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Web 2.0: The Global Impact
Study by Universal McCann Dec 2006
A welcome note
Universal McCann's global research into the impact of Asia is at the forefront of many aspects of Web 2.0
Web 2.0 on frequent Internet users is the largest adoption; in particular user generated content where
exploration of its kind. Interviews from more than 16,000 personal blogging is an obsession for millions across the
online users worldwide has for the first time allowed a true region. China leads the world, where despite decades of
world-wide perspective into to key trends associated with media oppression, millions of Chinese consumers are
the changing Internet. This research focuses on levels of using blogging platforms to express themselves in ways
penetration, the differences by market and the potential unthinkable in years gone by.
universe sizes of Web 2.0 technologies, platforms and
applications; exploring 3 key areas: This research confirms what marketers, advertisers and
media owners should already know. The changing internet
Creation: Blogging, social networks, photo sharing, Wiki's, is radically altering user's media habits the world over;
social news sites and writing comments, reviews and irreversibly altering the media and communications
feedback have all fundamentally changed the web, environment by driving globalisation of media
providing consumers with the tools to drive the consumption, mega fragmentation of media channels and
content agenda. creating a truly international social network. These are
real challenges that brands and media companies
Connection: Social networking, personal blogging, instant regardless of country must face up to now -
messenger and VOIP are all playing a role to revolutionise not in ten years time.
and globalise the way we interact, stay in touch and meet
new people. This research is an ongoing commitment, tracking the
adoption of Web 2.0 platforms and technologies from a
Entertainment: Thanks to the unstoppable rise of global perspective, understanding the evolving impact of
broadband - video, audio, live TV and radio are all central the changing internet. To contact me regarding this and
to the way we use the web today. future research please email:
Over the last 18 months the term “Web 2.0” has firmly Of course the hype has been huge; Newspapers the world
entered the mainstream consciousness of the online world; over proclaim the ‘Citizen Journalist’, investors push huge
however the definition and even its existence as a concept sums of money into online start ups, while established
have been hotly disputed. We like to define it in the media companies desperately try to grab a piece of the action.
simplest of terms: “an evolution of the internet to become It’s hard not get caught up in the hype; Technorati claim
a network of interconnected web pages and applications 52 million blogs in existence, with 75,000 added each
that encourage consumer participation, creativity and interaction”. day, Youtube stream in excess of 3 billion videos a
month and MySpace recently breached the 100 million
The really important point behind Web 2.0, particularly for members mark. The media, advertising and communications
advertisers, marketers and media owners is not the name environment shows all the signs of changing as quickly as hype.
or the definition, but the impact. It is clear that these
recent online developments have the potential to transform To understand the real impact, Universal McCann
the media landscape quicker than at any other time in implemented a global study into the adoption of Web
history. The technologies commonly associated with Web 2.0 tools, sites and services to assess the extent to
2.0 such as social networking, RSS, tagging, blogging, which consumers are getting involved, establish how
aggregators, and Wiki's, coupled with the explosion they are adopting and identify the country by country
of broadband enabled services like Instant Messenger, IPTV, differences. The results form the basis for the exploration
Podcasting and VOIP (see glossary for more information) of Web 2.0 that follows, considering the impact for media
mean it has never been easier to create and share owners, advertisers and marketers the world over.
content, meet people and enjoy a personalised multimedia
experience. The tools and channels to create and share
video, images and the written word have never before
been as accessible or democratic - never before has there
been a completely open media and communication
platform available for everyone to contribute to. Controlled
media distribution channels, the need for funding, lack of
access to production technology and the need for industry
contacts have all been eroded as barriers to becoming a
‘media owner’. The only barrier today is a willingness to
create. The potential is clear - if consumers want to they
can be the lead creators of media content.
Key findings 4
The research was conducted amongst a representative European Media Panel, Insight Express in the US and local
sample of frequent internet users (Use the internet every media partners in Asia. Unsurprisingly (Figure 1) relative
day / every other day), who in general now make numbers by market differ hugely both in size and overall
up the majority of the online universe particularly in penetration of online - however it is clear that frequent
developed markets (see Figure1). These users are best usage is becoming the norm. It also worth reflecting on
placed to demonstrate consumer uptake of Web 2.0 these numbers for the results that follow and the relative
services. They are the vast majority of adopters of sizes of the universes that the results indicate.
new products and services online and will be the All universe size estimates are based upon applying the
majority of Web 2.0 adopters. percentages in the survey to the latest universe sizes that
exist from industry surveys such as TGI and Simmons.
