Some days I feel like 90% of my blog posts are posts disagreeing with other blog posts. Am I the alternate voice crying out in the wilderness?
Anyway, today’s post that I take issue with comes from Silicon Alley Insider. I actually have to dig in with a little of the line-by-line:
The burn rates and valuations of many Web 2.0 companies are predicated on this article of faith: The Web will benefit from a massive share shift as marketers choose the measurable (online advertising) over the not-so-measurable (newspapers, TV, etc.).
Wait a second, it is not just about measurable vs not, it is about where people spend their time. I read recently that almost 20% of the media that people consume is online. The percentage of US ad spend that is online is in the single digits. So you have to assume that online ad spend in the US will double or triple in the next few years. That means 30%+ sustained growth rates. Even if ad budgets shrink, growth should still be significant. Anything less creates a substantial arbitrage opportunity for smart marketers.
But what if at least one of the core assumptions — that online ads motivate consumer behavior — is wrong, or maybe just half-right?
The beauty of a measurable medium, including mediums where transactions are measured, is that prices become appropriate. The reason we have banner blindness is that people just consume more pages, seeing more ads. Many pages have literally a dozen ads on the page. Those ads are, in many instances, virtually worthless and will be priced accordingly. 6.5 billion pages on MySpace every day: Mostly not valuable. But that is ok, things will be priced accordingly.
Then SAI tries to question the conclusion:
Does it hold water? Certainly banner advertising had been hit by the perception that it is roundly ignored, but a raft of research concludes that video advertising — even annoying pre-roll ads — has some of the highest recall in the business.
What does this have to do? Nielsen says TV works because it is entertaining and you are focused on it…. just like pre-roll. Pre-roll is different than banner ads. Pre-roll is annoying for the same reason commercials are annoying: I don’t want to watch them and I can’t ignore them.