UK on-line advertising - Essay Example

?Tan Mary Joy Tan April 23, UK On-Line Advertising: Is It Worth Spending? Being at the so called “digital age”, people tend to go online whenever possible whether to chat, socialize, buy products or services, or even finding a job. When you go over the internet, you will see a lot of advertisement regarding various products and services being posted. Even job orders are being posted online by various companies. While other advertisers tend to spend millions of dollars on television networks, newspapers or magazines, and radio advertisement, there are some advertisers that would rather invest their money with online advertising. It is the current trend in the world of advertising to go over the internet and post ads. But is it really worth spending posting in an online advertisement? What is the level of reliability that consumers who are taking risk that they would not be scammed in availing products or services in an online advertisement? In countries like the United Kingdom, online advertising has a potential market. According to the statistics done by the UK government, between 2001/02 and 2006 the proportion of adults in Great Britain who had used the Internet in the last three months increased by one-quarter, from 48 per cent to 60 per cent wherein, 59 per cent of the 16 years old and over go online almost every day and 4 per cent go online less than once a month. Internet usage is more common among the young people, wherein 84 per cent of people age 16 – 24 go online compare to older people, wherein 54 per cent are 55 – 64 and 15 per cent are 65 and over. There are different reasons why UK people access the internet. Based on the statistics, the top 2 reasons are that 85 per cent of the internet users are looking for information, and 81 per cent are Tan 2 using the e-mail. While the third reason is that the internet users purchase online for personal reasons which is 44 per cent of the adult population of which 51 per cent of the consumers are spending on travel and holidays. Meanwhile, 18 per cent of the internet users sold goods or services via online. The increasing development of interest of internet users in UK to access online services gave an opportunity to advertisers to connect to them via internet. The accessibility to businesses to customers is easier compare on television and radio wherein, customers can easily interact via internet to the ads posted by advertisers. On the other hand, advertisers can easily access positive or negative customer feedbacks, monitor the customer needs, and communicate faster but cheaper to customers via internet through the websites. Websites have become an essential means to communicate with customers. In 2005, 70 per cent of the businesses online have a website while the proportion of businesses that sold via internet was doubled between 2002 and 2005, from 7 to 15 per cent. In 2005, the sales value over the Internet was ?103 Tan 3 Billion. This accounted for 34 per cent of sales across all kinds of ICT by non-financial sector businesses. The usual Internet activity by nine out of ten or 91 per cent of young internet users was sending or receiving emails. Other activities included were: finding information about goods or services which is 77 per cent, downloading software which is 55 per cent, and reading or downloading online news or magazines which is 54 per cent. Meanwhile, seven out of ten or 70 per cent young internet users stated that they had purchased goods or services online.  The increasing demands and internet usage had made advertisers in UK believed that online advertising is important and that has great opportunity. They have seen some potential in doing so because the online become a direct response medium wherein the marketing budgets being stretched to their very limits, and the online has proved its worth. Another is the growth of new display format wherein the internet has become an entertainment medium because of its interactive multimedia content. There is also the booming of e-commerce wherein people shopping choice is through online because of its best deals, making online the best place to reach bargain – hungry consumers. And whether there are challenges in the economy, retailers continue to expand and improve their online presence. Lastly is the penetration of faster, cheaper broadband wherein 92 per cent of the people have broadband with a speed of over 2MB and 56 per cent of home broadband users have wireless connection attracting audiences to go online and allowing advertisers to provide consumers with richer branded content. Another reason why UK advertisers are attracted to go online is because of the cost of advertising and its profitability. According to e-how, the cost of online ad varies depending on the type of advertisement, advertising arrangement and advanced options like targeted delivery. Tan 4 Fixed costs advertisements vary depending on the size and popularity of the advertising website, and the price of pay-per-click advertisements depends on how many users actually click on the advertisement. It is recommended that new advertisers start with a budget of around $10 to $50 per day, but variables like keywords, market segment and even geographic area may require considerable adjustment to these amounts. On the other hand, advertising via national television has an average cost of about $350,000, a standard 30-second television commercial. The cost includes paying the director of the commercial, any actors involved in the project, and all associated crew members and this cost may be too high for small to medium-sized businesses. Smaller business tends to advertise to local media outlets to help create advertisements for television. Local television network advertising can be much more affordable and it also makes more sensible market-wise, since the ads are targeting consumers in the business' actual market. Local advertising during the day can be even cheaper, costing from $90 to $1,500. Meanwhile, advertising on radio would cost around $1,750 for creative development wherein it ranges from single-voice radio ad of $850-$900, and for additional voices, another cost of $150-$200. This includes creative strategy, copywriting, and production. A 3 – 4 week test period for the initial media test is also included which costs $3,000 to $6,000. Another radio costs is the media budget which has two phases. The phase one is the weekly testing budget spent early in the campaign which focuses on the strategy, creative and media variables. The cost is around $6,000 per week, and includes testing of two ads, each with half of the total budget. And lastly, the radio ad costs depend on the number of stations & radio ad frequency which means the larger the audience of the station plus the preference number of airing will cost the advertiser more. Nevertheless, regardless of the advertising costs, 33 per cent of the people in UK prefer to shop Tan 5 online. Online advertising in UK has a self-regulatory body that protects the consumers, y1oung or old. Online advertiser in Europe which includes UK in the online advertising industry agrees online behavioral advertising guidelines. The behavioral advertising framework aims to provide transparency and control for consumers. The framework was built upon the IAB UK’s Good Practice Principles published in March 2009. The framework will educate consumers and control over online behavioral advertising by introducing an ‘icon’ that will appear in or around the display advertisement. With one click, the icon will give consumers with further information about behavioral advertising in the relevant European language as well as, it will provide a way to manage information preferences or to stop receiving behavioral advertising. The icon is already being piloted in the UK. The framework seeks to provide consumers with enhanced transparency and control without disrupting their online experience. Its basis are the seven key principles which are to notice in the transparency in data collection providing consumers with clear, prominent, and contextual notice through multiple mechanism, the user’s choice wherein it gives the consumer greater control over behavioral advertising, data security, sensitive segmentation of which there is a limitation on the creation of “interest segments” to target children and collection of sensitive personal data, education, compliance and enforcement to ensure the effectiveness of the framework, and regular review of the framework to ensure its effectiveness to the developing technology and business practices. Aside from the Behavioral Advertising Framework, they also established the Committee for Advertising Practice (CAP) wherein it explains that care should be taken when featuring or addressing children in marketing communications. The Advertising Standards Authority (ASA), on the other hand, aims to Tan 6 prevent any advertisements that are likely to negatively affect children in the online environment by administering the CAP Code. CONCLUSION The trend in the advertising industry has exceeded other advertising means and that they have expanded they network online. It only implies that internet users in the UK have a huge impact in the UK advertisers to post their advertisement in the internet. Moreover, economy wise, it is more practical to post an ad online because it is expected to be viewed by millions of viewers not only in the UK but also worldwide. The consumers learned to embrace the convenience provided by the internet that with just one click of the advertisement they will be able to get the goods or services they wanted. Tan 7 Works Cited “Europe Commits Self Regulation”. International Advertising Bureau. Web. 2011 “Internet Advertisement Spend Grow 4.6%”. International Advertising Bureau. 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