More than half of UK ad spend this year will be on digital media, according to research released last month by WPP-owned media buyer Group M. The statistics predict that UK advertising spend in 2015 will increase 5.7% to £15.7 billion, with digital spend expected to reach £8.1 billion.
These predictions coincide with a report by PwC, which forecasts that by 2018 half of the UK population will own a tablet, 73% will own a smartphone and 15.5 billion apps per year will be downloaded.
PwC claims that the industry “has seen a number of tipping points over the last few years as consumers switch to digital”, which is set to continue over the next five years.
However this does not mean marketers should ignore traditional media as Marketing Week looks at three marketing channels being overhauled by digital developments and why they are worth the spend in 2015.
TV gets smarter
There is no denying the reach of television – nearly all UK households (95%) own a digital TV according to figures from the Broadcasters’ Audience Research Board (BARB).
However marketers are increasingly under pressure to ensure advertising is seen by the right people at the right time to maximise spend, and regulator Ofcom says the average viewing time per day fell last year – though still to a very healthy 3 hours 52 minutes.
TV is therefore becoming increasingly sophisticated, particularly with the rise of on-demand services. PwC predicts that on-demand revenues will overtake TV subscriptions in 2015. This trend is even influencing non-commercial broadcasting, with the announcement that BBC Three is to become an online-only channel that can be accessed through the BBC iPlayer service.
TV on demand has advantages in capturing user data and preferences. At the end of 2014 Channel 4 announced it would let advertisers use programmatic technology to purchase ad space as part of a wider bid to guarantee impressions against specific audiences rather than traditional ratings.
Lindsey Clay, chief executive of commercial TV marketing body Thinkbox, says: “[Marketers] can invest in broadcaster VOD advertising where the UK’s TV companies offer suites of different advertising formats especially suited to reaching lighter linear TV viewers. They can also invest in addressable advertising in linear TV via Sky AdSmart, which is attracting businesses that would not have considered TV before.”
“Marketers interests lie in making sure that they place their media in the right contexts, and at the right time, and that their audiences experience of their content is a valuable one”
Justin Davison, CNBC International
Clay also believes that the trend of brands getting closer to content by creating partnerships with the broadcasters to invest directly in TV shows is likely to continue, “with sponsorships, advertiser funded programming, and product placement continuing to blossom”.
Broadcaster CNBC International argues that marketers will continue to invest the majority of spend in TV advertising and that the way TV is used will change according to the needs of the consumer and the marketer.
“Marketers interests lie in making sure that they place their media in the right contexts, and at the right time, and that their audiences experience of their content is a valuable one,” says Justin Davison, vice president, sales at CNBC International (UK and Western Europe). “On air, they’ll want to be around the highest quality, independent content that will draw in viewers whose interest is piqued. On digital platforms, they’ll want their content to be part of an immersive on-demand experience that provides native opportunities to share their own brand’s content and views.”
Life beyond print media
Print remains under the most pressure of any medium, according to GroupM’s forecasts for 2014-15, with 2014 advertising in physical newspapers and magazines expected to drop below £2.5 billion, a decline of 9% from 2013. It forecasts of a further 9% fall in 2015 to £2.3 billion.
But although print is in decline, reaching media owners’ audiences with digital content and experiences will be a key strategy for brands 2015.
David Pemsel, deputy chief executive at Guardian News & Media, believes that in 2015 marketers must capitalise on publishing innovations and find new ways to engage with their target audience. Pemsel advises them to look for quality rather than quantity of content to win the attention and trust of audiences.
“Brands need to be sure to align with publishers that enhance their credibility,” says Pemsel. “Publishers need to become more agile to effectively engage with an ‘always on’ consumer. The vast amount of content vying for consumers’ attention has driven this need. I expect to see more platform innovations, new ways of delivering content to audiences and the capacity for new and direct engagement, as well as the use of mobile and social media channels to take precedence this year.”
Publishers are also still trying to give print life in a digital world. Popular culture and fashion title Drafted partners with augmented reality provider Blippar to create content such as behind the scenes showcases. Recently the magazine created a content series linked to a fashion shoot titled The Pembridge Files, which was released to viewers each month to add extra content to the fashion spread in the magazine.
The strategy was to create engaging content that went beyond the page to keep readers coming back and wanting to know the next part of the story. Readers could also shop from within a fashion shoot by directly linking to products so users go from a printed page to putting items in an online basket via the Blippar app.