The study took place between March and September 2006 As the research audience makes up 60% of frequent
in mix of 15 highly developed and emerging internet online world for 16-44's and as there are consistencies in
markets; France, Germany, Italy, Spain, Russia, UK, US, technology adoption, it allows for robust estimations on the
China, South Korea, Thailand, Malaysia, Hong Kong, global reach of these technologies. It should also be
Singapore, Philippines and Australia. Combined they considered that some Internet markets are less mature
make up 60% of the global Internet universe: than others and so tend to have a younger, male skew,
In every market the sample is representative to the 16-44 whereas markets such as the US, UK, France and South
frequent internet user population with the research con- Korea are more established tend to have normalised
ducted online. Respondents were provided by Ciao profiles. This can be a factor in overall penetration of services.
South Korea
USA
China
France,
Germany, Hong Kong
Thailand
Italy, Spain, Philippines
UK, Russia Malaysia
Singapore
.
Australia
Blogging
China, 26.01
Russia, 3.48
Singapore, 0.17
Spain, 3.63
Hong Kong, 0.18
Australia, 0.26
US, 10.7
Singapore, 0.14
Russia, 0.9
Singapore, 0.1
Spain, 1.8
Hong Kong, 0.1
•
conduct - that it is basic manners to comment on friend's
Asian use of blogging is orientated around personal content - blogs - developing the community aspect. (APAC UM)
its use is closer to social networking. The barriers to entry
here are lower and growth is viral thanks to this social aspect. • In China blogging is the first time many have had the
•
chance for self expression.
The huge uptake in China can be linked to the lack of
uncensored media and a thirst for independent information
and fresh opinions. The blog run by Chinese actress Xu Jinglei
• Blogging in Western Europe and US is more associated
with individualism and sharing your opinion. This is likely
to have channeled social interaction into established
is now the world's most popular blog. (Technorati August 2006)
•
social networking sites. (see figure 13)
Due to the heavy governmental controls in China, personal
blogging is a safe subject matter. Chinese blogs tend to
avoid political topics and so have little impact on political
• This explains the rise of personality blogs in the US
and Europe, something less evident in Asia
discourse, unlike in Western Europe and the US.
This strengthens the associations of blogging as a social
medium and fuels adoption. (International Herald Tribune
• Blogging in China is popular due to a generation
of only children.
The way we take and share photos has transformed Figure 10 below demonstrates the impact of these
thanks to the combination of broadband, the availability changes - photo sharing is clearly a mainstream form
of digital cameras and camera enabled mobile phones. of content creation and sharing in all markets.
When photos are in a digital format there is clearly a The global average is 68% but the variation is small
demand to share them. Thanks to the rise of simple compared to blogging - even in France, the market of
online photo management and sharing tools such as lowest adoption 48% have shared. These numbers are
Flickr.com, Ringo.com and Photobucket.com it has never consequently vast (see figure 11). The total universe for
been easier. These new services have changed photo photo sharing is 122 million in our research universe -
sharing by making your photos publicly searchable with a massive 43 million in the US and 41 million
through the introduction of tagging (labelling a photo in China alone.
with a searchable keyword) and social networking
aspects. Also as users have become more sophisticated, Tags / Tagging
photos have also become an integral part of social
networking profiles and personal blog pages. “A series of keywords assigned by users to cat-
egorise web pages, products and services or
content by subject or category. Pages can also
be scored or ranked allowing search for content
based on Social Recommendation rather than
traditional algorithm based search engines.”
Australia, 1.05
US, 43.23
China, 40.67
Although there has long been the facility to review The role of online as a commerce tool is firmly entrenched,
products and services, in a Web 2.0 enabled space this both in terms of purchasing through online channels and as
has become more central to shopping online and a source of information for products and services. In a Web
researching purchases. Reviews have become easier to 2.0 world where social interaction and personal content are
create and due to integration with tagging and profiles, central, the role of the consumer review will hold huge weight.
now carry more weight than they did. Reviews matched As web users become more comfortable with interacting with
with social profiles allow you to search for products people they do not know personally and become more familiar
and services that will interest you from people you with the concepts of tagging and consumer powered recommendation
trust. Regular reviewers are often rewarded for their systems, the role of the consumer review will increase in
work with a higher status and often users become importance, changing the nature of “word of mouth” as a
habitual reviewers. communication channel. It will be the primary source of
information in the purchase process for all online consumers.
