John Watson, founding partner of Watson Phillips Norman discusses the predicted rise on online marketing budget spend, and what the means for the more traditional offline routes in the future.
The recent IPA Bellwether report makes slightly more cheerful reading than usual for the advertising business. For the first time in nearly four years, budgets are predicted to go up – just. And as you could have guessed, such growth that’s going looks like it’s going to come from on-line.
This pattern is hardly new, of course. But does this mean off-line advertising will soon be dead and the world will finally have gone digital?
Fear not, Luddites. The evidence is becoming increasingly strong (actually, overwhelming) that looked at overall, digital simply replaces retail as a way of conducting a transaction, rather than being a medium in its own right (social media excepted). Or put it another way, in the bad old days, you opened a shop or you printed and mailed a catalogue. Now – at a fraction of the cost – you whip up a quick website and Bob’s your uncle.
But the on-line community believe that’s all you need to do. Get some good search terms and a decent Facebook page and the world will beat a path to your better mousetrap, and if your expectations are modest this probably works.
Sadly, that’s far from enough when you want to drive serious traffic. Moneysupermarket is currently spending millions off-line to drive site traffic, and where would comparethemarket.com be without spending millions more on those bloody meerkats? Thus off-line continues to fulfil its traditional role of creating brand awareness. As the on-line market matures and separates like cream into the prime sites and the skimmed milk of the also-rans, those who can afford to spend off-line are the winners, and as on-line continues to grow, so too – soon – will off-line, and I suspect rather faster.
Where does that leave direct? Without undue prejudice, happily in a better position than the brand people. Web traffic is gloriously measurable – second by second – and direct marketers can wallow in results heaven. Given that we really do know a lot more about getting people to act rather than just feel, when clients want to see serious web traffic coming in, direct marketers are in a better position to talk about results-based strategies than simply brand-based ones (though as usual, I suspect they will lack the confidence to do so). Certainly when it comes to generating cost effective response, then our cultural tradition of managing to achieve significant response impacts with budgets that brand agencies would get out of bed for isn’t going to hurt us.
And the gathering speed towards the mobile websites plays even more strongly to this strength. With 40% of response to DRTV, for example, now coming via SMS, it isn’t a big jump to seeing strategies that use off-line media to drive to smart phones becoming the norm in a few years.
But the effect of off-line media on digital is usually quite well hidden. How many meetings have you sat in when the search agency tells you what a wonderful job they’ve done while you’re sitting there wondering why nobody phoned in while your new DRTV campaign went live at the same time?
Consumers aren’t behaving themselves. They watch your DRTV, refuse to call (or text), don’t remember the URL, wait a day, then search on the name they remember and get to you that way. Given that we know that one of the greatest uplift in brand campaigns is with on-line, then it’s hardly surprising that a substantial minority – and I suspect in some cases a majority – of the response we forecast is leaking away via search. This is only going to get worse (or better, depending on how you look at it).