Advertising

Paul Fisher, CEO of IAB Australia, told the Future of Digital Advertising Summit conference in Sydney this week: “Online will very quickly become the number one advertising channel by volume and by share, overtaking television and newspapers. There are only two other countries where that has happened: the UK and Denmark.

“Australia is a very fast growing economy for digital advertising: it is growing faster than the global market and faster than Asia Pacific.”

He told the audience: “We are going to move very heavily into a world where media planning and buying for advertising and for measurement is not about digital as a silo as it has been for the last 10 or 15 years. It is now going to be now very much in comparison with TV and newspapers.”

He added: “Global marketers with multibillion dollar budgets are not moving into digital because they think it is sexy…The single reason driving online advertising growth is consumer behaviour: people are spending huge amounts of time online.”

Fisher cited forecasts from PricewaterhouseCoopers that put the CAGR for the digital advertising marketing in Australia growing at an average of 14.2 percent between now and 2014, compared to 13.7 percent for Asia Pacific and 10.6 percent globally.

For Australia, PWC is forecasting TV advertising to grow at an average of 1.9 percent to 2014 to reach $3.808b, newspaper advertising to grow at 3.9 percent to reach $3.811b and Internet advertising to grow at 15.4 percent to reach $3.854b.

“When people say to you ‘Is the money moving out of TV and newspaper to digital?’ of course it is…There is a strategic shift of billions of dollar of money moving out of TV and newspapers and into digital every year over the next three or four years,” Fisher said. “But TV and newspaper advertising are not going to die. They will still be multibillion dollar industries.”

The big winner, according to Fisher, will be search advertising. “We think search will be the dominant player, probably securing a 50 percent share of the market. Display will take around 27-30 percent and classifieds about 23-25 percent. We don’t think those shares wil change much.”

Fisher said strong growth was expected in video advertising: its share of the online marketing spend in Australia is presently significantly smaller than in the US and UK.

“In the US five percent of total online ad spend and 14 percent of display ad spend goes on video. In Australia those figures are only 1.4 percent and five percent. It’s likely we will follow the same growth curve as the US over the next three or four years.”

Mobile advertising growth in Australia is tipped to outstrip global growth by even greater margins than the overall digital advertising market. PWC is forecasting 73.0 percent CAGR to take the figure from $26m in 2010 to $219m in 2014, compared to global growth figures of 27.7 percent and 22.5 percent for Asia Pacific. Fisher said these figures were for display ads only.

However he said there was a lack of accurate data on the Australian market compared to Internet advertising. “We don’t have in this country an accurate capture of mobile advertising expenditure, but we intend to change that in the first half of this year. There is an initiative where we are going to try and persuade publishers to offer up their actual mobile advertising revenues to PricewaterhouseCoopers as they do for online expenditure.”

A recent Advertising Age article revealed that more and more companies are now putting actual staff front and center in their advertising. Could your company do this? Probably not, if your staff are like those in Forrester’s recent surveys of knowledge workers.

In a report published today, Forrester Research examined the question of employees advocating for their companies. We surveyed 5,519 information workers across the U.S. and Europe, using a variation on the Net Promoter methodology that asks, on a 10-point scale, “How likely are you to recommend your company’s products or services to a friend or family member?” As in Net Promoter, we count people as promoters if they rate this a 9 or 10, neutral if they rate it a 7 or 8, and detractors for 0 through 6. The results are surprisingly negative. For example:

• 49% of information workers are detractors for their company, and only 27% were promoters. That’s a net score (promoters minus detractors) of -23%. Surprisingly, this doesn’t vary much with age, income, or size of company.
• Directors, VPs, and executives are net promoters, but individual workers and managers/supervisors are net detractors.
• Among U.S. workers, the best scores are in design, HR, and the ever-optimistic sales department. With a net score of -10%, marketers are actually more likely to be detractors than promoters for their own products. And customer service workers are among the most likely to be detractors. When your call center staff don’t believe in your company, you’re ripe for your own Maytag moment.
• In case you’re wondering if you should allow employees onto social networks (and trust me, you can’t stop them), try this fact on: workers who use social media are among the most positive. 48% would strongly recommend a company’s products and services and only 22% were detractors, for a net score of 26% — among the highest of the groups we surveyed.

