I love surveys. They are a constant source of entertainment to me. The recent survey conducted by my colleagues at Dynamic Logic in conjunction with MediaPost has some real gems in it; some lying there in plain sight, some for which you have to dig a little. The finding that I liked best comes from comparing the beliefs of media buyers and sellers. That simple comparison highlights a mismatch between the objectives of the two groups and it led me to wonder who has got it right, the buyers or the sellers?
In March, 2007, 1089 subscribers to MediaPost completed an e-mail survey on their attitudes to media and media spending. The sample consisted of three groups: media buyers (advertisers and agencies), media sellers (media companies), and others (technology companies and consultants). The survey findings make interesting reading in themselves and can be found here, but my attention was caught by two charts concerning the online activities in which the respondents expected to invest in the coming year.
Both groups seem to be in agreement that investment in the Web is likely to increase this year, with 81 percent of respondents reporting that a higher proportion of their budget would be devoted to the Web in 2007. It was when they were asked which digital marketing areas they planned to invest in that the disparities became apparent.
Topping the buyers ‘ list of areas they intended to invest in heavily was search, at 62 percent, with e-mail and microsites following (40 and 39 percent, respectively). No prizes for guessing why. Buyers are most interested in driving sales. Search has a proven track record for generating traffic, and e-mail is a great means to contact existing customers. Microsites provide a platform for getting your message across.
By choosing to focus on these three areas, the buyers demonstrate their old school beliefs about how marketing communication works. All three are under the marketers control. All three are highly measurable. All three are nearer the end of the sales generation process, rather than the beginning.
By contrast, media sellers would see their plans involving more online video, search (at a far lower level than buyers), and social networking. Well I guess now that they’ve invested heavily in video streams, video sharing and social networking sites, they want to sell the associated inventory.
What intrigues me about this comparison, more than the mismatched objectives, (after all, each party believes it is acting in its own best interests), is the fact that the media buyers are so heavily invested in selling rather than marketing.
Search, e-mail and microsites: all ways to get your brand in front of people and generate direct response. In other words, “push” marketing, focused on triggering activation rather than creating demand. And where is the money going to come from? Well, assuming that budgets are pretty much fixed these days, then traditional media, the ones best able to generate initial demand for brand, look set to lose out.
I wonder if these media buyers realize that any response they get to their direct response activities will in large part be a function of the pre-existing demand for their brands—that is, how many people are already predisposed to buy the brands before they enter the search or shopping phase. If they stop investing in creating demand, their activation activities will slowly lose effectiveness. Just ask the U.S. auto manufacturers what happens to price promotions when your brand and product don’t pass muster. You end up investing more and more in a tactic that has less and less effect. Death spiral here we come.
So are the media sellers right to be planning for more online video and social networking revenues in their budgets? Well, online video has proven its power compared to traditional TV viewing, but we have a long way to go before its reach can anywhere near rival offline video viewing. And what of social networking? It’s great if you have a brand that can benefit from the spontaneous admiration of fans, but of little use if you have to pay your way into peoples’ personal pages. Sorry folks, but that means that most marketers will just have to continue finding creative ways to engage consumers using existing media and marketing activities. New media will deliver the goods one day, but it is not going to be in 2007.
There we are—a few little numbers can suggest a lot. At least that’s my opinion. What’s yours? Am I just an old stick in the mud when it comes to new media? Are marketers unduly fixated on search just because it is the last step on the path to a sale? Let me know.
Tags: Millward Brown, Nigel Hollis, Dynamic Logic, media spending, digital marketing, media budget, email, , search, video, social network
(17 votes, average: 2.76 out of 5)
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May 9th, 2007 at 4:42 pm
I think your conclusions are right on - with one exception. You assume that the dollars for online activation tactics come at the expense of investment in brand building traditional media. What if the money is coming from traditional activation media - direct mail, yellow pages, newspaper coupons. It may be that brand managers will wisely continue to stoke brand demand through traditional media, but activate it through digital channels instead of offline channels. In that scenario, crisis averted - for now!
May 9th, 2007 at 4:49 pm
Hi Don, you are right, of course, I was making the assumption that monies would be diverted from ATL media not BTL. That assumption was based on reports that both “new media” and BTL were growing at the expense of ATL, but maybe that’s not always the case.
Thanks, Nigel