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Digital Marketing

Sunday, 11 January 2009

A lack of experienced specialists could stunt on line’s prodigious growth if swift action is not taken, writes Ben Carter

There are few marketers who aren't embracing digital strategies. But before you get carried away by the optimism surrounding the medium, there is a dark cloud on the horizon which, if it persists, could put paid to the boom being enjoyed across the digital arena.

Much has been written about the lack of experienced talent available to digital agencies and that, despite the swell of interest in digital marketing, there is still reluctance among traditional advertising agency people to switch to the discipline. This situation is preventing most of the UK's biggest digital agencies from growing in the way they would like, from both a resource and new business point of view.

But the recruitment issue is similarly chronic on the client side. There is a major knowledge gap at all levels within marketing departments on the nuances of digital. This hiatus is not helped by the fact that those marketers at the most senior levels did not grow up with the internet. As such, it is a new and threatening marketing channel to them. The reluctance of industry leaders to change their ways is a major flaw in arguments suggesting that the uptake of digital marketing strategies will continue to grow.

Consequently, marketers with digital experience can be selective about which jobs they take. They also tend to move around frequently to capitalize on their unique position. One headhunter claims that thanks to the 'digital gold rush', marketers with digital experience 'can virtually set their own salaries'.

Behind consumers

Guy Philipson, chief executive of digital trade body the Internet Advertising Bureau (IAB), says the problem is being exacerbated by the fact that consumers are now ahead of advertisers in terms of their online behavior.

'The pace of change and consumer behavior is outstripping marketers' knowledge,' he says. 'New concepts such as user-generated content, blogging and IPTV are not on their radar at all, despite the fact they are fast becoming mainstream.'

The IAB is seeking to address the problem through an initiative called IAB Progress, which includes workshops, training courses and seminars for clients and agencies.

Developed in conjunction with Digital Strategy Consulting, the initiative has identified five areas in which there is a substantial lack of knowledge: media planning and buying, online media sales, email marketing, search-engine marketing, and advertising-traffic management.

While the trade body is concerned about the lack of expertise in key sectors, Philipson says there are some exceptions, particularly in areas for which online is vital, such as finance, travel and telecoms.

AOL UK's brand marketing director, Timothy Ryan, switched to digital after several years working in the mobile telecoms sector, on both the agency and client sides. He believes that there is a natural crossover between the two sectors because both are 'incredibly dynamic'.

'With mobile, there is so much change going on, that you tend to have worked with digital from very early on,' says Ryan. 'As it is such a dynamic industry, mobile marketers are prepared to be much more experimental.'

He adds that it is not hard to find digital-literate people, but what is becoming increasingly difficult is finding those who also have marketing skills. 'Most people are deeply specialist and can't do anything else, just as it was with direct marketing a few years ago,' he says.

With traditional media starting to lose its role as the dominant advertising channel, integrated campaigns with digital at their heart are growing in importance. But digital-literate marketers are needed to implement them.

It is not only the IAB that is trying to help evolve the next generation of marketers. The Institute of Direct Marketing (IDM) has placed an emphasis on becoming a digitally focused organization, with the medium now accounting for more than half of its business. It has set up a dedicated digital marketing faculty in an attempt to bridge the gap by running several courses for clients and agencies.

Neil Morris, deputy managing director of the IDM, says the skills shortage is not unsolvable, although 'it will take time for a new breed of digital marketer, who is both brand literate and digitally in tune, to emerge'.

Although the dearth of digital expertise is undoubtedly a challenge, there is little evidence to suggest that companies are ignoring the medium for this reason. The success of campaigns run by inexperienced digital marketers is, however, open to question and could even lead to doubts being raised over the effectiveness of the medium in the long term. These are the same questions that caused the dotcom bubble to burst first time round — a classic case of failing to use the medium correctly, harming the industry view of digital's place in the marketing mix.

For the time being, according to Nick Blunden, client services director of Profero, clients rely heavily on their digital agencies to get it right. Many are capitalizing on this dependence in a way their traditional counterparts can only dream of — but this will not last.

Education initiatives are a good first step, but to ensure that digital is regarded as an attractive arena in which to work, the industry must strive to prove that not only is it the buzz medium of the moment, but also, as it is now secure, it is one that will attract up-and-coming marketers.

 

The vital statistics

The confidence marketers have in any marketing discipline is reflected in the proportion of spend they allocate to it; agency growth is another key indicator of the market's health. Below you will find all the statistical information you will need to lay the groundwork for a digital marketing strategy, including a breakdown of spend by industry, medium and ad category, plus details of the top digital agencies.

'It will take time for a new breed of digital marketer, who is both brand literate and digitally in tune, to emerge'

Neil Morris

Institute of Direct Marketing

£ 1.4bn Digital spend in 2005, up 65.6% year on year

Source: Internet Advertising Bureau

 

IAB Creative Showcase Awards Best Online Creative Award

Legend for Chart:
A - Year
B - Agency
C - Client
A: 2005
B: Agency.com
C: NSPCC
A: 2004
B: The Viral Factory
C: Trojan Condoms
 

IAB Creative Showcase awards

Legend for Chart:
A - Month
B - Agency
C - Client
A: Jun 06
B: Dare
C: Vodafone
A: May 06
B: glue London
C: Mini Cooper
A: Apr 06
B: Agency Republic
C: Mercedes-Benz
A: Mar 06
B: Agency Republic
C: BBC Radio 1 Musicubes
A: Feb 06
B: Profero
C: COI, child protection online
A: Jan 06
B: glue London
C: Royal Marines, recruitment
 

Top five digital agencies by growth

Legend for Chart:
A - Agency
B - Digital turnover 2004 (£)
C - Digital turnover 2003 (£)
D - change (%)
1
A: Harvest Digital
B: 2,442,000
C: 955,000
D: 156
2
A: Online Media Group
B: 6,000,000
C: 2,500,000
D: 140
3
A: Bluhalo
B: 1,240,786
C: 518,004
D: 140
4
A: Modem Media (incl. Digitas)
B: 10,890,000
C: 4,698,099
D: 132
5
A: Equator
B: 2,020,000
C: 879,697
D: 130
Source: Marketing Digital Leagues 2005
 

Digital media mix by share of revenues, 2005

Paid-for search
56.2%
Display
24.6%
Classified
19.2%
Source: PricewaterhouseCoopers/IAB/WARC
 

Share of total advertising market by medium (2005)

Radio
3.5%
Cinema
0.9%
TV
23.5%
Press — display
21.2%
Press — classified
17.8%
Direct mail
13.6%
Internet
7.8%
Outdoor
5.1%
Directories
6.4%
Source: PricewaterhouseCoopers/IAB/The Advertising Association/RAB/WARC
 

Top five digital agencies by turnover

Legend for Chart:
A - Agency
B - Digital turnover 2004 (£)
C - Digital turnover 2003 (£)
D - change (%)
1
A: Framfab (incl. Oyster Partners)
B: 16,500,000
C: 11,800,000
D: 40
2
A: AKQA
B: 13,800,000
C: 11,800,000
D: 17
3
A: dgm
B: 13,412,000
C: 9,064,000
D: 48
4
A: Agency Republic[*]
B: 11,220,673
C: n/a
D: n/a
5
A: Modem Media (incl. Digitas)
B: 10,890,000
C: 4,698,099
D: 132
Source: Marketing Digital Leagues 2005 *Companies House data for Sarbanes-Oxley-affecte agency

 

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