More Ads, Less Sex: Another Digital Dividend

Michael Hedges November 28, 2013 Follow on Twitter

Online advertising is soaring. Ad buyers can’t get enough. New platforms and new devices have captured consumer’s attention. But the ad people trade on anxiety as much as optimism. Perhaps social media is replacing the traditional headache.

Ad spending of the digital variety has pushed all media advertising this year in the UK to pre-crisis levels, announced media buying house GroupM this week. Total measured ad spending for this year could be GB£ 13.9 billion, 7% higher than last, they forecast, with 2014 up another 6% to GB£14.8 billion. And a whopping 44% will be spent in the digital realm this year and 47.5% next year to just over GB£7 billion.

“This ad recovery is spectacular, but not a phenomenon,” said GroupM chief forecaster Adam Smith in a statement accompanying the ‘This Year, Next Year’ report. “The question is whether advertisers sustain their optimism that UK households are feeling richer, and might actually get richer, between now and the election expected in spring 2015.” In June the WPP media buyer projected 3.3% ad spending growth over 2012 as “wage growth and consumer spending remain depressed.”

Coincident with the GroupM ad forecast, perhaps furthering the theme of optimism, was the official Survey on Sexual Attitudes and Lifestyles, reporting that people in the UK are “not in the mood for sex.” Among people 16 to 44 years of age, always the key advertising target, sexual frequency has dropped from more than six occasions per month to fewer than five in the last decade.

“People are worried about their jobs, worried about money,” said University College London researcher Dr. Cath Mercer, quoted by the BBC (November 26). “We also think modern technologies are behind the trend too. People have tablets and smartphones and they are taking them into the bedroom, using Twitter and Facebook, answering emails.”

Anxieties, however, can be motivational as advertisers flock to new media. “UK paid search has doubled in size since 2008 in cash terms and as a share of all UK marketing investment,” said GroupM’s Mr. Smith. “Smartphones, tablets and e-commerce sustain this momentum. We think mobile (including tablets) will furnish 70% of paid search investment growth this year and all of it next year.”  

Television advertising in the UK continues to rise nominally, to GB£3.705 billion in 2013 from GB£3.468 billion one year on. Proportionate to the expected total ad spending rise, TV ads remain at 26.6%. TV ad inventories in the UK are limited to ITV channels, Channel 4 and Channel 5 while public broadcaster BBC, with a total audience share slightly below 30%, carries no advertising.

The declining market for print advertising in the UK continues. National and regional newspaper ads have dropped to a projected 15.1% share of total advertising for 2013 from 30.3% in 2007. Earlier this year GroupM estimated that about one-quarter of digital advertising accrues to the print sector. In all other UK ad sectors – radio, outdoor and cinema – spending continues to fall, albeit less abruptly.

Ad spending growth rates have long been considered directly related to gross domestic product (GDP) growth rates, roughly lagging by a year. The most developed economics spend more on advertising proportionate to total economic output with developing economics playing catch-up. The conventional wisdom as offered, then, that global ad spending would always rise until one of those ugly corrections take place.

“Now, we reluctantly just assume that advertising will remain the same proportion of GDP globally, with the under-advertised fast-growth markets balancing the slow-growth markets,” said WPP chairman Martin Sorrell, giving his ever-offered projections for the coming year to the Telegraph (UK) (November 24). “People ask, 'what is the next big thing in our industry?’ And the trite answer seems to be mobile and data. Hard to argue with that, but I think the next really big thing, or things, will be coming from China.”

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