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Posts Tagged ‘British Airways’

Biggest brands: Top 100 online advertisers 2010

Posted Wednesday, May 19th, 2010

Marketing, May 2010

While the recession cut a swathe through above-the-line media channels, digital marketing grasped the opportunity to prove itself, writes Adam Woods.

As many advertisers were forced to cut back last year, so media owners probably comforted themselves with the thought that no part of the industry was immune to the effects of the UK‘s deepest recession since the 30s.

However, the latest research shows that digital media have, to some degree, managed to ride the storm. According to Nielsen, overall internet adspend rose from £461.4bn in 2008 to £506.3bn in 2009 – a 9.7% year-on-year increase. While half of the UK’s top 100 online advertisers cut their media spend in 2009, more than 80% of them increased their internet investment; many of them attracted by the prospect of solid ROI at a time when they were striving to cut marketing costs.

Advertising budgets overall have been slashed, but nonetheless advertisers want measurable returns,’ says Guy Phillipson, chief executive of the Internet Advertising Bureau (IAB). ‘They have had to use the budgets they do have really wisely and have learned more in the process.’

Whether the downturn has acted as a catalyst in this process is a moot point, but many industry figures believe that internet advertising has started to come of age in the past two years.

‘There’s obviously a macroeconomic picture of a move to digital from traditional channels over the last few years, and I think the recession has only sharpened that,’ says Chris Clarke, chief creative officer at digital agency LBi.

Ironically, the increasing refinement of brands‘ online marketing abilities, allied to a general trend of online price deflation, has helped to take some of the edge off the growth of spending on digital (here excluding search, but including social media, affiliate marketing, mobile and online display in general).

Overall, financial services was the biggest-spending sector on internet advertising, though many of the biggest individual online advertisers were in the telecoms and media/entertainment sectors.

O2, Hutchison 3G, which owns 3, and merger candidates T-Mobile and Orange all increased their investment in web- based marketing. In the number-one spot, O2 remained by far the country’s biggest single online advertiser, allocating £15.2m, or almost 27% of its total media spend, to this platform.

O2 senior marketing manager Neill Garfield identifies social networking and the mobile internet as key emerging channels. Nonetheless, he refutes the suggestion that spend has been shifted wholesale out of traditional media and into online.

‘Often, it’s the reverse,’ he says. ‘Online channels are now at relative saturation, so we are investing in offline channels that stimulate online demand.’

The COI, the UK’s biggest advertiser last year, was also the second-biggest internet advertiser, boosting its internet spend by 45% to £10.4m. Nonetheless, its digital budget still accounted for less than 5% of its £218.3m overall media bill.

Some of the more dramatic changes at the top of the list include the doubling of internet spend at Virgin Media, Hutchison 3G and Moneysupermarket.com. However, Capital One provides the most notable example of a strategic shift among the top 20 advertisers.

The US credit card company was in the headlines in March when it scrapped its UK offline direct marketing programme and moved a proportion of the money saved into online communications. This was reflected in a 53.6% increase in Capital One’s internet spend to £2.9m, meaning this channel accounted for 99.98% of all its media spend, which fell as a whole by more than 65%.

More for less

Regardless of the effects of the recession, there appears to be a growing belief among brands that increasing adspend does not guarantee marketing success. By its own reckoning, Moneysupermarket.com, the 10th-placed online advertiser in the list, spent 22% less on its marketing last year, including search, but was still able to attract 14% more customers.

‘For us, it has become less about how much you spend and more about what you say and how you say it,’ says Ian Williams, the brand’s director of communications.

In a handful of sectors there was a sharp reduction in internet adspend. While they continue to make extensive use of the channel, media/entertainment brands collectively cut their budgets for online marketing by almost 16%.

Other sectors where big falls occurred include retail, which spent 42.3% less, and the property and pharmaceutical sectors, which made reductions of 45.5% and 55.2% respectively. However, while property and pharmaceuticals cut their marketing across the board last year, retailers raised their budgets overall; this suggests that online price deflation has enabled advertisers in this sector to make significant savings.

The figures compiled by Nielsen do not include a breakdown of information on the separate online advertising platforms. Nonetheless, some upward trends across digital marketing can be easily identified.

For example, mobile internet use is growing rapidly, as smartphone handsets offer users a greatly enhanced online experience on the move. The mobile advertising market is still relatively small, but is beginning to generate fresh revenues and helping to cannibalise those of other sectors.

‘Mobile internet is here to stay,’ says Garfield. ‘Inevitably, that will eat into media consumption in other channels, mostly from print. As transactional capabilities improve in mobile, this may even affect consumer retail and internet retailing.’

