Advertising

UK Net Advertising Spending Beats Radio For First Time:
Cappuccino-supping Hoxtonites will be cheered by new figures showing that online advertising spending grew by a thumping 60% in 2004, edging ahead of radio in terms of market share for the first time.
The report, from the Interactive Advertising Bureau and PriceWaterhouseCoopers, declared 2004 to be “a coming of age year” for online ad expenditure.
The amount spent on the Internet sector in 2004 topped £653.3m (US$224.8m/€953.6m), an increase of 60% on 2003 (£407.8m), with new spending driven by increased broadband availability, consumer confidence and creative marketing campaigns.
The new figures push the sector’s annual market share to 3.9% for the year (up from 2.6% in 2003), overtaking radio’s 3.8% share for 2004.
The Internet sector looks to record further gains, with spending for the second half of last year reaching a record-setting figure of £373.9m (US$701m/€545.8) representing a 4.3% half-year market share.
The press remained the top dog of advertising spending, claiming a 41.5% market share for the year, ahead of TV (23.9%), direct mail (14.6%), directories (6.4%), outdoor (5.0%) and cinema (0.9%).
Online spending went against the overall general advertising trend, with total UK spend rising just 5.8% in 2004 to £16.9bn (US$31.7bn/€24.7bn) in 2004, based on figures from the Advertising Association and WARC.
Guy Phillipson, chief executive of the IAB, said: “There’s a massive cultural shift going on, forcing a change in consumer and advertiser behaviour. The triple crown of cheap broadband, cheaper technology and ever more compelling content is driving consumers to the Internet and pulling advertisers online.”
The report went on to assert that the online industry is now ahead of its targets to overtake the market size of Outdoor advertising by November 2007, adding that online ad revenues are now more than four times bigger than they were at the height of the dotcom boom in 2000.
“The audiences are there – more marketers need to wake up to the brand building and direct sale benefits of the Internet as a maturing medium.” enthused Phillipson.
Interactive Advertising Bureau
PricewaterhouseCoopers
5 April, 2005
Viacom Outdoor, Tube Trial For Digital Advertising Screens
The London Underground is to show digital advertising on its escalators for the first time, as part of a trial being handled by Viacom Outdoor.
Viacom, the current holder of London Underground’s outdoor advertising contract, will be trialing the display screens, (snappily entitled Digital Escalator Panels (D-EPs), on the side of the busiest escalators on the network at Tottenham Court Road station.
We spoke to the staff at London Underground and understand that tests will be carried out over the next five days. The screens will intially be mounted at the top of the escalator, but they are very concerned that the screen could initially attract too much attention from the public, causing a blockage at this very busy station.
The 66 video panels will blast out moving images and text, although LU has stated that they will not display TV or film advertising on safety grounds “for fear of distracting travellers”. Seeing as some adverts are better than TV shows, we’re not quite sure how they work that one out.
The screens also have the ability to link up, making the transfer of images from screen to screen possible. What is displayed and when will be controlled centrally at Viacom’s North London office.
Advertisers will be offered the option of time-specific advertising (such as theatres using evening slots, or fast-food at lunchtimes) although there is no prospect of retina scanning being used to provide personally targeted advertising, a la Minority Report.
Viacom is flogging five- and 10-second slots and has already scooped up seven clients for the service.
The trial is due to start within months, and if successful will be rolled out at other locations across the network.
Jon Lewen, Viacom Outdoor’s digital account director, was on hand to provide the required buzzword-peppered statement: “We are committed to exploring new and innovative ways to capture and captivate London Underground users. DE-Ps will both enhance the consumer’s experience of advertising on the Tube and offer revolutionary new creative opportunities for our clients to connect with this audience in a more creative and tactical fashion.”
With London Underground’s recent statement about introducing mobile phone coverage at tube stations, we wonder how long it will be before some bright spark suggests bombarding long-suffering tube passengers (sorry, ‘customers’) with interactive videoscreen/Bluetooth advertising.
Viacom
London Underground
1 April, 2005
‘Podvertising’ Supports Virgin Radio Daily Podcast
Virgin Radio is making highlights of its breakfast show available for digital audio players like the iPod, in what it claims is a first for “podcasting”.
The station began making its Pete and Geoff show available to download today, saying it is the first UK station to podcast a daily show.
Podcasting allows audio programmes to be downloaded and later replayed on a computer or popular digital audio players such as iPods, Creative Zens or Walkmans.
The BBC has already been experimenting with the new audio distribution model, introducing weekly podcasts of Five Live’s weekly sports quiz Fighting Talk after a successful trial using Melvyn Bragg’s ‘In Our Time’ series on Radio 4, downloaded by more than 70,000 users.
