Online Advertising – the end of a decade…
Hugo Drayton, CEO of InSkin Media, explains why he thinks the hybrid model for mainstream, news-centric publishers is hard work … but why it continues to make sense.
A few months ago, there was understandable euphoria across the digital ad industry when it was announced that online, well ahead of the expected timetable, had overtaken television as a UK advertising medium (the first major economy to witness this change). Notwithstanding some valid comments from TV and others that online is not a single medium, but rather a collection of Search, Display, Classified, etc, it was a notable landmark. We continue to read articles bemoaning the lag between audience time spent and advertising pounds spent, but digital media is now, after a roller-coaster decade, fully settled in the mainstream.
The IAB, especially Richard Eyre and Guy Phillipson, should be proud of its leading role in recent years; from a humble start in the mid-nineties when we were a few publishers (Telegraph, Guardian, Associated) forming the UK IAB, through the inclusion of the major portals in the new millennium (and we publishers consequently forming the AOP). The IAB has grown into a dynamic, well-marketed, influential and respected trade body, fostering varied and valuable research and specialist groups. At InSkin Media, as well as our membership of the IAB, we are active on the Video Council – online video being a key growth area.
The EIAA this week confirmed their forecast of a 7.6% growth in online advertising for 2010, and a further 15% growth in 2011, as the economy recovers. Against a general backdrop of a flat or falling market, this is strong news indeed for digital media, and for mobile – which further buoyed by Google’s acquisition of AdMob, is poised to exploit its full potential.
This rising tide begs searching questions about the widespread pessimism around advertising and sponsorship as a funding model for media, and online content in particular.
The Evening Standard, buoyed by the closure of both London Lite and thelondonpaper – neither of which furthered the cause of journalism or the environment – has bravely taken control of its own destiny with a clear free-to-air, ad-funded strategy. Meanwhile, the print-to-online publishers, understandably perplexed by their inability to raise sufficient advertising revenue to support their cost structures, are contemplating a return to pay-walled gardens. The debate has not moved much in 10 years; the hybrid model for mainstream, news-centric publishers, is hard work. But it continues to make sense, even though truly unique, must-have content, for which consumers might pay, remains hard to identify. More mystifying is the reluctance of small, valuable niche publications to charge their users: I visit MediaGuardian several times a week, and also receive their amusing, irreverent Fiver (football gossip) every afternoon. Both are great consumer value, at 0p.
Last week’s positive and uplifting IAB Engage event included excellent contributions from Stephen Fry, Richard Eyre, Charlie Leadbetter and the COI’s CEO, Mark Lund, who ran an ad agency before recently joining the COI. Mark was upbeat and challenging about the media platforms for his significant public advertising budgets; there is a clear opportunity for the digital world to take a large proportion of those budgets, as long as we prove performance and measure results effectively. With near-ubiquitous online reach, especially among many of their key target audiences, digital (including video and mobile) is perfectly placed to deliver for the COI. Let’s hope that soon-to-launch UKOM, the long-awaited online planning tool based on Nielsen’s platform, will help the online industry attract increased brand advertising – while the key for clients is shifting to ‘engagement’.
Talking of targeting – as we must, if we are to realise the potential of digital advertising – one session of IAB Engage that sadly failed to ignite or inspire was the panel on Behavioural Targeting. BT is a much debated, hugely misunderstood and controversial area of marketing. However, as pragmatists such as Peter Bazalgette consistently remark, the industry needs to embrace the cost-effective, user-friendly, relevant opportunities of understanding our audience and their interests. The debate has been clouded in an over-zealous privacy fog. In a calm, measured way, the facts about anonymous (i.e. private) use of data must be proved, so that marketers can start to exploit the value, flexibility and narrow-cast potential of a ‘semantic’ web, to the advantage of consumers, as well as advertisers and publishers. We have the tools to reduce or eliminate wasted impressions, and to raise the value of every page impression.
I think it is absolutely right that publishers and content owners should explore every possible avenue to charging for their hard-earned, costly, special content. But in a world of open access, and dominant free-to-air, I despair that some are giving up on advertising as the key revenue stream before having even tried or tested its potential. The dominant models in the analogue world have advertising at their core – newspapers, and of course, TV (free-to-air ITV and C4 etc.) and hybrid (Sky). And don’t get me started on the BBC…!