Memorandum submitted by the Institute
of Practitioners in Advertising (IPA)
Please note that throughout the word "advertising"
is used as a shorthand and in its widest sense to mean all types
of advertising, media, new media, direct marketing and marketing
communications.
Clearly there is an enormous amount of information
that we could have sent, but instead we have strictly limited
ourselves to focus on three key areas:
1. NEW MEDIA:
THE ECONOMY;
MEDIA HABITS
AND FUTURE
TRENDS
(a) As can be seen from the Bellwether
Report, now in its sixth year, advertising expenditure is
closely linked to the performance of the economy as a whole and
indeed gives pretty accurate forecasts of a number of indicators
that report later than Bellwether. Bellwether has also revealed
two related trends within the market which are the gain in share
of expenditure of both the direct marketing and online categories,
with the latter showing the most dynamic growth. We estimate that
the total spend on all advertising and marketing communications
is £43 billion annually, with now about 5% of that being
online.
(b) For the first time we have in IPA
TouchPoints a research methodology that enables us to take
a holistic view of an individual's media habits and set "new
media" in the context of "old". This summary presentation
can only scratch the surface but it confirms the dramatic differences
between younger and older people. We have to assume that the 16-24s
will take on into adulthood their multi-tasking, searching, screening
behaviours and their immersion in media, especially on-line and
mobile.
(c) In terms of future trends, the Group
M and Zed documents give comprehensive overviews produced
by two of the IPA' membership's leading media planning and buying
groups. It's clear that the digital media are going to become
all-pervasive and that whilst there is fragmentation in terms
of platforms and outlets for content, is seems likely that much
of that content will converge on video. This means that skills
in the production of film and video content are going to be very
much in demand. We are also convinced that digital media are facilitating
the transition from "interruption" to "engagement"
and from producer "push" to customer "pull".
2. NEW MEDIA:
THE "MEDIA
ECOLOGY" AND
THE REGULATORY
LANDSCAPE
(a) The UK has an unusual media ecology in
that the BBC, a non-commercial, license fee funded, public service
broadcaster and publisher has such an embedded and powerful position
within it. The IPA/ISBA and IPA submissions summarise
the widespread concerns that the sheer wealth of the BBC has and
continues to distort the "media ecology" to the disadvantage
of commercial operators, and especially the newly emerging SMEs.
We reiterate our view that the BBC should be reined back into
much closer adherence to its public service remit through a much
tighter funding and closer external supervision.
(b) The UK and the EU are grappling with
the regulatory issues surrounding new media and we are dismayed
by some of the views being expressed by large numbers of member
states in the context of TVWF. Our IPA Review of the Television
Without Frontiers Directive summarises our concerns.
(c) We also believe that Government may be
significantly under-estimating the negative impact that the implementation
of the Unfair Commercial Practices Directive may have. This is
because we see the proposed criminalisation of parts of the UK
advertising Codes leading to the break down of the whole self-regulatory
system. How many companies are going to submit evidence to the
BACC when seeking pre-clearance of a commercial if it is to be
used later in court in evidence against them? The IPA Response
to DTI Consultation on the Unfair Commercial Practices Directive
sets out our worries in more detail.
(d) We are convinced that digital media are
very unlikely to be able to be regulated effectively through legislative
action and believe that self-regulation in a co-regulatory environment
is the way forward. The rationale for this was set out in the
AA document A "one stop shop" for consumers and advertising
and this was the basis upon which Ofcom contracted out the regulation
of broadcast advertising to the ASA. In the new media world we
will be well-served by the ASA and can rely on Pareto's Law—already
it's reported that 80% of the expenditure online is deployed across
a handful of major portals, ISPs and online publishers. These
media owners, their clients and their agencies know the importance
of preserving and enhancing consumer confidence in commercial
communications. Thus their enlightened self-interest will ensure
that self-regulation works for the vast majority.
3. NEW MEDIA:
THE PROCESSES
AND SKILLS
REQUIRED
(a) One of the most significant recent developments
has been the rapid rise in the influence of purchasing and procurement
over the world of advertising and marketing communications. Government
itself has been in the van of this trend, indeed setting it in
Scotland and Northern Ireland where the IPA has strong memberships.
Unfortunately the transition from buying tangibles such as machine
components to the purchasing of intangibles such as the Intellectual
Property inherent in an advertising idea has not been an easy
one. Too often the procurement process has been focussed on cost
reduction rather than added value. In order to redress the balance,
the IPA has partnered with CIPS and ISBA in the Value Framework
project and has just published its first work—Magic and
Logic. There is an associated website—www.magicandlogic.co.uk—where
videos of the launch presentations can be viewed. We would urge
Government and its agencies to become role models in procurement
of the products and services of all the creative industries as
this would have a significant impact on their future. These SMEs
need to be able to invest in talent and technology to maintain
their position amongst the world leaders, and to do this they
must make a reasonable profit.
(b) One of the issues besetting the creative
industries in general and the advertising sector in particular
is the lack of a proper definition of "creativity" or
an accepted set of defined skills as a basis for recruitment.
In an attempt to resolve this the IPA has been carrying out research
to validate its hypothesis that there is a special skill called
"Diagonal Thinking" which sets apart the very best people
in advertising. The goal is to produce a "self test"
designed to enable candidates from all socio-economic and ethnic
backgrounds to see whether they have this aptitude and thus open
the door to potential employment in "Adland". Creative
& Cultural Skills have seen fit to co-fund the completion
of the research and, if successful, we will be seeking additional
support to launch the self test throughout the UK. The presentation
IPA "Diagonal Thinking Project" summarises the
progress so far.
June 2006
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