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Online Advertising and the Quest for Dominance |
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Consumers now spend as much time on the Internet as they do watching TV, according to Forrester Research. However, advertisers spend less than half the amount on digital advertising budgets that they do on TV budgets. At this summer's upfronts, television networks commanded 8–10% increases in advertising spending, despite years of predictions that digital advertising would steal share.
In October, executives from some of the biggest online brands — including Facebook, Huffington Post and Groupon — came together and admitted that they are facing challenges in marrying digital marketing data metrics with real-world implications for brands. Mike Gamson, LinkedIn's senior vice president of global sales and one of the attendees at the event, said, “It takes time to explain what you can do with audience information and context and explaining how to use that to go viral.”
This admission, on top of the realization that the Web has not caught up with ad spending on television, raises the question: why hasn't online advertising taken more of a bite out of the television ad budgets of big brands?
There seem to be several reasons:
1) There is not a single measurement shared between digital and traditional media that allows brands to see a comparison of effectiveness. Brands don't know how to compare TV apples to online oranges, and therefore cannot directly guarantee that lowering TV budgets would not have a negative impact on brand impressions, as well as on sales.
2) As a brand-building medium, digital advertising is not as effective as TV advertising. While online advertising is more directed, TV advertising is an audio-visual immersive experience, capable of swaying emotions and high-level (upper funnel) opinions. Online advertising serves a better purpose when the user is further down the purchase funnel, and just needs to be invited to take an action — otherwise known as the “lean forward” experience. Dave Morgan, CEO of Simulmedia, hit on this distinction when he noted, “I don't know many Web ads that made me laugh, cry and want to hug whoever was near me.” Brands need upper-funnel brand awareness and affinity as much as they need a call to action.
3) There are many digital measurement tools in the market right now, due to an influx of venture capital. This may actually be preventing the market from producing one end-to-end solution that could combine the full complement of media planning, analytics tracking, optimization and return on investment. With all the tools on the market, companies are struggling to even keep up with the technologies available. It may take some time for the analytics marketplace to mature, so companies can fully understand and take advantage.
We believe that online advertising will remain relegated to second-class status until a majority of Americans have their large-screen TVs connected to the Internet. Once that happens, then interactive ads can also be “lean-back” experiences, and may become as effective at brand-building as TV ads. As experiences get more immersive, users are more emotionally affected — and that is what brands are all seeking.
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More about Wong, Doody, Crandall, Wiener
The Wong, Doody, Crandall, Wiener family of companies includes Wong, Doody, Crandall, Wiener, a full-service marketing-ideas agency and United Future, a provider of marketing-critical Web and technology applications. From our offices in Seattle and Los Angeles, we provide a range of strategic, creative and analytic services to clients including Alaska Airlines, the Bill & Melinda Gates Foundation, T-Mobile and Epson.
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Seattle
206.624.5325 |
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310.280.7800 |
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