Tag Archives: online advertising

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:

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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.

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Online research: the crack cocaine of media evaluation

The low cost, fast turnaround and ease of doing online research has turned it into the crack cocaine of media evaluation; we know it’s bad for us but it is also addictive and gives us an instant high.

So a big thumbs up and round of applause should go to the IAB in the USA. They have just released an independent review of the methods used to measure online advertising’s effectiveness via the internet.

This was a very brave move indeed by the IAB, given that these ‘surveys’ consistently claim that online advertising spend is significantly more effective than spend on established media. The IAB across the Atlantic took aim at many of its members’ own feet.

I doubt there was the sound of champagne corks hitting the ceiling when the results came in. Conducted by one of the leading research specialists in the USA, the review concluded that much of online effectiveness research is seriously undermined by extremely low response rates, problems of survey design and a lack of evidence that it is weighting the data to account for inherent biases in the system.

Most of these surveys work on an ‘intercept’ approach, which means that respondents are invited to take part in a survey via web pages which are serving the online ads of the brands being evaluated. It is a bit like asking people sitting in Burger King and eating Whoppers if they prefer Burger King and Whoppers to McDonalds and Big Macs.

Talking of whoppers, I am regularly shocked by how many people in our industry take these studies’ findings seriously. I was at the MRG Conference in London when one such online study was presented. It demonstrated that expenditure on a series of banner ads had been around twice as effective as spend on TV. In a moment of frustration, I asked the media agency presenting the research the following question:

“If, twenty years ago, I had presented research selling the effectiveness of newspaper advertising by saying we had recruited a sample of readers of a newspaper, they had responded to an invitation to take part in a survey that was on the same page as the ad being evaluated, and they had completed the survey in their newspaper before sending it off by post, and the research then concluded that newspaper advertising was by far the most effective for that brand, would I have been taken seriously?”

I never got a satisfactory answer.

Research into advertising effectiveness needs to be scrupulously fair. It needs to be unbiased and comprehensive. We cannot restrict our questions to online panels, as they only represent the 70-odd per cent of the population that are regularly online and also skew towards heavier online users. We cannot recruit them via the pages on which the advertising to be evaluated sits, as that introduces yet another level of bias. And we shouldn’t even be asking them to complete the survey online, as the context of the questions will add another bias towards online.

In short, and in line with the results of the IAB’s investigation, there are far too many biases to make the research even remotely viable. It is flawed before it starts – and that is before we factor in additional failings such as the short-term nature of the research (some media channels, most notably television, carry on delivering value many months after the campaign ends), or the fact that a single exposure to the online creative is given as much of a weighting as multiple exposures to other media channels.

This is an issue that Ipsos has already raised in the UK.  Studies that have previously always demanded intellectual rigour and methodological discipline have been dumbed-down, seduced by the instant ‘hit’ of data showing the results that were wanted in the first place. In the area of advertising effectiveness, which should surely be the most rigorous and scientific of all advertising research activities, we have developed an approach that offers plenty of data but very little insight, and that is fundamentally wrong.

But it is crack cocaine, so it is hard to wean people off it. So, well done the State-side IAB for tackling this issue – as it puts much of the data of its supporters under the spotlight – and for offering rehab.  Media research relies on mutual trust between the commissioner of that research and its audience, and it is only by taking a leadership role, as the IAB has done in the States, that we can ensure the many positive advantages of online research are not misused and that we have a set of insights we can trust and use.

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Most irritating things in media: ‘Interruption’. No. 4 in an occasional series

Right then.  So far, we’ve had a dig at digital, a pop at passive, and blown a long raspberry at long-form video; it’s time now to get irate because of the way we obsess about ‘interruption’ in our industry.

This is a quote from Dr Samuel Johnson (the real one, not the even-more-amusing @DrSamuelJohnson on Twitter) in 1759 from The Idler:

“Advertisements are now so numerous that they are very negligently perused, and it is therefore become necessary to gain attention by magnificence of promises, and by eloquence sometimes sublime and sometimes pathetick.” (I’m guessing that ‘pathetic’ doesn’t mean crap but more pathos-provoking).

It’s interesting that even 250 years ago there were apparently too many ads, but even more so is that he identified the need to ‘cut through’ the noise with magnificence and eloquence and emotion; surely still three ingredients of all good  brand communication.

In a way, Johnson was also talking about the notion of interruption. Interruption in advertising, we are so often told, is a bad thing. Johnson’s contemporaries may have been captured by it, but sophisticated, empowered consumers do not want to have commercial messages thrust at them; they need to be engaged by modern brands and to start conversations with them.

I’m not going to argue that engagement isn’t key and that conversations with consumers aren’t a great ambition for a brand to have.  But I do believe that you can’t expect people to ’pull’ a brand until it has ‘pushed’ in some way; you can’t have a conversation until you’ve been introduced.

There is a myriad of ways a brand can choose from to push themselves in front of people for the first time – including retail facings, PR, doordrops, posters etc. etc. – but all involve occupying either a consumer’s space or time. But, without making that overture on their own terms, brands would be entirely subject to random and commoditised searching, which is no way to be the guardian of a brand.

All brand communications are essentially a form of interruption but some have greater potential for annoyance: the inserts that drop out of a mag, a pop-up, branding on a public venue, unsolicited mail, whether off- or online.  None of those are ever expected and rarely reward the space and time that they occupy.  Print, online and outdoor ads are arguably much less annoying but perhaps only because they are more easily edited out or ignored.

Is this an unresolvable conundrum? Is it simply impossible for a brand to create impact and get noticed without being a pain?  

Broadcast ads are a slightly different case I’d argue; radio and TV ads are not unexpected, at least not on commercial channels. I would argue they are not even interruption because, with a few exceptions, the content they appear within is constructed specially to contain them. Like the doors and windows of a house, they are part of the overall design and are in-built, not rammed in.  It doesn’t stop them from being annoying on occasions though.

There will always be a vocal minority who avoid all advertising per se, be it TV, radio, banners, pop-ups or posters. There will always be some who reach for their remote when the TV ads appear (although we know from BARB that people are watching more TV ads at normal speed than ever before at a time when many have intuitive technologies that enable them to avoid them should they really wish).

But lots of people enjoy lots of TV ads a lot. Lots of them. We’ve plenty of footage of them doing just that: dancing, clapping, salivating, singing, searching, smiling, reciting the dialogue. They don’t mind being interrupted if we make it worth their while (cf. Bill Bernbach). In fact the word interruption wouldn’t even occur to them unless the ad was bad. Even the less entertaining ads are welcome if they are relevant, timely and tell viewers something they want to know (e.g. 10% off tomorrow).
 
Even when ads are not welcomed with unbridled joy, many of our research projects have revealed that most people understand and accept the implicit commercial contract whereby advertising subsidises the programmes they love. This contract is reinforced when broadcasters make their content more accessible and convenient.

How many ‘conversations’ with brands would we all have to have in order to reach even a tenth of the audience reached by the 2.45 billion TV ads seen every day in the UK? There are around 7,800 brands advertising on TV, divide that by the population and, even if each of us had conversations with 10 brands, the average brand would only have around 70,000 ‘friends’ and precious little opportunity to influence the other 53 million members of the population.

Engagement has to start somewhere. Few brands can sit around waiting for consumers to come along and engage with what they’re up to. The problem is not a structural one but qualitative and tonal.  As Martin Boase said, so long as brands interrupt with grace and charm they will become welcome guests in the nation’s living rooms, and ones who might be invited into other areas of people’s lives too.   Let’s stop worrying about the interruption part and start obsessing instead on the engagement.

 

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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.

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