Listeners can sign up to the service on Virgin’s Website, with a link encouraging users to download the free iPodder desktop software for Windows, Mac and Linux.
Once subscribed to the service, listeners will get the latest show highlights every time they synchronise their MP3 player with their computer.
The Virgin podcast sidesteps the still-unresolved copyright issues of distributing music via podcasting by simply editing it all out – Virgin will serve up a half-hour edit of its four-hour breakfast show with all the music, news, weather, traffic and travel cut out.
Interestingly, the UK government Central Office of Information and online travel company Expedia are sponsoring the service via what Virgin cringingly describes as “podvertising”.
Virgin Radio sales director Lee Roberts said: “Radio stations have to adapt to the changing market and new platforms in order to create new revenue channels. We’re proud to be the first with podvertising.”
The Virgin sponsorship deal ensures that their podcasts will be relatively ad-free, although some advertisers may be reluctant to invest too heavily in a format where the ‘fast forward’ key only an iPod twitch away.
Pod casting has already taken off in the United States but has been slow to find an audience in Europe.
Although the format is already creating a few podcasting stars, it has to be said that most of the thousands of personal radio broadcasts currently available to download are home-made, rough-edged, and, frankly, pretty crap.
With increasing sales of MP3 players sales, there’s every possibility that Virgin’s commercial initiative may help push the format into the mainstream.
Virgin Radio Podcasts
Adam Curry Wants to Make You an iPod Radio Star (Wired)
iPodder
10 March, 2005
HomeChoice Floats Advert Targeting on IP VOD
Video Networks Ltd (VNL) has announced a range of enhancements to the TV functionality of its HomeChoice service, claimed to improve the overall customer experience.
The enhancements include ‘On-demand intros’ which lets advertisers place brand stings, messages, cross promotions or advertisements automatically before any on-demand programme.
These on-demand intros are designed to look like the trailers and cross promotions that are shown before the start of a movie in a cinema.
HomeChoice will soon be showing targeted trailers at the beginning of purchased films together with parental advice where appropriate. The trailers will be for films of similar genres or suitability for the audience.
Targeted advertising or sponsorship may also be included, with viewers being able to link from these on-demand intros into other video-on-demand content related to the brand being advertised.
The benefit for consumers is that because the programme itself is on-demand, they wouldn’t miss any viewing time by responding to these adverts.
Also announced is the ability to press a button on the HomeChoice remote control and receive an email containing details of programmes, products or services promoted on screen.
HomeChoice are yet to implement the feature, but have suggested that the technology could be used to include a URL taking you to a specific part of a company’s Web site, a PDF brochure for a car advertisement or a printable coupon allowing money off a specific product that has been promoted.
Dean Hawkins, Chief Operating Officer, Video Networks Ltd said: “Video Networks has already announced plans to launch The Ad Chart following an extremely successful pilot with Lowe Partners and these latest developments reinforce our commitment to creating alternative advertising opportunities on our platform. We will continue to build on these enhancements to build a comprehensive advertising strategy during 2005.”
Video Networks have also introduced the ability to broadcast short, channel specific, targeted messages that can start the moment the viewer tunes in – these could include messages promoting upgrade promos on channels.
Our first reaction when we read today’s announcement was not a good one: do hapless consumers really want even more adverts/promos/jingly-jangly PR assaults thrust at them every time they go near their video box?
Happily, we rang them up and learnt that viewers can skip the ads. Phew.
Video Networks Ltd
21 February, 2005
London Media Summit: McKinsey’s Five Key Media Trends
Piracy, technology, brand concentration, fighting for advertising dollars and a new consumer relationship are to be the hallmarks of commercial success in the international media markets in the near term, according to international consulting group McKinsey & Co.
Michael J Wolf, McKinsey’s Director and Global Leader – Media & Entertainment practice, outlined these challenges at Friday’s the London Media Summit 2004 organised by the London Business School in association with CNN and Deloitte.
In a knockabout, amusing presentation, Wolf emphasised that few media groups were generating profits currently and that a new tough approach was required to rebuild shareholder value. Although the tipping point – when TV channel income from advertising fell below 50% – was some way off, five key trends were emerging within media groups’ strategies to counter ad revenue decline.
Number one was a marked rise in aggressive competition for advertiser’s dollars. Audience fragmentation and the advertiser’s trend to ‘up’ their mix of below-the-line media spend have left agencies sharing a smaller cake with what’s left flowing to low risk, conservative programme slots. Next was a move from simply owning the content or the means of delivery to owning the audience and the opportunities that give rise to direct merchandising and long term revenues.
