tedr says: There’s a tidal wave of advertising spending coming to the Internet. It may being held back by recession dangers, but once the dam burst and they give up on the media that people aren’t favoring anymore, it’s gone but a game changer.
(via tedr)
Rafer sez:
Only sorta — that’s a grapefruit-to-cherries comparison. For every dollar that vanishes from TV, newspapers, et al, only a dime or so of spending will show up online. The rest will go into some combination of profits, revenue deflation, and the inefficiency of buying online (so far). Every one percent gain in online spend is disproportionately important in these accounts.
(via rafer)
Sawickipedia: I’ve taught Scott well :) Seriously though - tidal wave isn’t the correct analogy since that implies an overwhelmingly fast wall of spending. It won’t happen that fast - it will be a slow and steady march. Yes, the recession is holding it back in overall growth in comparative growth the march hasn’t stopped.
What does slow it down is how inefficient it is to market online at any meaningful scale. I have too personal anecdotes. Last fall, Universal McCann in SF held a roundtable between Microsoft and interesting online ad tech startups like Lookery. One of the conundrums posed was how could Microsoft spend $50M in one place. The reality is it can’t to @Rafer’s point without materially blowing up literally every ad startup in the room that day. As a result, large spends could divied up into bite size chunks with potentially huge overhead costs (thus defeating some of the inherent performance cost advantages online has).
The other story comes from an acquiaintance of mine who used to the VP of Brand Advertising at Coca-Cola. He made the point that no matter what - Coke was going to spend $4 billion a year on marketing. If spent entirely online, then that would choke even the largest inc. yahoo and google. And it would require a team of hundreds, if not more to manage. At the same time, Coke could spend $500M on TV advertising in an hour at the network upfronts. Online is a _LONG_ way from being able to offer that level of scale.
