SimonWaldman.net

Today the IAB released the final figures for digital advertising. This is now a £2bn market and digital’s total share of total (ie including classified) revenue was 12% in the final half of the year, 11.4% for the whole year.

The headline story is that digital has now overtaken national newspapers (shucks..I can remember when we were pretty chuffed to overtake outdoor!).

Although, before I start going nah nah at my print colleagues, the counter point to this is - err not in most national newspaper companies it hasn’t. The lion’s share of this revenue is still split between Google (which dominates the largest sector, Search), Yahoo, MSN and AOL (who dominate display). But, I’ll grumble about that another time.

The point is that digital takes a higher share of advertising in the UK than any other country. That 11.4% compares to a global average is 5.8%.

It’s funny because you still here grumbles from (some) clients about their agencies not ‘getting it’, likewise you hear grumbles the other way. Digital agencies and their traditional counterparts love to grumble about how the other one doesn’t get it. And media owners aren’t above the odd grumble about everyone and anything. Yet, somehow, in the midst of everyone grumbling and absolutely no-one getting it whatsoever, a bigger proportion of advertising budgets are being shoved onto the net than anywhere else.

How did that happen?

Is it Guy and Richard’s excellent work at the IAB? Well I think you have to give them some credit, but I think even they would take sole credit.

Is it simply an outbreak of neophilia on behalf of irrationally exuberant marketing execs? I suspect there’s a bit of that…but the degree of difference is quite significant.

In no particular order, some of my thoughts.

Broadcast market leaders had a bad year. It’s not enough for you to win - someone else has to fall. And broadcast didn’t have a great year - in particular the market leaders. CRR has hampered ITV and TV revenues have dropped by 4.7% . GCap hasn’t had a great year - with revenues down by 9% in the year to March. for March [thank you to my colleague Iain for pointing this out]

Google on the rampage: perhaps the result of a very strong, consolidated media buying sector that loves ROI and believes they have found a copper bottom way of measuring it through AdWords (a short term view, IMHO..but we’ll save that rant for another time) and, apparently, it’s becoming quite profitable for them (agencies) as well. Hence Google is now the UK’s second largest recipient of ad revnenue and has increased it’s share of the digital revenue to 43%. Not bad given they’re a ‘technology company not a media company’.

Broadband and wifi growth: 10m broadband households and growing. Fastest rate of growth of connections among the major economies according to the OECD. And unless they live in my village, you can bet that pretty much every media buyer, brand manager etc etc will now be connected, probably with Wi-fi and will see just how much media consumption of their children and partners changes once that happens.

A love of new ideas: Yes, there are some for whom ROI = some headlines in the trade press. But our agency sector loves doing new stuff. And new stuff = digital.

Good start ups: I think the ongoing strength and success of some of the original start ups such as iLevel and AKQA and their very creditable, calm leadership has prodded the rest of the agency world into action.