The Negatives of a Positive Outlook According to Julie Roehm

I am going to be attending the iMedia conference in October in Nevada and plan to host a round table where I would like to discuss the fact that the digital spend of advertisers continues to either stay flat or grow very little while the consumers usage of digital mediums grows and is WELL beyond the 5% digital budget allocation. My point is that we go to these conferences and here the positive spin on this and I think it is time we speak more frankly about what the hell is going on! When I was at Chrysler, we had our digital budgets near 10% and that was 5 years ago. (see http://adage.com/article?article_id=105108) I have some theories about why clients and their agencies don’t allocate more spending to digital including:
1. comfort with what they know…TV
2. lack of control over the content on the internet
3. fear of the unknown: while there are a couple hundred TV stations there are a myriad of sites so the idea of choosing both the content and where to place it can feel daunting and challenging in terms of optimization.
4. digital fragmentation: the digital budget (versus the TV or print budgets, etc) gets tapped for social media efforts, mobile efforts, and sometimes digital OOH as well.

I’d love to hear your thoughts as well.

4 Responses to “The Negatives of a Positive Outlook According to Julie Roehm”

1. cathy healey says:

   September 15, 2009 at 8:02 pm

   All good points. Preserving ones lifestyle and the lifestyle of people you like may be part of the resistance. Traditional media provided money, power and prestige. It’s been a great gig for over 40 years, a well oiled machine. Why would anyone enjoying that good life want to see it change?

   Most traditional media is bought by large corporations full of risk averse people. They stick with what has worked for years and enjoy the power and prestige that goes with controlling huge budgets that are unquestioned.

   Budgets will tip to new media after traditional media collapses. Or when a new online competitor dominates its industry. Net-a-porter and bluenile are my favorite examples of this.
2. detroitmediaguy says:

   October 6, 2009 at 2:30 pm

   What on earth are you talking about that “Digital” spend is only 5% of the advertising mix? Using AdAge as your guide is not necessarily the most reasonable source … since they are using TNS estimates as their guide … and everyone in the industry knows that TNS under-reports their numbers for Online (let alone all Digital) spend.

   I believe that Jack Myers actually projects numbers for “Internet” advertising to by between 12-13% of mix. And this does not even account for the sudden rise of Digital place-based media and Out-of-home, or the growth of Online video players like Hulu and other FEPs

   Want to take the iMedia crew to the woodshed? Then ask them about Digital media backrooms – the worst in the business (and a historic drain on agency resources in attempts to reconcile Online buys) … or, how about establishing some kind of reliable (standardized at least) normative measures of branding to conversion (the best advertisers are doing now is to measure themselves against themselves).

   Or better yet, just get them to put a valid measurement tool in place for advertiser spend out there … so at least the projections are on the money (i.e. SQAD’s recent and growing attempt).

   Maybe then Digital can warrant an even further increase in ad spend.

   But to suggest it should be higher … and is somehow restricted … by Advertiser complacence, or paranoia is kind of far fetched. There is no validation in that line of thinking.

   Anyway … have a nice conference.
3. Julie says:

   October 7, 2009 at 9:14 am

   Thanks for the comment DetroitMediaGuy. I agree that all data is flawed in someway and that TNS is no exception. I too know Jack personally and his data does differ. That said, if you look at the variances of these different reports year over year for the past several years, you will see that the growth in digital/online spend (granted digital now reps much more than online alone) has been miniscule..whether you look at TNS which has grown maybe 1% or Jack’s reports which show 3%..on a ratio basis, its pretty similar and thus the point. For arguments sake, if digital spend was 12 or event 17% would you think that that is comparable to the actual time the average consumer spends with the digital mediums? I would argue that it is far less than what consumers are actually spending.

   I totally agree with the lack of measurements and norms..it is part and parcel to my original theory. If you have some specific ideas, I would be happy to hear and float them.

   Thanks for responding.

   Julie Roehm
4. Abernathy says:

   October 15, 2009 at 5:49 am

   It’s the numbers, plain and simple. The big story is TNS and Nielsen’s inability to measure the medium accurately and the end users of the data to interpret accurately. Two examples:

   Aside from the fact that due to its highly targeted nature, Web based media can’t be measured accurately with a sampling of sites, dollars are going into parts of the Web that aren’t being measured, like video, and to mobile, and so on. Money is leaking out of the realm of measured media.

   Secondly, looking at the U.S. ad spend ignores big skews between large national advertisers and small local ones which contribute large sums of ad dollars to media that they know, or can buy easily.

   The budgets I’ve seen for a large diverse set of national advertisers don’t reflect the premise.