schmidt was asked by an analyst during a question-and-answer session whether he was concerned about YouTube being sued by big media companies over copyright violations because users have been known to post TV and other content without permission.

Google has about 44 percent of the U.S. search market share, up from 37 percent a year ago, while Yahoo’s market share has declined to 28.7 percent from nearly 30 percent a year earlier, based on Internet users, according to ComScore.

Nielsen/NetRatings says Google accounts for half of all Web searches in the U.S.

Not only does Google receive more Web searches and more search users, but it is able to make money from those searches much better than its closest rival.

Google’s U.S. ad revenue growth rate is expected to rise nearly 65 percent from last year, while Yahoo’s will grow only 17.5 percent, according to eMarketer. Google will garner one-quarter of the U.S. Internet ad revenue as opposed to the 18 percent Yahoo is expected to pocket.

Mark Mahaney, an analyst at Citigroup, praised Google’s results, saying they were “extremely strong, indicating a still robust search market, market share gains, and excellent execution.”

News Source: http://news.zdnet.com

Online retail, travel and event ticket sales totaled $45 billion in the second quarter - a 3 percent increase from the first quarter and 16 percent more than in 2Q05, writes Internet Retailer, citing data from Forrester Research.

More traffic, higher conversion rates larger average order values contributed to the growth, according to the report. Retail websites in the food and home improvement sectors had double-digit increases in traffic.

Online retail sales remain on course to reach $211 billion by year’s end, according to Forrester.

News Source: http://www.marketingvox.com

03 Aug 2006

comScore Forecasts Total E-Commerce Spending by Consumers Will Reach Approximately $170 Billion in 2006

Non-Travel E-commerce Spending Grows 25 Percent in First Half of 2006 Versus Year Ago; Travel Spending up 15 Percent

RESTON, Va., August 2, 2006 – comScore Networks today reported its e-commerce sales estimates for the first six months of 2006 and forecasts for the entire year. From January through June, total online spending by consumers totaled $80.8 billion, representing a 20.1 percent increase over the same period in 2005. Online non-travel (retail) spending increased by 24.6 percent to $46.1 billion, while travel spending reached $34.7 billion, marking a 14.7 percent gain.

Several retail categories achieved significant growth compared to last year. Office Supplies, the top gaining retail category, saw online spending rise 54 percent, while Computer Software grew 39 percent. Also experiencing strong gains in the first half of 2006 were Sport & Fitness (up 38 percent), Home & Garden (up 36 percent), and Toys & Hobbies (up 33 percent).

Total Online Spending to Reach Approximately $170 Billion in 2006

Overall, comScore forecasts that total online spending in 2006 will reach approximately $170 billion. Of that total, comScore estimates that non-travel e-commerce spending will hit approximately $102 billion in 2006, breaking the $100 billion threshold for the first time. Approximately $24 billion is expected to be spent on non-travel during the 2006 holiday season (November 1^st – December 31^st).

“Despite the sluggishness of retail growth in general, online consumer spending remains strong,” noted Gian Fulgoni, Chairman and Co-Founder of comScore Networks. “Growth in non-travel online spending continues at a rate of 25 percent year-over-year, which suggests that consumers’ online purchase behavior has been relatively unaffected by the general economic trends. This news certainly bodes well for online retailers for the upcoming holiday season, with online consumer spending expected to reach $24 billion in the November through December period.”

News Source: http://www.comscore.com