Tag Archives: Digital Advertising

Digital to Drive Media Growth over the Next 4 years

digital advertising spend increasesAccording to a recent study by Pricewaterhouse Coopers (PwC), digital innovation is expected to boost the value of the UK’s media industry by an average of 3.7% a year over the next four years, to total £59.6bn by 2015.

The UK is expected to keep its position as the world’s fifth biggest media market in terms of value by 2015, driven by digital products.

It is predicted that the only segment of the UK market set for double-digit growth over the period will be internet advertising (11.2% annually to 2015), providing new sources of income for traditional media owners expanding onto new platforms.

In the UK, it is also predicted that the payment of subscriptions and the licence fee would keep the television industry as the most valuable media sector by 2015 with a value of $14.7bn, an average yearly increase of 4.2% over the four years.

Of the 12 countries with adspend in media and entertainment markets above $25bn, only earthquake-affected Japan and developed Germany are expected to experience slower growth than the UK.

China’s market is expected to grow by 11.6% over this period to $148.2bn by 2015. Brazil will see a similar level of growth – 11.4% to $56.7m.

France is estimated to see a 4% growth annually to a wealth of $80.9bn by 2015; Italy is expected to grow by the same figure to a valuation of $51.3bn while Spain will grow by 4.8% to a valuation of $33.5bn.

The US, still the largest global media and entertainments market by a considerable distance, is expected to record growth of 4.6% to be worth $555.3bn by 2015.

PwC concluded in their findings that the next four years would represent a “golden age for the empowered consumer” as the demand for digital experiences increases and becomes the norm.

Convenience, experience and quality are the key ingredients that matter to consumers when choosing from the menu of content and delivery channels now available. Alongside these sit participation and privilege. Consumers enjoy playing an active role in shaping their content plus they are happy to pay for privileges which enable them to “jump the queue” to get earlier access to content.

The challenge for companies is reported to be in turning these five attributes into sustainable, profitable and engaged relationships with the consumer, by offering advantages which outweigh the attractiveness of free content.

Facebook set to be biggest display advertiser online

The leading social network, Facebook, is reportedly to become the world’s largest online display advertiser by revenue during 2011, surpassing both Google and Yahoo.

Forecasters are predicting a 95% increase in Facebook’s advertising revenues this year, jumping from $1.8bn to $3.5bn. Meanwhile, Google’s display networks, which include YouTube and DoubleClick, are expected to rise from $2bn to only $2.6 by the end of 2011.

Although this is very impressive growth from Facebook, these figures are based on only image and video advertising shown on a standard web page. Excluded from these statistics is Google’s revenue from search advertising, which produces considerably larger revenues each year ($25.4bn in 2010 and $8.3bn in Q1 2011 alone).

Facebook’s advertising revenues remain a fraction of Google’s search business, however, the social network’s 500m user base is impossible to ignore and and enabled them to lift their revenues rapidly.

A statement from Ian Maude, internet analyst at Ender said “Facebook is changing the dynamics, bringing new advertisers into the market as Google did in 2002 with search,”

It’s not known how long Facebook will retain this kind of advertising growth. With Google now setting display advertising on YouTube and its third party sites as one of its top growth priorities, Facebook is likely to be challenged  heavily as  the ‘top dog’ in online display advertising.

Four’s Opinion: This is not only a revenue victory for Facebook on image based advertising; Facebook has forced rivals like Google to make significant changes to their advertising game.

Google responded recently by creating a new search algorithm called “Social Search” which allows Google Search users to share and recommend search results on their search results. This applies to both paid and natural search listings.

It will be interesting to see how this competition will change the Web and Social networking as we know them.