Study: Advertisers Not Using Internet to Full Advantage

May 9, 2007

This article is included in these additional categories:

Email | Financial Services | Media & Entertainment | Pharma & Healthcare | Retail & E-Commerce | Travel & Hospitality

Advertisers are beginning to believe in the power and importance of the internet as a marketing tool, but many fail to use the medium as an effective advertising vehicle, according to a news study from WPP’s GroupM.

The study, called Interaction, examines what advertisers should demand of the internet and suggests how to create a strategy to achieve their goals. It includes consumer and advertiser internet data from 28 countries that account for 96% of global online internet marketing investment, GroupM said.

“Online is already a mainstream component of consumer behavior and media consumption. The fundamental purpose of communication strategy remains unchanged, but marketing must urgently harness interactive media and the behaviors it induces,” said Rob Norman, global CEO of GroupM Interaction.

Some survey findings

The survey portion of the study asked respondents to score pre-selected drivers and inhibitors to digital marketing, finding that social networking and the proliferation of entertainment and information are much higher drivers than digital-enabling technology.

Moreover, the drivers scored higher in aggregate than the inhibitors (1,043 to 866), essentially pointing to an optimism about digital. The leading constraints are “historic attachment to traditional media” and “lack of client understanding,” followed by “lack of skilled resources in the industry” and the “complexities and ever-changing nature of digital media.”

The study asked respondents to give their opinion on the potential shares of media investment in mobile, in-game, and interactive TV in 2010 and 2015 – merely an average of guesses from what are mature ad markets, and therefore conservative, according to GroupM:

  • Mobile: 2.2% and 4.9 %, in 2010 and 2015, respectively
  • In-game: 0.8% and 2.1%
  • Interactive TV: 2.7% and 7.5%.

The study also found that in Western Europe the internet is the principal source of measured-media revenue growth, and it runs a close second to TV in North America (it’s surpassed by the explosive growth in US Hispanic TV).

The internet’s share of 2007 forecast revenue in the US and Germany, for example, are about 12% (up from 7%) and 13% (up from 4%), respectively.

GroupM also estimates online’s share of media investment in the US by product category:

  1. Computers: 11.4%
  2. Telecommunications: 6.4%
  3. Travel 6.0%
  4. Financial services: 5.2%
  5. Media: 3.5%
  6. Consumer electronics: 2.4%
  7. Automotive: 1.8%
  8. Retail: 1.8%
  9. Pharmaceutical: 1.2%
  10. CPG: 1.0%

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