Online commands respect : Another IAB Ad Spend report, another milestone for online – this time the big one
We released the IAB Ad Spend results today, with the record breaking news that not only has Ad Spend grown again – as it has every half year since we launched the survey in 1998 – but we have finally done what media pundits have been guessing and betting on for years. That is we are now the largest medium in the UK, with 23.5% share of all media spend now being spent on online display, classifieds and search. We are larger than TV not by a fraction, but by £113.6 million. We are also now larger than press display by £369 million.
We know that this is happening in a strange market however, with rumours that TV prices are back to 1980s levels (so it’s not just fashion that’s harking back to the good old days of Dynasty-style shoulder pads and studs, but TV prices too) and constant press stories decrying the fall of print circulations, all too often ignoring some of the success stories bucking the trend in both of these media. But the important thing for us here at the IAB, and the reason why we are very proud of our industry, is the proof that when the going gets tough, online can more than hold its own against other media. Budgets are being cut and prices are falling, but online is maintaining and growing its importance in the media budget.
Just to put the sceptics point of view across, we do present the data splitting press display and classified, so press combined is still the largest media. And we do include search in our figures, which some commentators are quick to point out is maybe not fair when comparing this to display media in particular. But the rise of search agencies with large blue chip clients spending their large blue chip client marketing budgets shows that this is not just an online directory service, it is a core part of the total media and brand marketing mix, not just the online bit. And even though online display did fall a bit on this time last year, though only by 5.2%, it remains the most successful display media in growth terms, with all other display media falling dramatically in this recession, with only cinema at 7.8% decline also getting away with single figures declining growth rates.
At £317 million for the half year to June 2009, online display is showing its strength and we expect it to ride out the rest of the recession well against other display formats. This is an exciting time to be selling online display, as new methods of targeting, behavioural advertising and reach measurements are becoming mainstream and the introduction of UKOM, the online industry’s answer to calls for one source of planning data, is being launched to build further confidence and growth in online display.
Classifieds are growing but are having a mixed time of it, with recruitment classifieds falling from this time last year, but growing from the last six months of 2008. All other classifieds are performing very well online showing growth from the same period last year, and in total classifieds makes up 22% of the online marketing mix, showing the effectiveness of and belief in this medium.
Search is by no means the be all and end all of online, though it has been a medium worth over £1 billion every six months for the last year. And it shows no signs of declining from this. As new offerings such as Bing bring innovation and choice to the market, and new product launches from Google such as FastFlip means this medium keeps being relevant and effective for advertisers.
We at the IAB are very excited for the next six months to see where ad spend will end up for the whole of 2009, even if sadly I won’t be here to announce it as I am leaving to start my own business. However I am very happy that my last week at the IAB sees the announcement of the big news that, perhaps earlier than most of us expected, online is now number 1 in the UK. And I was there at the heart of the industry when it happened.
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I’m getting used to behavioural advertising. It makes me amused when I’ve read an article about a Maserati to then be served an ad for one on another website (note to advertisers – interest does not equal income). But at the weekend something new happened. I was browsing the M&S website, looked at a couple of items and then put them in my shopping basket, then realised that payday was not for ages so shut down the website and carried on surfing the net when twenty minutes later on the news of the world site (I’m fascinated by Katie & Peter, please forgive me my bad taste) I was served an ad for M&S that showcased exactly the two pieces of clothing I had been looking at on their site. Clever, and kind of cool when you think about it. For a demo of how this works visit http://www.struq.com/demo/. This kind of advertising is yet another example of how technology is allowing advertisers to reach interested consumers online. Behavioural advertising is driving value in our industry and is helping advertisers to understand how to get more bang for their budget out of what can sometimes be a confusing market in terms of planning for audience reach online. It is helping advertisers buy target audiences for brand awareness campaigns, and not just being used for direct response as was traditionally the case. It is not surprising that advertisers are taking advantage of the technology on offer to buy audiences that through behavioural advertising technology they know are already interested in their products and have visited your website. It is not difficult to see the attraction in buying an audience that though you don’t know who they are, you know that they like reading about cars, or holidays, and therefore that might make them more interested in what you are selling than if you knew absolutely nothing about what they liked. Behavioural advertising has always been popular among direct response advertisers, but more sophisticated tools and alliances online with retailers and ad serving companies will help to drive the use of targeted ad buys for branded advertisers, not just those looking for clicks and acquisitions. There are also a host of new formats out there that are giving advertisers even more choice for their media budgets. Innovations in formats are driving renewed interest and are building the internet’s reputation as a serious branding medium, such as the widespread use of rich media, pre and post roll, media player skins and the exciting new billboard format (written about previously on the IAB blog). This innovation is happening alongside the development of UKOM, the online industry’s answer to calls for a common planning tool, which will give even more information to advertisers and media planners on online audiences and how best to reach them. All of this adds up to a fantastic year for online, with strong foundations being laid for digital media when we come out of the recession. Follow the IAB on Twitter
I’m getting used to behavioural advertising. It makes me amused when I’ve read an article about a Maserati to then be served an ad for one on another website (note to advertisers – interest does not equal income). But at the weekend something new happened. I was browsing the M&S website, looked at a couple of items and then put them in my shopping basket, then realised that payday was not for ages so shut down the website and carried on surfing the net when twenty minutes later on the news of the world site (I’m fascinated by Katie & Peter, please forgive me my bad taste) I was served an ad for M&S that showcased exactly the two pieces of clothing I had been looking at on their site. Clever, and kind of cool when you think about it. For a demo of how this works visit http://www.struq.com/demo/.
