Online and over here

Amid the cutbacks and regulations that have hamstrung some advertising categories, there is one that has recorded rapid and continual growth in the money invested in advertising in general, and TV in particular. It is a category that has access to a wealth of data to evaluate the success of its marketing activities, much of it instantaneous. It has witnessed rapid growth in sales revenues and the number of brands entering the market. I am talking, of course, about online brands.

Yesterday morning, we held an event (and streamed it live online) looking at this phenomenon and exploring why it is happening and how best for online brands to use TV. We’ll be making it available on the Thinkbox website to watch in the coming weeks.

It is amazing to think that only five years ago this market category hardly appeared on the radar. In 2004 a total of 34 brands spent less than £10 million a year on TV. Last year the market was worth over £180 million to TV, with a total of 239 brands accounting for 5.5% of all TV advertising revenues; and that doesn’t include the 20+ programme sponsorships in which they also invested. It is an average annual growth rate of 172%.

Other media have also benefitted from this dynamic market, but it is TV where these online brands have invested the vast bulk of their money. In fact, TV accounted for nearly three quarters of their offline media spend in 2009.

There are many reasons for this. The complementary nature of TV and online means that TV drives online response better than any other media channel.  But it is not only response generation that is responsible for TV being the predominant marketing channel for online brands. It is TV’s ability to build brands, through fame and emotion, which has kept them coming back.

For brands that have little or no physical presence, the ability to create an emotional connection with its consumers becomes even more important. Meanwhile, the power of fame to create word of mouth, awareness and, most important of all, trust cannot be denied, as the 700,000 Facebook fans of Aleksandr the Meerkat would no doubt agree.

Also, the growing phenomenon of ‘two-screen viewing’ – concurrent consumption of TV and online – has helped facilitate response. A brand can go from initial awareness to purchase during the course of a single commercial break, making TV a point of sale medium in these circumstances. New research we’ve just carried out shows that 94% of the UK claims to have gone online as a direct result of something they’ve watched on TV in the last 12 months.

Consumers’ growing confidence online means they instinctively know where to go when a TV commercial engages them and creates demand for a product or service. Our growing arsenal of evaluation tools demonstrates TV’s significant role in this process more and more and online brands have been voting with their budgets.

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