• by Ari Rosenberg , Op-Ed Contributor, November 7, 2005

Advertising is in angst.

We all felt it--and now Martin Sorrell, WPP's chief executive, has said it. He recently warned that many of the world's leading media companies are on the verge of panic amid the seismic shifts brought on by the Internet.

What the Internet has brought to advertising is accountability--and accountability always makes people nervous. This feeling of indigestion, however, comes not from the Internet's inherent ability to track performance, but from advertising campaigns morphing into direct marketing efforts as they pass through the medium. The influx of acid is brought on by the way online ad inventory is purchased and sold.

Online advertising uses direct marketing pricing models to sell and buy advertising inventory. Publishers sell impressions either on a cost per thousand (CPM) or a pay-per-performance basis. However, even when the former model is used, guaranteeing publishers a fixed fee for access to their audience, it is the action in response to the advertising sold that becomes the critical point in media buyer's evaluations of publisher's online properties.

If you replaced the term publisher with the name of any list rental company, you can see how the current online pricing models treat online ad impressions like direct mail drops. The rate of response is far more valuable than the consumer's exposure to the letter. This buying mentality is permeating all media -- and that is what has the advertising landscape shaking under Martin Sorrel's feet.

There is a downside to this ROI mentality. For one, it sucks the creative out of creative. For another, it causes content publishers to behave poorly. To see this one-two punch in action, look no further then the home pages of some of the most established brands in content publishing, like Newsweek.com, for example. This publisher sells its coveted home page to as many as six different advertisers, all running at the same time. Premium content brands would never sell their coveted table of contents adjacency in print to more than one advertiser--nor would any advertiser agree to share that space. And yet so many premium content brands' home pages online, which act very much like a TOC, are sold as if the home pages were the classified section.

Because of the pressure buyers apply to publishers to meet direct marketing objectives, the very client they are meant to serve gets hurt. Clutter is the single biggest headache for brand or product managers, and yet their marketing message online must compete for consumers' attention with other advertisers on the same single-page view. No wonder the value of the ad exposure online takes such a beating.

Publishers should immediately limit the number of advertisers on all of their online page views to one single advertiser. If they did this, both the price and the value of that exposure would increase, while the emphasis on response would diminish.

Publishers reading this now may look at their online page views, see two or three ads on a page, and think, "Well it's not six, so we're OK." Not so. Didn't we learn in kindergarten to "wait your turn"? One at a time is the golden rule that still applies. I understand that selling multiple advertisers on single-page views creates more inventory for sale, but it also feeds the direct marketing beast that is eating the value of your content brand for lunch.

The revered David Ogilvy once wrote, "I am convinced that if all advertisers were to follow the example of their direct response brethren, they would get more sales per dollars spent on marketing." John Wanamaker, on the other hand, gave us the well-known quote ("Half the money I spend on advertising is wasted; the trouble is I don't know which half") protecting advertising from quantitative scrutiny that would diminish the intrinsic value of brand-building.

Conversations never really end, and this debate between advertising and direct marketing is no exception. A compromise of delivering one advertiser per page view online, while still manipulating data from response rates to improve conversions, would make a happy medium--and Martin Sorrell slightly less nervous.