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EIAA Marketers’ Internet Ad Barometer September 2005 Agenda Background The Research What the Industry does well Barriers to Advertising Online Online’s Role within Marketing Strategy Online Advertising Expenditure Key Takeouts European Online Advertising Jupiter predict that the European advertising market will be worth over €80bn by end 2005 Online adspend will be worth almost €3bn, almost 4% in share The EIAA predict that online will account for 7% by 2008 The Research Objective To understand the role online advertising plays and attitudes towards the internet amongst key advertisers across Europe Methodology Enders Analysis commissioned to run research Telephone interviews with over 50 leading brand advertisers Focus on FMCG, Entertainment, and Automotive sectors Companies selected according to level of offline ad spend with top 20 advertisers by spend in each sector targeted Mix of marketing decision-makers with national and European responsibilities Participating Advertisers What the Industry does well Shattering the myth…. 1. Brand advertising doesn’t work 89% DISAGREE that brand advertising online is a waste of money Shattering the myth…. 2. Online advertising is an add-on to mainstream marketing strategy 81% think that online advertising is a vital component of their advertising strategy Shattering the myth…. 3. The internet only has a niche audience 88% of those questioned agreed that increasing broadband penetration is making the internet more attractive as a branding medium Shattering the myth…. 4. Online advertising can’t do both branding and direct Advertisers have similar broad marketing objectives when using online as with other media Strengths Audience reach topped the list of unprompted strengths mentioned with 58% highlighting its benefit. Other unprompted strengths mentioned were accountability, the interactive nature of the medium and the ability to innovate Strengths by Market & Country FMCG Reach/targeting perceived most important strength Followed by interactivity & ability to innovate Entertainment Reach/targeting perceived biggest strength Accountability more of a strength for UK Automotive Accountability biggest strength in UK Followed by ability to innovate and interactivity Barriers to advertising online Research & Measurement Unsophisticated research tools mentioned in highest frequency FMCG in UK also mentioned difficulty in comparing to other media in a large amount Only 3 out of 16 advertisers include internet in brand or media influence studies Many advertisers struggle to link online advertising to key marketing and business metrics Online Planning Insufficient standardisation of formats Insufficient dedicated staff and resources internally Labour intensive nature of campaigns Support Lack of enthusiasm from ad agencies cited as top barrier to using online Lack of internal senior management support one of top internal barriers Senior marketers interviewed keen to build relationships “at the right level” Role within Marketing Strategy Branding Vs Direct Response pan-European UK 100% 78% 69% 61% 61% 53% 39% 47% 39% 31% 23% Branding FMCG DR Branding DR Branding DR Branding Vs Direct Response pan-European UK 100% 78% 69% 61% 61% 53% 39% 47% 39% 31% 23% Branding FMCG DR Branding DR Entertainment Branding DR Branding Vs Direct Response pan-European UK 100% 78% 69% 61% 61% 53% 47% 39% 39% 31% 23% Branding FMCG DR Branding DR Entertainment Branding DR Automotive European Marketing Objectives FMCG Influencing purchase decisions the strongest objective Followed by changing brand perceptions Entertainment Influencing purchase decisions and generating sales UK & Europe less focussed on delivering customer contacts UK less focussed on increasing brand awareness Automotive UK – Increase brand awareness, change brand perceptions & generate sales Europe – Influence purchase decisions & generate sales Measuring Objectives Purchase decisions, branding, sales are most common objectives Yet brand awareness, purchase intent and sales are least used measures Click-through & registration measured across the board Although branding related objectives more prominent, measurement is still relates to DR Search Many advertisers already spending a significant proportion on search vs. display advertising Pan Euro FMCG advertisers invest very little in search UK advertisers intend to increase search spend Online Advertising Expenditure FMCG: Share of Adspend 3.8% pan-European UK 2.8% 3.5% 2.9% 2.2% 2.0% 1.5% 1.7% 2004 2005 2006 2007 Entertainment: Share of Adspend 6.5% pan-European UK 5.4% 5.2% 4.6% 3.5% 3.8% 4.0% 2.8% 2004 2005 2006 2007 Automotive: Share of Adspend pan-European 8.7% UK 7.5% 5.4% 5.8% 4.8% 4.2% 3.9% 2.7% 2004 2005 2006 2007 Reallocated media spend 2005 Majority of new spend coming out of traditional media budgets, particularly TV UK PanEuropean Share of increase from other media All TV Print DM FMCG brand advertisers 57% 29% 14% - 14% Entertainment brand advertisers 33% 33% - - - Automotive brand advertisers 81% - 41% 20% 20% FMCG brand advertisers 83% 33% - 33% - Entertainment brand advertisers 50% - 25% 25% - Automotive brand advertisers 50% - - 50% - European Online Adspend FMCG predicting smallest share of spend in 2007, Automotive largest Pan European advertisers predicting biggest growth in share of budgets Exception with automotive where UK advertisers predicting biggest growth in share Advertisers predicting budget reallocated from TV and print to increase online share UK also intending to reallocate some DM budgets to online Key Takeouts Summary Positive growth in spend predicted on all sectors Online already and integral part of the marketing mix with objectives following brand strategy and sales Barriers derive from research/measurement, ease of use and enthusiasm See you next at … For further information please contact Alison fennah [email protected] or visit www.eiaa.net