New Media Advertising

19/01/2009

Danny Meadows-Klue talks about the current trends in online advertising at the British Screen Advisory Council (BSAC).

• Lecture notes available for download
• Online Q&A forum available
• Additional information available from Danny@DigitalStrategyConsulting.com

The Chair introduced Mr Meadows-Klue who had helped to develop the Daily Telegraph’s web sites, acting as their publisher in the 90s before setting up the Internet Advertising Bureau and helping to develop new forms of online advertising. Online advertising was a difficult and important issue since the informational value of a broadcast commercial was a lot less than of a return path Internet commercial and it was in those diminishing values that the problems lied for ITV and other broadcasters.

Note that there is a 60 slide presentation and that the commentary in these notes is a summary of what was said alongside the slides.

Mr Meadows-Klue said that the monetisation of the Internet was inevitably about the advertising model. He intended to present a short summary of the journey of internet publishing, a journey the entire media industry was on and explain how this was a journey without clear road maps. It had been only 1994 that the first web banner had been created. The medium of internet publishing was continuing to evolve and advertising was the driving element in the business model for free to air content.

However the form and the structure of advertising was also continuing to evolve at a pace far beyond the speed at which most web publishers or brand advertisers could comfortably cope. He explained how Google had recently celebrated its tenth birthday and around the same time they had announced that they had indexed one trillion web pages.

Meadows-Klue sees these as still the early days of digital media and the really big changes in society and media not yet arriving (in spite of the massive changes already in place). Online advertising was growing in every market and the UK had been the world leader since the start in terms of digital advertising. The UK had a higher percentage of advertising budgets going into online media than anywhere else in the world. The figures for the first half of 2008 showed that almost 19% of all advertising were spent online, and that the web would be overtaking television by the first half of 2009 in terms of total ad spend levels. In terms of the overall size of the market clearly it was a thunderbolt at the heart of the media industry because this was not simply a migration of advertising from one channel to another, but an evolution of the form and structure of advertising itself. A new type of marketing was emerging and (citing Facebook and social media applications) the traditional language of advertising as paid-for media space seemed to break down in those new environments.

Meadows-Klue went on to explore some of the key trends in advertising, giving his opinions on the nature of change…. Everyone seemed confident of this migration from ‘interruptive advertising’ models such as television commercials to the new forms of engagement that create consumer participation. But few seem aware of the painful challenges of globalisation as a paradigm shift in a market where suddenly every piece of content in theory was accessible to everybody anywhere in the world. In terms of the marketing paradigm shift we had moved into an era of conversation with brands, which created enormous challenges in advertising approaches, and ultimately how clients spend their budgets. There was a democratisation of the production of media, and as part of this within advertising, a way consumers can become co-creators of advertising content. Consumers select exposure to advertising with consumers in control of what they see in a way it had never happened before, and a new equality between brands and consumers.

Within YouTube new behaviours for advertising consumption could be found: the idea of media snacking of bite-sized content, packets of 3-5 minutes that people may digest over a coffee break or on their mobile phone. It also means that advertisers were competing for the divided attention of their consumers rather than the undivided attention. The LightSpeed research showed how more than 28% of Britons said that daily they both simultaneously surfed the Internet and watched television. At a very simple level there were new approaches to online advertising around the notion of blogs and marketing content generated by brands. Here the relationship between advertising and content started to meld into one. But in a more democratic environment it meant consumers could also be in the same space as for example retailers. Citing examples from consumer blogs about the Tescos chain, the notion of who owns control over the conversation between consumers and brands had changed. It was against this background that the advertising industry had to face new challenges.

A look back at the first ever television advertising in the UK from 1953 and the evolution which followed suggested that online advertising today was in its early days. This commercial is accessible online in the workspace created for people who want to follow up on this talk. The banners advertising format that dominated the Daily Telegraph in 1994 was just one tiny component now of a much richer digital advertising mix. In the UK over half of all online advertising spent went into search engines and that helped quantify the nature of what we where seeing as a marketing tool.

Consumer’s use of media is changing. They’re now part of media in a way never before possible. Thinking about the issue of consumer participation and engagement and the way consumers were taking a key role in writing their history of the world it was often shocks like the harrowing events from July the 7th which helped trigger the step change of media consumption and forced the media industry to behave differently. Wikipedia became one of the hubs of media content for that day with many news organisations taking their feeds and knowledge out of blogs and Wikipedia services.

