The internet, and most notably its applications, are, by most measures, growing faster than any other part of the UK economy. In general, there is 10% growth but among some activities growth is bigger by factors. The reality is that the internet is a new, fast growing and, currently much under estimated new form of economy.
In this post I will bring evidence to bear that suggests a PR industry of £20 billion. This is a sector that will grow by factors in the next decade. Already, we are seeing the evidence. Interpublic "continues to see the benefits of our digital strategy in which the primary pillar is embedding digital talent at all of our agencies," The market for the PR industry to exploit is already in place.
- In August 2011 there were 3.4 billion hours spent online by the UK Internet population#. The average home broadband user downloads 17 gigabytes of data each month, equivalent to streaming 12 hours of high-definition content from the BBC's iPlayer#.
- 77 per cent of households have Internet access#.
- Social media is a major activity for a majority of the population from the age of 8 years old#.
- It is an area of activity that appeals to over 60% of the UK population#.
- The UK leads Europe in smartphone adoption with 70% growth this year#.
- Over a quarter of adults and nearly half of all teens now own a smartphone and 37 per cent of adults and 60 per cent of teens are ‘highly addicted’ to them#.
- Smart phones already drive 5% of online traffic#.
- The use of wireless hotspots almost doubled to 4.9 million users
- 21 per cent of Internet users did not believe their skills were sufficient to protect their personal data and
- More than three quarters (76%) of TV viewers now surf the internet, use mobile phones, iPads or instant message while watching TV. http://bit.ly/rUzUHp.
The reasons are clear.
Of the total internet economy, 60% is driven by consumption (the rest is in infrastructure etc).
At the same time other sectors such as the financial sector (10% of GDP) are stagnant or in decline.
- Online retail in the UK will grow at a ten percent compound annual growth rate over the next five years#.
- Forrester projects that online retail across 17 of the largest EU markets in Western Europe will hit €114 billion by 2014
- UK Internet use will be up by a factor of 3 in 5 years. Set against Ernst & Young ITEM Club's forecast for GDP to grow just 0.9% this year and 1.5% next year#, this would seem to be close to magic.
- 190 million Europeans will shop online by 2014 (up from 141 million today).
Consumer activity from desire to purchase is well understood and documented.
One third of Facebook and Twitter users in the UK are followers of brands. Online is clearly the place to be. The majority of marketers (58%) are using social media for 6 hours or more each week, and more than a third (34%) invest 11 or more hours weekly.
90% of marketers indicate that social media is important for their business.
Online retail in Western Europe will grow at about 11 percent a year, slightly ahead of the UK and the US, two mature markets.
Online banking the most popular way to manage money with 79% of people feeling confident in making online banking transaction A number that rises to 90% for 25 to 34-year-olds.
Meanwhile, the UK banking sector employing 4% of the labour force will expand at a relatively subdued pace during 2011-15, with growth averaging around 3% per annum.
Companies have found out that web sites deliver sales. Sometimes visitors buy from the site at other times their visits are an immediate precursor of sales.
Companies have also discovered that websites offer other benefits in delivering suitable vendors, prospective employees and others stakeholder benefits.
Along this journey, organisations have discovered that interventions in online social discourse lead to increased brand awareness and enhanced stakeholder engagement.
It is not as though the dynamic of the last five years is about to change.
By any and every measure, the internet is dynamic. It is exciting and is delivering very real economic as well as social benefits.
Online retail sales in Europe will increase by a third over the next 4 years. Tablet computers will see an explosion in sales over the next four years, selling 60% as many units as PCs by 2015#. Activism is expected to rise. The majority of both corporate and activist respondents predict an increase in shareholder activism#. Online activity at work is said to be costing £14 billion a year# leading to growth in Online HR services. 70% of companies have yet to launch a mobile site#. More than half (54 percent) of UK businesses with fewer than 50 employees do not have a website#.
Internet marketing budgets in the autumn of 2011 are up 16% and search marketing is up 9% four times more than all other marketing activity.
We are beginning to see PR firms growing faster than the economy would traditionally suggest is appropriate.
In addition to maintaining the existing internet based infrastructure the PR and associated industries have to be able to deliver a minimum of 10% incremental activity for the foreseeable future.
Meanwhile, there is a skills shortage. Microsoft warned of it#, Major Players says the talent pool is leaving PR for the digital world if PR agencies fail to integrate social media into their traditional offering#. An inability to retain cyber skills at GCHQ is causing the Prime Minister a headache#. Finally, 60 of IT chiefs have difficulty in finding candidates with digital commerce, social media and web architecture skills.
It is reasonable to suggest that between 5 and 10% (in some cases much more) will be spent in online marketing activities with compound growth in excess of 10%. In total this represents £6.7billion in 2011 rising to £12.7 billion by 2017.
Can we now expect to see a £20 billion PR industry by the end of the decade? The numbers say - yes!