Six Pixels of Separation - The Blog
April 2, 2011 7:35 PM

When Is This Going To End?

Quick question: do you believe that advertising spend should match consumption patterns when it comes to media?

I sure hope you answered "yes!" Sadly, the Internet is still the red-headed stepchild of the media world. As consumption on both Internet and Mobile continues to rise (the other day, I tweeted about an eMarketer news item about how the Internet surpassed newspapers to become the second largest ad spend media platform after TV), the Web is still the Rodney Dangerfield of media (it gets no respect).

It needs more respect.

It turns out that eMarketer is at it again. Just a few days later another news item appeared titled, Ad Dollars Still Not Following Online and Mobile Usage (March 31st, 2011). Here's what the news item reported...

"Despite the projection that online advertising will increase its share of US major media ad spending by more than 10 percentage points between 2009 and 2015, spending on digital, including internet and mobile, has not yet risen to match consumption patterns, eMarketer estimates. Among the major media of television, internet, radio, mobile, newspapers and magazines, US adults still spend the most time each day with TV. eMarketer estimates adults watched television for 42.9% of the time they spent each day with those media in 2010, and ad dollars align closely, at 42.7%. The internet, by contrast, took up 25.2% of adults' daily media time in 2010, but received just 18.7% of US ad spending. 'Those of us focused on the internet channel have complained for years that it hasn't been getting its fair share of media dollars based on time spent,' said eMarketer CEO Geoff Ramsey. 'However, the precise extent of that imbalance has been shrouded in mystery and exaggeration. Now we know--it's a gap of 6.5 percentage points.'"

It's a big gap... it doesn't make any sense.

How is it that we have this new media channel move up through the ranks to become the number two most consumed media in the world and yet, still, marketers and brands are not pushing things further ahead? This could well be the first time in our history where the consumers and their patterns are moving at a pace that marketers can't seem to keep up with. On top of that, we're only looking at advertising spend. I'd be curious to see what the numbers look like in terms of coupling in the Digital Marketing budgets as well (the development of websites, apps, mobile platforms, e-crm initiatives, etc...). It would be interesting to see overall Digital Marketing spend and then how the advertising part of it makes out. Regardless, we need to get the advertising spend into the same realm as the media consumption.

If you ask me, I think it's tragic that the ad spend online does not (at least) equal consumption. What do you think?

By Mitch Joel


Comments Comments Feed
  • Posted by Jay Ehret
    Mitch Joel

    Mitch, I understand what you are saying here, but here are some considerations:

    1. The internet is a big thing.
    If I want to advertise on in the newspaper, or on TV, I call my local rep. If I want to advertise "online" who do I call? The Internet sales department? Where is that? Maybe Facebook? Try calling Facebook and getting in touch with someone if you have less than $100k to spend. Oh, I can advertise on Facebook myself you say? Ok, let me try it out for a couple of hundred dollars and see if it works. Meanwhile I'll call the TV station and they'll help me figure out how to spend a couple of grand.

    2. Are you taking into account content creation budgets as marketing budgets?
    Marketing online isn't always about placing an ad or a campaign. It may be article marketing, blogging, podcasting, YouTube videos. Are those budgets being counted?

    3. Marketers think they can advertise on the internet for free.
    Set up a Facebook page, open a Twitter account, start a blog, do SEO...all for free! Why should I spend money?

    Reply
    • I agree with you Jay.

      When it comes to spend though, you would be surprised how well-informed the major media buyers are now. They are sophisticated. The know who to call and - more importantly - the media and publishing companies know how to find them too. As I say in the Blog, post, the data does not seem to be taking into account anything but advertising and while I agree that Marketers know that it's free to set-up a space, I think they all know that getting people there (and attention) costs money.

      If they don't, we have a lot more work ahead of us than I suspected.

      Reply
      • Posted by Jay Ehret
        Mitch Joel

        Mitch, I should have added that I agree that maybe more money should be invested in online marketing. But I think we as marketers think of online marketing differently than we do traditional forms of marketing. We have been conditioned, and perhaps condition our clients, that the internet is where you get by as cheaply as you can, and maybe even do it for free.

