Online Business Blog

2008 was, in no uncertain terms, a flop for ITV, a £2.7 billion flop to be precise; this was the figure of the actual loss ITV made in 2008. 2009 saw profits, £25 million pre tax profits and the start of this year has shown advertising revenues, thanks to UK advertising agencies, grow by 7%, with predictions that this will rise to 15/20% in April. There is a new prosperity within ITV and with thanks to hit show like the X Factor and Dancing on Ice, being in the black for the first time in a while is reassuring. However, hopes are reserved, with many fearing there is along way to go to keep ITV afloat. The network has been criticised for not successfully riding the boom in internet services like their competitors BBC iPlayer and YouTube and because of recent woes the network scrapped its dividends last year. Debts still stand at £612 million.

ITV is still a major force in the UK commercial television industry but viewing audiences have been falling for years and the competition of digital and cable TV have added to the pressure. In a bid to adapt to multi channel television with freeview ITV launched their free to air digital channels ITV2, ITV3, ITV4 and ITVplay. ITV admits that it is no longer in such a dominant position because of the big growth in digital rivals which is led by Sky and realizes that ITV would have to become a very different business over the next five years. With increased internet viewings and free to air TV being threatened by digital media, ITV has a big challenge ahead of them.

In an inevitable turn of events, product placement on TV has finally been accepted by the government in the UK. Until now, the UK, along with Denmark were the only EU member states that had not yet allowed TV product placement or indeed express an intention to do so. But following heightened pressure and a realisation that if they didn’t allow product placement they could jeopardize the competitiveness of UK programme makers against the rest of the EU, the UK realized it was something that they had to be a part of which will mark significant opportunities for UK Advertising Agencies.

Stringent legislation will prohibit the placement of alcoholic drinks, foods and drinks that are high in fat, salt or sugar, gambling, smoking, accessories, infant formulas and follow on formulas along with over the counter medicines. Health Secretary, Andy Burnham said that without these restrains, advertising these products could lead to further obesity and alcohol related problems.

These restrictions bring mixed reviews to the table, whilst ITV and other commercial broadcasters have been lobbying for product placement for some time to generate higher levels of revenue are against the limitations of certain products, cabinet ministers and certain charities such as Children’s Food Campaign have had their concerns alleviated somewhat. Another concern over the movement in the UK was that product placement would blur the distinction between programmes and advertisements, but with every other country participating and the need for commercial broadcasters to generate revenue to invest in original content in the UK, the legislation seems to be a good compromise to start with.

How product placement will develop over the years in terms of its level of presence on screen and content, only time will tell, but what is for sure is that it is an advertising venture new to the UK which is set to grow substantially.

Whilst advertising in 2009 as a whole has been down on 2008 there have been successes across the board with digital and online advertising continuing to grow and become more competitive. The war of the Internet Search Engines began with Microsoft’s Bing launching globally in June, much to Google’s annoyance. They have teamed up with Yahoo and now have a Market share of 10%, Google is a little worried and has launched its first ever global advertising campaign. The question is will people be coining the new phrase ‘I binged it’ in the new decade?

Internet advertising has been the most innovative marketing medium in 2009 which is supported by the Internet Advertising Bureau (LAB) reporting that it had grown by 4.6% in the first half of 2009, overtaking television spend for the first time ever. Now more than ever people should be looking at utilising the Internet for their marketing and many UK Advertising Agencies are fully equipped to manage campaigns as paid for searches continue to grow and be in demand.

The mobile phone market is also driving innovation in marketing with 2009 being another strong year. In June, consumers camped outside O2 stores across England to get their hands on Apple’s 3G iPhone, a launch which secured a 40% share of the smartphone market. The future for mobiles look set to get bigger and bigger and the medium is now accounts for 11.7% of ad spend.

TV has struggled this year but with shows like X Factor, Strictly Come Dancing and Britain’s Got Talent, TV advertising revenues will be up by 4% year on year this month. The BBC has been suffering with their networks and need to find £75 million in order to kick start its cost cutting programme for the next five years. Whilst Channel four has signed a ground breaking deal with YouTube this year which will make the broadcasters programmes available on demand, in full and free of charge via the video sharing website.

With these new avenues of marketing looking set to grow and continue to be fiercer in competition who knows what other ground breaking deals, new innovations and jaw dropping tactics will be used in 2010 by search engines, phone companies and direct response advertising . Watch this space.

British Government intelligence organization GCHQ are to launch a recruitment advertising campaign through online gaming. GCHQ plan to use the hugely popular Xbox Live, the online gaming platform for the Xbox 360, as a new inventive way to display their ads. This will mark the first time that the organization, who works with the Foreign Office, MI5 & MI6, has targeted online gaming.

