ITV left standing as Google’s UK ad revenue soars

Thames TV logo ITV is left standing as Google’s UK ad revenues soars, but what is the relationship between TV and search and does the health of one mean the failure of the other?

It was only going to be a matter of time, but if research from the Guardian is to be believed this is the year when Google will take more advertising revenue from the UK market than ITV currently billed as our biggest advertising earner.

The number boffins have done their work and come up with some nifty calculations that track Google’s current growth rate (of about 25% per quarter) and made deductions for traffic acquisition costs.  This brings them to the conclusion that 2012 will see the search giant acheive advertising revenues of “between £2.4bn and £2.55bn”.  This compares to the “£1.7bn ITV will manage if it achieves a 15% rebound during 2011” according to these left leaning men of numbers.

So what does this say about the relative health of these two businesses and the advertising channels they represent?   Does the old maxim of “you never get fired for buying TV” still ring true?

Google appears to be going from strength to strength, but this does mean that there’s something rotten at ITV?  The short answer is no – they seem to be bouncing back after a torrid few years that saw ad revenues plummet but there’s been a decent recovery since 2010 and their advertising revenues are expected to rise again by 15% this year in part boosted by the Royal Wedding.

What Google have managed to deliver is both the democratisation of advertising coupled with transparency of reporting.  Now anyone who owns or manages a business large or small can reach a local, national and international audience and be confident that their money isn’t being wasted.   You don’t need to employ a fancy Soho creative agency to “translate your vision” to TV and you can set up an ad campaign from your sofa.

However, we should all be mindful that the most successful companies employ a “mixed media” approach to their marketing activities. They understand that our response to their message will be different while we’re searching than while we’re being entertained or reading a magazine.  To capture and hold our attention and to build a brand that is liked and recognised needs more investment than a few lines on a Google page.

There have been multiple studies that show the direct link between a new ad campaign on TV and the number of associated searches at Google.   Studies show that this uplift depreciates over time but that for the first few days and weeks of a campaign hitting our screens our search behaviour is altered.

A fascinating peice of reasearch from Matthew Chesnes and Ginger Zhe Jin in the US looks at the effect of above the line advertising on the number of searches made for prescription drugs.  They conclude that  “Overall, offline advertising increases not only the likelihood that a user searches for a drug, but also the intensity of search within a search session”

This study seems to back up the view that a mixed media approach will deliver a better outcome in the long run,  so big or small companies need to recognise this and try to diversify their spend and effort to incorporate  more than just search.

To read Chesnes and Zhe Jin’s research paper on “Direct-to-Consumer Advertising and Online Search” go to http://bit.ly/glPDQu

To read the Guardian article in full  http://www.guardian.co.uk/media/2011/apr/15/google-uk-ad-revenue-itv

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