What should you do? Well, you could squeeze more work out of people, tell them exactly what to do and punish them when they don’t do it, and block their access to technology. This might boost short-term profits and make you feel like you’re in charge. In a recession, they probably won’t quit. But they sure won’t be spreading joy to your customers.

Or you could spread an internal reputation that customer problem-solvers will be encouraged and highlight the workers who do it. You could empower people. Then the ideas will be coming from your staff instead of just from you. And maybe they’ll be happy. You could put them in your TV commercials, get them tweeting about your products, and generating customer advocates with their enthusiasm. That’s hard to do, but it’s worth it.

While everyone is trying to figure out what goes into planning an effective social media campaign, the most engaging social media marketing is often unplanned, at least from my perspective: it’s interesting to see how brands play it by ear when things take an unexpected turn. The latest example is the Gap, which appears to be embarking on a social crowd-sourcing project for its new logo, more or less spontaneously, after the first logo redesign met with a not-so-positive public response, according to Ad Age.

The original redesign replaced the iconic all-caps white letters against a dark blue background with a more understated logo composed of black letters with a blue square in one corner. The redesign was introduced without much preparation or warning, jolting easily-started American consumers and leading to a wave of criticism, complaints, and demands to know what, exactly, Gap thought it was doing.

It’s kind of funny that a corporate logo redesign can inspire such a hullabaloo, but there’s no question that people become attached to brand images, to the point that they almost seem to be considered public domain.

To its credit, after fumbling the roll out Gap rolled with the punches, recognizing consumers’ engagement with the brand and thanking them for their comments. Then Gap went one better by asking consumers to submit their own ideas for a redesigned logo — taking a PR debacle and transforming it into something which encourages consumer loyalty and raises the brand’s profile through interaction.

The only question now is whether Gap will actually adopt one of the user-generated design submissions as its new logo. Although the company made it clear in its Facebook post that it just wanted to “see other ideas, at this point failure to adopt a user-submitted logo would likely draw more negative attention to the brand. So they better hope someone submits something good.

Written by Ian McKee
CEO of Vocanic

Global – The daily deal service Groupon, which quietly started in Chicago in November 2008, is a sensation.

In less than two years, it has grown to 29 countries, 230 markets and boasts 17 million subscribers who get daily offers on everything from leg-waxing sessions and amusement parks to restaurants. It’s estimated to be on track to record $500 million in revenue this year and perhaps double that in 2011. Forbes has christened it “the fastest-growing company ever,” boasting a $1 billion valuation.

Its success can be attributed to several factors — and traditional advertising is definitely not one of them.

Groupon, in fact, whose marketing is essentially built into the product, has done all this without the machinery of Madison Avenue, either to build its brand with deal-seeking customers or to entice businesses to its marketing platform.

Groupon’s approach “reflects a bit of the transformation of markets and the way in which advertising agencies have to respond,” said Ed Cotton, director of strategy at Butler Shine Stern & Partners.

Because the marketing appeal is built into Groupon’s product, he explained, it doesn’t have much need for what Madison Avenue specializes in: the creation of brand images and strategy, and distribution of them through paid media.

Groupon, which takes a percentage of the revenue generated, boasts an advantage in the world of branding: the social aspect of its service. Each day, a Groupon editor chooses a limited-time bargain at a steep discount that’s e-mailed to subscribers.

The deal “tips” (goes into effect) only when a certain number of people buy it. This helps encourage viral pass along (the service has grown so big that its deals tip over 95 percent of the time). The offers themselves are often for social activities — eating out, renting bikes, going to a comedy club — that also entice sharing.

Aaron Cooper, SVP of marketing at Groupon, saod there’s no need to hire traditional marketers: the firm believes it knows how to market itself better than agencies.

“When you deeply understand your customer and product, you’re going to be better, there’s no doubt. There’s no way that can be communicated by weekly phone calls. You just miss too much,” said Cooper, who arrived at the company two-and-a-half months ago following five years in online marketing at Orbitz.