Editor of Drafted Rivkie Baum says: “More engagement between digital and print media is what we envisage. A lot of people say print is dying but actually it’s reminding people that we have to make our print publications strong and engaging. By fusing them rather than treating them as two separate platforms it’s a really interesting way to appeal to both those that prefer digital media and those that prefer print.”
Ensuring that content is made and amplified effectively is also a concern for marketers. Heathrow Express prefers to pinpoint specific publications that interest its audience by working with content partner NewsCred, which in turn gives the brand an understanding of the performance of its content and allows a better understanding of return on investment.
Rav Seehra, head of digital at Heathrow Express, says: “Through our sponsorship portfolio we work closely with both the Rugby Football Union and USA Rugby to ensure that we are maximising our assets to generate relevant, dynamic content. This allows for a closer dialogue with our target audience. Investing the right amount of budget in amplifying the content we make is also important.”
Digital creativity in outdoor
The growth of outdoor advertising coincides with growing urbanisation and the development of technology of digital screens. Although the figures are yet to be released, out of home (OOH) advertising spend is set to top £1bn in 2014, growing by 2.7%, according to the Advertising Association and WARC. They also forecast that this growth will increase further by 5.9% in 2015.
The next step to attract marketing spend is increased creativity, using that growth in digital technology to capture the audiences that go past these adverts on their daily travels.
Lorraine Twohill, global chief marketer at Google, recently told Marketing Week: “I’m convinced that all outdoor will be digital in the next few years and that all of that will be [bought through programmatic auctions]. I’m really excited about the physical and digital worlds coming together.”
Large-scale digital screens can already be seen at national rail stations including Waterloo and Liverpool Street in London and last month outdoor media owner JCDecaux announced the launch of 80-inch digital screens at London’s St Pancras Station as part of its digital rail expansion plans.
“Publishers need to become more agile to effectively engage with an ‘always on’ consumer. The vast amount of content vying for consumers’ attention has driven this need”
David Pemsel, Guardian News & Media
David McEvoy, marketing director at JCDecaux, says: “In all the global forecasts on media expenditure it is outdoor, television and digital that are the growth media. The big reach and complimentary audiences of TV and outdoor make the transactional and conversational media of digital work that much harder.”
Outdoor media is also looking to provide an experience for audiences in order to get them engaged in advertising. Shaun Gregory, CEO at Exterion Media, formally CBS Outdoor, believes that creativity is going to enhance advertising as a whole and that “OOH is fast changing into a consumer engagement medium”.
The value of data in online advertising
Developments in the digital space are not only having an effect on traditional advertising but also increasingly disrupting online advertising, particularly in terms of audience data and metrics.
Advertising trade body ISBA believes that the industry’s audience metrics came under significant challenge in 2014 and that this is set to continue in 2015.
Bob Wootton, director of media and advertising at ISBA says: “As audiences diversify and fragment, so it becomes harder and more expensive to measure them credibly. Media owners largely fund the bodies that oversee audience measurement, and we’ll be reiterating that advertisers are unlikely to buy from sellers without credible metrics.”
Online games maker Jagex, best known for its multiplayer fantasy game RuneScape, agrees that a big shift in 2015 will be around metrics. “With more engaging ad types, the ‘click’ as a metric will lose even more importance and other metrics such as the uplift [after viewing an ad] will become a standard for display as well as video,” says Allan Stewart, vice president of digital marketing.
Online advertising will also see a change in data ownership, particularly for publishers, with rewards for both parties as first party data becomes more valuable and marketers seek knowledge on which consumers they should and can target effectively through programmatic.
Yahoo suggests that in the past publishers have essentially sold their own ads to their own audience, but now they increasingly understand the value of the data associated with a user rather than just the impression generated by that user. Towards the end of 2014 rumours were circulating that Facebook’s ad platform Atlas is to launch a demand side platform (DSP) this year.
Nick King, director of platform solutions at Yahoo, says: “That being the case, publishers are increasingly becoming buyers and in 2015 we expect to see more and more publishers launching their own buying platforms.”
“Publishers have a deep understanding of their users beyond simple demographic data. By becoming buyers themselves, publishers can create highly targeted audiences for advertisers and then target these audiences across the internet, not just on their own sites,” he adds.
Other industries are also following suit. Jagex, which works in partnership with DataXu, is moving towards building an in-house trading desk to manage its data closely.
Stewart says: “I think more and more brands will see the benefit of getting closer to their own data. A good understanding of your audience based on a variety of data sources is key to unearthing the best ways to reach them. We can see a real competitive advantage in owning all our data, allowing us to respond faster and get even closer to our customers, which will be a key driver for us in 2015.”