Technology was the third new and major influence – from the ability of viewers to skip ads with TiVos, to the enhanced ability to connect interactively with audiences, as evidenced by the 100m registered users of Everquest in China. Wolf used the now tired sounding expression ‘lean back or lean forward’ technologies by way of illustrating the diversity of ways now being employed to engage with viewers.
He then moved onto IP and the risks of piracy before concluding with his fifth trend; brand concentration. Wolf said more funds would go into developing the best top brands at the expenses of lesser ones. That development would include enhancing the quality of the output and cited HBO as a prime example of where quality led to profitability.

:SP: Clearly McKinsey clients are primarily the current Media Majors, the huge organisations that currently control the output and access to the media, not the fast moving, smaller media companies that some feel are coming up to out manoeuvre and potentially bite them. We’re somewhat confused by his view of brand remaining important when anyone who has lived with a PVR for any period of time knows full well that viewers couldn’t care less where the content comes from. These comments also don’t take into account the thinking around the Long Tail. As to the final point on raising quality – we heartily applaud any thing that brings higher quality to the viewer.
London Media Summit 2005
8 November, 2004
Nokia’s First NFC Product – Why it’s Important
Nokia has lifted the lid on the world’s first NFC (Near Field Communication) equipped mobile phone by adding the special NFC clip-on shell to their 3220, a tri-band camera phone that is available in two versions (Euro/Asia & America). With its build-in NFC shell, the phone is the latest step in the development of innovative products for mobile communications.
NFC is essentially a contactless technology that allows for short-range two-way wireless connectivity using a tag and a reader. Developed jointly by Philips, Sony and Nokia, it is based on short-range (10 cm, 3.9”) radio frequency (RF) technology, an NFC-enabled mobile device lets you access services or operate your mobile device by placing it near a tag or share information by bringing two devices close to each other. When you’re near a tag, your mobile phone reads the tags content by emitting a short-range radio signal that powers up the tag’s microchip, allowing you to execute an action, such as opening a Web page, calling a number, or sending an SMS. The opportunities for the Media business, in particular advertising are immediately obvious. People passing posters, wanting to find out more information are able to directly request it there and then, at the point of impulse. It could them be immediately delivered by bringing up a Web page of info or received via email for later consumption. Vivendi Universal has also trialed selling tickets to films, simply by placing the phone on a NFC spot on a film poster. Similarly, by communicating with an enabled device such as a TV, the mobile device can send a picture to it It is currently unclear to us how much bandwidth will be offered by NFC, but we would assume it will be low, being more along the lines of ZigBee than Bluetooth. If this is the case, transferring a 1Mpx image will be a slow and painful process.
NFC is different from other contactless or RFID technologies in that it has a very short operating distance and also allows two devices to interconnect. The effective distance of an NFC solution depends on the tag design and the reader, but is only a few centimetres in Nokia’s solution.
The potential benefits of the technology include improved usability, easier access to services and content via physical objects, convenient sharing of digital items between devices by bringing them next to each other – such as swapping electronic business cards with clients – and local payment and ticketing capabilities. This has already been trialed in the Frankfurt transport system.
“Touch-based interactions will improve the consumer experience of existing services and create new opportunities for users to benefit from their phones. This technology has the potential to significantly improve the way operators provide and users discover and activate different mobile services,” said Gerhard Romen, Head of Market Development at Nokia Ventures Organisation. ‘By introducing the new Nokia NFC shell, Nokia clearly demonstrates strong commitment to offer users an intuitive wireless experience.” Samsung Electronics has also mentioned that it intends to manufacture NFC phones.

Tech Background to NFC – NFC technology evolved from a combination of contactless identification (RFID) and interconnection technologies. NFC operates in the 13.56MHz frequency range, over a distance of typically a few centimetres. NFC technology is standardised in ISO 18092, ISO 21481, ECMA (340, 352 and 356) and ETSI TS 102 190. NFC is also compatible with the broadly-established contactless smart card infrastructure based on ISO 14443 A, which is supported by Philips’ MIFARE technology and Sony’s FeliCa card.
Nokia 3220
4 November, 2004
In-Game Ads in the Ascendance
With the effectiveness of TV advertising on the wane other avenues are being pursued. Chrysler Group are doing it, McDonalds are doing it – advertising on game consoles instead of the screen.
The fantasy world of video games is rapidly becoming prime advertising space. According to Nielsen Media Research, TV viewership among men aged 18 to 34 declined by about 12 percent last year, while they spent 20 percent more time playing video games. So, if you want to successfully target a niche market pick the console rather than the screen.
Chrysler Group has already cottoned on to this trend and they are availing of some simple measurement science to see how they can do it better. Nielsen Entertainment and Activision Games have launched a test to measure how consumers react to ads in video games. The test uses audio encoders to identify when and for how long players are exposed to product placements within the game, and to do this they will use the exposure of Chrysler Group’s Jeep in the newly released ‘Tony Hawk’s Underground 2’.
