So where does digital fit into the media world?

Digital is a medium that media ignores at its peril. Clare Goff finds out who’s leading the way in the digital revolution and how the medium is managed.

Colin Ramsay, head of online sales at ITV, has fond memories of the early days of digital media.

"I'd go to these tiny agencies on the outskirts of London. Everyone would be eating bagels and wearing sandals. I'd turn up in my pinstripe suit," he says.

But, with online advertising now accounting for a greater share of ad spend than radio, digital is claiming back the pinstripe brigade and moving into the mainstream of media.

"It's coming back into my domain," says Ramsay.

Some of ITV's early forays into new media go down in the annals of digital disasters but following the merger of Carlton and Granada, the broadcaster is building a serious digital presence.

While Celebrity Love Island proved a televisual flop, the broadcaster notched up more than half a million page impressions a day on the show's website, which broadcast video clips of risqué material. Some days, the site recorded a million impressions and Ramsay is seeking ways to monetise such spikes.

It has launched a raft of channels around the site, including motoring and movies and will soon add travel and money channels to its portfolio, thus building an online presence which offers programme based content, as well as being an entertainment brand in itself.

Ramsay says that while many got burned in the so-called "dot-bomb" days, this time around, the medium is being taken seriously by agencies, owners and advertisers alike.

Building online

"It's like a pendulum," Ramsay says. "The more popular online becomes, the higher up the food chain it goes in marketing departments."

ITV is hoping to capture the wave, building up an online brand to match the strength of its TV offering and allowing clients nervous of digital, a tried-and-trusted haven.

It has recently launched ITV Consumer Products, with the aim of exploring new digital revenue streams, particularly in the areas of interactive TV and mobile.

Channel 4 has also been busily coming into its own, digitally. With broadband penetration now having reached a critical level, it is about to simulcast all its TV programming online.

"That advancement will change the market," says Errol Baran, commercial manager in new media at C4.

As well as opening up the broadcaster to an international arena, it will allow viewers to catch up on programming during, for example, their lunch hour at work.

"This is historically a hard time to talk to people," Baran says. While he won't divulge any advertiser involvement at this stage, he is excited by the opportunities that digital offers.

"It's a completely blank canvas and allows for much more creativity," he says.

In the radio industry, Virgin has been leading the pack, extending its output over new platforms, from the internet to 3G and iPods.

It is already making money from podvertising and later this year, launches Visual Radio in conjunction with Nokia, which will allow interactive advertising via mobiles.

Successful expansion

Mobile is also the next media extension for newspapers heading up the digital vanguard.

The Financial Times is looking to move into video and audio content, having successfully expanded its brand onto the internet.

And The Guardian's web offering, which embraces real single syndication and blogs, is the envy of its rivals.

But while media owners build up their new media brands, are the clients following?

"In the early days, Heinz would do a ketchup website and wonder why no-one went to look at it," Ramsay says.

Recent TGI data showed that almost a quarter of a 16 to 24-year-old male's media time is spent online. But while digital is increasingly a larger part of the media picture, it stills only accounts for around 4-5% of overall marketing budgets.

Charlie Dobres, chief executive of digital media agency I-Level, says that there is a plethora of clients spending 1% on digital, a smaller group spending between 5-10% and a very small percentage, mostly in the financial services industries, spending upwards of 25%.

"The FMCGs will be last," he says. "To them it is viewed as an alternative media channel."

For those at the vanguard of digital marketing, however, a key opportunity it offers is one of direct response. In a recent BMW campaign for the One Series, the car was initially launched online, targeting warm prospects pinpointed through e-mail targeting, before the TV campaign was launched to the general public.

"It's a fantastic acquisition channel," says Dobres.

Viral campaigns have also been successful in building up interest – and often cult status– among a select group, before hitting the traditional channels: Burger King's Subservient Chicken campaign is the most successful example of this and Pot Noodle and Lynx have found new ways to attract key demographics through edgy internet campaigns.

Damien Burns, head of digital at Zed, says that digital marketing can be used to address the "shortfalls of traditional media".