This was fundamental to the advertising debate because it showed how advertising was changing. It may be that Amazon were doing this 10 years ago quietly with involving consumers and authors in the marketing of books and reviews. There may be a very long history of this but now there was the language to describe it. ‘Web2.0’ and ‘social networks’ and ‘social media’ epitomise the new models and techniques available.. As an example, Marmite’s brilliant media activity on Facebook is not entirely clear if this should be classified as editorial, marketing or advertising.

The brand’s relationship with the web reaches for beyond their own website. Brands thought about the web space rather than the website and the number of different touch points they had with consumers often took their messages back into the consumer’s environment. These ideas may seem like just whispers of new techniques and technology, but these and the other trends the team at Digital Strategy Consulting track could be elements of mainstream marketing within 10 years.

Another trend is how the notion of geography had been marginalised in this environment. Most places had relatively easy access to most content all of the time, the notion of the customer could often be as ambiguous as the location of the retailer or the advertiser and cross-border trade had become a synonymous part of the fabric of these markets. In search engines ‘relevancy’ was rarely driven by geography. So if geography and its boundaries were hard to enforce (or even identify) then it was worth thinking about the journey that marketing had been on to try and understand where this was heading.

Digital tools have accelerated the death of mass indiscriminate marketing. There has been a journey from ‘one to all’ in the marketing discipline which had become first ‘one to many’ and was moving towards ‘one to one.’ An example of this is how what began as individual email to all of us eventually became truly unique, personalised advertising. The economics had changed in the cost of production and the precision of targeting. Against this background it was important to think about how people craved individuality and how data-based, net-centric, consumer marketing would permanently change each consumers expectations.

In terms of the progression of change, all of what is described here was true with the ‘fixed’ Internet that we know in the home or office. However the mobile Internet just accelerated it at a rapid pace, and created the so-called Martini culture of “anytime, anyplace, anywhere”. That meant consumers were in a different mind-set, with different spaces providing access to marketing and content in different ways, a different size of screen display and different tools and techniques. Post the arrival of the iPhone the real mobile Internet had begun. The iPhone generation enjoy easier access and a more pleasant reading environment.

Summing it up this meant that the scale of change is being underestimated. Trends in digital media typically took much longer to impact than commonly expected but were much greater when they arrived. In terms of advertising content and advertising formats and structures those early days of banners and static media were now just a tiny part of the digital market. In the long run content creation, blogs and the ways in which brands could be discovered, plus how video was now converging which those environments, will be as important in the marketing mix. These new trends were driving the growth and would dominate industry and regulatory discussion in the 18 months to come. The first day of the online banner may seem like many generations ago and yet it was only fourteen years ago that it had been launched.


The Chair thanked Mr Meadows-Klue. He was putting forward a world where the value of traditional advertising clearly changed, as there was a shift of value into more interactive areas. He asked Mr Meadows-Klue what this meant for the world they currently knew and how an advertising supported broadcaster should deal with this. Mr Meadows-Klue said that advertising spend migration happened at a vast scale. His team had been talking for a while now about a massive migration of up to 30 or 40% of total advertising being redistributed, allocated into some form of Internet advertising. There was obviously an enormous budgetary pressure on existing broadcasters. He said this with great concern, because having spend fourteen years in the Internet media industry, he still loved traditional broadcasting and appreciates the content, quality and value those broadcasters create in the media industry. The challenge was that most broadcasters simply had not woken up to the scale of the risk fast enough or appropriately enough to defend themselves. In that sense he feared that many broadcasters were horribly exposed as this advertising spend migration continued to quicken.

In terms of the nature of online advertising it was perhaps most appropriate to see it as a fusion of all other forms of advertising, such as radio, television, outdoor advertising, sponsorship, PR or social discussion, all fused in this new environment. That meant that in a way the advertising we were seeing online now was just like the advertising of early television. A lot of advertising was still in the “radio with pictures” era. All he could do at the moment was to give some snapshots of where the industry stood and some examples of best practice; his views shouldn’t be misread for where the changes will stop, simply where we are today.

Ms Lighting said that one of the most interest areas he had been talking about seemed to be the potential of individual marketing, because in terms of traditional broadcasting that seemed to be the crux of the challenge. What intrigued her was that individual marketing was balanced between being a fantastic feature and resource and a potential breach of privacy. It was this kind of balance of how much information they all wanted to give to the net and while it may be very useful in some areas, in others it could be very disruptive. She asked Mr Meadows-Klue what research in this direction was being conducted at the moment.

