10 April 2013 - 11:11am | posted by | 0 comments

Reaction as IAB report claims Digital advertising breaks through £5bn barrier: Thinkbox, LBi, SapientNitro, Microsoft Advertising, affilinet, Fetch

The IAB's latest yearly digital advertising report has found a surge in spend of 12.5 per cent for 2012, reaching £5.42bn as the trend in ad spend invested in digital increases. The Drum asked some figures from across the industry for their views on the continued increase in spend and what it means for the sector.

Creative Review: 

Neil Mortensen, research and planning director, Thinkbox

Neil Mortensen, research and planning director, Thinkbox

While we would question the validity of defining search within advertising figures, the IAB's figures contain great news for TV advertising. They show the many ways in which TV influences and is colonising the internet. TV is a major fuel for and beneficiary from social media and online search; it is the premium part of online video advertising, and it is a growing presence within mobile advertising as it expands on to new screens and into new parts of people's lives. TV broadcasters are a major force in online advertising and the IAB figures, which aggregate online TV revenues within them, reflect this. They also reflect the fact that TV advertising revenues had a record year in 2012 thanks to TV's continued expansion and its proven, peerless effectiveness.

Jonathan Lyon, global director of strategic insight, LBi

Jonathan Lyon, global director of strategic insight, LBi

One of the most significant and interesting findings of the IAB’s latest ad spend report is the rise of mobile. Its growth is unparalleled and represents half of the total increase 2012 has seen over 2011. With an additional £607m being spent in 2012, this is truly significant. It’s all the more important given that display advertising, 2011’s darling growth engine, has to some extent become a victim of its own success in providing hyper-targeted advertising options, the increased use of real-time bidding, and the ability to dynamically change and personalise creative. All these measures have in many ways suppressed growth in display advertising by virtue of increased efficiency of the medium. Display advertising has grown by just 14 per cent, with mobile enjoying a 148 per cent increase.

Mobile has benefited from a now universally accepted mantra of brands adopting a converged media planning approach that sees mobile stand alongside all other activity as opposed to an afterthought. It’s almost the emergence of a new, now grown up channel taken more seriously by advertisers as both advertising options on mobile increase and the measurement frameworks and metrics to support the channel improve.

Paul Brown, business development and strategy manager, affilinet

Paul Brown, business development and strategy manager, affilinet

These results demonstrate how quickly brands have responded to the ever increasing central role that our smart phones play in everyday life. Brands do need to be careful though that they don't get 'mobile goggles.' Effective marketing is all about context and understanding where people's eyeballs are at a certain point in time. For example, I might use my mobile to research a holiday during my commute, but use my work PC during lunch. To really make an impact brands have got to ensure that they are utilising all channels available to them and not putting all their eggs in one basket.

Omaid Hiwaizi, planning director, SapientNitro

Omaid Hiwaizi, planning director, SapientNitro

In these recessionary times it's no surprise to anyone working in marketing generally or digital in particular that investment in digital ad spend would continue to grow at a huge rate. While paid search still continues to dominate, growth in other areas indicates some interesting trends.

Mobile is truly coming of age – with maturing brands embracing the omnichannel possibilities to engage and service customers better. From a consumer's point of view, access to digital services via mobile has emerged as a norm, and laggard clients and brands are likely to lose out as consumer expectations move forwards.

FMCG brands, with a particular need to assert the intrinsic and extrinsic value of their branded goods vs. own label, are investing in digital media ahead of other sectors – again vital when families are tightening their belts.

James Connelly, co-founder and managing director, Fetch

James Connelly, co-founder and managing director, Fetch

This growth is excellent but by no means unexpected. Finally, we are seeing advertising pounds follow consumer eyeballs, which are now most definitely looking down at their connected devices. Tablet uptake and the rollout of 4G will only increase this. Early mover brands such as eBay, William Hill and Hotels.com, who had the insight to invest early, have had a head start and are now reaping the rewards.

There's still work to be done – more regulation and standardisation across the mobile advertising market is important and the real lack of specialists in mainstream agencies is still holding brands back. I heard that in one of London's top five media agencies, their culture department, which focuses on maintaining the culture of the agency, had four people in it; three more than their mobile department.

