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.

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.

Most people are agreed that 2009 is going to be a tough year for everyone. Many of the world’s richest countries are already in recession and those that aren’t will likely enter it at some point soon. With all the economic turmoil it’s easy to see why so many companies are cutting back on there advertising spend. While this will indeed save some money in the short term, long term it could have a negative impact.

Advertising now could give your company an advantage over your rivals. While all your competitors are scaling back there advertising now could be the perfect opportunity to try and win over some of their customers. The right advertising campaign could easily capture the customers out there that still have money and are still spending freely. With little competing against your ad campaign it is likely to have much more impact. Any advertising initiative undertaken now could also give you a head start in the future.

Most of the world leading experts agree that the resurgence in the economy will start either this year or next. A great advertising campaign during 2009 could see your company in a prime position as the economy recovers and more and more people begin to spend again. Research has actually proven that continued and extensive advertising during a recession does benefit business in the long term. In one research carried out in 1985 companies who continued to utilise their advertising agency during an economic downturn saw sales rise 256% while another study in 2001 found that some companies grow there market share by 2 ½ times.

There are so many possible advertising outlets available to people at the moment that it would be a missed opportunity not to try at least some of them to help your business beat the crunch. An Ad agency is a good place to head for help and advice on the best way to make sure that advertising works for you. Their expertise could prove invaluable in positioning your company ahead of your rivals and making sure you can come out of this recession ready and waiting to take advantage of the up turn.