Thursday, November 5, 2009

Is Digital Interaction Pulling Its Weight?

Agency bosses too old and change resistant, claims Sorrell

(Advertising Age) NEW YORK - WPP chief executive Sir Martin Sorrell claims that brands are not spending enough online because the people who run their agencies are too old and resistant to change.

"Delivering the opening keynote session at ad:tech New York yesterday, Sorrell criticised brands for investing an average of just 13 per cent of their marketing budget online despite the rapid increase in digital media consumption.

The boss of WPP, parent of OgilvyOne and Wunderman, claimed that brands are being preventing from spending online due to a lack of understanding on behalf of the agencies handling their media budgets."

"WPP's [five year] strategy can be summed up in one simple sentence: new markets, new media and consumer insight," he told ad:tech delegates.


Drinking with some digital marketers last evening, I mentioned a stat that the average under-25 spends 5 hours a day on Facebook, a starting change in media consumption. But before we rush to purchase every online ad avail on Marc Zukerberg's brain child, my colleagues wisely noted that the average 20-something is also simultaneously watching TV, listening to iTunes, texting on mobile and probably checking every 60 seconds on the Domino's Pizza Oven app to monitor the progress of dinner. The medium is not the message. In today's communication planning, the brand experience as represented in digital media has become a critical support plank for the brand promise. Not always sufficient, but necessary.

With all due respect to Sir Martin, there are limitations in our present approach to digital media. Catalogs and other mailed communications deliver more more revenue per touch - and more certain revenue -- than digital media. The first wave of digital communications has hit a saturation wall of effectiveness. While email is scarcely 10 years old, remember, "You've got mail," open rates and end-actions rates are sinking under the volume. Ditto for online display ad banners. They didn't exist five years ago, but OA response is down by 50%, and network CPMs are in the tweens to single digits because of excess inventory. UHIPs like MSN home page reach eyeballs but at a negative ROI for most advertisers. And while pre-roll video is hip, hot and showing good numbers, there a lot of questions of exactly what constitutes an "interaction". Viewing through completion is much lower.

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