Online: the interactive ingredient

Transcription

1 Online: the interactive ingredient 1. Introduction - Getting to grips with online The internet is unique as a marketing medium: simultaneously a marketing channel and, for many, a channel to market. It can help the smallest business to gain distribution and promotion of their web-based brochure through paid-for search listings, as well as help the largest multinational brand raise purchase intent through powerful graphical brand advertising. Viral marketing, banners, pop-ups, , text, skyscrapers and search listings are just among the dozens of formats companies turn to when they go online. During the past five years the industry has become a mainstream media channel, open to clients of all budgets and sectors, and able to deliver marketing benefits that straddle the entire marketing mix and customer journey. The IAB s role as a centre of expertise is a powerful route into learning more about online. We can provide knowledge training, guides, examples of best practice, case studies and raw facts about the market. We can help clients find an agency to be their partner on this journey and we can support the agency s development in their understanding 2. The Growth in online audiences Audience numbers continue to grow. The latest data according to NOP world shows that 58% of GB adults are now online (27 million). Not only are there more people online but they are also online for longer. Key driver to this is the rapid take up of broadband services, according to OFCOM five thousand internet users each day are migrating from narrow band to broadband and this trend is set to continue for the foreseeable future. People of all ages and backgrounds are now making use of the internet, for both business and pleasure purposes. Contents 1. Intro - Getting to grips with online 2. The growth in online audiences 3. The change in advertising spend 4. Getting the media mix right 5. Search marketing new customer acquisition tool More information 2.1. The change in audience patterns Online has already become the third most used medium among those with access. In 2002, Wanadoo (then Freeserve) commissioned the Life in a Fishbowl study that explored online media consumption patterns in the context of traditional media. Diaries kept by a thousand users revealed a picture of life today that rocked the media industry. Online came in after television and radio as being the third most used media channel. Its audiences were consistently high on the weekend as well as weekdays and they were also consistently high across all demographic groups. Indeed the number of reasons that drive us online are so much greater and broader than those compelling us to use traditional media, it is hard to know where the ceiling on time could be when it comes to online use. These Interactive Advertising Bureau The interactive ingredient 1

2 findings were a shock to the marketing community because, while their customers had clearly switched channels, most marketers were yet to follow. Clearly in the UK we have already come close to saturation in terms of media volumes and coverage. Each day we are exposed to thousands of commercial messages and with the number of media brands proliferating we can be assured that this will be a permanent fixture in our landscape. Online can cut through this noise Daytime is primetime Another key reality for online audiences is that they are the only daytime media audiences, which means that for the marketing community daytime is the new primetime. Investigations by Nielsen NetRatings across all media have documented how the reach of each media channel into its potential market (ie those with access) changes throughout the day. While radio has a characteristically high morning peak and television a high evening peak, online is consistently high across the day. Reaching customers while they are at work is a powerful prospect for many marketers. Search has particularly benefited from this during the last couple of years along with business to business brands, but achieving standout with messages to customers is a powerful draw for consumer brands as well. 3. The change in advertising spend Marketers, realising their audiences have moved into online from traditional media, are following. Long gone are the days when a website was enough to establish an online presence. Smart marketers now weave the web throughout their marketing mix, from graphical ads that build brand identity to search listings that drive immediate customers towards a purchase. The interactive marketing community has created a breadth of products that help businesses of all sizes and sectors extend their effectiveness by harnessing the power of online Setting new records Online advertising set records in October 2004 with the release of new figures from the industry s official tracking research published by the Interactive Advertising Bureau UK (IAB) and PricewaterhouseCoopers LLP, with additional research supplied by WARC Search market soars to 50% larger than cinema The value of paid-for advertising listings on search engines leapt again in the first half of 2004, more than doubling year-on-year (increasing 109%) to a value of 114.3m for the first half of 2004 (up from 54.7m in the first half of 2003). Interactive Advertising Bureau The interactive ingredient 2

