Gasta Tech News: Digital Platform Advertising,Robert Moskowitz part 2.

By Robert Moskowitz part 2.

Another factor may simply be structural. Karna Crawford, EVP, chief media and connections officer at Engauge, a total marketing solutions agency, thinks that: "When you can buy huge scale one time with a quick hit, that's worth a premium. 'American Idol.' 'The Super Bowl.' That's a huge audience available for a finite period of time. Because people are so engaged with the content, the advertising is more likely to be paid attention to. And a lot of products want to advertise there, which also drives up the price. The digital space doesn't command such a premium because your audience has exponentially more opportunity to take control and move away."
Historically, advertisers have been hesitant to push dollars into something new and unproven. "Think of the internet now versus 1995," Crawford says. "Wireless isn't proven in many instances, a lot of advertisers still don't know how to use it, don't feel confident about the expected ROI. So the prices are significantly lower than a video ad on ESPN, which is tried and true. It's the same adoption cycle you'd see for any other product."
The practical value of online advertising is also determined by the needs and strategies of the advertisers. Todd Riley, senior vice president, digital media & integrated strategies at Doner, headquartered in Southfield, Mich., the largest independently-owned advertising agency in the world, points out that, "The real benefit of the online space is the ability to engage, now. For example, a car purchase requires a lot of research. Digital media has the ability to make many relevant connections to content to help the process along. A can of Coke, on the other hand, can be purchased by anyone at anytime, so engagement is nice, but much less important."
Given all this, the inability of online advertising to fully replace the income lost from offline advertising probably reflects that advertisers simply don't perceive it to have an equivalent value.
For one thing, in today's more complex advertising environment, it's more difficult to accurately define and pinpoint ROI. "Is the goal a direct sale," asks Spiegel, "or the overall increase in sales during and after the campaign? I continue to support the idea that different media channels can support different goals/metrics and that a 'one vs. the other' comparison isn't all that useful."
"You're hoping to get different outcomes from the various media," Ellet points out. "It's why you're thinking about one medium versus another. They all relate to an overall objective, but the way you're going to use the media is very different. Online advertising might be about requests for information, driving sales, traffic, and so forth. Offline advertising might be about raising awareness or changing beliefs or attitudes about your product. Every advertise has different priorities; some are all about raising awareness and so are willing to pay more for that outcome."
"CPM is one useful benchmark," says Ben Kunz, director of strategic planning with MediAssociates, a media planning and buying agency, "the other is probably cost per inquiry -- how much do I spend to make my phone ring? The relative value of offline tends to be less in both areas. It's more easily measured, and it's putting a lot of downward pressure on CPMs."
CPMs in a high-end financial magazine might be $60, but advertisers recognize that people don't read every page of the magazine.
On the other hand, says Kunz: "you have to be careful not to take that logic too far. People spend four hours a day watching TV. That's two months per year. Internet gets a lot of buzz, but TV washes over you and you may be exposed to a commercial that you would not click on, on the internet. There is a lot of value in offline media."
"It's not news," Maitra says, "that print is in trouble and readers are migrating online. As a result, we're seeing innovation in terms of what kinds of ads we use, we're looking at better metrics, and we're learning how one medium can amplify another."
Central to success in today's complex advertising environment is an understanding that we live in a very fluid world. People now watch TV while sending emails and tweeting. They read magazines and then go online to check details about what they've read. As a result, there are now very complex relationships across the media types and channels. Advertisers are learning to look for the relative contributions of different media in different campaigns, different situations. For example, a successful TV campaign can lead to a huge jump in the number of online searches for a product or a company name.
"The idea that 'digital's not getting its fair share of the advertising dollars' is bit of a fallacy," Crawford argues. "Advertisers may want digital to be 50 percent of their media mix, but that doesn't mean it has to be 50 percent of their dollar spend. There's too much dialog about the dollars and not enough about the share of the media mix that's going toward digital."
"Obviously, budgets have been cut and cut and cut," Crawford acknowledges, "but media vendors are really hurting for advertiser dollars. So advertisers should start asking for improvements in pricing, interesting pricing models, and set some precedents to build on when the economy gets healthier."
"Marketers need to advertise where their consumers spend their time," says Spiegel. "In time, most, if not all, media channels will become digitized and this comparison will be moot."