Advertisers continue to spend too little on digital media – by half. Marketing budget allocations continue to lag consumers’ digital media consumption including web and search advertising, gaming and email marketing. Though estimates vary and simultaneous media consumption complicates picking a simple percentage of time that consumers spend on digital media, marketers have been allocating roughly half the budget they might if they instead chose to spend their budgets where consumers spend their time. (See BIGresearch – SIMM – Simultaneous Media Usage Survey).
Back in 2005 Bill Gates, while speaking at an Interactive Advertising Bureau conference, noted that “the future of advertising is the internet.” Gates was also among those noting that spending lagged eyeballs by about half – that trend continues today. Even though digital marketing budgets are expanding rapidly, they are generally around 10 – 12% of total advertising while time online is around twice that.
Even though digital media channels are booming, consumers are not abandoning TV – its viewership continues to increase. However, if we take a closer look we find that folks using the internet are also watching TV – recent figures from Nielsen indicate that over half of TV and internet homes use the two media forms simultaneously at least once a month. Interestingly, 28% of consumer time using the internet is also spent watching TV, though only 3% of time watching TV is spent simultaneously using the internet. Consumers are clearly spending online time also watching TV and changing the dynamics of how TV, the web and their respective ads are consumed. Perhaps this helps explain why online display ads are seeing far lower clicks vs. just two years ago according to Ad Age.
A few implications:
- Digital spending lags consumer media consumption. Even so, I sense that this may be finally changing as the “Great Recession” has jolted marketers to a new state of examination of their ways of old. As spending (investment) in digital media accelerates, its effectiveness will increase along with the tools for measuring it. There will simply be more at stake and less acceptance of an experimentation mindset – even among emerging digital media.
- Consumers are still watching a lot of TV though their attention to it is less than full. Between time shifting devices (DVR’s) and the two other screens at their disposal – PC and mobile – consumers are using selective reception and choosing among more “channels” than ever before. Marketers must design communications that serve the selective consumer across media and in bite-sized pieces of time.
- Marketers need to study specific consumer engagement and media consumption tendencies for their brand. Generalization of media consumption just won’t cut it – marketers need to understand how to seamlessly integrate messaging into the world of the simultaneous media consumer by studying precisely how the consumer relates to their category’s communications. In other words, measurement must center on media consumption (not media distribution against demographic segments) among specific consumers of the brand and its competitors. In this way, marketers can link their investments, media consumption and their brand’s volume using consumer income flows (category and brand spending) as the common measure.
These implications are surely the tip of the iceberg. Maybe 2010, though, will be the year that ad spending starts to catch up with consumers’ digital media consumption. Let’s hope so.
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