        Reply
  • Posted by John J. Wall
    Mitch Joel

    Jay has a good point about fragmentation, you have to do a lot of work to figure out where to spend the money. Also remember that the web is the only medium that was not created with advertising support as part of the business model. The web does fine with no ads and users paying for access.

    Reply
  • Posted by Just a reader
    Just a reader

    It's my sense that the gap will close when marketers are better able to translate consumption into conversion.

    In other words, just because people spend more time browsing on a mobile device than they do watching TV, that doesn't necessarily mean that they're more likely to buy something.

    The money will follow when the proof is in the pudding.

    Reply
    • I'm not sure about this. The longer you are consuming/creating content and being exposed to messages at the same should increase your conversion... unless the world changed in the past little while. I'd love to see some new research/data on this. Otherwise, we're both speculating.

      Reply
  • Posted by Sylvain Martel
    Mitch Joel

    This is what happens when you let "media planners" decide where the big advertising bucks go. They simply don't get what's going on out there right now and stick to what they known for the last 15 or 20 years. TV and it's web counterpart, video/display advertising.

    Digital ad models suck because they're copied from TV models and are planned mostly by the ones who had it easy planning traditional media a few years back.

    SM

    Reply
    • Sorry, Sylvain, I can't agree with you. I'm in rooms with media planners a lot and they're level of sophistication has caught up to the times. More often than not, they have digital media planners that are as (if not more) sophisticated than some of the digital agencies I come across. They see the same data we're all saying. They know where the future of their business is and they're evolving fast. I would not be throwing them under the bus so fast.

      Reply
  • Posted by DavidofSeattle
    Mitch Joel

    On what basis do you assume there is any need that spend has to match consumption? I say "welcome to the world of direct marketing!" which is the oversight all the mass-media-turned-internet-gurus always make...if everyone has complained for years that the mass media model is inefficient, then why the angst that the web is not matching its wastefulness? If the web was as efficient as everyone would like to pretend it is, then you should be seeing the total share decline...right now the average user would tell you they see far more useless, uninteresting, un-targeted and inappropriate ad counts relative to real estate than they do per minute of viewing on TV...so what could possibly motivate you to think its not enough?

    Reply
    • We're not talking about quality of advertising and consumer appreciation for the media. My overall gripe is that this media channel has grown to be the second-most popular form of media and that advertising (be it banners, email, search, whatever) get it's proper share of the budgetary pie. I am not saying that it should be the same type of advertising and that it should not look more like marketing than advertising, I'm just saying that the amount of dollars put against it should be comparable.

      Reply
      • Posted by DavidofSeattle
        Mitch Joel

        I know exactly what you are saying, but have no idea why anyone would think it "share of budget" must equal "share of eyeballs". It's a false choice. If web advertising spend ever did equal the share of attention it gets, I would be shocked because all the crap we now see every day would be tripled. The web will be more about reducing marketing budgets than it will be about growing them simply because it is more efficient. Simon's point on outdoor advertising is the same - just because I spend two hours a day in my car doesn't justify anyone crying about the dearth of billboards lining my local highway...

        Reply
  • Posted by Jace Turner
    Mitch Joel

    Here's my thought: Social media isn't social when we remove the social aspect (communication, organic, spontaneous Authentic -Dialog- with human beings, as human beings) we remove the value of the tool (SM). I take responcabyality in my role as a social media/marketing professional. The time has come for there to be a quantum leap in creativity and innovation. I see this as being so simple it's divine, invest in people. It's said every purchase is an emotional purchase. I'm more inclined to buy something from a friend who recommends something to me than an ad I see - on TV, online or in print. This aspect is "free" it takes "time" to build up trust with people and to create community. My vision is clear - the money goes to the people who are authentic and have a passion for social activity, the ones building lasting relationships founded on love, mutual respect, giving, receiving, and abundance. There need not be a concern about how to sell something, being that there is a PERCEIVED VALUE that can be offered organically when the opportunity presents it's-self. Not to dismiss media all together there is a place for that. What I do is: I build a relationship over months maybe even years with key people and organizations, I know what I can post on their walls for instance on Facebook after we have gotten to know each other. I can post anything that will add value to the relationship. This is where the work is, building real relationships with real humans, being social and stepping further and further outside of your comfort zones. We can continue to believe that it's "they" who are not doing what "needs" to be done. Or we can finally let go of that conversation and take that quantum leap. As long as we are not choosing to be the change we wish to we will continue to see that which we would not wish to see. So what do you do now?

