Why Is The U.S. Behind In Online Advertising Spend? Is That Even The Right Question?

Reflecting on ZenithOptimedia’s latest ad-spend forecast, Jeff Jarvis asks why the U.S. is behind in its share of online ad spending versus major European countries:

Is it that the national media markets in those countries are more competitive and thus, perhaps, innovative? Is it something about the culture of American agencies or advertisers — and if so, what? Is it the nicotine habit of TV upfront here? Is online just more of a pain to buy than upfront? The audience is shifting online faster than the advertisers. Online is more efficient and measurable and more competitive, thus less expensive. So tell me: why are we behind?

I left this response in the comment section:

I’m not suggesting Internet spend shouldn’t be more, but you frame the issue as if Internet spend is less in the U.S., so therefore it is behind. The real question is not one of share here or there — that’s a horse-race mentality. The real question is: What’s the right mix that will achieve defined business results for the advertiser? That said, the U.S. has a huge legacy, and there still are some impressive clusters of massive reach and homogeneity in media distribution (i.e., reach of television networks) here which still deliver respective value and will continue to. That’s as opposed to almost any other country, which tend not to have nearly the same scale, and therefore perhaps less reason to hold on.

Second, the legacy of advertising executives (on the marketer side), as well as agency business models and incentive structures, are defensively holding onto the margins and familiar operations of existing media planning/buying behaviors. It’s a preservationist mentality, for the individual people, and the divisions that represent those legacies, especially in the big ad holding companies.

Finally, complexity of the “great Internet advertising advancements of the past decade” is a huge factor. It’s a massive problem when an industry begins to characterize itself by inaccessible silos and geekery. Perhaps the biggest problem with this mentality is that it spawns black boxes and breeds a “keeper of the flame” mentality. That ultimately thwarts advancement. This complexity epidemic has spread to virtually every corner of online advertising, especially search, the fastest growing online sector. The result is a darkening cloud of frustration, inefficiencies and skepticism building among many marketers small and large, despite undisputed benefits and unprecedented ROI. I’m not suggesting all the great new advertising technologies and capabilities aren’t wonderful and exciting, but the blunt, underlying pain of convolution is nearing its threshold. Marketers don’t need any more features, options, solutions or clutter. What they need is relief and clarity.

Eventually, our silo-laden definitions of media categories (i.e., Internet, newspaper, television) will blur, and most media will be digitally connected to the so-called Internet. As that happens, the advertising economy will achieve greater targeting, predictive, delivery and interactive efficiencies. As for forecasts, these greater efficiencies could shrink the size of the so-called advertising economy as we define it today, and cause dollars to shift to more direct customer management functions. Just a thought.

What do you think?

Published by Max Kalehoff

Father, sailor and marketing executive.

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