For many users, writing reviews is one of their primary
Also it is clear that online helps cement consumer societies
contributions to the Internet and this can be seen in
in all markets where online is active.
the level of usage as shown in figure 12.
All markets show a very high level of involvement and
the global average is 74.1%, making it the second
highest reaching activity in the survey. France and
Spain lead the way, however it is interesting to see
that some of the more developed markets show lower
adoption rates than may be expected, in particular the
US, UK, Germany and Italy. Russia is the one market
with significant lag, but, in the main, reviewing products
and services online is a mass market phenomenon and
the adoption in less developed consumer markets is
very significant - particularly marked is usage in
Thailand and Malaysia. Again, as with blogging
adoption of online services does not follow
traditional economic lines.
Social Networking
Instant Messenger
The first clear observation on the uptake of dedicated
Social Networking platforms (figure 13) is that usage is “Software that allows real time email type
higher than blogging, with a global average of 28.6%. conversations with messenger buddies. Popular
Again as with blogging there are some differences by programmes include MSN Messenger, Yahoo
market, with South Korea leading the way on 51.5%, Messenger and Google Talk”
however Asia does not dominate as it does with blogging.
The other interesting point is that Russia, with its younger
online profile has the highest usage in Europe, far exceeding
that of Western Europe. The US, often seen as the home
of social networking thanks to Myspace, Friendster and
Facebook amongst others, actually lags other markets in
VOIP (Voice Over Internet Protocol)
percentage reach but in terms of numbers (see figure 14) ”Voice telephone calls conducted over the
remains the largest market - its 17.8m users representing internet. The most well known service is Skype”
nearly half the global research universe.
Australia, 1.14
US, 43.1
China, 43.35
Singapore, 0.38
UK, 7.74
Hong Kong, 0.35
Spain, 4.35 Thailand, 1.65
Italy, 6.53 Malaysia, 0.98
France, 6.58
Germany, 3.78 Philippines, 1.24
Podcasts
Compare watching video clips to Podcasts (figure 20), and
it's clear that on demand video is beating audio hands Podcasts
down. The global average is just 17.4%, well beneath video
“A method of delivering audio files over the net.
clips. Interestingly France and South Korea have the highest
Podcasts are typically half and hour to an hour
reach, but the pattern across all markets is similarly low.
in length and usually recorded in the style of a
Why? There are a number of clear reasons that could
radio show. Podcasts available to today cover
explain this: copyright limits the musical content that
every imaginable topic from unsigned bands to
Podcasts can include so the vast majority are voice and
technology. You can subscribe to Podcasts via
special / niche interest; video clips are shorter, more
RSS, through services like iTunes or downloaded
interactive and easier to share virally; it is easier to create
directly from the publishers website. Once you
video clips that are entertaining - Podcasts require more
have subscribed you automatically receive the
equipment and radio production skills to make engaging
next installment when it is published” individuals.”
content; the distribution platforms for video clips are more
consumer friendly and easier to make part of your
day to day surfing. Distribution platforms for Podcasts
are improving, in particular the integration with the Itunes
music store, however until copyright issues are resolved
then the Podcasts in the future are still likely to lag video.
Australia, 0.44
US, 32.84
China, 25.39
Russia, 1.63
Singapore, 0.15
Multi-media online is now the norm for our online universe In summary the internet clearly is evolving into a global
in all markets. This is particularly case for streaming entertainment platform, which, for content producers both
media via online in the traditional live sense. Watching consumer and professional, is a massive opportunity.
clips on demand has a much smaller reach but its growth It is also a big boost for the advocates of convergence
is significant. The idea of trawling pre made and user and the idea of internet delivered content being made
generated video is a fairly new concept. Podcasting is also available through your main TV set in the living room.
relatively new and, although its take up is markedly lower, It is surely only a matter of time before this is the norm
thanks to the global nature of online there is still an and many companies will benefit substantially: online
audience of millions. Streaming live media is more popular distribution channels like Yahoo Go; technology companies
particularly in developed media markets mainly due to such as Sony who will connect the PC and the TV and
existing media organisations moving their radio and, content producers themselves. The barriers to creating
increasingly, TV delivery online. This has been promoted globally recognised and appreciated content are falling
heavily and has been made available through existing and a golden age of video could emerge.
media organisations' online properties. In the main it is The industries who should be really concerned are the
an easier point of entry for consumers wishing to utilise networks, cable companies and satellite broadcasters
their PC as an entertainment medium. It is also a more who have historically controlled distribution within
familiar concept, with media delivered in real time. markets very tightly.
