Amid all the bad news about the new-media industry we’ve had to
digest in recent weeks (see opposite page), it’s tempting to go in
search of something nice to say.
So here it is: at last someone’s written a credible report on the level
of online advertising expenditure in the UK! Even better, the study -
which is the first of a series of monthly AdWatch bulletins from
Fletcher Research - backs up the industry’s view that advertisers will
spend something in the region of pounds 12-pounds 15 million on Net
advertising this year. In comparison to traditional media, this is tiny
- it accounts for only 0.1 per cent of total advertising spend - but it
is a not inconsiderable sum for a fledgling medium whose method of
delivery is still so unreliable.
That’s the end of the good news, however. Back to the bad: of the 250
online advertisers identified by Fletcher in the UK, only 20 are using
the Web as a strategic marketing tool. Indeed, 75 per cent advertise on
only one site - which is a bit like advertising in only one magazine,
only a whole lot worse because the Web is vastly smaller and more
diverse than the magazine marketplace. All of which leaves me
sympathising with Robert Hamilton’s comments in the piece opposite: what
really defines a service industry is its clients, not its operators, and
the new-media industry will not mature until advertisers start adopting
a grown-up attitude towards it.
That said, it is partly the responsibility of agencies to educate their
clients. Ajaz Ahmed may sound a little holier-than-thou when he says not
enough agencies do this, but he’s right.
Whatever the reason, the number of advertisers taking the medium
seriously is so tiny that it renders statistical ’averages’ meaningless.
The same is true of media owners. AdWatch reckons that, at average
prices, the UK Web advertising inventory would be worth pounds 9.5
million a month. But only 14 per cent of this inventory is sold. Why?
Because most Website owners who claim to be offering advertising space
don’t actually have a sales team to do it.
There are maybe a dozen - the top search engines and (traditional) media
owner sites - who are trying to drive the market forward. Their
inventories are probably between 70 and 80 per cent full, so God help
I wish I could say I left the best news until last. But Fletcher’s
highly optimistic prediction that the market will have grown from pounds
15 million to pounds 479 million by 2002 leaves me cold. We all want to
talk the industry up, but no-one can predict this sort of increase with
confidence. Anyone using this forecast as the basis for their business
plan should prepare to meet Indexfinger and the rest in the great Web
consultancy in the sky.