Mobile marketing in particular can offer one-to-one messaging to key targets.

But Burns says that digital in any form is "at its most powerful when part of a coherent and integrated campaign."

While specialist digital agencies are often considered best-placed for negotiating the market, the larger agency networks have now reclaimed their space in the digital market with dedicated digital divisions: ZenithOptimedia has Zed, Carat has Isobar and Mindshare has M1. Though separate from the main agency brand, each works closely with traditional media channel planners and buyers, and their ability to action an entire media plan puts them above the specialists, they claim.

M1 has 40 staff and works alongside the traditional planning and buying function at Mindshare, while maintaining its specialism.

"We are a self-contained unit with our own identity. We are more complicated than traditional media," Richard Dunmall, managing director of M1 says.

Broadband uptake

He feels that digital is no longer the "Wild West" in terms of its standards of trading.

"It is articulated much more in line with traditional media channels and more and more experienced individuals have moved into digital," he claims.

Around 70-80% of digital spend is direct response, but branding campaigns are more prevalent, particularly with broadband uptake allowing for video advertising online.

Easyjet began its online marketing in an data-driven manner, but has now moved on to develop brand-building ads online and the increase in behavioural data allows advertisers to be more creative in their output.

Leigh Terry, head of digital, data and direct at OMD Digital, forecasts "more integrating and blurring of content and advertising".

"More and more clients are asking for advergaming and podcasting," he says.

But in many respects, digital media is still often treated in an ad hoc manner, with late creative not being charged for, for example.

And while media agencies have largely embraced digital, many creatives are lagging behind, lured by the big bucks of TV budgets.

"It'll be interesting to see at what point larger creative agencies will put digital at the heart of a campaign," Terry says.

The Nokia Game and Volvo's Mystery of Dalaro campaign are examples of digital and interactive leading a marketing push, but such campaigns are few and far between.

However, around half of the digital market is avoiding agencies altogether and going direct to online media owners, such as Google, to implement campaigns.

"There's often a do-it-yourself approach," says Dobres. I-level, claims to currently handle 15% of the digital market and he says that agencies whose focus is display advertising, are not well-equipped to offer clients the whole host of tools digital offers.

This year, however, has already seen the great and the good of media expound the virtues of digital. Rupert Murdoch recently told an audience of newspaper executives to "face up to digital or die", while marketing bosses at both Procter & Gamble and at MacDonald’s have been expounding the virtues of digital.

As the drip turns into a flood, get ready for the second coming of digital.

British Airways integrates digital

At British Airways, digital has been integrated into the overall marketing mix for three years.

"You can't look at it in isolation," says BA's leisure marketing manager Andrew Shelton.

"It's very much integrated into what we do."

The company uses digital to drive awareness and to tactically sell, with an emphasis on its value as a selling tool.

Some campaigns use digital only, but at the beginning of each campaign, the marketing teams and agencies from both above and below the line, will sit down together to decide the aims of the campaign and the most appropriate channel.

"Some audiences and products respond better to online," says Shelton.

Performing chicken proves an instant hit

It's been described as one of the defining moments in advertising and the agency behind it could fill an entire trophy cabinet with the awards it has won.

Not bad for a campaign based around a man dressed as a chicken, put together on a shoestring budget and sent out virally via the net.

When Burger King's Subservient Chicken first appeared last April, it was an instant hit, notching up more than one million page impressions within a day of its release and 20 million within a week.

Based on the idea that you can "Have it Your Way" at Burger King, viral e-mails directed surfers to a microsite that allowed them to type in requests for the chicken, who would then perform them.

The online campaign spiralled into TV, with ads showing the chicken living and interacting with 20-somethings and engaging in mock fights. The TV campaign then spawned another website, allowing viewers to vote on who wanted what to win in the fight.

The initial site has attracted around 14 million unique visitors and had almost 400 million page impressions to date. Burger King has reported sales increasing by an average 9% per week and has seen double-digit growth in awareness of its chicken products since the campaign began.

It has also seen take-up particularly among the key youth demographics who are increasingly abandoning television.

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