Digital agencies boom, but trail major agencies
MediaComment: In an era dominated by digital conversations, it’s no surprise that this industry is thriving. Having seen the need for high quality digital teams within their agencies, major media agencies have spent vigorously in this area, to create an individual yet integrated digital business. These departments were once seen as a weaker part of the company, profiting from bigger media clients wanting to trial a bit of digital, with specialist digital clients preferring smaller digital specialists like I-Level. However, times are now changing and clients now know they can deliver a more effective, efficient solution by working with the same agency for both online and offline. This has seen companies such as O2 moving their digital business from digital specialists to much larger, integrated media agencies
matthew.bamford-bowes@mediacom.com
Concerns as Google fails to click
MediaComment: It’s easy to get drawn into the Google PR machine but (as we have been suggesting at Media.Com for a while) their model is actually surprisingly fragile. With almost all of their revenue coming from search pay per click they have desperately been trying to diversify through acquisition (Youtube) and product release (Gmail). The fact is, virtually none of these have generated the levels of revenue they require to maintain Google's stellar growth and share price performance. There's also another interesting point here: that perhaps the better the results in the natural listings (which Google is also working hard on) the less people need to rely on the sponsored listings....which creates a huge dilemma for Google. Of course, like any business Google may just decide to up the prices to maintain revenues. This is surprisingly easy in a market as untransparent as the search market. Watch out for Google click inflation over the next few months...
Outdoor sector eyes £1bn mark as digital role grows
MediaComment: The general Out of Home marketplace has remained relatively steady with the top advertisers continually returning to the medium with a large proportion of their total media spends; entertainment brands still claim the top category spot, spending a reported £171.7 million in 2007. However for the first time in twenty-one consecutive quarters, Q4 of 2007 saw a decrease in spend on Outdoor and this decline was reflected across the whole industry landscape. Despite what critics may say though, the medium will continue to grow in 2008, as those involved carry on pushing the boundaries through creativity and innovation. Especially highlighted with the extensive rollout of digital formats at roadside 48 Sheets and digital rail and mall 6 Sheets, this can only serve to increase revenue and hopefully ensure that Out of Home reaches the £1bn mark in 2008.
Online threat to radio has been overstated...
MediaComment: The Radiocentre has revealed research that suggests advertisers who have abandoned spending on radio in favour of online, will eventually return to radio as an advertising medium. The research, conducted by media strategy company Human Capital, questions the internet's ability to sustain the significantly higher share of ad spend over radio, in results to be published next week. Media buyers surveyed are reportedly more optimistic about investing in radio than a year ago. Radio listening has remained strong, with nearly 90% of the population tuning into radio of some form (whether BBC or commercial). The renewed interest in radio as an ad medium seems to be reflected in the current buoyant marketplace - it is now up to media owners to invest in maintaining and building audiences and enabling advertisers to connect with listeners in new, interesting ways.
