Online Business Blog

Facebook has just released a forecast for its advertising revenue for next year that cites the company will make just over 1 billion pounds.  Facebook was created in 2004 by Mark Zuckerberg and several of his college roommates whilst studying at Harvard University and has seen its popularity increase over the past few years immensely.

People could be wrong in thinking that this will be a trend within the online advertising market as other companies such as MySpace have unfortunately reported 14% shrinkage in their advertising revenues.

Facebook now has over 500 million users globally and relies on 65% of its revenue from the US. It is very big news that it has now dwarfed its rival MySpace that is currently owned by Rupert Murdoch’s news corporation. With advertising profits rising by 165% since 2009 the company is set to soar even further over time and reach its own goal of 1 billion users in the near future.

Most of Facebooks revenue is served by its advertising partner Microsoft in the form of Banner advertising.  Facebook has a much lower click through rate than many other large websites but is still extremely successful and used by many UK advertising agencies.

One of its reasoning’s for its low click through rate is its reckoning that many of its users are very young and technically minded and in turn use advert blockers to bypass adverts.  It has been reported that some adverts used within Facebooks wall posts have had click through rates as high as 6.49%, which is one of the reasons as a Direct Response Advertising Agency there is no better time to start using social website Marketing.

It has been a turbulent old time for Direct Response Advertising and other elements of the media sector which over the last three years have seen a drop in revenue. Today there seems to be a surprise recovery though on the global advertising markets, having seen for the past three months some positive growth. Some large UK Advertising Agencies have actually boosted their forecasts for industry spending this year by more than 50 per cent and have predicted a further spike in 2012 which can only be good news for an industry that has been suffering.

Drastic falls in advertising have historically been followed by a good rebound approximately three years later, so for example, after the big slump of 1991, spending went up by 6.8 per cent three years later. The same can be said for the dotcom bubble when spending went up 7.4 per cent about three years later.

Whilst the media industry diversifies all the time and opportunities arrive in all manner of new places like online, via mobile phones and even through television programmes with the latest allowance of product placement then the scope for companies to get their products and messages across to consumers is as exciting and innovative as ever. Companies need to lead with their innovations and pave the way against their competitors in what is an incredibly cut throat, competitive industry. Consumers are more demanding than ever and expect great value for money along with well designed, high quality finished products.

2010 Election

It would have been a bitter pill to swallow, in the wake of our turbulent economic crisis, to find the powers that be had spent millions on advertising fees to promote their party in the quest to govern this country. Thankfully the leaders, especially Brown had the sense not to.

For the three UK Advertising Agencies appointed to peddle each party, a baptism of fire ensued. It is often a few weeks, sometimes months, for the strategic briefing of an ad campaign to turn into the creative execution. For this election it was required within a matter of hours, overnight sometimes, to rewrite messages and tweak ads already lined up to run. The modern digital world moves at such a pace that it is possible (and sometimes vital) to reconfigure entire strategies overnight, reacting to the media frenzy and party oppositions day by day.

The recent election has been hailed as the Social Media Election. With tiny budgets, the evolution of social media has played a huge role. Allowing each party to work hard building relationships with the voters via social media opportunities along with email marketing to amplify their party policies and keep in touch with the voter.

Opinions are split on how much more effective social media has been for each party opposed to the traditional poster sites and press ads of yester year. One strong argument is that it is the real people within these realms that have had the most influence, rather than the parties themselves. From high brow intellects to youthful pop stars; it will be difficult to quantify how much impact their tweets and profiles have had in swaying the public with their unrestricted and transparent opinions posted on sites like Facebook and Twitter.

It will be interesting to see what happens in the run up to the next election and monitor how each UK Advertising Agent will strategise the campaign; will the emphasis be on Modern Social Media or Traditional Press Media?

As the internet evolves so do the opportunities of advertising and marketing avenues for UK Advertising Agencies. Whilst we once engaged in placement ads on social media sites with gusto we now see that people want to see what others are into, and like, and can offer, than just clicking on the adverts that sit next to these people’s profiles. That’s not to say paid placements are pointless. As we watch social media grow and mature we see more sophisticated methods of advertising coming through with developers designing much more reactive and measurable information in the form of capturing profile data, profile targeting and auction systems that meet the advertisers ability to engage and also to measure the results.

Away from the paid placements there are of course the social media usage itself that for the likes of almost every company has benefits: from increasing brand awareness to direct response call to actions. Marketers are awakening to the realisation people don’t want to be shouted at or have adverts thrust in their faces. More so, businesses see the effective benefits of offering relevant, informative and valued insights to facilitate building a relationship with consumers. By engaging in more social communicative ways and offering entertainment and benefits to their valued target audience, the target audience in turn, respond in a more effective way. Following companies tweets, becoming a fan of their Facebook page and signing up to their news alerts has become a way of life for consumers to keep in touch and stay informed with all the latest that company may offer.

They say in this industry it is far more cost effective for a UK Advertising Agent and indeed a business, to retain and market to their existing client base than reaching out to new, and in this social media world we live in, surely that is truer and easier today than when this statement was first penned.

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.