    Reply
  • Posted by Simon
    Mitch Joel

    I'm uneasy with the comparison as it treats all media as equal, when it terms of attention and intrusion they are not.

    The internet is huge in terms of time spent, and we are very active on it. While that is good for advertisers, it is less good for the public who notice the constant intrusions (at least until they get banner blindness).

    If we were to exaggerate the principle, what if I spend two hours a day commuting, an hour a day on email and half an hour of the phone. Is ad spend here concomitant to the spend per time spent on TV? Outdoor advertising maybe, the others certainly not.

    On a digression, Kevin Kelly recently had an interesting post on ad spend and attention at http://www.kk.org/thetechnium/archives/2011/03/your_attention.php

    Simon.

    Reply
  • Posted by Bill Laidlaw
    Mitch Joel

    It is possible that Tv's share of spend equalling our share of time spent is a coincidence. Having said that in the end any markets spend will be governed by the results of all participants. It may be because the successes are much more easily measured e-marketing is simply more efficient, and always will be?

    Reply
  • Posted by Mike Charbonneau
    Mitch Joel

    I hear you, Mitch, and tweeted the same thing on the day. This Monday, I have a client presentation recapping a recent, huge marketing campaign whose digital component fared very well. Alas, once again, we'll need to convince them how important this is (despite the metrics) and how to leverage their digital channels to make more money instead of just giving it all away.

    I guess it's all part of the education process.

    Reply
  • Posted by Marc Binkley
    Mitch Joel

    Great post Mitch and some great comments from the others.

    Media consumption vs ad spend is a topic near and dear to my heart. I've written a number of different blog posts related to this topic, preach it in presentations and recommend it to all of my clients. I am a big believer in the alignment of marketing resources with consumer media consumption behavior. I've noticed when I go fishing, I have a better chance of catching fish in places where there are fish.

    Full disclosure, I work for a radio broadcaster. However, I've learned that to be successful, I have to sell ideas that make sense. Getting your business online is one such idea. There are numerous studies ie. CMUST that show consumers spend the majority of their time with 3 media formats - TV, Internet and radio. Why wouldn't you fish there then?

    Every single day I find prospects who have committed the majority of their marketing resources to newspaper, yellow pages and other printed material. These people are not alone. Globally, newspapers and magazines still get more dollars http://bit.ly/dVYm53 than both radio and Internet combined.

    It's my belief that businesses who realign marketing resources to match consumer media consumption give themselves a competitive advantage. The sooner a company focuses online, the sooner they can start building a tribe, listening to customers and servicing their community. To paraphrase Gary V, getting your business online is like word of mouth on steroids. These same prospects who spend the majority of their budgets in print also tell me that word of mouth is the single best source of new leads. Why not focus online where its easy for consumers to share your word? Where dollars go, marketing resources like time and people follow. Nearly every small business that I've worked with has 1 overworked marketer in their organization. That person can't bring their company online all alone because they don't have the time. For companies that have shifted their resources, the marketing departments have grown to include staff from other departments. Their marketing teams feel empowered to execute ideas and create remarkable experiences for their customers that I've not experienced anywhere else. These teams have brought their company online and given it a personality. If you want to see an example and live around Calgary, check-in to an Original Joes a few times and see what happens. They made me feel special enough that I'm talking about them (and not their competition) here. How do you measure that?

    Reply
  • I disagree Mitch. Its all about ROI latest center for media research showed people found TV ads twice as influential as digital. I never click digital ever. Seriously. Ever. Yet I spend hours and hours online. So it is wasted add spend using digital to reach me. And no one ever asked the people where they want to see ads vs where agencies tell brands they want to see em?

