Feature: Online Bites At The Advertising Pie
The internet has proved its resilience in the face of the ongoing advertising downturn and the latest figures from Nielsen Media Research show that the sector now accounts for 1.6% of the UK’s total adspend, ahead of cinema with 1.4% (see below).
Collectively the top ten internet advertisers (by adspend) invested more than £60 million in online activity between January and July, indicating that 2002 could be a year of growth for the sector as a whole.
On average, financial services brands spend more on internet advertising than any other, investing more than £2 million online during July alone (see below). Computer companies and online retailers also rank highly, each spending more than £1 million during the same period, whilst entertainment and media brands allocated almost £800,000 for internet related marketing during July.
Barney Farmer, commercial director at internet ad-tracking company, LemonAd, claims that the increasing popularity of rich media formats will drive the growth of online advertising over the coming months. He said: “In the past the majority of brands saw the internet as a direct response medium and were only interested in return on investment. Now online advertising has so much more to offer and marketers are beginning to trust the internet as a brand building medium.”
However, in terms of expenditure online is still a relatively minor part of the marketing mix and a breakdown of July adspend for COI Communications, the UK’s largest advertiser, shows that the agency devoted just 1% of its marketing budget to internet advertising during that month (see below). Direct mail also took 1%, with cinema and outdoor accounting for 6% of COI’s total spend. Unsurprisingly TV and press took the largest share with a respective 46% and 23% during July.
The head of new media at one leading agency argues that internet advertising will only become a truly indispensable part of the media schedule when brands look beyond traditional online formats and realise the potential of the internet as a broadcast medium. He claims that the majority of advertisers and agencies are unaware of the range of online opportunities available to them and insists that the medium’s increasing creativity will be the key to its development.
Broadband will undoubtedly be a major catalyst for the growth of online advertising with faster download times giving rise to a range of new creative opportunities. The latest figures from communications regulator, Oftel, show that more than 1 million UK homes have a high-speed internet connection and Continental Research predicts that a further 700,000 plan to upgrade within the next twelve months.
Chief executive of the IAB, Danny Meadows-Klue, says: “Broadband will allow creative directors to come closer to a television experience within the advertising content. It will also expand the scope of the interactive artwork formats to become even bolder. We will see more interactive games within adverts and more adverts that act as mini shop windows into another website.”
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