Sunday, May 18, 2008

BPN 1102 2008 Global Digital Media - Advertising and Marketing

The Australian consultancy BuddeCom has pus published a report on Advertising and Marketing. It contains BuddeComm’s analyses of the current market and the future for marketing and advertising in the digital media era.

In the digital media era the traditional media companies have made quantum leaps in comparison to the telcos in terms of advertising and marketing. While the Internet companies (ie, Google) have clearly been the leaders to date, media companies are now making great progress. New advertising models, permission-based marketing and premium sales activities are being used to attract people to events and services. New video applications are also emerging as the Internet media companies seek to exploit the added speed and capacity of broadband infrastructure.

The most significant change broadband is bringing to the market is that it is opening up consumer markets. For decades, only corporate users have been able to afford data services. The Internet quickly used this new data development to create an enormous number of consumer applications. Broadband improved the quality, allowing for video-based applications, and, just as importantly, it made access to digital media affordable to the mass market.

The rise of the Internet, mobile phones and other digital media is forcing marketers and their suppliers, including ad agencies, to adopt new business models and broaden their offerings. Although the Internet still only accounts for a small percentage that will be spent on media advertising in 2008, its influence spreads much further than that. It is changing the way consumers are exposed to and interact with advertising.

To date, traditional ad agencies have been accustomed to mass media advertising, with its one-way flow of communication. Digital adverting however will be led by the consumers; they will more or less have full control of the information that they wish to receive and the format will look nothing like traditional advertising. It will be highly personal and highly interactive. Mass advertising will not disappear. There are still good reasons for it to continue, but over time its role will be eroded. The trend will be the democratisation of advertising, necessitated by changing consumer behaviour in favour of the digital media
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We are seeing the emergence of new advertising models as the industry gains confidence; driven primarily by the phenomenal growth in online advertising revenues. Online advertising formats can involve searching, games, online directory listings and other permission-based models. Video-based services on broadband and interactive digital TV networks are also becoming a whole new area for advertising opportunities. Social networks have also gained much attention in recent years, but in 2008 questions are beginning to be asked about the true potential of advertising over this medium. Personalised media and one-to-one communication will be the predominant mode on the Digital Media.

Location Based Advertising has had a revival with the development of Location Based Services over mobile devices. Put simply, LBA is when advertisements are strategically communicated based on a consumer’s location. Mobile LBA is slowly becoming a reality with services starting to roll out around the world, particularly in North America, Europe and Asia Pacific. In addition to the marketers, major players in the mobile and Internet fields are also taking great interest in these developments.

Key highlights:
- The biggest growth in advertising for the next ten years will come from digital media and this will most certainly involve massive changes for the traditional ad agencies.
- It is expected that by 2015, 65% of all New Media revenues will be based on permission-based marketing..
- The online advertising market stalled during the dotcom era, but a significant recovery began in 2003 and today online advertising is flourishing with over $60 billion to be spent worldwide in 2008..
- A reflection of the growing digital advertising market has been the growth in Internet advertising across Europe, which is taking an increasing share of total advertising spend.
- Four of the major Internet media companies in the US capture over 60% of US online advertising revenues.
- In South Africa, Vodacom has started selling text ads to be placed on the 20 million free ‘Please Call Me’ SMS that are sent through its mobile network every day.
- There is a small but fast-growing band of new digital marketing houses in Australia who are promoting their ability to deliver an end-to-end solution..

Blog Post Number: 1102

Tags: marketing