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Facebook drives soaring digital ad expenditure

March 29, 2011

Recession, what recession? None at all where expenditure on digital advertising is concerned. After the merest hint of a stutter the year before last, the engine of growth has surged to new heights of performance. Annual spend is up nearly 13% according to the latest, and much awaited, biannual study by the Internet Advertising Bureau and PwC. That’s close to double the rate of recovery in the rest of UK media spend (7.2%) over the same period.

The easiest way to grasp the overall significance of the survey’s data – which is rich to the point of indigestion in statistics and trends – is to remember the 3 Quarters.

One quarter of all UK media spend – or £4.1bn – now goes online. That makes it nearly, but not quite, the biggest medium. Television remains ahead by a whisker (26% versus 25%), but is likely to experience slower growth. You can draw your own conclusions about what is happening to press and the rest.

One quarter of that £4.1bn (£945m precisely) is now spent on display. Search is still dominant (57%), but is enjoying a growth rate of “only” 8%. IAB chief executive Guy Phillipson attributes the power of digital display to 3 underlying factors: the general recovery in advertising confidence during 2010;  more importantly, “the power of online to build brands” (an issue which has held it back in the past); and faster and more reliable broadband delivery, which has helped to stimulate video streaming.

One quarter of all time spent online in the UK is dedicated to social media, of which by far the largest component is Facebook. According to ComScore, cited in NMA, the social network accounted for 81.6bn page impressions in Q4, 2010 alone. More than anything else, we could speculate, it is Facebook – with its enviable reach, dwell time, and video opportunities – which has given advertisers the confidence to plunge into online display in such a committed way.

Two other accelerants of growth are worth noting. First, packaged goods companies, for long sceptical about dipping their toes in the digital pond, are now within the top three digital online spending categories, outgunned only by finance and entertainment and media.

Second, mobile advertising budgets more than doubled (116%) last year to reach £83m. That may still be a small figure, compared with the online total, but it demonstrates beyond doubt advertiser confidence in smart phone platforms. While on this subject, a report just out from US consultants Borrell Associates identifies mobile as the key revenue driver in the internet’s most hotly contested battlefield, “local” (see Groupon, Craigslist etc).

For more on the IAB survey, check out its website.

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Deloitte research gives ITV more impact

August 24, 2010

ITV and commercial television cheerleader Tess Alps (of Thinkbox) will have been heartened by an indisputably solid piece of YouGov research  – not their own, as it happens – which bolsters the traditional 30-second ad spot and trashes the pretensions of its so-called digital nemesis.

Tess Alps: Manna from heaven

The results, distilled from 4,199 respondents on behalf of Deloitte as a preamble to this week’s Edinburgh TV Festival, could not be more on message if Thinkbox had designed them. TV advertising appealed most to 18- to 34-year-olds and least among over-55s. What’s more, nearly 90% of the 18- to 24-year old cohort was prepared to admit that advertising had some kind of impact upon them.

Best of all, for the TV lobby at least, more than half the respondents said television was more memorable than any other kind of advertising medium, compared with 10% who opted for newspapers as their favourite medium and – here’s the corker – 2% for online video ads, and 1% for online banner ads, and ads on iPhones and iPads.

If I were Guy Phillipson or one of his eager team of analysts at the Internet Advertising Bureau, I’d be demanding a recount. I’d point out that there are going to be a lot fewer 18- to 34-year-olds about in the years to come; and a lot more over-55s (who do use the internet, and hold an increasing part of the nation’s disposable wealth). I’d also ask how TV impacts measure up in terms of actual viewing (as opposed to distracted multi-tasking).

Still, there’s no denying that television – according to a significant majority of the population – remains by a long chalk the best brand-building medium.


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