Mr Meadows-Klue said that this was one of the fundamental debates around data protection and what the consumer-value exchange was that they were going to have for the next ten years. In a data-driven culture, the information that we chose to allow third parties to be able to work with was an incredibly complex issue one he felt went far above and beyond straightforward data protection issues. Meadows-Klue sees an implicit contract between the real data owner (the consumer) and the person they grant access to their data. This contract is best seen as a value exchange between the consumer and the company when they gave permission for their data to be used. The exchange needs to be fair and companies can quickly lose confidence from consumers. When that happens the consumer will tune out, rejecting communication. This was therefore not an area that had an immediate research answer or solution.

In terms of the relationship between individual marketing and mass marketing, part of the challenge of the first decade of the web was the promise of one-to-one marketing and the pain of actually trying to deliver it, because of prohibitive cost, lack of data, systems that would not scale and a lack of models in the marketing industry to be able to assimilate this properly. This threshold seemed to have been crossed now. Amazon may have trailblazed in true one to one marketing and they were now moving into an environment where real one-to-one marketing channels became possible. They were just at the beginning of this story and the research brief needed to be a permanent one.

Mr David said that he had talked about how advertising moved from one platform to another and how its nature changed. What Mr Meadows-Klue had not talked about was which gatekeepers or power bases controlled these changes. Was it still the broadcaster or the aggregator who got to control the advertising or might the content provider or the consumer get to control the advertising?

Mr Meadows-Klue said that this question was at the heart of the changing power structures. Advertising spend migrated, but it did not necessarily migrate to the same companies or even the same types of companies. He gave examples: direct marketing spend may move from certain traditional direct marketing channels such as postal direct marketing or direct marketing out of newspapers to email and search engines. There was a natural shift of budgets but also a shift to different brands. Many of these tools might be at a global level, rather than at the level of a national provider, or they may be directly backed by the brand itself as the brand becomes a media owner. Examples included work from BMW and other global leading brands, who created content which was so compelling, they could begin to build their consumer-marketing relationship themselves. In that sense there was a migration in the form of communication.

In terms of issues of control, consumers themselves have more control over what they see than ever before. As a publisher I know that we lived and died by the success of pages to hold the consumers attention at that moment. The debates about advertising-editorial ratios seemed redundant. It was very clear that if you had too much advertising, consumers would leave faster than anything. That was the truth every web publisher had to live with. Consumers had the ability to filter incredibly fast and make judgment about the advertising they see in a way they have not before. Switching brands became so much easier as well, because everything is just a click away, rather than going back to the newsagent and taking something different off the shelf or scrolling through the television channels. In this sense there was a migration of control to the consumer, a replacement of the ownership of the gateway by new gatekeepers and a new balance between gatekeeper, band and consumer.

Mr Davies said that with all the talk of migration of advertising revenues and consumer interests there was a real danger of thinking of these kind of things in isolation from traditional media, whether that was television or other media. The big question was how traditional businesses integrated with all of these new opportunities. They were doing work, for example, on how out-of-home media impacted on how people search online. Different media sometimes had similar challenges and that was where a gap in peoples’ understanding often lay, but it was important to realise this to be able to unlock all the opportunities that had been discussed.

Mr Meadows-Klue said that it was great to hear that. He always felt uncomfortable about the slow pace with which many media owners in the UK had woken up to challenges that to be fair were pretty clear even a decade ago. Having spent 15 years in the digital sector and much of the time coaching management teams in how to tackle this, he was frustrated by the way traditional media firms moved so slowly, letting newcomers take their markets and audiences. Inside the Digital training Academy or by directly helping to write the strategies for media groups, it was clear that a lot of these ideas should have been in place a long time ago. He was concerned about this, because it meant that many traditional broadcasters and publishers who in the past had the most powerful of brands and exceptional content, had been so late to the market place that they had missed the opportunity of really owning the relationship to the consumer in the new market. And that relationship would have been fundamental to their longer term revenues.

The Chair thanked Mr Meadows-Klue. This debate was about how one integrated all of this and it became increasingly a question of being inside or outside the coral in the sense that television advertising and recorded music were outside the coral were value was being made.

Several reports were distributed to participants, an online workspace was created by Mr Meadows-Klue and those interested were invited to see more at www.DigitalStrategyConsulting.com or by emailing Danny@DigitalStrategyConsulting.com

<< Back to press cuttings

Copyright ©2000-2019 Digital Strategy Consulting Limited | All rights reserved | This material is for your personal use only | Using this site constitutes acceptance of our user agreement and privacy policy