MC Stop Press: Digital Media Comes Of Age
13 October 2009
The IAB has announced figures this week which show that online adspend has overtaken that of TV, becoming the largest advertising medium UK in the process.
This is cause for celebration as it shows just how far we have come as an industry since the first digital display ad in 1994 (for AT&T). Below is a thorough investigation of what this milestone means, why it’s worth celebrating, and where we go from here. Firstly, some of the numbers:-
In the first half of 2009, online adspend grew by 4.6% to £1.75bn, according to the IAB. The UK is the world leader in terms of market share for online, with the medium accounting for 23.5% in the first half of 2009. Within these figures, Paid search saw a 6.8% increase from the first half of the year 2008 to the first half of 2009. Search is proving recession-friendly with marketers investing £1.05bn during H1 2009, or 59.8% of all online ad spend.
Despite the property market crash and stalled automotive and recruitment sectors, the classified sector grew by 10.6% period-on-period to £385m – or 22% of all online ad spend – reaping the benefits of the continued migration of advertising from print to online formats.
What does this really mean?
Milestones are generally interesting because they have some meaning. Statistics on their own are a little hollow and meaningless and there are many who would challenge the IAB/PWC numbers and whether it is an ‘apples-with-apples’ comparison. Thinkbox, somewhat unsurprisingly, were vocal in claiming that the TV comparison did not include the full extent of TV revenues from areas like sponsorship and that in fact digital spend incorporates online TV (video) revenue.
We believe this is somewhat academic. TV is having a tough year and in the same year digital is showing growth, which is pretty impressive in this climate. The two are not mutually exclusive and growth in online video could as easily be attributed to TV as digital. This is exactly why we set up the Video Integration Unit over a year ago, and why we have similarly set up both Audio and Press Integration teams; online video is best planned/bought as an integrated TV/digital play, as opposed to being either purely broadcast, or purely digital. We know from experience that integrated digital activity is becoming as necessary and important as conventional TV on an advertiser’s media plan.
So if you are an advertiser who spends limited amounts on digital media, this should be a wakeup call. 92% of the UK population has broadband access, 29.4 million people accessed at least one social networking site in the UK in May, averaging 4.6 hours per visitor during the month and £41bn has been spent so far this year on goods and services online. This milestone to us should mean the end of digital having to justify its presence on a media plan and provide multiple comparison benchmarks next to traditional channels. The conversation should be more about which digital channels and what % of budget do I allocate to each.
If digital is already central to your plans then the announcement is less ground breaking, as you are already a convert. However, it is worth taking stock and having a think about whether you are investing the right amount in to digital and whether your digital advertising works as well as possible in conjunction with your offline activity. We know that 29% of web users watch TV with a laptop by their side. They might see your TV ad, search for your product and not find it, and then select a competitor instead. One of the Thinkbox responses to the announcement was that it is inaccurate to add together all of the diverse digital channels to arrive at a conclusion. Not only did they not get the point, but it is actually down to the fact that there are so many diverse ways to do digital, that the medium is growing at such a pace. You may be investing in PPC, but do you have a clear SEO, mobile and social media strategy? If you don’t, isn’t it about time you did?
Where do we go from here?
When Gordon Brown unveiled the Digital Britain report earlier this year and introduced it by saying that whatever your business ‘the digital revolution is going to be at the centre of everything we do’, we knew that digital media was more than just another place to advertise. The web is where people do business, buy products, communicate with their friends and family and research new services. It is more than just another media channel.
So, what does this mean, and why is it worth celebrating? Our feeling is that reaching this milestone is purely a vindication of how far digital has come. Hopefully, this announcement will mean some more grown up conversations about the opportunities within the medium. The quality of competitive tracking on the web means it can sometimes be difficult to prove the extent of spend in any given sector. What we can do, very clearly, is prove again and again that digital advertising has a demonstrable effect on the bottom line of any business, which other media activity is still working towards. That’s not to say that it is better than other media, nor that marketers should only advertise only in digital; quite the opposite – it means that online advertising is an incredibly important tool in the armoury for any ad campaign.
In fact, ironically the strongest relationship we see in modern times in driving effectiveness is between television and the web, so that is perhaps the more pertinent message to ponder following last week’s announcement.
Here at MPG Media Contacts, we have created a model where we have specialists in all existing and emerging channels. We are passionate about understanding the chemistry of how media channels work together and we prove the results of integrated campaigns (more often than not involving TV & digital as the lead channels) day in, day out.
We believe that the real point about reaching this milestone is that digital media is no longer purely about banners and buttons any more than it is purely about search, affiliate, video, mobile, rich media, Spotify, e-readers, blinkx or anything with the word ‘digital’ in the name (e.g. digital escalator panels). It is about the fact that digital is best seen as the glue that binds all media activity together. It is about creating a ‘return path’ between advertisers and consumers – whether that is via mobile from a text shortcode on a traditional ad or the ability to click on a link after hearing a ‘radio’ ad on Spotify, or seeing a ‘TV’ ad on Veoh.
So yes, we’re happy that digital has come a long way as a medium and that this data represents an important milestone, but that’s not why we are celebrating – we’re happy because we know that we are in a great place to move media forward, together and in an integrated fashion, as a more effective means of affecting your bottom line.
If you have any questions, or would like more information please contact us.