3 The growth propelled the search industry to record-setting heights, valuing it at about one and a half times the size of the UK cinema advertising industry (based on published data and forecasts of their Q2 performance which valued cinema at 77 million for the first six months of 2004). This impressive performance is in line with previous quarterly and half yearly growth rates revealed since the IAB started separately tracking the sector in Direct marketers are gravitating to search as their new customer acquisition tool. Search brings buyers and sellers together at their very moment of greatest interest in a service; providing the hottest of prospects, the most qualified of leads. Comments Danny Meadows-Klue, Chief Executive and Co-founder of the IAB. Alongside search advertising, both display and classified formats grew significantly. Within display embedded formats (banners, skyscrapers etc) rose 31.4% year on year to 73.3m and classified as a sector rose 45.0% to 67.7m Online tops the half billion mark, reaching 3.4% of total UK adspend When the additional recruitment websites are included, the online sector grows to 3.4% of UK adspend from 3.2%. This reveals that the market has already crossed the half billion mark to reach 507m. The gap between the size of the online and radio advertising industries has narrowed to just a whisker. With this industry growing more than 70% year in year online will overtake radio before Christmas, beating the industry s target two years early. Online is now mainstream media and any marketer not treating it as an important element in their media strategy is simply failing to talk with a large group of their customers. Comments Danny Meadows- Klue, Chief Executive and Co-founder IAB 3.4. Recruitment companies place online marketing at heart of their media mix Recruitment advertising took pole position as the largest single industry category tracked in the research. As an industry, its share of the UK online advertising market has grown from 24.1% in the second half of 2003 to its current value of 29.9% (based on the large sample of spend companies attributed to specific categories) About the research The main data source is a survey of media owners carried out for the IAB by PricewaterhouseCoopers and measures the industry based on recorded revenues reported by the finance departments of online media owners. It is the authoritative financial source for the size of the UK market and has always been used as the definitive source by the ad industry. This second level of analysis is traditionally published two weeks after collation of the top-line figures has been completed. The IAB is grateful to WARC for releasing data on additional recruitment websites previously not accounted for in this market report (adjusted historical figures now available for total spend). Interactive Advertising Bureau The interactive ingredient 3

4 4. Getting the media mix right Firms are constantly seeking to understand how effective their different forms of marketing are. The strong desire for accountability of spend and clear data that monitors campaign performance has led online marketers to produce a flow of data that would keep even the most determined statistician content. Unlike traditional media that can only offer a guess to the actual circulation of a newspaper on a given day or the actual amount of people who listen to a radio show, online media offer their advertisers the chance to specify exactly how many times they want their advert viewed. The trading currency of views, called impressions, is typically sold in bundles of thousands (CPM). More details are explained in the IAB s introduction to online marketing guide which is available from our call centre. The new frontier for brand marketers is medianeutral planning. The vision is simple: same client IAB Cross Media Optimisation research tracks the effect of each channel budget producing better results. By evaluating the effect of online in each of the media channels through scientific research among a large sample of people exposed to the campaign, marketers can gain a greater understanding of how their media should be allocated. The seminal research into media-neutral planning was carried out by MSN, IAB International and a series of research companies back in when Dove launched their Nutrium soap bar. This paved the way for a set of studies that have, under the burden of scrutiny from Forrester, ESOMAR and others, quantified how under-valued online is. They have concluded that, even for the low involvement brands, online should be 10-15% of total campaign spend Summary Online is both a critical and growing element of the media mix. What began as a niche media channel in the early nineties has grown to touch all industries and all market segments. Firms of all sizes and sectors use online today, not simply by having a website, but using online media to promote their brands and enhance their media mix. Online advertising is the catalyst in getting value from your existing web investments and, with audiences rising daily, this is a media channel you cannot afford to ignore. Online is the interactive ingredient in your marketing mix. Interactive Advertising Bureau The interactive ingredient 4

