The Story
The UK has claimed the record for being the first industrialized nation to have its internet advertising spending eclipse all other forms. This past year, advertisers spent £1.75 billion ($2.8 billion) online, which made for 23.5% of the total market. Television, the next biggest sector for advertising, only 21.9% of total spending.
There are a lot of numbers about what’s changed in the past year, though the most notable come from ads in search and online videos. 60% of the entire budget was spent on search, meaning a whopping total of £1.05 billion ($1.68 billion). That’s up 6.8% from last year. Online video grew 300% to about £12 million.
One UK analyst suspects that the online ad market may have peaked this past year. Adam Smith at Group M said that the continued growth of social networking sites, which have yet to gain massive support from advertisers, could well cause the online advertising market to shrink in the next year. Aside from that, Mr. Smith said that television could well rebound.
It Keeps Going
Mr. Smith is dead wrong: we have not yet reached the apex of the online ad market in the UK or in any other market.
In the next year, more than likely the online video advertising segment will continue to grow. It’ll take a while for that 300% growth to fall to a sustainable, constant rate. Right now, sites like Hulu are giving people good reason to give up standard livingroom televisions altogether. Why would I sit on my couch at a specific hour, a third of that time being spent watching awful ads, if I can just watch Castle on Hulu the next day?
One thing that a lot of analysts don’t seem to understand yet is that online advertising, especially in streaming video, is intrinsically more valuable than that on television. And this is simply because online advertising is more successful at causing an audience to receive the advertiser’s message. Part of it is that, unlike the five minute blocks of ads we get on television, ads on video streaming services usually last around thirty seconds. In those thirty seconds, I’m far more likely to remember that awful commercial for Axe Body Spray than I am to remember all that crap about the new product I need to call in to order.
The other way in which advertising in online videos capture mindshare is in that people actually watch it. In those fifteen to thirty seconds, users are far less likely to get bored of ads than they are in the television five minute block. Additionally, you can go and make yourself a sandwich in thirty seconds.
Search The King
So search is 60% of the advertising budget, which makes a whole lot of sense as it’s essentially the traffic director for the internet. The other day when people were freaking out that Google was starting to redirect to its own content? Yeah, that’s because Google essentially controls where 65% of users go online. So while advertisers may not know which sites you’ll ultimately visit, they do know that search will funnel you there. As the internet continues to grow, so will the money spent on search advertising.