Andy Hart, VP Microsoft Advertising & Online, Europe

Andy Hart, VP Microsoft Advertising & Online, Europe

The digital advertising industry saw a seminal year in 2012 with advertising experiences becoming more seamless, relevant and contextual than ever before. It's great to see that over the past year brand confidence has continued to grow and digital ad spend has increased by by 12.5 per cent to £5.4bn – the first time it's ever passed the £5bn mark.

The evolving digital landscape and adoption of new technology is now enabling brands to re-engineer how they target and engage their audiences for longer term reputational value.

Inviting consumers to take part through transparent, collaborative engagement will be key to the future of digital advertising. It's up to us in the industry now to really nurture the value exchange across digital devices in order to grow brand stories into online experiences anytime, anywhere.

Richard Sharp, UK MD, ValueClick Media

Richard Sharp, UK MD, ValueClick Media

The latest ad spend results are incredibly encouraging and represent some real growth across the digital advertising market.

The growth of video, across both online and mobile, reflects the current trend and shows that the best way to reach consumers is through engaging, rich advertising. Video is clearly a progressive sector as more and more consumers are engaging with online adverts, I think that by creating content that’s relevant to users’ needs is how the industry will continue to evolve.

It is also encouraging to see that online growth hasn’t slowed in the light of the increase in mobile ad spend, mobile and display are not competing mediums, they’re complimentary. To enable continued growth across both channels, the industry needs to focus on integrating online and mobile. Many brands do this well but the channels still often treated in silo. Cross device advertising has proven to be more effective for the advertiser and will start to show increasing ROI, helping businesses to build brand awareness with consumers as well as delivering traditional performance metrics.

Sam Barnett, founder and CEO, Struq

Sam Barnett, founder and CEO, Struq

2010 was going to be the year for mobile, then 2011, but these results show that in 2012, mobile finally took centre stage. The UK’s digital ad spend hit nearly £5.5bn last year, all all-time high for the industry, up from less than £200m a decade earlier. Nearly £1bn of that spend was generated through mobile: today, we are consuming media on the move more than ever, be it through our smartphones or tablets.

Almost two-thirds of the UK population now owns a smartphone. Mobile now accounts for 9.7 per cent of all digital advertising spend. That’s a massive increase on the 1.1 per cent in 2009. If these figures keep up their current trajectory, mobile could overtake ‘traditional’ media within a decade, perhaps sooner. With super brands like Facebook concentrating the bulk of their efforts on leveraging the power of mobile to create new revenue streams, I think it’s fair to say brands who fail to evolve for mobile will soon be left behind.

Scott Abel, CEO, Spiceworks

Scott Abel, CEO, Spiceworks

The 24 per cent rise in social media advertising spend is almost twice the online standard (12.5 per cent). Spiceworks’ experience certainly supports this; we’ve seen strong revenue growth across our advertising and email marketing businesses. I believe other vertical social networks would also report the same trend.

B2B marketers are flocking to platforms that can deliver engaged, highly targeted audiences with significant buying power. Unlike more generic social or professional networks, vertical, profession-based networks are able to cut through the clutter and connect marketers and their audiences in meaningful ways.

Ross Jenkins, managing director of Profero Performance

Ross Jenkins, managing director of Profero Performance

These numbers reflect the impact of technology on consumer behaviour and media consumption, and the now mainstream role of mobile devices in many aspects of our daily lives.

Bit by bit, technology is enabling our fundamental human needs and removing barriers to access, encouraging people of all ages to assimilate digital into every aspect of their daily lives. For example tablets, led by the iPad, have done more than any other device to encourage the over 50s and 60s to adopt new digital behaviours, and smartphones are now routinely enhancing our everyday situations, from watching the X Factor or the Champions League, to shopping in your local department store.

It’s a great sign that FMCGs are finally starting to weigh-in with proportionate levels of digital investment. Clearly they are starting to recognise the unique ability of digital media to drive targeted brand building. The other benefit is that FMCGs will encourage better measurement practices and a shift away from some of the flawed and siloed response metrics so prevalent in digital today. This in turn will allow new and better planning currencies to emerge, which should fuel continued growth and best practice.
Ross Jenkins, MD Profero Performance

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