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.

As the world cup kicks off, England had their first game on Saturday night and in true form managed to have the nation in states of tension, frustration and at times embarrassment. Robert Green, England’s chosen goal keeper, managed to let a goal in that even I could have saved and in the wake of his embarrassment, UK Advertising Agencies have told him that he should have a fairly good career in advertising, presumably being the butt of his own joke.

So, who else has managed to make a career in advertising?

Gareth Southgate, Chris Waddle and Stuart Pearce who all famously missed penalties in crucial matches gained roles in the Pizza Hut advertising campaign. Southgate was seen with a bag over his head in the restaurant whilst trying to eat a pizza, trying to hide his identity from fellow diners.

Gary Lineker was a household name for his football abilities and clean record on the pitch and become the face of Walkers crisps in ironic roles as Mr. Bad Guy, stealing crisps off unsuspecting crisp eaters in a series of very successful adverts.
Eric Cantona retired early from an extremely successful football career playing for Manchester United and his country, to become an actor. Along the way he starred in a fair amount of adverts, the most famous being his Nike commercials which featured a whole host of world class players in a dungeon playing football, he was the dungeon master hosting the tournament.

It will be interesting to see which players sign up to a UK Advertising Agent and start to appear in adverts as a result of their success or demise in the World Cup.

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.

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.

Unfortunately there are still a large amount of company owners who believe that advertising their brand or product is a “Waste of money” and “Doesn’t bring results.” This maybe true, perhaps in the past they have worked with an agency who doesn’t know what they are doing, producing adverts and campaigns that weren’t properly thought out.

Alot of marketing/advertising budget is spent on adverts that attract the consumer but not necessarily to act or make a purchase. This is called “Image advertising” designed specifically to stay in your mind next time you want a drink, chocolate bar etc. The only problem with this is unless you have the cash flow of a marketing giant like Coke, Mars or Walmart you just won’t be able to compete.

The solution? Direct Response Advertising. This type of advertising is made exclusively to attract or generate a specific action or response. There are many different ways of getting your advert across be it TV, newspaper, radio or magazine. Direct response advertising is designed to generate leads, to make the consumer think a bit more about the brand or product. This means that you will have their details and can contact them with future campaigns, sales or offers. The question is how would the ideal UK Advertising Agencies go about doing this?

Step one - Create a quality/resourceful piece of content that will become an authority in that sector. This can be done through trial products, newsletters, tips, reports etc. Once you have decided what to write about and what format you are going to put it on. (email, mail, website, blog) Leave it alone and wait for people to request, download your content.

Step two - Once the requests and interest rolls in send, send send! Why does this form of advertising work well? It means not having to cold call or force the consumer into a place they don’t want to be. The discussion can be had on their terms even if they are only interested in spending a small amount of money. People don’t generally like being sold too, if you can show that your service or product offers good return on investment and have read your reports then a bond of trust has already begun.

It’s an obvious but very effective way of marketing. Think about it, if the person is calling up for your free information or after reading it then they are obviously already interested in what you have to offer. Now all you have to do is push the sale through. This also means that you can measure the popularity (or not) of your advertising campaign. Lack of interest? Change the campaign and try again!

The other benefit of direct response advertising is that you now have information on people who have previously shown interest in your product. Invite them to events, send them monthly newsletters. Invest your money in something that works!

A recent poll has shown that the more traditional forms of advertising are favoured by professionals who advertise for business to business clients. The research that was collated by the Direct Marketers Association also shows that direct response advertising uses over 40% of marketing budgets.

In second place after direct response adverts is brand advertising which has a 16% market spend. Third was trade show marketing which owns 13% of the total market spend.

So what makes up the yearly spend in the direct response advertising sector? Over a quarter of the budget goes on direct mail (27%) closely followed by online advertising work on 18%. Other parts like catalogues and trade shows are responsible for 15% and telemarketing advertising counts for 12% spend. Surprisingly only 1% is spent using newer forms of media like content making, blogs and RSS feeds. It seems that Web 2.0 will have to wait its time a bit as far as direct response advertising is concerned!

Unfortunately this looks like it could be a major mistake within the business to business sector. Another recent survey shows that a large proportion of business professionals (87%) throughout the UK use the internet to find out more information on a product before they go through with a purchase or transaction.  If this sort of data was used with a business to business campaign I feel that advertisers could attract consumers not only easier but quicker too.

A recent survey shows that youthful online/internet users want to be entertained with funny videos and content whereas the older users are looking for particular queries that are both useful and relevant.

The IAB (Internet Advertising Bureau) also known as the trade body for online advertising in the UK has collated the data and found the different kind of adverts that attract particular consumers on the internet. It is fairly obvious what makes up an effective advert, grab the viewers attention with relevancy and usefulness before offering an exciting incentive that will save the consumer money. Interestingly the results show that there are many key differences between the age groups.

The results showed that more youthful internet users aged between 18-35 are more intrigued by special sales or offers, entertaining and or exclusive information is also seen as important. Online users aged between 45-54 seem to be attracted by advertising that actually shows a benefit to its purchase. One thing that the age groups have in common is their want for a deal and during these times of economic depression that is not a massive surprise!

People who took the survey also believe that they have more access to and are more likely to click through on the “traditional” online advertising like banners, emails and sponsored links.  Every demographic that took part in this survey found that the most popular forms of direct response advertising are through adverts within a page and sponsored listings.

The data also showed that the popularity of new forms of digital advertising is gaining on their more traditional options. These new ads include using video, sound, games, widgets and free gifts, some of which have become very effective. The popularity and importance of social media in the present and the future can not be overstated. These forms of advertising will become more and more vital as the internet increases in users.