By Jason Deign, campaignlive.co.uk, Friday, 29 September 2006 12:00AM
Advertisers loved digital at first. When the industry imploded six years ago, however, they fled for cover. Then, suddenly, everyone was online and the industry was booming again. But some advertisers are remaining wary. European Interactive Advertising Association figures show UK internet users spend 19.6 per cent of their "media time" online, while the Internet Advertising Bureau says the medium's share of total advertising spend is still only 7.8 per cent.
Unhappily for the online market, it is the biggest advertisers that are proving the most dogged refuseniks.
Consumer goods companies still insist that, for them at least, digital has questionable benefits. E-commerce is all very well, they scoff, but why would consumers bother to buy soap powder via the internet when you can pick some up at the local supermarket?
An extra few per cent of Procter & Gamble's marketing spend translates into millions of digital advertising dollars, but online spend by FMCGs actually fell from 2004 to 2005, the IAB says - but it is confident the sector will join the market sooner rather than later.
Meanwhile, it is left to other sectors to drive growth. Campaign spoke to marketing managers at the AA, Coors Brewers, Jamster, the Canadian Tourist Board and Panasonic about what digital has done for their brands.
TOBIAS BRINKHORST - JAMSTER
Our online spend is growing and will very soon be a bigger proportion of the total than ever.
I think we're following a global trend. With the tracking possibilities that digital media give us, we are in a better position to analyse the success of campaigns.
We can react accordingly, which is very important in a market that is so highly response-driven. In this sense, we're in a better position than FMCG companies. Consumers can click straight through and buy our products, but people still have to go into a shop in order to buy their Unilever butter.
Our success in digital is very much thanks to our experienced agency Advertising.com. It helps to team up with leading specialists in this area and to complement our knowledge in-house.
- Tobias Brinkhorst is the director of marketing and operations, and area manager UK, Ireland and Australia, at Jamster
GAELE LALAHY - PANASONIC
Brand owners are generally aware that spend is disproportionate to the medium's share of audience. But it takes time for them to change.
People like me, who are in charge of online, would like spend to be ten times bigger. Panasonic has been investing seriously in the medium for five years. We've increased our spend by more than 25 per cent a year for the past four years.
Two years ago we chose online as part of the mix to launch our Lumix camera range. It was risky launching into a competitive market. We ran press and online advertising and after tracking where people were coming from, it was a no-brainer to focus on digital. We started the campaign with 80 per cent of activity in newspapers versus 20 per cent online. By the end of the campaign the proportions were reversed. Digital has also helped us get closer to our customers. As a manufacturer we don't get to see our customers in a shop every day, so finding them online is tremendously powerful. Receiving comments from them has revolutionised the way we do things in terms of new-product development too.
- Gaele Lalahy is the web and e-commerce manager at Panasonic UK
NICOLA YOUNG - COORS
With better ways to track return on investment and evaluate campaigns, and a drastically changing media landscape, digital is now a legitimate rival to the traditional media. Digital channels now secure a significant share of attention from our core target audience, typically young males.
Consumers are spending ever larger amounts of time within digital environments. These offer them a greater sense of empowerment, as well as a space and the freedom to express themselves, something advertisers should bear in mind. Brands are under more pressure to be relevant online. If they are not, their future within the medium will remain uncertain. It allows us to talk to consumers - but also to listen to their views and needs. This is the greatest value of the digital media and will guarantee its role within marketing.
- Nicola Young is the head of digital and direct marketing at Coors Brewers
BEN WALTON - AA
Online accounts for around 20 per cent of our media spend across our three core businesses.
We were pretty early to invest in online, running a TV ad with a pure online call to action, back in 2001. Since then, our online spend has grown rapidly. We've embraced the growth of aggregators and used the reach of affiliate networks. This has resulted in upwards of 130 per cent growth from 2005 to 2006. Next year this is set to increase further.
Internet users are now firmly in control. They generate their own content and take their opinions from their peer group rather than being led purely by the big brands.
To stay ahead of the competition we must have a sizeable presence within the search engines and aggregators, and find new ways to be heard above the noise.
- Ben Walton is the head of e-commerce marketing at the AA
NIM SINGH - CANADIAN TOURIST COMMISSION
Most people researching travel now do so online. So we we have to be there to get consumers to think of Canada as a great place to visit. Digital media are quicker to measure response rates to our website, which makes it easier and faster to chart return on investment - this keeps the bosses happy. That aside, as it's more interactive, you can build a dialogue with the consumer so you get a better idea of their travel habits. You can then use that information to plan future campaigns more effectively. Our future customer relationship management strategy is moving in that direction. We've been busy in our London office getting to grips with what is essentially a whole new ball game for us.
I've been busy looking at sites such as www.tripadvisor.com, the development of MySpace, and keeping track of the whole explosion of broadband this year. Our 2007 planning starts shortly and we will definitely be looking at ways to increase our online presence.
- Nim Singh is the manager, marketing programme CTC UK at the Canadian Tourism Commission.
This article was first published on campaignlive.co.uk