UK Online ad spend takes top spot – but bickering over figures misses the point

October 2nd, 2009 by Lloyd Gofton

We experienced a major milestone this week in the form of Online advertising spend overtaking Television advertising spend for the first time in the UK.

To be precise, the research from the Internet Advertising Bureau and PricewaterhouseCoopers confirmed that online spending grew 4.6% to £1.752bn in the first half of 2009, a 4.6% year-on-year increase, while TV spending shrank 16.1% to £1.639bn. Overall advertising fell 16% compared with the same period in 2008.

The internet now accounts for 23.5% of all advertising money spent in the UK, while TV ad spend accounts for 21.9% of marketing budgets. These figures are in stark contrast to the first time the IAB measured Internet advertising in 1998, when the figure was just £19.4m. That’s quite a leap! As reported by the Guardian.

As a result, the celebrations kicked off on Wednesday and Twitter was buzzing with the great and good of digital welcoming the news and highlighting it as a landmark for digital, which I totally agree with in more ways than one. Not only did the internet take first place ahead of time (originally predicted by the end of the year), but the UK has become the first major economy where advertisers spend more on advertising on the Internet than they do on television (although in Denmark Internet ad sales overtook TV earlier in the year).

So, that’s what the report said, and the digital reaction, but that’s only one part of the story, and of course the TV guys aren’t going to let this one go without a fight. Lindsey Clay, marketing director at Thinkbox, the marketing body for the main UK commercial television broadcasters, was quoted in a BBC piece:

“Online marketing spend is made up of many things including e-mail, classified ads, display ads and, overwhelmingly, search marketing. They should be judged individually.

“The internet is a fantastic technology and home to many different marketing activities that do different things. As such, it is interesting but meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it.

“Television advertising remained the most effective advertising medium ‘pound for pound’ but was even more effective when put together. To set them up in competition is a mistake and misses their complementary relationship.”

Now obviously I’m biased, but to try and belittle the figures by saying online marketing spend is made up of many disciplines leaves a bit of a sour taste considering the Internet was looked upon as a minor irritation to the power house of the TV industry only a few years ago.

Yes, an advertising recession has seen TV advertising spend fall, and this has ultimately pushed the Internet to the front much quicker, but to say TV advertising is the most effective advertising medium is quite a statement, considering the move to the Internet has followed the consumers move online and its superior measurability.

I have to admit that the point raised by Tess Alps from Thinkbox, who added her thoughts in a comment on Revolution’s story, saying the figures did not compare like with like, made a bit more sense: “the IAB has used only TV spot advertising revenue for comparison when they themselves have aggregated all forms of online marketing into one big number for themselves but not applied the same methodology to other media. I can’t give you the equivalent number for the first half of 2009 but the Ofcom figure for total broadcast TV commercial revenue in 2008 was £3.74bn net. Online TV revenue is in addition to that.’

But this doesn’t really have an overall baring on the ultimate end game, which is that however you cut the figures and at whatever point you make the cut-off at, the change is coming, this is real proof that the Internet is becoming the focus for advertising, and all the denial and arguing will be swept out of the way soon.

The truth is that many media sectors have considered the Internet as secondary or supportive to their traditional mediums. The facts are slapping them in the face yet still there is denial.

This is the fundamental issue with the print and broadcast industries - a failure to evolve. It has started now, about 5-10 years later than it should and the delay has cost jobs and valuable position, but continuing to deny the issue is quite unbelievable, especially considering that print, TV, online and mobile are blurring. So, standing in your old boys club and ranting isn’t really relevant because the world you live in is changing and very soon you’re going find yourself still defending your position to an ever decreasing audience.

As final proof of this denial, here’s a quote from Adam Smith, futures director at WPP’s combined media operation Group M, who argued in the Guardian that the Internet’s share of total UK ad spend could be close to its peak.

“This day was bound to arrive, as the internet has been attracting a huge long tail of advertisers that have not advertised before doing completely new things. It is a memorable event. However, it is a bit simplistic to make this comparison [and] it is always possible that internet’s share [of total UK ad spend] could go backwards if TV has a good year.”

Words fail me. Close to its peak? In my opinion this is only the beginning, Internet ad spend will continue to grow, and although I’m sure we will see the face, form and medium of advertising change, it will be the Internet that provides the focus of this hybrid and it’ll be the digital thinkers that will be leading it.

      

Tags: advertising future, IAB, online advertising, Thinkbox, TV advertising

This entry was posted on Friday, October 2nd, 2009 at 8:53 am and is filed under Blog, Blogging, Content, Digital communications, Digital media, PR, Social media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.