• by Cory Treffiletti , Featured Contributor, May 14, 2008

Winston Churchill once said, "The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty." I think, but I cannot be certain and have seen no confirmation of this point whatsoever, that Winston Churchill started out his career working in advertising. I think he may have been speaking to those people who feel brand advertisers are not spending online in conjunction with the time spent online by their consumers.

There's much ado about online advertising in the trades and the mainstream press these days, but I read very little that speaks to the difficulties with online advertising. I read about online advertising in Fortune, Forbes and sometimes Time magazine and it's regularly covered in BusinessWeek as well as the New York Times and the Wall Street Journal. What they cover is the growth and the proliferation of new technology that's being applied to the space, but they rarely break down the difference between dollars that are spent against direct response advertisers vs. brand advertisers and the difficulties that still surround brand advertising in this space. The majority of the dollars being spent online are being tracked, optimized and managed to direct response metrics, while many brand advertisers are still afraid to shift money to the Web. In a conversation I had this week with some well-respected industry experts, we identified our hypothesis as to why many brand advertisers are afraid to make the large-scale shift. These reasons were: ease of use and breadth of opportunity.

Brand advertising dollars dramatically outweigh direct response advertisers in the offline world. The primary, and probably the best, reason that brand advertisers have not yet shifted the majority of their dollars to online media is that it's not easy for them to do so. It's really quite easy for an advertiser to spend $250 million in television, but an advertiser would have a hard time spending that much online! A budget of that scale would create extremely high frequency levels and utterly blitzkrieg the target audience, pounding them into submission until they just couldn't take it anymore, never purchasing another product so long as they live! OK, that may be an exaggeration.

Beyond the potentially painful consumer impact that $250 million in online would have, imagine the pain on the part of the agency or the sorry souls who were tasked to execute a campaign of this size. The promise of the Web is in its accountability, optimization and the amount of data that are available to help your campaigns be optimally effective. Imagine what the trafficking sheet would look like for a campaign of this magnitude, and the volume of creative that would have to be created and rotated just to make the effort seem fresh! It would be a Sisyphisian task, to say the very least.

While spending $250 million online would be an immense undertaking, I could spend that money on television and for a fraction of the time required to manage that campaign. For online to continue to grow at the rate projected over the next 10 years, we need to find economies of scale that will allow for an advertiser to realistically spend large budgets in an efficient manner -- and we need to come to terms with the value of said inventory as well.

Which brings us to the second challenge that online advertising faces: the breadth of targeting and options that are available. There are too many choices for advertisers to consider. In direct response marketing there's a mantra that states, "If you give a consumer too many choices, they will not choose one." That's what happens to brand advertisers to some extent. Targeting opportunities and targeted ad placements and sizes and formats and the choices facing planners are so robust that selling through the appropriate plans requires weeks of education -- and in some cases, the audience for this education will default to what they know best: TV and print!

As the old adage goes, "If it ain't broke, don't fix it." Let's face it; offline advertising is not broke. It works. It sells products. Until a large packaged goods advertiser sees a decline in sales as a result of the tried and true, they will not make any dramatic changes. Of course that doesn't mean that they won't "test" and "allocate opportunistic funds" to online. They will. It just means that until we make it a little easier to understand, they won't jump in with both feet. Of course if you read my article last week you would know that science is winning in the battle over art, so for this shift to take place media planners will need an MBA and a Ph.D.

Online advertising is not in desperate times, by any means. It is still growing and it will continue to do so for many years to come. The exponential growth we saw five to 10 years ago will not be experienced again, and the dollars allocated to the medium won't match the time spent with the medium until we solve these two challenges: ease of use and breadth of opportunity.

Just by pointing out these challenges, you might say I am being a pessimist, but in truth I am an optimist. I know these challenges will be met in the coming years and I feel that the automation of much of our business will assist us in doing so. Ad Exchanges, SEM tools, ad servers: all of these platforms exist to help us improve the process behind planning and buying media, and I am 100% convinced that these challenges can be overcome.

As another quote from Winston Churchill noted, "I never worry about action, but only about inaction." Our business is never one that lacks action! Wouldn't you agree?