The great marketing ripoff...

Recent data from Nielsen shows that increasingly people are spending less time reading newspapers and watching television and more time on the net..In fact the younger generations (ie < 40) are spending significant less time watching TV and this been going on for years.....Go into any household in Australia and ask them if they are watching more or less TV than they were 5 years ago..The answer will be less and where has the time gone...on to the internet.

In the normal world advertising dollars follower consumers...I mean what idiot would pay for a bill board in a park where no one came or what genius would increase their TV advertising spend over the past 5-10 years when their audience has been moving to the net?

Interestingly total $ allocated to digital advertising is around $1.3b and to television around $3.5b. Strange given the behaviour of consumers does not map to this allocation. So why is there this enormous discrepancy between where people spend their time and where ad dollars are spent.

The simple answer is that for a large number of people it is not helpful to have money shift from television to the net. This group includes (obviously) the TV networks, the ad agencies (who would much prefer creating a big budget TV commercial filmed off the coast of Cuba with Russian dancing bears) then having to create something on a lower budget that actually drives people to act, Media planners (who have a much easier and less complex life allocating money between a few TV networks with limited and laughable measurement metrics as opposed to the more complex and intellectually challenging process of finding out where on the web people are and how to engage them) and finally (and sadly) the marketing directors.

It is understandable that the TV networks, ad agencies and media planners hate the idea of less money being spent on TV but why are the marketing directors in on this game....Firstly it is because it just feels nice and comfortable (kind of like going back to gran's house when you are an adult and sitting in the chair you did when you were smaller eating a piece of her special cake)relaxing back in an ad agency board room with a bunch of black skivvy creatives going through their show reel while the TV ad exec spins stories of engaging audiences etc etc..This is so nice and easy just as long as no one mentions the cost per actual viewer or (heaven forbid) the cost of acquisition of someone who will actually buy the advertisers product compared to the web then all is OK.

The second issue is a darker one...The currency of the marketing director is the size of their advertising budget. This is the cache of their world...Unfortunately what the web shows us is that we can spend less money to achieve better outcomes...In simple terms this means that to achieve the SAME advertising outcomes (reach, brand recognition, sales) we can spend LESS money than in the past..In real terms this means that you can take a bank/auto/FMCG ad budget of $30m reduce it by 40% (with most of the cut coming out of TV and display newspapers) and allocate half of this to the web and put the other half to the bottom line (that would be the profit line for people who have spent too much time in the marketing department).

This is what is happening in the US...why?? Becuase marketing directors that want to be employed in 5 years time can see the writing on the wall and CEOs are taking a more active interest in the efficiency of the marketing spend...In Australia we are seeing a few examples of this breakout but in most cases the marketing director stays coddled in the loving arms of the TV/Ad agency/media planner family while hoping that the CEO doesn't start asking some hard questions any day soon...

Is such a strategy sustainable??? No. It is a strategy that will result in the marketing director being out of a job. If you as a marketing director and you are not on the front foot cutting wasteful media spend, really understanding the power and efficiency of the web and providing your CEO with more margin points then your goose is surely cooked.....