Week-9Lecture Hour

Digital Advertising

By,

Dr. Yuvaraj

Internet Advertising in UK

Internet advertising accounts for 20% of total ad spend in 2009 (£3.4bn) and grew at 20%. It should overtake TV spend soon

Of that total, the breakdown is: - 60% search - 20% classified - 20% banner/display - 5% video

Source: Internet Advertising Bureau

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Internet Advertising in UK

So clearly internet advertising is growing overall, with Google (and other search properties) accounting for more and more growth.

This is important in the UK where Google accounts for over 90% of searches

In this environment, certain keywords become very expensive and a “long-tail” effect kicks in with some words producing low cost per click and high conversion rates and others generating poor returns

For more detail, see: www.wordtracker.com

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Internet Advertising

Search marketing is driven by consumer-behaviour trends:

1. 90% reach of Google in UK

2. Majority of affluent buyers (30 years old +) go online for information first rather than amusement.

3. Ease of search is changing consumer behaviour

(Young people are often seen as more “involved” yet 90% of 20-30 year olds do not blog, upload content and are quite passive digital consumers)

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AIDA is augmented in digital world

Interest

Awareness

Desire

Research Referral

Action

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Internet Advertising

Digital agencies offer services to address these trends through advertising:

1. Natural Search Engine optimisation 2. Contextual advertising (pay per click) 3. Conversion enhancement plans 4. Web analytics

Further details at: www.seotoolset.com

www.keyworddiscovery.com

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Internet Advertising

Digital consumers use digital channel for research even if they do not buy online (see report on local classifieds at:http://www.pewinternet.com/Reports/2009/7--Online-Classifieds.aspx)

“Engagement” and encouraging consumers to distribute content is a holy grail but hard to achieveSee Heineken example and commentary here:

http://interactivemarketingtrends.blogspot.com/2010/03/engaging-doesnt-mean-interactive.html

Viral cannot be created nor guaranteed – campaigns can only be optimised for viral

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Internet Advertising

A good example of an established brand using the web and social media as part of its wider advertising is Benetton

In My Time is a global casting which includes elements of online competitions, web voting and traditional advertising

The competition attracted 65,500 entries, wide media coverage and consumer engagement

http://casting.benetton.com/

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Internet Advertising

Print owners continue to struggle with digital advertising (only 20% of internet advertising is banner/display) and struggle to get click-though and demonstrate value.

By contrast, the contextual nature of search and the ROI of click- through means advertisers are buying leads not ads (see www.google.com/webmasters)

So advertisers want an integrated approach with social media publishing (typically via PR) and other digital engagement

(http://www.thisislondon.co.uk/standard-business/article-23823696-future-for-ad-industry-is-simples.do)

Cadbury’s Wispa campaign is an ongoing example of this approach

but raises ethical issues (need for disclosure under new ASA rules)

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Internet Advertising:Summary of Campaign Options

Campaign Aim Campaign Tools

Brand awareness Online ads, viral, content sponsorship

Enhance brand image and sentiment

Website, online ads, email marketing, online competitions, mobile competitions

Product trial Mobile, email marketing, online competitions, e-coupons and e-sampling

Brand loyalty Email marketing, website, online newsletters, social media and networking

Sales or lead generation Search marketing, online advertising

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Media Sponsorship

Broadcast media vehicles have been subject to sponsorship, with the US leading Europe and EU

Soap operas were radio and TV dramas sponsored by soap brands in the USA

TV remains tightly regulated, particularly in the EU State/public service broadcasters, the BBC in particular, have

an almost reverent view of the need for independence, particularly in the area of news

In the early days of television, for example it was seen as a breach of trust and independence for a news announcer’s face to be seen on the screen in case his facial expressions gave away emotion

In the US it was less clear who would pay for development of programmes. Who did pay?

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Sponsorship of Media

Brands continue to create content as a driver for consumer engagement (Audi TV channel on Sky)

Brands create and publish content on web (Perrier by Dita)

There is a migration to sponsored content on social media

EG in 2010, Bacardi scaled back its websites in favour of social media sites:

“Bacardi is set to scale back its brand websites and refocus its marketing efforts on social-media platforms that host its branded content.

The drinks company, which owns the Bacardi, Bombay Sapphire, Dewar's and Grey Goose brands, will pare back its sites because they are expensive to run and are experiencing a fall in visitors, according to sources.

Over the next one to two years, it is believed that Bacardi will shift up to "90%" of its digital spend to Facebook as it no longer deems dotcom sites relevant.

A source said: "With dotcoms you are not getting a great return on investment if you are not getting the hits.“

ww.brandrepublic.com/news/1051058/Bacardi-rethinks-drinks-brands-online-strategy/?DCMP=ILC-SEARCH

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The regulator said "no" on 11 March 2009

ITV has suffered another regulatory blow after the Government said it will not allow product placement in home-made programmes despite the collapse in advertising

The commercial broadcaster, which reported losses of £2.7bn last week, said it will fight the decision which will mean that Boddingtons bitter on tap at the Rover's Return and Coca-Cola cans on the X-Factor will not become a reality

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/4975232/ITV-suffers-placement-blow.html

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On 1 March, product placement became possible on UK television

In US and Australia, placement accounts for 5% of advertising spend (so could go as high as £170m in UK)

No rush of early deals and Ofcom suggests a figure of £25-30m

Products high in fat, salt and sugar (“beer, coke and crisps“) are not allowed under Ofcom rules

Broadcasters are not allowed to run product placement in children's programming, news and current affairs, religious and consumer advice shows

Revenues will have to be split between programme makers and media owners (issues of openness)

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Questions?

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