5 5. Search marketing new customer acquisition tool 5.1. Why should marketers be interested in search? The internet has changed forever the way that we find out answers to questions. From health issues to train times, book reviews to business services, the internet is becoming the primary source of information for all of us. Search engines are often a first port of call as they let customers navigate billions of web pages in a fraction of a second. Website owners realise that getting high profile listings with these search engines is key to developing audiences and the search industry has responded with several tools that enable this. Broadly they fall into two categories Site design and search engine optimisation Advertising products and marketing services 5.2. Site design and search engine optimisation (SEO) To understand why a website is listed high in the results (rankings) on a search page, we need to appreciate the way that search engines learn about the internet. This is explained in detail in the IAB white paper on search, but in its simplest form they look at a webpage in advance (an activity called spidering ), read the words on the page, and from this make deductions about the language which is specific to that page. From this they build a vast index of the language that is used on all web pages. When you type in a question (query) to a search engine, a smart computer program then looks through this index and finds (matches) answers to your question based on the probability that the language on a certain web page matches the terms that you have searched for. Each of the spiders and smart programs has its own additional tool to achieve this and that is why the results may be different on different search services. The challenge for the web publisher is how to make their pages easy to read by these spiders. For example, while a typical internet user may glance at a page and make a judgement based on the words and pictures they see, the spider may do this differently. It can probably not see the words inside the graphics on a page, but only the raw text. It may not be able to read any materials if certain technologies have been used on the page. It may also read other text which is hidden from the normal viewer (including meta tags information that goes into the heading of the page that is not displayed but can be read in the html code that forms the page itself). Search Engine Optimisation (SEO) tackles all of these issues and more. SEO specialists can help website publishers to give their sites the best chance of being read and indexed by search engines. Website publishers should consider SEO issues before they start building or redesigning pages as they may need to consider the publishing technology as well as the page content Advertising products and marketing services However even when a website has been successfully optimised there is no guarantee of a high ranking when a user searches for a topic. Generally the more generic the search the lower the chance of a high ranking as more and more websites will have patterns of language which match the terms. Website publishers use further marketing tools to boost the prominence of their entry and to reinforce their text link with graphical branding messaging. These tools include a variety of paid listings and entries. Some of these are bought on a performance basis, within which an advertiser will only pay for internet users who click on the link and then visit their website. Some of these performance products may be priced in a dynamic way that changes depending on the demand by others for the same key word (bidding). New marketing service companies can help manage these bidding strategies. If you have a large website, filled with content that changes regularly then you may want to consider arranging for a feed of this content into the search engine How does online compare to traditional media? For direct marketers these online activities have many advantages over traditional channels. Websites: Are increasingly a primary channel for customer acquisition. Search marketing improves the overall effectiveness of all the existing website investment. Wastage: In search you only reach qualified leads who are genuinely interested. Timing: You reach these customers at the very moment of greatest interest. Campaign cost control: The budget for campaigns can be tightly set and easily adjusted. Customer value: For direct marketers this allows not only a tight control of marketing costs, but also strong linkage between marketing spend and lead generation. Some marketers may then track the behaviour of these customers further by calculating a likelihood of purchase and then re-purchase either online or offline. This helps marketers relate the lifetime value of a customer to the initial marketing spend made. Interactive Advertising Bureau The interactive ingredient 5

6 5.6. History Search marketing has rose to prominence between 2000 and 2003 as waves of new marketers entered the online industry for the first time and realised that search let them reach prospective customers at the very moment of greatest interest in their business area. While the origins of search listings date back to the first commercial internet sites, consolidation has created a more mature market place within which marketers can reach customers through dozens of websites through working with just a few key search services Examples For case studies about search marketing call the IAB team and review materials in the case study library as well as those in slideshow seminars from members. More information available from the IAB Call Centre For further information contact the IAB call centre on / CallCentre@iabuk.net and ask for: Media-neutral planning Four simple case studies including McDonald s, Kleenex, Dove and Colgate Getting the media mix right the full Dove study IAB seminar An introduction to cross media optimization IAB article Audiences 29m people online IAB article NetRatings Annual keynote address to the IAB IAB seminar The Forrester View Annual keynote from Forrester research IAB seminar Interactive Advertising Bureau The interactive ingredient 6