When I first joined Advertising.com, one of the calculations that led me to join was that it seemed like the market was poised for explosive growth, far above and beyond expectations. Here was my off-the-cuff theory:
- Online was 5% of US media spend
- Online was 17% of US media consumption
- Until those two numbers are the same, people are getting better value advertising online than anywhere else (arbitrage), so those two numbers will gradually come into alignment.
That made me think that the market would grow 20%+ YoY for several years, because I didn’t think that 17% would get any smaller.
Lo and behold, I was right about that, at least. Today the numbers are headed in the right direction:
- 12% of US media spend is online
- 30% of US media consumption is online
- So, far from coming together, these two numbers, while increasing rapidly, are actually diverging.
My new theory as to why this is: Advertising online sucks. It simply doesn’t work as well as advertising on TV. So TV is getting a disproportionate amount of advertising dollars relative to its media consumption because it works better than online advertising. And that is not too surprising. 728x90s suck. They don’t tell a story. They are like tiny magazine ads.
TV ads have a story arc. They have punch lines. They are visually stimulating.
Targeting and measurability and all the stuff that most people in online advertising do is great. They create a situation where advertising theoretically could work better by being more personalized. Flight prices to Vegas from your city are not what we are talking about, though. Without a fundamental change in the kinds of creatives that big brands can put out there, online ads simply won’t work as well, at least in a subjective sense for advertisers.
Solving this problem is hard.
First, we must overcome prohibitive expense. People already spend way more outside of buying media when prepping an online campaign then they ever did for TV. You build some web site with some viral thing on it, and all that stuff. That is great. If a consumer wants to engage with your brand, you want that brand experience to be awesome. But the first step in engagement is seeing an awesome ad. If you asked the top X agencies today if they would prefer a consumers first interaction with a brand be via a 160×600 or a 30 second spot, I think you would struggle to get anyone to say the web banner. Making these great ads is expensive though and someone has to do it.
Second, there must be a visionary industry breakthrough. Even if we knew how to do it all affordably, I don’t know that we would crack the nut anyway. What do awesome ads look like? Punch the monkey captured the imagination. I just named a 728×90 ad that people actually recognize (although I don’t know what they were selling). Dancing Lower My Bills ads? These caught the eye but in a way that left me angry and bitter. I don’t think Teracent or Tumri is solving this problem. Making the ad green or blue or blue-green may increase the odds that I click, but it doesn’t vault the ad into the pantheon of great advertising moments. At least not mine.
Everything that I see in the market is evolutionary and incremental, but this is not the time for incremental. We are in the first inning. You are not standing on the shoulders of giants, you are standing on a speck of dust. There is so much room for change that we need people to swing for the fences.
Let this be a call to entrepreneurs. If you figure out how to make great ads online, you get a billion dollars.