Wednesday, December 16, 2009

MEDIAPOST: Has Anyone Been Accused Of Spending Too Much Online?

Someone posed a very interesting question to me this week, and it inspired me to write an article that I may not have otherwise written. In a strategy discussion regarding online they asked, “Has anyone ever been accused of spending too much of their budget online”?

At first pass this sounds like a really simple question and you’d expect the answer to be just as simple, but it’s not. Back during Web 1.0 this was an obvious problem because the Internet hadn’t yet reached the mass audience penetration. Back then you would be hitting the 30-40% of the audience that was online and you’d be hitting them with lots of frequency and with under-developed creative executions. No matter what you bought; Excite, Webcrawler, Netscape, Yahoo or Pathfinder, you’d be hitting the same “smallish” group of users.

Around 2000-2001, otherwise recognized as the birth period of Web 2.0, audience penetration started to become a non-factor as it inched closer to 70% of the US (even more in some other countries), but the medium was still maturing and the percentage of heavy internet users was small and they would typically garner the majority of the attention against your online campaigns. You could buy the homepage of Yahoo and reach a large audience, but it would be the same audience every couple of days.

Now at the close of 2009, and as we enter into a new decade and the birth of Web 3.0, this question becomes interesting again. The mass audience is here. The creative units are impactful. The integration of video and the mass adoption of social media make for an attractive mix of possibilities for advertisers and I don’t really think you can say that a brand could spend too much online. There are single placements that will drive large reach in a short period of time, rivaling and exceeding that of any prime time television show. There are more ways to target an audience and reduce waste than there are with any other medium. There are more unique, targeted content opportunities and the creative impact is far higher than anything in the past. You can create customized solutions with short-term runs or you can go deep with a partner and create content that will live the length of the year, and possibly beyond. Most consumers go to the web for information that will influence purchase decisions (a recent stat said that 74% of US consumers go to the web for information on buying electronics). Social media brings true brand evangelism to the forefront and gets as close to true word of mouth marketing as one vehicle can possibly achieve. And the scope of possibilities in search alone will bankrupt some ad budgets just trying to maintain proper position for a 100% share of voice. Put simply, no brand is having trouble spending their budgets online.

No; this question is a no-brainer now. The Internet can take the budget and be very effective, but what is difficult to grasp is just how much work it would be to spend that money correctly.

Spending $10MM online requires more time and attention than it does to spend $10MM in television. You can spend that much in TV with 4 people, but online it will likely take 10-12 people, and that is the lesson we’ve learned over the last few years. Spending the money means being accountable and being accountable takes time and attention, unlike in TV when spending the money just requires a phone call. TV is not an accountable medium, and the old adage of “I know half of my advertising is working, I just don’t know which half” is where that comes from.

If you spend $10MM online you will know exactly what was working and what wasn’t, but for my money that’s a good thing. If I were going to spend $10MM on paid advertising, I would certainly want to know it worked, wouldn’t you?

So to answer the question; no-one gets accused of spending too much in online these days, but they get accused of under-valuing the execution and the analysis of these efforts, and that could be their downfall.

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