Trends in online advertising

19/02/2007

Danny Meadows-Klue in interview for FutureAd, Croatia

Feb 19th 2007

What are the predominant trends in online advertising?
Online marketing is now mainstream, From the smallest one-man business to the largest corporate, digital marketing tools are now a core part of the mix. That's a big leap in just a few years, and while the percentages may vary radically between firms, the reality is that every business is changing; refocusing its marketing to embrace digital channels deeply.

Can you tell us some numbers related to online advertising in the last decade?
The UK is the most developed online advertising market in Europe so it makes for a great laboratory for other countries to study and learn from. In the first half of 2006 online advertising accounted for more than 10% of all advertising media spend. We were forecasting it to be more than 12% by the year end, making it larger than national newspaper advertising, outdoor advertising or consumer magazines. What's fuelling it is the amount of time we spend online, and that's something that just keeps rising for everyone.

What is your advice for small companies who want to advertise on the Internet?
Start small, keep it simple, measure what you're doing and above all get some training. Build a basic web presence, start promoting it to search engines, gather customer data to build an email relationship service, and ensure your website plugs into your business in the smartest way: it might be a full scale e-store, or simply a reference point for product information; it may support after sales service, or simply be an extension of your newspaper and television brand building advertising. Digital isn't a single channel like Radio or Television: there are hundreds of formats, thousands of tools and whole new approaches to marketing. It takes time to figure out what's right for you, and that's why training is so important.

What should a company take into account before creating a corporate website? Which actions should be taken (goals, market research, target groups)?
Get a strategy in place; do the thinking before going near the technology. Figure out what you want to say, why, and to whom. It's those classic marketing disciplines that still hold true in the digital space.

How to make a website that would attract advertisers? What determines which sites attract advertisers?
For media groups there's a bigger challenge. In the traditional world media brings people together to create a market that advertisers can tap into, whether it's the niche business magazine, or the populist reality-TV show - it's about building audiences. In that world most advertisers could not go direct to their customers because they don't have the channels to do so. On the web the mechanics of communication are different and that's why media need to re-earn their place in the value chain. Back in 1995 I was brought into The Daily Telegraph ( www.telegraph.co.uk) to run the UK's first online newspaper and for more than a decade I've been working with media groups to help them figure out the best path. It's tough because simply taking offline content and moving it to a web page just isn't good enough. Even before "Web 2.0" became the buzzword of the media industry, the smart websites had figured out that the offline content was only the starting point.

How to make most of the resources invested in online advertising?
Act, test, measure, refine, learn. Online is the best marketing channel for measurement so listen to your customers by reading all the relevant metrics. Run split-run tests to try out new ideas and watch what happens. Through that you'll have the right process for getting the most from the medium.

Are "classic" advertising formats such as banners abandoned as a concept? What are the new/alternative formats related to online advertising (Web 2.0)?
No, they're just an established part of a rich landscape. All of the formats work to satisfy different marketing objectives in different ways. That's why serious online advertisers will need a smart agency to help them get the best value from all of this.

What are the main advantages and disadvantages of online advertising?
Online advertising is a mirror to all your traditional marketing: anything you do in classic media, from direct mail and competitions to ambient and outdoor media, will have an equivalent online. That vast diversity is one of the advantages. Another set of advantages are the accountability, measurability and precision. More are the way that online is the connection medium; connecting you to your customers, to your website. That's part of the sales channel you have and a really key element. The disadvantages only come when these tools are used by people without the training and expertise to do it well; that's true for all media, but because everything is so new in online it's a particular risk here.

Which processes led to the enormous financial growth of Internet companies?
Awesome product development that harnesses the core truths of the digital networked society. Google, Yahoo, Flickr, YouTube, MySpace, Blogger: they've all got it right.

On average, what is the share of financial resources companies invest in online advertising vs. resources invested in advertising in other media (worldwide, Europe, Croatia - if you have the information?)
I've written a report about that because I get asked so much. Sharon can send you the special Croatia web address we're putting it on.

What is the future of "traditional" media, such as TV, print? What is the future of online advertising?
This is one to debate in the pub! Everyone has opinions and some changes will for sure happen. The thing is that classic media will evolve to develop new structures that work for its audiences and its business models. The web will be taking more than 20% of total advertising spend in the UK by the end of the decade (more than TV) and that will certainly have a big impact. But there's still a great future for classic media, but it does mean changing your product, and that type of change won't be embraced by every media group for sure.

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