Big advertisers whose internet commitment remained relatively small in 2009 included Procter & Gamble and Unilever, each of which assigned 1.4% of their overall media budgets online.

However, they also committed more than in the previous year, and the expected ongoing rise of social media and mobile look set to extend major FMCG players’

‘The growth of mobile and maturing of the social web as an advertising opportunity have underpinned a growth in digital spend from the more reticent sectors,’ says Rhys Williams, managing partner at digital agency Agenda21.

As relatively recent additions to the online advertising portfolio, mobile, pre-roll video and social media are still in their initial growth phases, and are therefore likely to make an even bigger contribution in 2010, particularly as their interplay with offline media is explored.

According to IAB figures, online was the only media channel to grow during the first half of last year. TV and press adspend may have been squeezed, but the notion that digital and traditional forms of advertising operate in isolation from one another has been questioned recently.

Advertisers understand the combination of opportunities online and how they fit with traditional media,’ says the IAB’s Phillipson. ‘They are thinking of digital as the platform that runs through that entire media schedule.’

Sir Martin Sorrell has suggested that the picture presented by next year’s equivalent figures could be very different from this one. The growth in digital marketing is unlikely to stop as the economy continues to recover. Smart marketers will continue to invest their budgets where they can achieve the biggest returns and if innovation in digital continues, the industry will continue to thrive.

Price deflation: the ups and downs

While most of the brand-owners in the list spent more online in 2009 than they did in 2008, price deflation means this is not simply a case of online up, offline down.

Mainstream print and broadcast channels are turning over less than recently, but falling rates may mean brands are using them as much as, or more than they were.

‘A lot of our clients want to move away from broadcast and narrowcast, but they still spend healthily on TV – it is just that it has got cheaper in the last couple of years,’ says Chris Clarke, chief creative officer at digital agency LBi.

Similarly, a surplus of inventory means online rates have fallen, explaining apparent cutbacks made by the 19 advertisers in the top 100 that reduced their digital budgets. Most of these made cuts across the board, but Tesco, Hewlett Packard and Thomson spent less on digital while growing their wider media budgets.

‘Everyone is getting more bang for their buck,’ says Rhys Williams, managing partner at digital agency Agenda21. ‘The average cost per thousand online has gone down and I can’t see it going back up. It means advertisers don’t have to spend as much to get the same sort of impact.’

Coming up

Sainsbury’s just failed to enter the UK’s Top 100 online advertisers table despite increasing its internet marketing spend by 297% to £771,000. Fiat also bolstered its online advertising budget in spite of the recession with a 230% year-on-year increase to £702,000. Kraft grew its spend by 120% putting it in 104th position.

Going down

American Express slashed its online marketing spend by 43% year on year to £1.2m. British Airways also slashed its budget by 8.9% year on year placing the airline at 59th in the table. Holiday operator Thomson slashed its budget by 66% year on year to £992,000.

Methodology

Nielsen has improved the methodology used to work out the top 100 online advertisers for 2009. The new data is based on a Netview panel. Each panellist is given a meter and every time they view an ad online, it counts as one impression which is projected nationally. Previous surveys used a combination of figures from ABCe and declared information from the sites themselves. This tended to lead to inflated spend data. The new system creates a more robust methodology and removes the inflation factor. However, it means there is as yet limited comparative data with the previous year.

The figures are for display advertising and all figures are estimated costs based on a number of factors including rate card and industry discount factors. Details of the full methodology are available from Nielsen.


The power of branding: a practical guide

Posted Wednesday, July 29th, 2009

What do we mean by the word ‘brand’?

Design Council, updated 06 April 2009

The words brand and branding are thrown around liberally by all sorts of people in different contexts and with different meanings in mind, so it may help to start by asking ‘what exactly is a brand?’

The simplest answer is that a brand is a set of associations that a person (or group of people) makes with a company, product, service, individual or organisation. These associations may be intentional – that is, they may be actively promoted via marketing and corporate identity, for example – or they may be outside the company’s control. For example, a poor press review for a new product might ‘harm’ the product manufacturer’s overall brand by placing negative associations in people’s minds.

To illustrate the idea, let’s take what is arguably the best-known product – or brand – in the world: Coca-Cola.

Although essentially just a soft drinks product, Coca-Cola the drink is eclipsed by the sheer might of Coca-Cola the brand. This phenomenon is best summed up by the following quote from a Coca-Cola executive:

‘If Coca-Cola were to lose all of its production-related assets in a disaster, the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget everything related to Coca-Cola, the company would go out of business.’

In a 2007 survey of the value of global brands by branding agency Interbrand, Coca-Cola‘s brand equity was valued at US$65.3bn, just under half the company’s true market value.