Nielsen also conducted pre- and post-test surveys with 500 male gamers aged 13-to-34 in their research. Two-thirds of respondents actually believed real-world products and advertising in the games made them more realistic. The more highly integrated the brand was in the game the more it was remembered, with 40% even admitting that they would be more inclined to buy the advertised product.
Four years ago the Chrysler Group did not even have a budget for video game advertising but now it represents 10% of that budget, with Chrysler, Jeep and Dodge vehicles featuring in more than a dozen games. Conversely, their spending on TV and print ads has dropped. Chrysler first experimented with this medium a few years ago in the “Tony Hawk’s Pro Skater 2” game where players had to do rail stunts over a Jeep to get points, or go through game levels festooned with Jeep billboards. In “Tony Hawk’s Underground 2” they have gone a step further – players who want game upgrades will have to go to Jeep’s Web site to download them.
Activision and The Chrysler Group have also just announced the Chrysler brand will feature in the upcoming simulation game, The Movies.
Nielson
26 October, 2004
Targeted adverts for P2P
AlmondNet, Inc. and Intent MediaWorks will separate the appropriate from the irrelevant to exclusively bring you only the good ads.
Should your browsing habits make you fair game for any advertiser or should you only be subjected to ‘relevant, targeted interactive ads’? The latter option is obviously a lot more preferable, and if done in the right way, it shouldn’t be too much of a nuisance.
Two technology companies in New York and Atlanta are trying to achieve the latter option and have consequently signed a deal whereby advertisers can target specific ads to P2P users.
During the download process users are served ads via the INTENT MediaWorks client, using AlmondNet’s technology, which is cookie based and they say doesn’t collect personally identifiable information, adverts should be targeted.
The two companies involved are AlmondNet, Inc., a New York-based advertising technology company that offers web publishers targeted ads based on audience attributes, and Intent MediaWorks, an Atlanta-based company that provides a technology platform for secure distribution of content via legal peer-to-peer networks. They have signed a co-operation agreement whereby Intent MediaWorks will use AlmondNet’s patent-pending behavioural targeting technology to target ads to P2P users who use their secure distribution platform.
Intent MediaWorks already has technology that allows recording artists and music companies to distribute their digital content securely via major P2P systems like Kazaa, Gnutella, and Bit Torrent. INTENT say they already has 600 artists on its books for music distribution.
Ads come in good, bad and ugly flavours, not to mention irrelevant and downright inappropriate. As usual it is the 18-34 year old that is being targeted in this space, and while one has to be slightly suspicious about users being targeted based on their online behavior and interests, since no ad campaign is altruistic, at least they are being spared the irrelevant and inappropriate.
We’re not certain that anyone who is downloading via a P2P network will be looking at their screens while the files are coming down, it’s normally a fire-and-fire operation. If this is widely-so, we’re not sure who is going to pay to advertise?
INTENT MediaWorks,LLC
AlmondNet, Inc
25 October, 2004
Google’s Profit Growth Continues
Anyone who was concerned that Internet search giant Google would be hampered by going public in August can breathe easy as Google announces, in its first financial results since floating on the stock market, that its profits have more than doubled.
They have posted third quarter net profits of $52m (£30m), up from $20.4m in the previous year, and its share price has now surged more than 90% since its initial float.

Not bad for a company, which was started in a garage by two students and overtook the established search engine giants Yahoo! and Microsoft to become the most popular search engine in the world. If only so many rock bands who started life in that same auspicious incubator could have done so well.
Many have argued that Google is an advertising company, not a search company. As Google strength as a search tool has surged, so has their income from advertising. Demand for their paid-for search text-ads, where advertisers are increasingly willing to pay high prices to have their site listed along side search results in the knowledge that they only have to pay if a potential customer clicks on their link. The move to putting their advert on many other sites, targeting them closely to the pages content by automatically understanding what the page was about, significantly increasing their reach.
Google hasn’t rested on their advertising laurels, have now moved into email, a core business for its rivals Yahoo! and Microsoft, and it also operates a comparison-shopping search engine called Froogle, which recently launched in the UK. It’s not stop there – it also recently announced a test of a new desktop search product in the US that allows people to search Google using mobile telephone text messages in an ongoing game of chess where they are trying to anticipate what a rival like Microsoft will do.
Personally, I get nervous when ‘the suits’ move in on previously laid-back but remarkably successful technology companies. Google and rival Yahoo each get a significant portion of their revenue from the lucrative Web search advertisements, and while some analysts predict that growth in this area will slow down in coming years, its hard to predict where Google will end up if this potential difficulty is realised.
Google
22 October, 2004