The adverts which will feature the strapline “Careers in British Intelligence” and will feature on poster in the backgrounds of game being played online in real-time. A number of top games are being lined up to carry the posters.

This move in to new territory shows that GCHQ are looking at new ways of attracting today’s techsavy graduates. While traditional forms of recruitment adverts still have a place in GCHQ’s future plans the orginisation is clearly looking beyond the traditional outlets advertising to target new audiences to find the employees of the future.

GCHQ has two remits to cover signals intelligence and information assurances. Signals intelligence provides information to support the government in national security, law enforcement and military operations. Information assurance helps keep the Government communications and IT systems safe from hackers and other threats.

Advertisers and those who depend on advertising for income are keeping their fingers crossed this Christmas that after a long period of decline ad revenues might stabilize or even make a recovery.

Overall advertising is down again in 2009 compared to 2008 with many struggling to cope with the downturn. Its not just the like of local newspapers who are struggling either, big national papers as well as the likes of ITV and Channel 4 are all finding life difficult as their incomes continue to fall. Advertising agencies are also feeling the pinch with many have to scale back operation or having to close altogether.

The sign for the industry are not all doom and gloom though; many believe that this Christmas period could see advertising spend either match or beat last years spend. ITV is one such company who are predicting that December’s advertising revenue could be up 4% following a 3% fall in October and just a 1% fall in November.

It is hoped that the more positive outlook of many companies and consumers this year compared to last year and the likelihood of exiting the recession soon will see companies increase their advertising budgets. Many London advertising and UK advertising agencies are also predicting an upturn across many different advertising sectors such as TV advertising, outdoor advertising and recruitment advertising.

According to the Association of Chartered Certified Accountants (ACCA), the profession of an accountant is changing.  The claims of the ACCA are based on substantial research.  The polled over 2,500 qualified accountants in over 50 countries around the world.  The results of the polls definitely lead them to believe the accountant job role is changing.   And, they also explain why many companies are having difficulties recruiting, developing and retaining employees in the accounting profession.

One of the key findings from the study revealed that new roles and skills are needed for accountants.  Also, many accountants are becoming more motivated and ambitious with their careers.  This is particularly true in rising economies.

In today’s world, there is apparently more regulation and a changing business environment that accountants must deal with.  These changes give accountants a new role and require different skills.  Bottom line, their work becomes technically more demanding.  Additionally, they have to start thinking strategically instead of just computing numbers.

One thing that really stood out in the study was that there was a noticeable difference between the skill level of the majority of accounting and financial professionals and the level of skill that is needed by most corporations today.  Fewer people are measuring up to the necessary level, and it is becoming more difficult to find individuals that measure up to fill the accountancy jobs.

During the last few years, more and more accountants seem to be less loyal with their employers.  They seem to switch employers and switch segments.  A lot of people are even looking for international opportunities instead of moving up the corporate ladder.  They think that this will help build their resume.

Additionally, there is a common misconception around the world about accountants.  Many people think accountants are dry, boring, soft, or dull.  Often they assume that they lack the necessarily skills, specifically people skills.  For this reason, they often stick them behind a desk and underutilize them.  The negative connation regarding accountants sometimes leads to a supply shortage.  It can make recruiting difficult and retention even further problematic.

According to sources at the ACCA, now is a good time to be a qualified accountant (the key word being qualified!).  If you are qualified, organizations are most likely out there who need your services.  Also, if you are new to the industry, there will be less you have to adapt to with the changing business environment and new regulations.   For those who are currently accountants, it is important to keep up on your skills and stay ahead of the competition.  It will definitely benefit you.

Bingo halls across Britain are struggling to make the numbers work after falling income and a tax increase could spell the end of many halls. Even the biggest player in the bingo industry Gala Coral are looking to close up to 6 clubs with the loss of 180 jobs. This could be joined by another 100 clubs right across the country.

Some insiders believe that this is not the end of the closures but only the beginning. Over the next two years some believe that 40 to 50 more clubs may be closed or sold off, many of which are former cinemas, allowing Gala to concentrate on the more popular flat floor halls. Since the smoking ban, which many blame a down turn in business on, and the scrapping of section 21, Gala have closed 13 bingo hall and 4 casinos.

The recent rise in duty on bingo from 15 per cent to 22 per cent has forced many bingo operators to reassess their futures. The Rank Group, owners of the Mecca Bingo chain, has had to issue a profits warning estimating that they will now lose £9 million a year in lost profits.

Its not all bad bingo news at the moment though, online bingo is continuing to grow bigger and bigger and has become the fastest growing form of gambling on the internet. In 2008 the world wide online bingo market is worth $1.4billion, this year it is expected to hot $1.7billion with it rising to £2billion in 2010.

