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Global Brand advertising online tipped to rise 50 per cent

15 Feb 2012

Brand advertising online is tipped to grow 50 per cent globally in the coming year to total $20bn, at a faster rate than either traditional advertising or direct-response online spending.

The prediction comes from analyst firm Deloitte in its latest Technology, Media & Telecommunications predictions report, which stresses however that the rapid growth will not come at the expense of the other channels.

"This is not a zero sum game: all advertising will likely grow 5 per cent in 2012, and all internet advertising is likely to grow 11 per cent," the report said.

"However, total advertising and overall web advertising will likely grow slower than online branding, which we expect to rise 50 per cent year-over-year to $20bn as marketers realise and invest in online advertising's ability to build long-term value for brands."

The report defines online branding as banner ads, rich media, sponsorships, social media and video, while direct-response online ads include email ads, lead generation and paid search.

"A shift toward online brand spending would be a new trend: online advertising has historically been dominated by direct response ads. This contrasts sharply with the traditional media world, where branding accounts for 61 per cent of all spending: $91bn out of $149bn."

According to Deloitte, data from 2011 shows that ad buyers were starting to accelerate online branding spend. In the third quarter, online display spending grew 21 per cent while search was up 7 per cent.

That was off a relatively low base however from roughly $3.3bn to $4bn while search grew from $10.2bn to $11bn.

The company said the most important factor in the growth of brand ads online is the development of new tools that allow ad buyers to have control over placement.

"In the past major consumer brands worried that a traditional display ad buy might end up advertising their product or brand on an unsavoury website or adjacent to other ads or content that were not suitable to their brand image."

"Real Time Bidding (RTB) technology changes that by allowing brands to specify exactly where and in what contexts their ads will appear."

Deloitte also pointed to a wider variety of online branding options driven by custom design for online as a driver. The firm said new talent will be needed to manage the changes, with ad buyers, media agencies and ad agencies all likely to require skills in social, video, and real-time bidding.

Source: B&T

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