David Meer at Enfatico observes that many frustrated and idealistic people in the online media business persistently point out the discrepancy between time and money spent online:
Despite the fact that people spend around 30% of their media time online, advertising online captures less than 10% of media budgets-and the gap has persisted over the last several years.
Which begs the question: Why do people automatically and narrowly apply time spent in a given channel as a proxy for value and justified ad dollars? It boggles my mind. In terms of branding and customer acquisition goals, I will gladly pay a lot more for one channel with almost no time spent versus one with a lot of time spent – if the former were to perform better against my objectives. And objectives and their achievement should factor in return on ad spend, including profitability to my business. It’s that simple.
So what best explains this lopsided online-offline equation? David says that both traditional and online advocates tend to be parochial:
We know that online allows us to measure conversion and business results with brands immediately and with more specificity than any other medium. Importantly, it also enables two-way conversations between customers and brands. But TV remains a powerful communications vehicle, one that consumers still embrace. What’s missing so far is better knowledge of how the two work together. When marketing is truly integrated, offline and online work together seamlessly, with robust analytics to make sure the allocation between them leads to the best outcome.
David’s right. Advertisers are stymied by their inability to understand and properly attribute the impact of individual and collective advertising investments toward predetermined goals. When that happens, we’ll see an adjustment to a more enlightened media cost/value ratio.
But beware: in the near-term, greater value may be reinforced with offline channels, not online. But in the mid- to long-term, the dichotomy of online versus offline will blur and disappear – if for any reason, because the world’s going digital.
I wish people would stop using the time spent to budget percentage argument. It shows a lack of economic understanding, ironically from experts who should understand how supply and demand impact pricing. Or did I miss something and now you can interchangeably buy 30 seconds as a TV spot or a page view for the same price?
Very right peter.
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