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2014: The end of the beginning for digital advertising – by IAB CEO Guy Phillipson

Guy Phillipson, CEO of the Internet Advertising Bureau UK, offers his take on the shape of things to come for digital advertising in 2014.

Guy Phillipson

Ours being a data-obsessed age, there are numerous statistics which reflect the magnitude of digital media, both from a consumer and advertiser perspective. UK citizens have an insatiable appetite for the internet, and online shopping activity during the holiday season in 2013 certainly reflected that. According to Experian, 26 December 2013 was the biggest online retail day ever seen in the UK, with British consumers spending 17 million hours on Boxing Day browsing on smartphones and buying on tablets.

However, the UK doesn’t just break shopping records during the festive season. As Ofcom reported in its Communications Market 2013 report, Britons are the most frequent online shoppers of all countries compared, with over 73 per cent buying goods or services online at least once a month, with nearly a quarter (24 per cent) shopping online at least once weekly, behaviour also illustrated in our own RealView research. It’s not surprising, then, that we Brits spend far more money online per head than countries like France, Germany, the US, Australia and Japan.

When online, Britons don’t just focus on shopping, however. Brits download more multi-media content than is common in other European countries. As Ipsos MORI reported, four in five of us reach for our phones within 15 minutes of waking. In 2014, I fully expect that smartphone penetration in the UK will surpass the 75 per cent mark. Tablet penetration will also likely reach 50 per cent by the end of the year.

This all adds up to more time spent online and exponentially more opportunities for advertisers. The question is — can brands keep up? When evaluating advertiser investments in key digital channels, it becomes clear that some of the smartest brands will continue to follow consumers where they’re spending more and more of their time, leveraging the inherent creativity and efficiency of digital media.

Video is route one for showcasing brand stories, building brand equity and driving purchase intent. Brands have already shown confidence in the medium, resulting in an impressive 86 per cent growth year on year. In 2014, even more video opportunities will be available across publishers, broadcasters, pure plays, social and mobile. Enhanced interactivity and continual innovation will be crucial for brands investing in this channel, as digitally-savvy consumers expect to be engaged and entertained, rather than merely talked at.

Given the British penchant for smartphones and tablets, mobile is likely to be reported as a billion pound medium in its own right for 2013, growing at a staggering 130 per cent. The consumer goods sector has led the way in mobile investment, accounting for 28 per cent of mobile display advertising. Retailers win the prize for the highest percentage of optimised sites (75 per cent). While there remains a lot to do in terms of mobile ad ops and measurement, mobile could very well double again in 2014, given that other sectors are also eager to reach the “always on” mobile majority.

No digital channel embodies “always on” better than programmatic advertising. Programmatic was a key driver of the 23.5 per cent growth in display in H1 2013 and will continue to be a major investment channel for brands in 2014. The market is a confident one, complete with premium inventory and private marketplaces. Reflecting the maturity of this marketplace, in 2014 the IAB will size the market through our Display Trading Council.

The size of programmatic advertising’s impact is really apparent when considering data. Programmatic, like digital as a whole, generates an enormous amount of data. Perhaps it’s time, however, that our industry stops talking about zetabytes and petabytes and focusses more on driving business through clever applications of data which delight and provide real use to consumers. Some progressive retailers and FMCG brands now harness localised weather data to optimise campaigns, delivering more timely offers to consumers. Marketers integrate their own first party data to sharpen media planning, getting the right messages in the right contexts. Through the intelligent, responsible use of data, we can all experience what we want when we want to — great for consumers and brands alike.

When I first started out in marketing and advertising, it would have been hard to imagine that I’d spend as much time as I do talking about data and automated trading, and we can definitely see this broader shift when considering the composition of the IAB’s own board, formerly known as our Leadership Council. Just five years ago, this group consisted of 12 companies, solely comprising of digitally savvy portals and publishers. Now that digital advertising represents a huge ecosystem — a third of total UK ad spend — our board represents 20 companies, leading media owners and content creators to be sure, but also the world’s largest social networks and tech companies.

Of course, the transformation of the digital industry is only slightly less mind-blowing than the transformation of our society as a whole.

For as I said at the start, at the end of every laptop, tablet and mobile is a UK citizen. And with British consumers on our side, the UK will continue to be a focal point of the global revolution in creativity and innovation made possible through technology. And this is just the end of the beginning.

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