November's Column By New Media Age Editor Mike Nutley
The rest of the advertising world may still be waiting to see if the recession is a bumpy bath or a double-dip, but in new media the recovery has already begun.
Anecdotal evidence has been suggesting an upturn for some months, but recently New Media Age has reported on two surveys that confirm the view among agency heads that the use of online advertising is increasing significantly.
The first research announced was MSN's Online Pulse, a survey of 500 advertisers, agencies and media planner/buyers carried out every six months. The headline figure here was that some 85% of those surveyed had used online advertising within the last three months, up by 8% last March. Meanwhile PricewaterhouseCoopers' report showed the increasing uptake of broadband driving significant growth in online advertising in the coming years.
Interestingly, considering the furore around online creativity in the early summer, both surveys pointed to creativity as being hugely important in the growth of the Internet as an advertising medium. PwC identified the increased creative opportunities offered by broadband as being crucial for increased spending on online advertising, while the Online Pulse found 43% of respondents saw creativity as a major attraction of online advertising. The MSN survey also found that reporting had replaced creativity as the main barrier to advertisers spending more money online. This suggests plaudits are due to the Interactive Advertising Bureau (IAB) for developing its Creative Showcase with The Guardian earlier this year. But I suspect that what also underlies this recovery is a growing understanding of what online advertising can actually do and what it is best at.
As with all other aspects of the commercial Internet, online advertising was hailed as a panacea when it first emerged. We were promised an unprecedented level of targeting which would improve personalisation and cut wastage to such a degree that Lord Leverhume's famous dictum about half his advertising spend being wasted would be rendered obsolete. Sadly, this was not what happened, and with the falling click-through rates came a vilification of online advertising in the media. No matter that online advertising wasn't just about banners; no matter that, during the worst advertising recession in history, online ad spend continued to grow.
Meanwhile, a host of other online advertising options beyond the simple banner started to emerge. Paid-for search, affiliate networks and dynamic content offered ways for advertisers to reach customers in new ways. From this perspective, the figures produced by PwC for the IAB earlier this year were the turning point, breaking down as they did the online advertising market into its component parts for the first time, and showing just how powerful a tool paid-for search, for example, actually is. At the same time, figures splitting online advertising spend by sector showed some markets had embraced online.
It's no surprise to me that financial services is the biggest-spending sector online, given that we now know that online is an ideal way to advertise products that require a lot of supporting information. Education has also played a vital role here, and will continue to do so. Talking to agency heads for last month's NMA Top 100 Online Agency guide, it was striking how many said they were poised to reap the benefits of two years of educating their clients about interactive media. The flipside of this, of course, is the call from companies interviewed for Online Pulse for more case studies showing what online advertising can do. Online is becoming an accepted part of the media mix for advertising campaigns, which is good news not just for agencies but for any site owners hoping to sell space on their sites. Rising broadband penetration holds out the possibility of another revolution, not just in types of advertising but also in types of client using the medium. What we mustn't lose sight of is the fact that we're just at the beginning of the recovery, and that we still have a lot of persuading to do.
Michael Nutley, Editor, New Media Age, http://www.nma.co.uk
Michael Nutley, Editor, New Media Age, http://www.nma.co.uk/