GroupM Says Radio, Newspapers Could Sell Digital Assets Better

A report from GroupM finds traditional U.K.-based media like radio and newspaper lacking when selling advertising on their digital assets. Across the U.K. Web the ad spend is set to see 36 percent growth, with an upgraded forecast for next year.

Television, radio and newspapers could each benefit by playing more to their strengths in the digital environment. Radio, for instance, is uniquely poised to sell digital radio, podcasts, Web sites, list management, SMS and sponsorships. The report faults “radio’s reliance on relatively few advertisers” and trading restrictions like advance-booking deadlines as deterrents for advertisers.

The channel would do better “by applying the same sales disciplines to their digital properties as they do their offline,” said GroupM Futures Director Adam Smith. “The offline ‘technology’ is taken for granted, whereas online startups have understandably taken up more back-office management time to get things up and running.

“There is a long history of new media being treated as if they were a separate species, but the purpose of marketing is universal: to sell something,” Smith continued.

GroupM subjects newspapers to similar criticisms. It faults big paper publishers for mixing its message to marketers, for instance by offering generic ad packages “while proclaiming ‘life is local,'” the report states. It points out a desire from advertisers to buy tighter geographical targeting of both display ads and recruitment classifieds. Traditional sales should be more closely tied to digital forums, blogs, podcasts, video and live chat. “We notice an absence of cross-selling, of training, and big variations in online quality which threatens to make planning complex and uneconomic,” according to the report.

GroupM estimates online ad spending in the U.K. is set to reach £160 million in 2006 ($312 million), a 39 percent increase over last year. That estimate remains unchanged from a previous forecast the agency group issued in July; however growth predictions for 2007 were upgraded from 26 percent to 36 percent. Growth in the online channel is attributed to the adoption of the search model by small advertisers due to its measurable return on investment.

“This is something like a perfect market, as we know what each response is costing us, and what it is worth,” said GroupM Futures Director Adam Smith.

The report estimates 40 percent of all Internet money comes from search, and as much as 60 percent of search money comes from small businesses moving dollars to the category. “It attracts companies which have never advertised before, and sometimes attracts all the money small advertisers had been spending elsewhere,” the report said.

Expected growth in the mobile space was downgraded from £60 million to £30 million for the year.

Smith cited a “lack of progress in defining what mobile has to sell, and how it is going to sell it, to advertisers and to users.” He continued, “This is a delay, not a failure. The industry’s best brains are working on this. Phone operators, clients and agencies all want to make mobile work — and perhaps most importantly, so do traditional media owners.”