Tag Archives: Advertising Association

Quality time

Time to look at time again.  As we await the IAB’s half-yearly update on internet ad revenue, Sir Martin Sorrell’s recent comments about the proportion of people’s time spent online compared to the proportion of online advertising money have come to mind.  His belief is that online media are being under-invested in compared to the time spent online.

Is the amount of time spent with a medium the most important reason for advertising money to follow?  It is certainly a sign of a medium’s vitality and popularity if we are choosing to spend time with it – and if no one is using your medium they can’t be exposed to any advertising on it. But is quantity the be all and end all? Read more on Quality time…

A graph to remember (we hope)

A picture is allegedly worth a thousand words, though of course moving pictures with sound (aka TV) are worth even more.

Sadly we don’t have any TV to make our point here, so a picture will have to do. It shows what each medium’s share of total advertising has been since 1995, according to the official Advertising Association/WARC figures:

  Read more on A graph to remember (we hope)…

The good news: TV won’t ever ‘overtake’ the internet.

Cast your mind back. You may remember a year ago when our cheeky cousins at the IAB announced that internet advertising revenue had finally ‘overtaken’ TV advertising revenue in the first half of 2009. This prompted some ugly triumphalism from internet fundamentalists and telly was given a right old kicking in the press. A year on our bruises have healed, and we’re all friends again.

But guess what; various press stories appeared last week using the 2010 first half figures from the Advertising Association to state that apparently TV had ‘overtaken’ the internet again. In the first half of the year TV had 25.5% share of advertising spending, and ‘the internet’ had 24.3%. Whoopee, you might expect us to say; boo-sucks to the internet, reap what ye sow, don’t throw stones in glass houses, hoisted by your own petard and similar sanctimonious retributions.

Except we are saving our celebrations for something that actually counts. At the risk of repeating myself, on the anniversary of TV’s trashing  and while ‘online advertising’ spend is fresh in our minds, I would like to revisit why the ‘who is the bigger medium?’ question is the chocolate teapot of media debates.

It is not comparing like with like

TV is a medium, the internet is not; it is a fantastic technology that enables a variety of activities, from banking to shopping to email to TV to radio to newspapers and all things in between. It would be like naming everything that uses print technology – from posters, door drops and catalogues to directories, magazines, DM and newspapers, not to mention phenomena like books, leaflets, or letters – a single medium.

‘Online advertising’ doesn’t exist
There is no single thing called ‘online advertising’; it is a confusing catch-all term for the wide variety of very different types of advertising, including online search, display, social media and classified advertising. These are mature enough now to be looked at individually, as people do with the different forms of print, not lumped together. Aggregating revenues from such disparate disciplines in order to create a PR-able big number is meaningless.

TV *hearts* the internet
I never tire of saying this. TV advertising and most forms of internet advertising are genuinely not in competition. Search – by some margin the biggest medium within the internet sector – and email marketing do completely different things for advertisers and are wholly complementary to TV. Google calls it a ‘special relationship’ and this was underlined by our joint research with the IAB.  Online display formats of course can be substitutes for TV, but the fastest growing one is … online TV.

TV is available on the internet
The increasing convergence between TV (the content) and the internet (the technology) makes comparing the two fundamentally flawed. TV will be increasingly watched via the internet, broadband connected TV sets are launching, and the most attractive and effective part of online display to advertisers is the advertising spaces around on-demand TV.

If you still care about what the biggest advertising sector is, it’s print

If the same methodology of aggregating revenues from different types of advertising that use one particular technology was used generally, then ‘print’ would remain the biggest advertising sector. TV advertising and ‘online advertising’ never have been, and neither is now.  TV however is the biggest display medium by a wide and increasing margin. 

Online never ‘overtook’ TV anyway
Ironically, despite what the IAB announced a year ago, ‘online advertising’ never finally ‘overtook’ TV in 2009. If you want all the numbers here goes…

Ofcom’s figures, the most reliable source, list net TV revenue in 2009 at £3.136bn. Expressed as a number gross of 15% agency commission that comes to £3.689bn. The Advertising Association figures are generally listed gross of 15% agency commission for all media. They have 2009 TV spot revenue only at £3.525bn gross, plus listed separately is £160m of TV sponsorship.  Together that comes to £3.685bn gross, almost exactly Ofcom’s number.  The AA uses the IAB’s self-published figure for ‘online advertising’ of £3.541bn gross in 2009. 

