Thursday, June 09, 2005

On line ad spend up again

An article in Adage today highlights the growth in on line ad spend in the first quarter of 2005. Yesterday one of the alumni from the university contacted me to say that he was now working in an on line agency and it was the place to be.

"The medium that once was the power of TV is dying at an alarming rate, so I would recommend telling your students not to bother!"It's an interesting comment. I think one of the key questions could be rather than "Is TV dying" one could ask
- "Given the maturity and potential decline of the Television Advertising market how will advertisers and the media buyers achieve effective ratings points in the future?"

I concur that TV advertising is in slow decline, but so too are newspapers. Why? Well simply ....readership and viewership figures are down in many developed markets. In a connected world the choice of media vehicles for all to consume is vast.

The move is almost certainly to a content driven media buying environment.

Must see TV - but through HD recorders (ad skipping is compensated for by sponsorship).
Must read papers and magazines or rather blogs
Must listen to - podcasts or radio

Another interesting blog that touts similar views is Ian McKee's blog

He highlights some interesting stats from a recent Harvard Business Review article.

"Some eye-opening statistics from the June 2005 Harvard Business Review (subscription req'd) on the effectiveness of 500 various consumer and B2B marketing programs:

* 84% resulted in less market share, not more
* Most customer acquisition efforts did not break even
* Fewer than 10% of new products succeeded
* Most sales promotions were unprofitable
* Advertising ROI was below 4%
* Doubling advertising expenditures for established products increased sales just 1% - 2%

The HBR shows what Professor Andrew Ehrenberg has cited before. The weak theory of advertising exists in mature FMCG markets.

Advertising in these markets is about sustaining your market share.

As one of my colleagues from Strathclyde yesterday quoted Ehrenberg - "Let the data speak." (sic)

3 comments:

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