"Direct response marketers are very hungry for the means to manage remnant inventory. The U.S. is probably more advanced than the U.K. in this regard, but we are catching up.
The amount of that total inventory which is being put through exchanges or platforms, we estimate it's up to about 30 percent of display media spend, up from 20 percent last year.
One consequence of this is that for brand marketers, there's a very strong demand for premium online inventory, trying to get away from the more cluttered remnant inventory market.
As a consequence, the quality homepage takeovers, they're sold out for the year. There's this appetite for innovative online inventory from premium buyers."
On Facebook ad spending…
"We're seeing a marked slowdown in our billings growth with Facebook. I think Facebook's long tail business is probably doing very well, but the large advertisers [are growing less quickly].
We think one of the serious constraints is thinking within the client organization on how we formulate Facebook strategy. Facebook marketing is so universal; it affects so many parts of a client's business. You need an integrated approach to managing this. That is the problem -- getting everyone around the table."
On video ad buying…
"Online TV, which Americans generally call video, is polarizing in this market. [On] the premium end is the household broadcasters' on-demand inventory, which is where more of the investment goes. Everything else is being bunched together into a network buy. We're seeing the evolution of an automated audience buy on video now.
It's history repeating itself. In the U.K. we thought satellite multichannel would provide an array of targeted audiences. In fact it's turned into one aggregated buy. [Likewise] the bulk of the online video money is an aggregated buy. It's driven by very viable audience measurements. It's not driven by micro-targeting.
I'm led to conclude the main economic value of online video is incremental coverage that we're losing on broadcast."
On integrating channels and measuring "true reach"…
"Although [things like online GRP] looks like a retrograde step to measure new media with the legacy metrics of old media, all we're doing is providing a liquid market. At the moment the price is all over the place in digital. In my view we need a decent common currency to price this stuff accordingly. Now how you analyze the ROI? That's a different story. The advertiser can make up any form or metric that he desires. That's one of the main benefits of search, is you can work out all kinds of ROI.
If print publishers are trying to sell tablets, or premium online versions, we need a de-duplicated situation. We need to calculate true reach.
The network online video buy we're doing now, that's getting more sophisticated. We can buy against standard TV audiences now on that. I don't think we're having a reconciled reach figure across the platforms yet. That'll come.
Vendors want to maximize their visible potential. They need this consistent single-source currency. That's where we're headed."
On mobile ad trends…
"Last year we spent about 4 percent of clients' search money against mobile, versus an average query share of about 13 percent. That gap is closing. This year is more likely to be 10 percent of our search spend on mobile, chasing 15 percent or more of query share.
Second point on mobile: smartphones are now giving us much better data about our campaigns. We can't cookie smartphone users, but there's more and more we can infer from behavior now just because people have smartphones. We know what size a screen is, 3G or wifi, location. Targeting seems to be evaporating as an obstacle, and that's all because of the smartphone.
The main constraint is still advertisers having optimized mobile web presence. The last I saw from Google is that 17 percent of U.K. advertisers have mobile optimized websites. The sites don't work properly. Some big advertisers don't even have mobile websites yet and those which do, they don't have the sort you can pinch and squeeze."
On the U.K.'s digital difference…
"The U.K. has a high concentration of e-commerce. We spend a lot on the web. We have very much a credit card culture here. We have a small, compact country, which has a good postal system, so delivery and returns are easy.
Comparing to Europe, Germany [for instance] is a bigger economy than ours, but their credit card use is far lower. And they have some surprisingly primitive systems on the services side compared to the global economy. To the Germans, [personal video recorders] are a very new thing. They have quite a low smartphone penetration for a very rich country.
Our tablet penetration in the U.K., we started the year at 7 percent and we'll probably end at 15 percent."
On defining digital ad spend…
"We measure Internet pretty much the same way the U.S. does. There's an email number in there, but it's pretty small. And there isn't any attempt to measure the investment in content.
If we take the whole of measured Internet, which is paid search, display, classified, if we compare those to the totality of measured media, which is TV, press, out-of-home, all classic advertising media, then as a straight percentage internet is already at 40 percent of the measured media total.
If I blend in direct marketing, market research, sponsorship, and public relations, which are figures we publish in the report, if you include those items then Internet is 25 percent of that total.
Philosophically, the main question is whether paid search should ever really be compared to paid advertising, because it's perhaps a bit more of a directory spend."