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UK Ad Spending, E-Commerce Remain Strong
UK online ad spending will pass £3.5 billion in 2009, and will show some growth despite financial and political uncertainties in the UK.
The Internet will continue to help consumers cope efficiently with a more challenging marketplace. Internet users will spend longer online, exploring options and seeking value for their money. Advertisers who target this committed audience effectively will achieve solid returns on their investments.
E-commerce will also thrive in 2009, passing £68.4 billion in spending as more consumers avoid the stress of crowded transport systems and city centers to shop from home. Major online retailers that upgrade to offer true multichannel shopping and delivery/return options—as well as value for money—will gain market share, while a number of second-rank e-shops will stagnate or go out of business.
Most online retailers will continue to court shoppers with money-off promotions and discounted delivery charges, and at least one supermarket chain will experiment with large-scale e-mail distribution of promotional coupons for grocery products bought in-store.
Mobile Marketing Takes Significant Steps
Mobile marketing will take some noticeable steps next year—albeit from a small base—as more UK advertisers, heartened by the growing number of high-specification (3G) mobile users, move to exploit this always-on medium. Data from the Office for National Statistics suggests that 19% of adults ages 16 and older accessed the Web via their mobile phone in the three months prior to polling in early 2008—and this was before the highly successful UK launch of the 3G iPhone in July 2008.
The 2009 mobile growth will take three main forms for marketers: increasingly sophisticated usage of SMS, short codes and bar codes in direct-response campaigns, and microsites designed for mobile users. November 2008 research by mobile marketing agency Sponge found that 20% of UK e-retailers polled already had a transactional Website that was mobile-friendly. Another 50% said they planned to create such a site in the next 12 months. This is building on the momentum of 2008 when one in five online retailers reported having used mobile microsites to drive promotions during 2008.
Bridging the UK’s Digital Divide
There will be little progress in bridging the UK’s digital divide in 2009. Several groups—notably the less affluent, adults 65 and older, and residents in the Midlands and north of the country—will continue to lag behind national norms for Internet access and online activities. Those who are hard-pressed financially will not consider going online for the first time a priority, unless they are convinced that the Web is a valuable tool for saving time and money. Sadly, failure to use the Internet will put members of these groups at an even greater disadvantage, depriving them of tools, information and services they could use to improve their situation. Some marketers targeting these demographics will cut back online ad spending and concentrate their efforts on traditional media.
Consumers Demand Transparency, Customer Insight
UK consumers are displeased with what they perceive as companies like banks selling them lies while putting personal and corporate gain above decency. So transparency, customer insight and service will be major themes for advertisers to employ this year.
The Economic Crisis Is a Catalyst
Marketers face a challenge of turning trying times to their advantage. Agencies and marketers that can raise their game will stand out in 2009, because the gloom and economic hardships will claim so many marginal players. Companies will have a tough time deciding whom to lay off and choosing the people who are tasked with keeping the digital flag flying.
There will be marketers who thrive in this atmosphere, and there will be very successful campaigns—some of them using mobile in newer ways as the iPhone draws many consumers to the mobile Web. The campaigns that succeed and shine in 2009 will be remarkable for going back to campaign basics and marrying those basics with intelligent application of technologies.
For more information on digital marketing in the UK or to speak with senior analyst Karin von Abrams, contact the media staff listed below.
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