The online opportunity in 2008

The Internet is the place to be this year for three reasons: it is the year of "more" (more reach, more activity and more spend); consumers behaviour is developing with the web becoming the channel of choice; and business is responding to this, changing the way is operates to fit this demand. If you can understand what this means for your business, you will unlock the opportunity.

More reach, more activity, more spend

The Internet is still growing, with more people using it more often in the UK. According to eMarketet (The UK Internet Boom), the British are going digital fast, with over 60% of the population online now and 70% predicted for 2012. And they are the most active users in Europe.

40% of UK Internet users are shopping online, spending an amazing of £2,000 each on average. This shows good growth from last year, with UK online sales rose more than 50% in the three months to Christmas (Christmas sales rise).

The channel of choice

The way people are using the Internet is also changing; it has become an integrated part of their lives, rather than a stand alone activity. It is no longer something you go and do, it is something you just do. This means that it is easier to integrate the Internet with your other activity, as getting people to go online is not a big ask. Why is this?

• People are surfing while they use other media, often in response to that media. This is particularly true of the youth audience, who will visit websites mentioned on TV or Radio, or text/IM their freinds about programmes they are both watching (Multi-tasking).
• The Internet is increasingly an activity in its own right. The growth of Social Networks is the latest face of this activity. Users aren't going online to do stuff they used to do offline, they are increasinly going online to do something new.
• Broadband is driving demand for digital services. Music downloads continue to grow hugely, but with increasing bandwidth video downloads are becoming the norm, led by the BBC's iPlayer service.

Business is responding

Last year the record labels were fighting the tide and prosecuting individuals for infringing copyright when they downloaded music. The signs are, however, that they have lost the war. Sony is the last of the big four music labels to offer music unrestricted by DRM for download from Amazon.com (DRMs Final Days). Ignoring the spin, it is clear that music marketers are starting to understand that the market has moved and that, if they don't want to be side-lined, they need to move with it.

The growth in online marketing spend, which is forecast to continue to grow at the expense of other media despite the economic slowdown (UK Advertising Strides On), shows that businesses are convinced that the Internet is an increasingly safe bet as things get tight. But the businesses that are really making the most of it are the ones who understand how the Internet is fundamentally changing their relationship with their customers.

The Internet allows users to find exactly what they are looking for. They are after a perfect match and close is not good enough. The market has, therefore, ceased to be mass; a one-size-fits-all approach is losing currency. It is now a niche-market place, where custom-demand is the name of the game. If you can understand what this means for your business, then you can unlock the opportunity that the Internet offers in 2008.

Tom Barnes 2008-03-27