The Paradoxes of Online Marketing

Here’s an interesting piece from MediaPost this morning: Marketers Threaten To Put Majority Of Budget Online:

Big-name brand marketers are fed up with traditional media channels and are threatening to shift the lion’s share of their budgets online, according to Nick Brien, worldwide CEO of Universal McCann.

“If this happens for another year, significant clients will want to walk,” Brien said at an Interactive Advertising Bureau conference on Monday in reference to a general climate of discontent due to increasing viewer fragmentation, disruptive technologies, and the resulting decrease in ROI.

Without naming any specific clients, Brien added they are “just waiting to increase their online spend to 50% or 60% [of their total budgets].”

Even assuming there’s remote truth in this statement, it represents more bad news for traditional media, TV and newspapers in particular, but generally across the board.

It coincides with this IAB release that online ad revenues reached $5.2 billion in Q3 (but at quarterly growth rates that don’t suggest Brien’s prediction above is happening yet).

There are a number of problems with Brien’s prediction and related events (if they come to pass):

  1. Traditional media can’t just make up dollars lost on their conventional products with online versions. In other words, for every dollar lost to TV advertising, pre-roll in front of online video can’t recapture it. (See, for example, that pre-roll is ineffective.)
  2. As just suggested, online advertising for all its “accountability” is often ineffective. Online, consumers will often just ignore brand advertising unless it is done in a clever or creative way or part of a more sophisticated search + display campaign (such as Yahoo! has been advocating for some time). Here’s a post (one of several) that suggests social network advertising may be ineffective.
  3. Finally there just isn’t enough quality ad inventory for everyone online. So brands can’t get the frequency they want even if they can get the reach.

Consumers have clearly moved online to the detriment of traditional advertising and media. But they’re also fickle and ambivalent about advertising in general. Online is all about pull and just a little bit about push. When ads are “relevant” consumers will consider them. (As evidence, see Nielsen: Google now number 1 in traffic in US.)

Offline, only classifieds and yellow pages are about pull. Most of the money is spent on push campaigns that, unless extremely thoughtful, just won’t work online. So as money moves online — or seeks to move online — it may find it has nowhere to go or is deployed in ways that are in some respects less effective than traditional media.

One Response to “The Paradoxes of Online Marketing”

  1. Lots of Interesting Things, but No Time to Comment « A Fuller View Says:

    […] The Paradoxes of Online Marketing […]

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