Seven reasons why digital will account for half of all UK ad spend in 2015

Digital advertising is set to account for half of all advertising spend in the UK in 2015, according to one research group. We discuss why that is, and why the UK is the first to reach that 50% landmark.

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Strategy Analytics has claimed that half of all advertising spend in the next financial year will be on creating content specifically for digital. That represents a total digital spend of £8bn (an increase of 9.5% on digital ad spend compared to 2014), with the increases predominantly coming from social media, mobile and video.

The UK is the first country to reach this landmark figure. By comparison, just 28% of ad spend goes on digital in the US.

But why is this, and why are brands focusing more of their efforts on digital?

Digital dominates our attention


In 2015, there are endless distractions all vying for an audience’s attention. Brands are bombarding their audiences with messages around the clock, across every conceivable channel, in an attempt to capture just seconds of their customers’ increasingly precious attention.

Conversely, it has never been easier for those audiences to tune out those very same messages. On Demand TV and PVRs make it easier than ever to avoid television ads, we’re oblivious to ambient advertising and we seek the content that we want to consume on our own terms.

Whilst audiences have become increasingly adept at filtering out the noise and the distractions, digital doesn’t face the same challenges (or at least, not in the same way), largely because it actually facilitates us in blocking out the noise. Want to watch your favourite film without being disrupted by ads? You can legally stream it, and thousands of others, for about the price of a lunch every month.

That means that brands can no longer succeed by investing primarily on traditional media. Instead, both advertisers and audiences have been empowered to produce and publish their own content and bypass the gatekeepers that make traditional media difficult, slow and expensive. Brands now have much greater freedom in defining their owned, earned and paid media strategies.

Digital advertising is effective because it actually allows us to drown out every other form of advertising. Instead of being bombarded with what we don’t want, digital allows us to seek, and be sought by, the brands we do want.

Consumers love digital communication, and they expect brands to be there


Modern consumers expect brands to be where they are active, and communicate with them on their terms. Social media has made it easier to communicate with, recommend and complain to brands and those brands that aren’t present in those channels are failing to control consumer sentiment.

The days when brands could expect their customers to remain on hold whilst listening to recorded messages telling them how important their call is, are long gone. It isn’t acceptable to offer a response to an email complaint in “five to ten working days” and people expect to access what they want on any device.

Lots of brands are incredibly effective at this, as evidenced by Virgin Trains’ ability to deliver a fresh roll of toilet paper to one somewhat “distressed” commuter and KLMs 24/7 Twitter customer service channel, but every brand needs to be striving for that level of engagement and interactivity – because that’s what their audiences expect. This places much greater emphasis on owned and earned media.

Now, it’s personal

personalised marketing

If consumers expect brands to be where they are most active, they also expect them to be talking to them about issues that actually interest them.

Mass marketing messages, the ‘one size fits all’ solutions, are very effective when there are so few distractions for our attention. But when there are thousands of voices, all saying the same thing, we naturally gravitate to the one that engages us on a much more personal level.

Brands are investing significant resource in understanding their audiences, how they engage with brands and how they use digital. Doing so allows them to deploy highly targeted and personal messages that appeal to our core needs and desires.

This level of personalisation has allowed niche start-ups to stand out from the crowd and big brands can equally use this approach to contact people in ways that they are much more receptive to.

It’s measurable


Digital has long been sold as a highly measurable marketing channel. Ad spend is easily monitored, campaigns are optimised and established metrics like traffic, search rankings, click through rates and conversions paint a clear picture of the success of a campaign.

What we have seen in more recent years is digital marketing attribution develop to become much more closely integrated with other consumer touch points. We have gone beyond ‘last click’ attribution to a model that paints a much clearer picture of how consumers interact with brands and the buying process.

Mobile device tracking means that brands can now bridge the gap between online and offline touch points, understanding an initial click translates into an in-store visit. The stores themselves are becoming much more digital, breaking down the barriers between two very distinct channels to create one, holistic experience.

Getting your content out there is harder

mark zuckerberg facebook1

Facebook, Twitter and Google are all fighting for a share of TV’s big advertising budgets. These networks have highly captive and loyal audiences, they understand more about their audiences than any other form of media and they can serve content in an endless number of ways to any device.

As the levels of content increase substantially, these networks have to find ways of filtering out the noise and preventing their users from being swamped with bad, irrelevant content. Similarly, they have to make sure that the best content does get through. If they don’t, their users will go elsewhere.

One way for brands to ensure that their content gets through those filters is to create content that is so unique, so remarkable and so engaging that search engines and social networks simply can’t ignore it. But that isn’t easy. The other way is to pay for it.

As social networks start to exert more control over the distribution of branded content, paid distribution suddenly becomes a much bigger factor in a digital strategy.

And of course, that’s music to the ears of Facebook and Twitter.

Digital infrastructure is growing

broadband infrastructure

For many people, the soundtrack of the internet was a series of clunks and screeches that were the unmistakable sound of a 56k dial-up modem. We’ve come a long way since then.

Governments around the world are investing huge sums in digital infrastructure. From superfast fibre broadband to 5G mobile networks and city-wide Wi-Fi, there has never been a greater focus on ensuring that the infrastructure that keeps us connected is as fast, reliable and secure as it can possibly be.

Such investment in infrastructure is what is changing the way in which consumers and brands use digital media. Digital video ad spend in the US has grown from $2.89bn in 2012 to $5.89bn in 2014. It’s forecast to reach $12.27bn in 2018. (IAB, PwC).

These developments require investment from brands, with the growth of mobile in particular placing demands on brands for responsive websites, mobile applications and responsive content. These opportunities demand new skills, new investment and new thinking.

Brands are investing in sought-after digital skill sets


The days of brands getting away with poor quality content, designed with search engines rather than users in mind, are long gone. Users have never accepted such content and now, search engines don’t either.

Instead, brands are having to invest resources into producing quality, targeted and timely content that serves a genuine purpose, fills a consumer need, and is delivered in the right way. However, this brings its own challenges.

The 2014 Econsultancy Salary Survey found that digital marketing was the biggest area in which brands were facing a skills gap, with 31.7% of those surveyed identifying it as a problem area. The second biggest area (17.1%) was social media, with mobile the third biggest at 11%. That means that 60% of brands are experiencing a skills shortage in at least one digital discipline.

Producing both the levels and quality of content is also a challenge. Econsultancy’s Digital Statistics Compendium for 2015 found that the biggest content marketing challenge for UK brands was producing enough content, with 21% reporting that the simply didn’t have the resource to produce the quantity that they wanted. The second biggest challenge, reported by 19% of brands, was producing content that actually engages.

We are starting to see brands invest significantly more in digital resource, with many brands now creating dedicated brand newsrooms to ensure that they are creating content that is perfectly timed, in the levels that they believe necessary to maintain their digital presence.

It is that investment in resource and skills that has resulted in branded content capitalising on (and in some cases, taking over) large parts of popular culture. Every year events like the NFL Super Bowl and The Oscars generate hundreds of examples of real-time branded content, much like the FIFA World Cup did in 2014. No other channel allows this to happen.

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