By Carl HoweThe New York Times today published some remarkable data showing that British advertisers are spending more 10% of their ad budgets online, compared with about 5% here in the U.S. This is despite the fact that just two years ago, the US and Britain were tied at about four percent of ad spending. The article bases this difference in ad buying on the fact that British ad buyers are just more aggressive and opportunistic than their US counterparts:
Ad buyers at the major American brand companies may be reluctant to commit larger sums to the Internet because they believe they do not have control over where their ads appear, analysts say. Many Internet advertisements in the United States are still sold through online networks that place ads on member sites. In Britain, more advertisers work directly with Web publishers, giving them greater say in where and when ads appear.
In contrast, large advertisers in Britain appear to be leading the push onto the Internet. British financial-services companies have been particularly aggressive online spenders, in some cases allocating 30 percent or 40 percent of their advertising budgets to the Internet, Mr. Noss said.
Big British advertisers have also been quick to jump at the opportunities provided by paid search advertising, like that sold by Google and other search engines. Search accounts for 56 percent of Internet ad spending in Britain, compared with 42.5 percent in the United States, according to the Internet Advertising Bureau. “We’re all searchaholics,” said Guy Phillipson, chief executive of the bureau’s branch in Britain.
Our data about US marketing spending supports the view that US advertisers are falling back on traditional methods, and relegating Internet ad spending to only about 6% of all marketing spending in Q3 2006.
Bottom line: the Brits get the power of search to cut through the tyranny of too much content, while the more risk adverse US advertisers are falling back on what they are comfortable with. And given that marketing spending efficiency is a pretty good leading indicator of future business results, we may see some divergence between the US and British revenues in coming years.