On-demand media is newer, requiring more consumer
input and sifting of content.
Figure 23: “Global reach” Figure 25: Global Web 2.0 adoption index (average take up by
Base = All Respondents: Average usage across all markets market across all technologies and activities in the questionaire)
- All Respondents
Overall summary 32
Implications for media owners
Online is progressively becoming the core medium for interaction, In order to survive this onslaught of user generated content,
creativity and entertainment across the world. Although it goes existing media brands must try to involve consumer interaction and
without saying that internet users are not yet entirely bypassing content creation within their digital platforms, while at the same
regular media sources in favour of creating, sharing and consuming time opening up communication with users to become more
user generated content there are clearly massive implications for conversant. They must be comfortable at releasing their content
all media owners, in terms of near and far future trends. in channels not controlled by them, while delivery should evolve
into short regular feeds in order to remain relevant in an age
If offline media owners have not already put online at the heart of RSS feeds, aggregators and personalised home pages.
of their product, they must do so regardless of the market they
operate in. Media brands need stretch across a variety of digital Anyone that produces video and audio content is provided a
platforms if they are going to survive this world of unlimited massive opportunity if they embrace Web 2.0 properly: broadcasters,
fragmentation and the demise of tightly controlled market production companies, record labels, movie production companies
orientated distribution platforms. Web 2.0 technologies are and TV stations could potentially distribute their new and archived
increasingly shifting media distribution platforms to a global content across the world - directly controlling distribution and
scale - presenting media owners both with opportunities to access rather than relying on the satellite, cable and TV networks
reach new audiences, but also the some key challenges: or the DVD and CD store. This should be seen as a massive
remaining relevant to their audience; increased competition; opportunity rather than a threat. Also the potential to make
growing issues with copyright and rights ownership. Also, media revenue from old content currently sitting in dusty boxes is vast -
owners will have to produce more as the delivery of basic news it can be monetised through sponsorship, adverts, subscription or
will increasingly become commoditised due to the wealth of pay per view. Why TV networks, movie studios and record
sources and the always switched on nature of online. Editorially companies cannot see this currently is baffling. Rather than
there will be more demand for expertise and niche content as threatening to sue the users and channels who use their content
people increasingly mix and match expert content with a distinct illegally they should be embracing the potential to reach hundreds
voice and point of view via their personalised page or content aggregator. of millions of consumers in new markets with recycled content.
As well as an increasingly competitive professional environment, Media in this on-demand format will change revenue structures
there is going to be huge competition from consumer content, meaning that retaining revenue through traditional interruptive
which as demonstrated has a big future in all markets. Asia is advertising formats, such as the 30 second commercial will
leading the way with content creation and interaction, but the become more difficult. Live broadcasting and event TV will
other regions will follow along the path from passivity to become more important to deliver any kind of significant mass
interactivity. Although vast majority of this content is of personal audience. However the rights to screen live events will become
interest and clearly not everyone will start creating content, the more difficult to source as rights owners may in the future
scale is alarming for established media companies. Supposing that increasingly wish to distribute coverage themselves rather than
10% of users create content and 10% of these produce sell their rights to the TV networks and Satellite broadcasters.
something of wider interest, millions of new media sources will
emerge to challenge established media owners. The threat is The real threat is to the existing controllers of the distribution
magnified by the new online platforms that are emerging: video channels. The appetite online users across the world show for
sites, photo sharing, aggregators and personalised homepages all consuming audio and video media online is a real long term
sift and sort the best of user generated content bringing together threat to the cable, satellite and TV networks. When online links
user created media into a viable channel. to the main screen in the household as will happen inevitably
in the near future, services such as Youtube and Itunes, or the
future as yet to emerge equivalent could be the distribution
channels of the future.
Overall summary 33
Implications for advertisers
Tom.smith@universalmccann.com