So what are these all-powerful associations? For Coca-Cola, typical perceptions might be that it is the original cola drink (‘The Real Thing’), that its recipe is secret and unsurpassed, that it’s all-American or maybe global, that it’s youthful, energetic, refreshing and so on. Visual associations might include the unmistakable red and white logo and corporate colours, or the unique shape and tint of the original glass bottles.

These are mostly positive brand associations, but there may be negative ones too. For example, Coca-Cola may be seen as unhealthy, or as a symbol of global ‘imperialism’ by American brands. What is seen as a positive association to some may be unpleasant to others and negative perceptions could become attached to a brand‘s identity even if the company strives to present a different character.

Of course, brands aren’t limited to the food and drink category. If a brand is just a set of associations then practically anything could be said to have a brand, even individuals – think Simon Cowell or Gordon Ramsay.

Ramsay’s own brand is so strong, in fact, that in 2007 he leant his weight to a major advertising campaign by Gordon’s Gin. He was chosen not just because of his name, but because his association with a sense of quality and exclusivity mirrors the drinks manufacturer’s own brand values.

Other high-profile examples of recognised brands include JCB, British Airways, Tate, Yahoo, The Big Issue or even London. From services to cities, products to publications, each carries a strong set of associations in the minds of a large number of people.

What is branding?

If a brand results from a set of associations and perceptions in people’s minds, then branding is an attempt to harness, generate, influence and control these associations to help the business perform better. Any organisation can benefit enormously by creating a brand that presents the company as distinctive, trusted, exciting, reliable or whichever attributes are appropriate to that business.

While absolute control over a brand is not possible due to outside influences, intelligent use of design, advertising, marketing, service proposition, corporate culture and so on can all really help to generate associations in people’s minds that will benefit the organisation. In different industry sectors the audiences, competitors, delivery and service aspects of branding may differ, but the basic principle of being clear about what you stand for always applies.

For the full article see: http://www.designcouncil.org.uk/en/About-Design/Business-Essentials/The-power-of-branding-a-practical-guide/


When rebranding can come back to haunt you

Posted Saturday, May 30th, 2009

To some, Santander‘s decision to rebrand Abbey and its other UK retail banking operations under a single banner marks yet another regrettable example of global businesses squeezing out local differences. To others, the move is just good business by the Spanish banking group as at least one of the brands – Bradford & Bingley – is fatally stymied by failure and government rescue.

The Financial Times, May 27th 2009

Aviva is another financial services operator which is currently spending millions advertising its original Norwich Union brand out of existence. Mergers, takeovers, disasters and transformations in the nature of business all provide justification for corporate rebranding. The rebirth of Guinness and Grand Metropolitan in 1997 under the Diageo banner and BTR Siebe as Invensys in 1999 are examples.

But companies introducing or extending their brands do so at their peril.

Abbey itself, then under Luqman Arnold, chief executive, was forced into an embarrassing U-turn over the pastel-coloured, lower-case livery of its identity when it dropped the “National” from its name in a £11m rebranding in 2003. It soon reverted to a branding style close the Abbey National original.

British Airways also found itself at the centre of controversy when as part of a £60m rebranding in the 1990s it ditched its Union Flag tail-fins in favour of a range of multicultural designs which it was eventually forced to abandon.

Most embarrassing, perhaps, was the case of Royal Mail, which under the leadership of John Roberts followed the trend of adopting a Latinate name, Consignia, to distance its post office service from its old-fashioned, public sector roots. Mr Roberts explained that Consignia described “the full scope of what the Post Office does in a way that the words ‘post’ and ‘office’ cannot”. Within two years, the name was gone.

But Latinate names such as Aviva are thought to work well in being understood and recognisable in globalised markets, and have also been adopted by companies such as Andersen Consulting which renamed itself Accenture in 2001. At least Accenture did not suffer the ridicule heaped upon PwC when its consultancy arm was briefly rebranded Monday – to signify the excitement of the weekly return to work.

And the subsequent demise of its former namesake Arthur Andersen in the wake of the Enron scandal made the name change particularly fortuitous.

Coca-Cola was also hit by a consumer backlash in 1985 when it rebranded its main cola line simply as “New Coke” – but was forced to retreat within months.

In spite of consumer complaints, some great British brands have been consigned to the marketing dustbin of history. Marathon and Opal Fruits now sell under their global names of Snickers and Starburst.

The imposition of a Spanish name on 25m UK banking customers may well pass without too much comment. But Mitsubishi found itself embarrassed when it introduced its “Pajero” – or Pampas cat – SUV model in the 1980s.

The name, a pejorative term in some Spanish-speaking countries, forced Mitsubishi to rebrand the car – known as the Shogun in UK – as the Montero in Spain and Latin America.


 
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