Latest Articles
More Web 2.0 Needed In Schools
An influential think-tank calling for more Web 2.0 use in school and technology experts agree, arguing that children should get used to collaborative tools before they enter the workplace.
moreUK Council for Child Internet Safety Launches
The UK Government launched its programme to help protect children from exposure to potentially harmful content on the Internet, including some forms of advertising. New Media Knowledge spoke to AOL, one of the companies involved, to see what real impact the new group would have.
moreUS Presidential Election Gets Social
Last week, Twitter launched its US Presidential Election microblogging site and, with social media likely to play a big part in the outcome, politicians this side of the pond should be looking closely at its impact, experts say.
more- i-design 08 - Brendan Dawes, My Interactive
- i-design 08 - Simon Waterfall
- YouTube gets into Top Gear
- Goldfarming for Fun and Profit
- Sky Appoints its First Head of Mobile Advertising: an Industry Viewpoint
- Industry Welcomes Intel/Yahoo! Internet TV Tie-In
- Media Landscape vs. Media Ghetto
Related Articles
YouTube gets into Top Gear
With the BBC launching its own Top Gear YouTube channel, Tim Hoang looks at the reasons for this move into video-sharing sites. more
Sky Appoints its First Head of Mobile Advertising: an Industry Viewpoint
With broadcaster Sky strengthening its mobile ambitions with the appointment of Tim Hussein, NMK spoke to Russell Buckley, newly appointed chairman of the Mobile Marketing Association, about what this means for the industry. more
Industry Welcomes Intel/Yahoo! Internet TV Tie-In
Chip giant Intel and media outfit Yahoo! have come together to create the ‘Widget Channel’, a television application framework primed for TV and other consumer electronics devices. more
TV Struggles With Ads
Traditional TV advertising is becoming less impactful as viewers begin to create their own schedules, according to eMarketer. Technology such as digital video recorders (DVRs), video-on-demand (VOD) and time-shift TV has meant that advertising is often skipped or avoided altogether. more
Social Networks and Profitability
Despite early promise, a huge question mark facing social networks has been their ability to properly monetise both the huge amount of information they have on their members and their large reach. Although advertising spend on networks continues to grow, it only represents a small percentage of the overall Internet advertising budget. Tim Hoang reports on how social networks are looking to deliver for investors. more
Related Events
Building Communities & Networks Online: The Clinic (NMK)
Location: TBC Central London
Price: £165.00 Reduced to £115.00 if you are eligible for a discount.
On-Screen Advertising Creativity Summit 2007 (Marketing Week)
Location: St Giles Hotel, London, WC1B
Price: Reduced to £699.00 if you are eligible for a discount.
Building Communities & Networks Online - Level 1 (NMK)
Location: The Space London - 57-61 Mortimer Street, W1W8HS
Price: £250.00 Reduced to £200.00 if you are eligible for a discount.
Future Film and TV Distribution and New Media (BECTU)
Location: The Auditorium, BT Headquarters
Price: Reduced to £0.00 if you are eligible for a discount.
Interactive TV made Easy
Location: 01Zero-One, Hopkins St, Soho, London W1F 0HS
Price: Reduced to £80.00 if you are eligible for a discount.
Communities Drive TV Versus Web Ads
StumbleUponJonathan Guthrie, CEO of MGt, discusses how the television industry is fighting back against the Internet advertising bogeyman - through communities, web aquisitions and multiplatform CRM...
Jonathan Guthrie, CEO of MGt, discusses how the television
industry is fighting back against the Internet advertising
bogeyman - through communities and web aquisitions and
joined-up, multiplatform CRM...
By Jonathan Guthrie
[Register and post your own comments
on this article below...]
Television executives are losing sleep over the threat of
Internet advertising.
The anthropomorphic manifestation of their nightmares is a
Google-coloured bogeyman, stealing in through the window during
the dead of night to rob yet more advertising revenues from the
stash beneath their mattress.
And when Google overtook Time Warner in June 2005 as the world’s
leading media company by stock market value, it seemed
commercial television’s worst dreams were coming true.
As a business, Google relies on Internet Advertising for 99% of
its revenues. Its market dominance is predicated on the fact it
does search better than anyone else (at the moment). And despite
this meaning that Google’s business is built on a technological
house of cards, investors value it at over $100bn.
Tip of the web advertising iceberg?
Why? The simple reason is that, despite the risk, investors
believe there are untold riches to be made from Internet
Advertising and that we’ve only seen the tip of the iceberg thus
far.
Internet advertising has a 5% share of global advertising spend,
yet 20% of media is consumed online. Google-ites readily point
to this discrepancy as evidence that the traditional media ice
caps are on verge of melt-down, which will result in a flood of
revenues for Internet advertising businesses at the expense of
print and television.
UK market breaks £1bn barrier
This prognosis is seemingly verified by advertising expenditure
figures from the UK’s Advertising Association (AA) which show
Internet ad spend grew just shy of 50% during 2005.