The online market is good news for Gala too. Gala Bingo is currently sitting pretty as the number one online bingo site in the UK; thought is position could be under threat with the impending sale of internet rival Cashcade.

Latest bingo news is not looking good. Amidst tough times for the bingo industry the government delta bother blow in their recent budget, despite belief that the government was sympathetic towards the industry.

The government has brought in partial exemption for bingo clubs yet it has stopped VAT reclaims which has previously been so beneficial to the industry to help reduce there large tax burden.

GPT meanwhile has seen an almost 50% increase to 22% from 15%. Some in the bingo industry are seeing this as an even heavier tax burden laid onto to struggling sector.

Many bingo games, specifically those involving cash for prizes, were originally tax exempt, under new government proposals however they will see there current tax levels rise from 15% to 22%. It was also revealed on Wednesday that VAT will be exempt from bingo rather than the zero rated that many had been hoping for. Leading bingo company Ranks chief executive Ian Burke said to the Daily Telegraph “I don’t understand what the UK land Bingo Industry has done to justify the government’s vindictiveness.”

The news of the tax increase spread quickly through the city and it traders. Shares in the Rank group tumbled by almost 14% after Alistair Darlings budget. The company has been predicting that the tax increase could see almost £6million wiped off its profits in the coming year while it could be as much as £9million annual in the future. As a result the company has had to scale down there pretax profit predictions, for 2009 the group are now predicting profits of £34million compared to £40.3million previously, while in 2010 forecasts are down to £32.5million from an expected £41million

Online bingo sector seems to have been much more fortunate that its offline counterpart. This has been largely due to the fact that many online operators are based outside of the UK so they get to avoid the tax burden. Those Online bingo operators who are in the UK have predicted an extra 7% of there income will go in the treasury coffers.

online bingo

Recent research by one of the internets leading bingo directories has found that online bingo sites are spending millions on TV advertising.

The focus of the report was the amount of money spent on advertising by the major bingo operators and the size of the online bingo industry.

The report showed that Foxy Bingo was by far the biggest spender. Their totals spend accounted to nearly a third of the total spending by the industry by spending $3.27 million. Its nearest rival in the spending charts was online bingo newcomer Tombola who spent over $2.5 million.

The report also showed that there are now over 230 online sites in Britain. There combined spending on TV accounted for more than $10 million.

The likes of Think Bingo, Party Bingo and Crown Bingo were also responsible for a considerable amount on advertising spending, with $1.09 million, $993,000 and $622,000 spent respectively.

During the research of the report it was noted that despite the current economic down turn bingo sites are still holding with plenty of people playing bingo online on strong and it’s likely they will continue to spend big on TV advertising in 2009. So far this year we have already seen big advertising campaigns from Foxy Bingo and Tomola.

Interestingly the report shows that the two biggest players in bingo, Gala Bingo and Mecca Bingo, where not among 2008’s big spenders. Both companies felt that it was not necessary to advertise heavily during 2008 after years of successful TV advertising has bought huge volumes of customers to its sites. It will remain to be seen if they change there stance in 2009.

While researching the state of financial recruitment and accountant jobs in the Netherlands we came across some interesting information on the views of the Dutch public when it came to the recent recession / financial crisis that we are having.

Due to a recent poll, the majority of people in the Netherlands think that the current financial crisis we are facing will come to an end in one to two years time.

The people in the Netherlands are confident that things will be sorted out sooner rather than later. Nearly half of the people who were asked thought that the current crisis will last between one to two years. A small, fifteen percent of the poll thought the crisis will be over within a year and a fifth are of the opinion that things will stay bad for two to three years.

These results were taken from a poll conducted by the central bank in the Netherlands, De Nederlandsche Bank. The poll was part of the bank’s quarterly report that also announces that 39 billion euros were lost last year by Dutch banks thanks to the current financial problems.

While the opinions of the Dutch people may seem optimistic, they do correspond to predictions from the economic policy unit that were recently released. These predictions from the CPB show that the economy in the Netherlands is expected to fall by 3.5% in 2009 and by 0.25% in 2010, then recovery is expected to start. Consumption levels are expected to stay the same during this period despite problems.

According to the bank’s poll, the Dutch public are planning to cut back on their spending. Half of the people interviewed said that they will reduce their spending as the think their purchasing power to diminish. This statistic is strange as it is generally expected that purchasing power will increase due to wage increases and improved unemployment benefits.

An average of 80 euros is the figure that people will be expecting to cut back on per month and around half of consumers are said to not be making large purchase until things get better.

When it comes to employment and jobs, half of respondents feel safe in their current jobs despite warning of a strong rise in employment. The main group of people who are worried about being laid off are from the low income groups which is understandable. Out of currently employed people around 40% think it will be difficult to find a new job.