Chris Evans, UK Managing Director at IgnitionOne examines new figures from the IAB taking the pulse of digital marketing at the end of 2011
The latest media spend figures show a shift from digital marketing being a direct response media towards engagement and brand building. The sheer amount of time spent on the internet is the biggest driver behind marketing spend. However, for many marketers, trackable ROI remains key. Video and social media are experiencing huge growth right now, bringing the emotional engagement of traditional media, together with the measurability of digital.
There’s no denying the health of digital marketing in the UK, which grew 13.5 per cent in the first half of 2011 to £2.26 billon according to the Internet Advertising Bureau’s (IAB) most recent online ad spend figures.
Looking at more recent data taken from our own IgnitionOne Q3 2011 global benchmark report, display and search are both doing well, which corroborates with the IAB study.
Paid search (PPC) spend is up in Europe with 20 per cent growth year-on-year, ahead of a global increase of 7.2 per cent. The IAB reports that PPC accounts for 58 per cent of the digital media mix – the biggest piece of the pie – and is growing by nearly 13 per cent in the UK.
There’s a reason for this; the results are highly measurable. Perhaps that’s largely why, within display, banner ads and embedded formats still lead the way. But the popularity and phenomenal growth of video and social media can’t be ignored.
Looking at the IAB report, in the UK we spend a quarter of our online lives social networking and we watch 2.3 billion videos a month online, so it comes as no surprise that, both social media and online video advertising have grown by 100 per cent.
Video in particular has had a positive effect on display advertising, pushing its share to 23 per cent of overall online ad spend.
The challenge for online video is the constant comparison to TV. Cost per eyeball is a good yardstick, but for agencies, the buying economies that have driven consolidation in the industry are not there.
Also, consider social media – which right now, basically means Facebook. It’s unsurpassed as an engagement tool, but marketers are still not getting the granular level of detail needed to drive success.
A Facebook ‘like’ could be considered evidence of a metric at work. But, unless the marketer’s overriding strategy is to achieve a certain number of ‘likes’, they only account for partial success. I’m sure that as Facebook makes more data available the measurability and effectiveness of its advertising will improve.
However, the way in which display has changed may provide some hope for data-driven marketers. The growth of ad exchanges and the ability to serve premium inventory in real time, is giving marketers a clearer insight into the customer journey.
This form of display advertising is similar to search in that it is bought in an online auction marketplace, is highly measurable and can be quickly scaled up or down. As more inventory floods the market, its cost-effectiveness is assured.
As more investment is made into real time marketing technologies, marketers are capable of greater precision across different aspects of digital marketing. And the technology is becoming easier for marketers to use as delivery software becomes user friendly, enabling brands and agencies to follow, track and serve display, search and social media messages.
Digital budgets are growing, as are impressions, which points to the fact that marketers are following consumers, who continue to increase the time they spend online. We can’t deny that engagement is working, but the problem is we can’t continue to rely on siloed attribution models. However, IgnitionOne is working to deliver more concrete metrics for engagement within digital media. For now, there’s no doubt that current figures would look very different if online ad spend was pegged to time spent on the internet.