Additionally, a recent study by the Interactive Advertising
Bureau and PricewaterhouseCoopers revealed that the UK online
advertising market broke through the £1bn barrier for the first
time at the end of 2005.
So has Internet advertising driven a stake through the heart of
commercial television?
Not just yet, according to AA figures. The latest Quarterly
Survey of Advertising Expenditure found that television ad spend
was flat (once the numbers have been adjusted for inflation).
However, spend across other mediums were significantly down,
suggesting that growth in Internet advertising is starting to
bite deep and that it will only be a matter of time before it
eats into television ad spend.
So how does the commercial television industry fight back?
Arguably the biggest advantage online advertising has over
traditional media, aside from low entry-level costs, is personal
relevancy - and hence effectiveness. An individual’s online
experience of advertising is contextual and real-time, driving a
high response rate that translates into revenues and a high ROI.
Broadcasting, conversely, by its very nature is an impersonal
mass medium that has limited or no direct relationship with
viewers. To address this, broadcasters have looked online and
learnt the lessons from the dot-com winners – that community is
king.
Communities top the TV aquisition trail
Created by the merger of Carlton and Granada, ITV controls more
than half of UK’s £4bn television advertising market and is
therefore somewhat of a bell-weather for the industry. In June
2005 it acquired Friends Reunited, pointing the way for
commercial TV. According to Jeff Henry, director of ITV
Consumer, the £120m acquisition was a “key step in the delivery
of ITV’s strategy to drive new revenue streams for the company”.
Aside from purchasing online real estate to bolster ITV’s Web
presence (which already included services such as online dating,
recruitment and classifieds), ITV effectively bought a
ready-built online community of 15 million people.
On a bigger scale, Rupert Murdoch’s News Corporation (which owns
36% of BSkyB) paid $580m for MySpace last year. MySpace is the
world’s biggest social networking site, claiming 57 million
registered users, and is currently ranked the fifth most popular
English language site on the net by the Alexa ratings
service.
Channel 4 is also a strong advocate of communities and hosts a
vibrant site at www.channel4.com/community.
Evolving the advertising model
The list of examples could go on, but the point is clear:
Creating a strong community offering will enable broadcasters to
evolve their advertising models and create a much more
compelling value proposition.
Being able to provide a joined-up media environment that extends
reach from the TV screen to PC desktop and mobile handset,
combined with the powerful cross-channel pull through effect of
‘community’, will enable the delivery of high-impact, integrated
multi-channel campaigns. The rich data collected via community
offerings will also enable much more sophisticated segmentation
and accurate targeting of key consumer groups.
New agility required from TV players as Google explores
video
Critical to making this all of this work though, will be the
ability of commercial television companies to manage
multi-channel CRM – not something which many count as a core
expertise. And since speed will be of the essence, with
go-to-market timeframes of days or weeks not months or years,
it’s likely that many will choose to strategically outsource to
specialist CRM service providers.
We can also expect to see a flurry of announcements around the
introduction of new pricing models. For example, Sky announced
in November that it was slashing the cost of response
advertising through its interactive television platform by 80%.
According to Robert Leach, head of interactive services at Sky
Media, the strategy behind the aggressive pricing is to make
integrated campaigns much more attractive and affordable, even
for low-end FMCG goods “such as washing powder”.
But just as much as commercial television companies are
encroaching on the Internet domain to create a joined-up
proposition that is both highly personal and relevant, so Google
has made its first foray into TV content with Google Video. The
race is therefore truly on to deliver the advertisers’ panacea
of a rich multimedia, multi-channel environment with community
at its heart.
And given the significant investments being made by the likes of
ITV, News Corporation, et al, you never know, it may just be the
turn of Google executives to start losing sleep.
Jonathan Guthrie is CEO of MGt.
About MGt:
MGt is a leading provider of outsourced support services
specialising in the digital broadcast and new media markets. The
company was founded in 1998 and is headquartered in Kirkcaldy,
Scotland. MGt’s knowledge and experience in delivering
technologically advanced and operationally complex projects has
resulted in continuous expansion and growth with now over 1200
employees located in six sites within the UK. The company offers
a full range of pay and transactional services as well as
customer management and professional services to some of the
biggest names in the UK TV industry. At the heart of MGt’s
success is its service delivery technology platform with a
leading edge CRM system, Profile™, providing fully integrated
and automated multi-channel front and back office functionality.
Broadcasters such as BSkyB, Discovery Networks, Freeview,
Playboy TV UK, Sony Entertainment and Top Up TV rely on MGt’s
expertise to look after their revenue management and viewer
relationships. www.mgtplc.com
The University of Westminster is a charity and a company limited by guarantee.
Reg. No: 977818 England. Reg. Office: 309 Regent Street, London W1B 2UW
© 2008 New Media Knowledge.
Site created by Green on Black and designed by Imagination
Comments
You must be logged in to comment.