But unlike the wave of internet juggernauts built on discovery and communication, like Google and Facebook, Groupon has not shied away from advertising, and its ads are ubiquitous on Google’s ad network. According to Nielsen, Groupon served over 600 million U.S. display ad impressions in August. (The company won’t reveal its online ad spending.)

Cooper, who calls Google “a huge partner,” said they are not relying only on ad networks and self-service ad platforms. It has also inked deals with sites like IAC-owned Evite, which shows a Groupon deal when users respond to an invitation. And it courts national deals, such as a Gap promotion in August that saw 440,000 coupons redeemed and netted the company $11 million in revenue.

It’s also riding the wave of earned media with a PR operation that includes its “Live Off Groupon” challenge, which came from CEO Andrew Mason. The winner, Josh Stevens, is trying to live off Groupons for a year.

He’s garnered 1,900 Twitter followers, nearly 8,000 Facebook Likes and, more importantly for building the brand outside the Web crowd, appeared on a Today show segment in May. The idea is to not only help build awareness of the service, but further cement its quirky brand image, said Cooper.

The question for Groupon is whether it can continue its meteoric growth with this playbook. Cooper said nothing is off the table, including more traditional branding approaches involving TV.

The company faces a raft of competitors like Yipit, Gilt Groupe and especially LivingSocial, which has raised nearly $50 million in venture capital. (Groupon has raised $150 million.)

LivingSocial CEO Tim O’Shaughnessy said that such social platforms have altered the marketing playing field. For instance, he said, LivingSocial has already built four products that have attracted over 1 million users.

“There’s not a lot of agencies that can say that, if any,” O’Shaughnessy said. “It’s a core piece of how we evolved. We know how to reach consumers and reach them with the right messages.”

Of course, history has shown that even fast-growing internet companies sometimes need to take more traditional steps, especially as the competition heats up. Google never advertised — until it ran a commercial during last year’s Super Bowl.

“There comes a time when a brand becomes big enough that it needs … to leverage the power of TV,” said Cotton. “But they can grow quite a lot more by continuing what they’re doing.”

Media Development Authority (MDA) and multi-agency outfit Interactive Digital Media Program Office (IDMPO) will invest SG$ 30 million ($22.3 million) to grow digital advertising spend in Singapore.

The announcement was made by acting minister for information, communications and the arts, Lui Tuck Yew who said that the funds will be spent over the next three years in support of the Digital Advertising Alliance’s goal of increasing the current 5.3 per cent ad spend to 20 per cent by 2020.

The newly-created Digital Advertising Alliance comprises of five trade associations, namely the Association of Accredited Advertising Agents Singapore (AAAA), the Interactive Advertising Bureau (IAB), the Institute of Advertising Singapore (IAS), the Mobile Marketing Association (MMA) and the Singapore Infocomm Technology Federation (SiTF)

The Alliance seeks to encourage initiatives supporting the development of talent, enterprise and innovation, as well as standards and guidelines.

Initiatives by members of the Alliance include the encouragment of innovative technologies to measure the success of digital advertising campaigns. To do this, they felt it was important to recognise the importance of having accurate data and industry-wide standards and guidelines in place.

In response, the IAB has launched an Asia-focused consumer barometer that provides media metrics about online audiences to small-and medium enterprises. The MMA launched its certified mobile marketer programme for Asia-Pacific, and is looking into introducing guidelines for consumers best practices in Singapore.

Yahoo Singapore’s Ken Mandel, speaking in his capacity as IAB chairman, said, “Recognising the importance of capturing accurate and transparent data for the effective measurement of digital campaigns, we have published the Singapore Interactive Advertising Bureau’s revenue report, a bi-annual report published to illustrate the current value of the interactive industry in Singapore. We are glad to have received MDA’s support for our inaugural report for 2008 and 2009.”

Angeli T. Beltran, regional senior director at Dentsu Asia’s digital division said that the agency hopes to spawn innovative solutions worldwide by leveraging from its award-winning innovations and developing breakthrough digital solutions through its regional network.

“Singapore is the ideal place to launch these new innovations outside of Japan because of the country’s developed and advanced digital infrastructure and its government’s support in propelling the digital advertising industry. This is the main reason why Dentsu Asia has chosen to have our digital division headquartered in Singapore,” said Beltran.