This kind of advertising is yet another example of how technology is allowing advertisers to reach interested consumers online. Behavioural advertising is driving value in our industry and is helping advertisers to understand how to get more bang for their budget out of what can sometimes be a confusing market in terms of planning for audience reach online. It is helping advertisers buy target audiences for brand awareness campaigns, and not just being used for direct response as was traditionally the case. It is not surprising that advertisers are taking advantage of the technology on offer to buy audiences that through behavioural advertising technology they know are already interested in their products and have visited your website. It is not difficult to see the attraction in buying an audience that though you don’t know who they are, you know that they like reading about cars, or holidays, and therefore that might make them more interested in what you are selling than if you knew absolutely nothing about what they liked. Behavioural advertising has always been popular among direct response advertisers, but more sophisticated tools and alliances online with retailers and ad serving companies will help to drive the use of targeted ad buys for branded advertisers, not just those looking for clicks and acquisitions.
This innovation is happening alongside the development of UKOM, the online industry’s answer to calls for a common planning tool, which will give even more information to advertisers and media planners on online audiences and how best to reach them. All of this adds up to a fantastic year for online, with strong foundations being laid for digital media when we come out of the recession.
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Murdoch and the paid content coalition would do well to keep an eye on Spotify. Spotify, the new music streaming service, offers two options to consumers: 1. Listen to unlimited music online for free but with advertising 2. Listen to unlimited music without adverts for £10 a month. Up until now, this choice hasn’t been forced, but now the Spotify iPhone app is out, you can only use Spotify on the go if you are a premium, £10 a month user. Personally I think this is a righteous bargain - £10 a month for unlimited music? I used to pay this exact amount before Spotify for unlimited music on Napster, and that didn’t even work on iPods. Convenience was its draw. Will it work for the mainstream? It depends whether content publishers can deliver quality, exclusive content for consumers. At the moment Robbie Williams, Madonna, Cheryl Cole, Shakira and more new singles aren’t on Spotify and won’t be for at least a month, yet I can quite easily download them illegally. Not quite there yet music industry, but Spotify is a massive step in the right direction.
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Working at the IAB is a funny old job. Sometimes it feels like we’re trying to solve a Rubik’s Cube while an entire industry worth of stakeholders are peering over our shoulders egging us on to do it faster. It can be a tough slog figuring out how we get all of the colours into the right place, but when we deliver, it’s hugely satisfying and often powerful. That’s why we love it… The satisfying bit, not because we’re power mad! Last year, before the recession reared its ugly head we expected 2009 to be the year when online looked inwardly at its business operations and bettered its technical wizardry. Undoubtedly, in IAB council meetings we’ve seen this happen, but the degree to which it has happened is unexpected. We've seen direct evidence of the recession forcing reassessment and the need to ‘be better’ beyond what I think would have been possible without the recession shaped stick beating everyone over the head.
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I’ve noticed that I generally start a blog post apologising for the many celebrity references, and not talking overtly about advertising, but I guess brands can actually learn a lot from the rich and famous, who are of course brands in themselves, and digitally some of the most forward-thinking there are. Step forward Lady Gaga, a current obsession of a couple of IABers, not just because she has good music and clothes, but also because she’s a fan of… online video! In a recent interview with Newsweek, Gaga spoke about the structure and look of her performances, which are tailored to suit the online viewer:
As a firm follower of celebrity and pop-lovin’ sites, I’ve been waiting with baited breath for the release of Madonna’s full-length video for her latest release, ‘Celebration’. Not because I like the song, but because for the past week her people have been releasing video ‘teasers’, tempting us with 15-second clips of what we believed to be highlights of the final version. What I found interesting about the end product – aside from all of Madonna’s totally unnecessary dry-humping of walls – was that Paul Oakenfold was nowhere to be found. Last week’s ‘Paul Oakenfold teaser’ showed scenes of the DJ doing what could only be described as granddad dancing, which were promptly ripped to pieces across the celebrity-obsessed blogs of the world wide web, with sites such as popjustice and Holy Moly ridiculing his final-song-at-a-wedding-esque moves. Just goes to show that DJs should never dance.
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