Beyond the tipping point

By all accounts, 2009 will be another momentous year for digital. The big question is, will it be the year that clients finally spend more money online in the UK than they do on TV advertising? If Group M’s prediction comes true in 2009 then, in marketing terms, next year will be remembered as the moment we passed the digital ‘tipping point’.

While most forecasts for total UK marketing spend next year are gloomy to say the least, digital should prove the exception. According to the IPA [formerly the Institute of Practitioners in Advertising], the Internet was the only marketing category that did not see a downward revision in marketing spend over the third quarter of 2008. For digital media next year, probably the worst-case scenario is for zero growth, and some think that’s overly pessimistic. However, this is no reason for complacency. Digitally focussed groups are far from immune to the downturn, and will still need to be prepared for leaner times.

On the upside, digital will become recognised as all-pervading. From the e-mail on your iPhone to that party invite on Facebook, from a rerun of the Today programme on BBC iPlayer to the installation you played with at the Southbank Centre – digital has grown far beyond the Web. The good news is that all this technology needs to be conceived, designed, packaged and promoted.

It probably safe to say that 2009 is unlikely to be remembered as a great digital year for retail, property or financial services, unless we are talking about using technology to promote ‘value’ ranges or discount offers. And while ‘eco’ isn’t going away, it’s probably fair to say that environmentally and sustainably led digital projects that appear as a cost on the balance sheet aren’t likely to make much progress next year either.

Where digital will flourish is with the brands that have passed the digital tipping point and become fully locked into interactive communications. Youth brands, entertainment brands, media brands and technology brands are largely there already. Perhaps 2009 could be the turn of fmcg? As consumer goods brands look for new ways to reach target audiences by creating their own content, they will join the technology-savvy vanguard.

Sales of big-tickets items like mobile handsets, computers and TVs are flattening off. In their place expect to see growth in cheaper service-led products, such as the ‘apps’ on Apple’s iPhone Appstore, or the e-books created for Amazon’s Kindle Store. Expect more higher-end bundles like Comes With Music, Nokia’s free download service, alongside next year’s slew of sexy devices that will attempt to steal the limelight from the Google G1 phone, the INQ1 ‘Facebook’ phone and the iPhone.

Two other things will transform the digital world in 2009. The first is the integration effect. Digital communications projects are already being conceived not as a series of jobs for individual channels like Web, mobile, TV or outdoor, but as joined-up projects that combine traditional and interactive media. This approach calls for integrated working practices too, and next year the most progressive projects will be driven by joint teams mixing skills from a range of different groups. The second big change will be moving-image content. At some point, if things go as planned, prime-time TV and movies will be fully watchable and recordable almost anywhere. We will be able to download tonight’s telly to our computers, phones and games consoles, as well as to our TV set top boxes. And we’ll be able to interact with it in all sorts of ways. The way we watch TV will be altered forever, leaving important questions for advertisers.

Already more than seven million people in the UK access the mobile Internet, according to Nielsen Online, and the platform, which is growing at 25 per cent a year, offers other opportunities to create novel content and interaction ideas. How we package it all for individuals and tempt them to participate in all the added functionality will be enormously important.

Structurally, the digital media sector will see continued consolidation among the bigger players as marketing communications networks continue to strive for digital integration, faced as they are with the demise of traditional TV advertising.

At the other end of the spectrum, expect an increase in digitally centred start-up groups, particularly in London, as senior individuals take the plunge, or are persuaded to do so by parent companies trimming costs. Independent digital groups that haven’t clinched a deal will have to wait for the next upward flip in the cycle, but for that we’ll need to look further afield than 2009.

Mike Exon is creative strategy director at Digit