There you have it: TV (excluding online TV) took £3.685bn in gross advertising revenue in 2009 and the whole online sector £3.541bn gross.

It gets confusing because the AA separates TV sponsorship from spot and lots of people get mixed up between net and gross (including some very large media agencies). So TV wasn’t overtaken it seems, so therefore can’t have regained some spurious position it never lost in the first place. 

But we genuinely don’t care
Who does?  We haven’t made a big deal out of this ourselves because, however tempting it might be, we are not in the business of comparing the two (Ok, apart from right now, but that’s only to show how fatuous it is). TV’s share of total and display advertising rose last year (as it also did in 2008), which might have justified a bit of showing off.  But when TV revenues were down nearly 10% it seemed a bit sick to get excited.  A year will probably come again when the online sector grows faster than TV but we’ll still be happy as long as it’s not at TV’s expense.

Real reasons to celebrate

2010 is a different issue.  Display advertising has come back strongly this year.  All media that are brand building are doing better, from cinema to outdoor. TV revenue seems to be growing by more than 12% and faster than any other medium this year.  All of 2009’s revenue decline will be regained .  Now those are facts we are happy to say ‘Whoopee’ to.

Read more on The good news: TV won’t ever ‘overtake’ the internet….

A graph that made me laugh

I’m supposed to be having a day off.  Fat chance. 
 
You might have noticed a story put out by our cousins at the IAB that claims online advertising has now overtaken TV to become the ‘biggest single advertising medium in the UK’ (by spend).  We find the IAB’s story odd because the internet is not a single anything; it is a fantastic technology that is home to many different marketing activities that do different things.  It even delivers TV.  It is a pretty meaningless statistic but it has garnered plenty of headlines and no small amount of apocalyptic predictions.  Journalists expect us to respond, so here I am blogging instead of planting my daffs.
 
As I have said many times before, I love the internet. I love the way that it complements TV – nothing else works better. I love the way people can respond instantly to TV ads via search and websites; I love the way social media helps make the buzz around TV programmes so visible and so much more fun.  I’m happy for online advertising to increase – so long as it is not at TV’s expense.  And so far it isn’t.  (I can almost hear your eyebrows rising at this point).
 
That’s the depressing part of this story; the implication that online advertising is taking broadcast TV’s money is just not true.  Last year broadcast TV spot advertising declined 2.9% compared to total advertising declines of 4.2% and display declines of 5%.  Not the spectacular share growth of online maybe but growth nonetheless and in the horrific ad market that is 2009 the same pattern is emerging; TV and online are increasing their shares, mostly at the expense of print and DM, though print remains the biggest overall advertising medium, not online.
 
If the IAB can’t resist making comparisons with TV then the fairest would be to compare all forms of online display with all forms of broadcast TV – spot, sponsorship, AFP, Interactive etc. – not an easy number to get hold of because TV has never bothered to lump its own advertising revenues together. TV would never try to compare itself with any form of classified advertising, DM or search because it wouldn’t make any sense.  
 
Anyway, Thinkbox’s thoughts on this are already out there so I won’t repeat them all here.
 
But I would like to draw your attention to The Guardian’s coverage of the story today. They produced a little graph that made me laugh (it isn’t online though). Along the x axis we had a list of advertising sectors, each with a bar representing revenue that got a bit taller as it went along. We had cinema, radio (spot only), business magazines, consumer magazines, directories, outdoor, national newspapers, press classified, direct mail, regional newspapers, press display, television (spot only), and then…internet. Just internet. No more explanation than that.
 
We think these numbers would be more meaningfully represented in one of two ways, either by technology/platform or by the genuine distinctive advertising sectors .  We’ve had a go, based just on the IAB’s figures.  Take your pick.

Read more on A graph that made me laugh…

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