    Reply
    • Posted by Sylvain Martel
      Mitch Joel

      Howie, because you never click on web banners they not impact on your purchase decisions?

      How many times did you hug your TV? ;)

      SM

      Reply
      • Posted by Sylvain Martel
        Mitch Joel

        Let me rephrase this ok? :)

        .. because you never click on web banners then they have no impact on your purchase decisions?

        Reply
        • SYLVAIN!!!! and also replying to Bill

          I wanted to clarify my point. Because I was at a hockey game and on my droid. My point was not to use me and example 1 and everyone is like me. It was more meant to say spend and eyeball time are not something that neatly parallel each other. It would be great if that was the case. Hell Facebook who I hate could state they deserve even more of the spend.

          My point was that we need to allocate resources where we get the best returns on our investment now...OR...future returns. I am going to blog this week about the Paid Tweet from Saks 5th Avenue showcasing a woman's dress I saw all day yesterday. That is a digital ad...served to the wrong person. Not Saks fault. It's either Twitter or the Media Buyer/Ad Server.

          I see Advertising everywhere already and yes sometimes I am influenced by what I see online. But often that influence is not marketing as say news or traditional media. Or sharing among real friends (not so much social media connections for me but sometimes).

          And Sylvain when I get a big ass TV I am going to hug it like a dog humps a leg! LOL

          Reply
    • Posted by Bill laidlaw
      Mitch Joel

      It is wasted ad spend only if the advertiser is paying per impression.

      Reply
      • Posted by Sylvain Martel
        Mitch Joel

        Even Not Bill.

        We made researches with major clients a couple years back (iCoke amongst others) and we found (and clearly) major increases in latent visits from people exposed to web ads VS non exposed (with web as the only media channel used during this specific period of time.

        Latent = exposed to an ad, no interaction with it, and then, within 30 or 6days, you vist that company's website promoted by the ad.

        We clearly underestimate online display advertising effect and one of the biggest mistake we still do today is measuring performance through CTR only.

        SM

        Reply
  • Posted by Elissa
    Mitch Joel

    Well, here's my very simple interpretation...the C-suite of major corporations are still run by Boomers. Boomers, while on Facebook and Twitter, will still spend the majority of ad dollars on what they know and understand - and that's TV. As the tide, and age demo, turns in the C-suite, then I believe you will see a shift in where ad dollars will be spent.

    Reply
  • Posted by Parissa Behnia
    Mitch Joel

    I'm late to the comment party! I am one of the organizers of ProductCamp Chicago and our event was this past weekend. I was stunned to learn that very few of these Product Managers and Product Marketers engage in the new channels. Obviously, they can't be tweeting all day long or checking in on Foursquare every moment (getting coffee! at my cube! lunch! etc) because they've jobs to do but the seeming large disconnect with the new and newer media channels seems to be at least one cause for what you describe in this post with a linkage to the "CMOs don't get it or are at least afraid of it" problem that we all know exists.

    Reply
  • Posted by Craig Tilley
    Mitch Joel

    I believe ad spend does equal consumption. When you add up all the new forms of marketing such as SEO strategies and social network marketing, including the video and blog post explosion you can see that the advertisers are flocking.

    Because the Internet is a relatively new advertising medium, advertisers are testing out all forms of marketing efforts to see what will stick.

    In order for advertising to work it must relate to the context of a well formulated and executed marketing campaign...and that advertising had better have some great content or it will be lost in the ever expanding sea of generated content.

    Reply
  • I'm not sure spend should equal consumption rates. I think EXPOSURE should equal consumption.

    If someone does 42% of their media interaction through TV, then 42% of their opportunities to encounter your brand should be through TV. If 25% of their time is online, than a quarter of their encounters with you should be online.

    But a TV exposure can be arranged only through the purchase of an ad (+/- interviews, etc). An online exposure can be arranged through an ad, through Twitter, through Facebook, through a blog, etc. Some of that costs money and some doesn't.

    Unless we're counting the salaries of your professional Twitterers in the online spend, in which case I have to agree

    Reply
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