Feature: Interactive Advertising Weathers The Storm
The last twelve months have seen the advertising industry batten down its hatches against the looming threat of recession. However, while most of the UK’s main media sectors saw revenue fall year on year during 2001, figures published by the Interactive Advertising Bureau (IAB) show that the online industry has weathered the economic storm surprisingly well.
It is no secret that internet advertising has experienced massive growth over the last few years and thanks to the dotcom boom, which prompted massive levels of investment in the sector, revenue has increased by almost 2000% between 1997 and 2001 (see below). Growth between 2000 and 2001 was considerably slower, with adspend increasing by 7.1% year on year to £165.7m. However, the sector still managed to outperform TV, which saw revenue fall by 11%, radio, which was down 9% and national newspapers, which slipped 8% year on year during 2001 (Advertising Association).
According to Danny Meadows-Klue, chief executive of the IAB, the biggest single factor driving the sector’s growth has been the continued increase in audience levels. He said: “2001 has seen a fundamental shift in media consumption. More people are going online and society is becoming increasingly internet focussed.”
The development of new advertising products, along with a broad range of standards also helped to propel the industry forward during 2001. New banners, skyscrapers and rich media formats offered advertisers the ability to create increasingly versatile campaigns and industry-wide standards helped to promote the accountability of the medium.
However, the growth of online advertising has not been entirely smooth. The ASA’s annual report shows that the number of complaints concerning internet advertising increased by 50% during 2001 to 750, making it the eighth most complained about medium behind direct mail. A recent report from independent research company Ocean Consulting also found that only 7% of agency/advertiser customers feel that the internet is doing enough to promote itself as an effective advertising tool.
Meadows-Klue is keen to play down these negative aspects and while he is aware that the “days of venture capital fuelled market spend are over” he remains optimistic for the future, saying: “Advertisers have come to understand the potential of the sector and more traditional brands are realising that online has a key role in the marketing mix.”
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