Has Anyone Been Accused Of Spending Too Much Online?

Someone posed a very interesting question to me this week, and it inspired me to write an article that I may not have otherwise written. In a strategy discussion regarding online, this person asked, "Has anyone ever been accused of spending too much of their budget online"?

At first pass, this sounds like a really simple question, and you'd expect the answer to be just as simple -- but it's not. Back during Web 1.0, this was an obvious problem because the Internet hadn't yet reached mass audience penetration. Back then you would be hitting the 30%-40% of the audience that was online and you'd be hitting them with lots of frequency and with under-developed creative executions. No matter what you bought -- Excite, Webcrawler, Netscape, Yahoo or Pathfinder -- you'd be hitting the same "smallish" group of users.

Around 2000-2001, otherwise recognized as the birth period of Web 2.0, audience penetration started to become a non-factor, as it inched closer to 70% of the U.S. (even more in some other countries). Still, the medium was still maturing, the percentage of heavy Internet users was small -- and they would typically garner the majority of the attention against your online campaigns. You could buy the homepage of Yahoo and reach a large audience, but it would be the same audience every couple of days.



Now, at the close of 2009, as we enter into a new decade and the birth of Web 3.0, this question becomes interesting again. The mass audience is here. The creative units are impactful. The integration of video and the mass adoption of social media make for an attractive mix of possibilities for advertisers. I don't really think you can say that a brand could spend too much online.

There are single placements that will drive large reach in a short period of time, rivaling and exceeding that of any prime-time television show. There are more ways to target an audience and reduce waste than there are with any other medium. There are more unique, targeted content opportunities, and the creative impact is far higher than anything in the past.

You can create customized solutions with short-term runs, or you can go deep with a partner and create content that will live the length of the year, and possibly beyond.

Most consumers go to the Web for information that will influence purchase decisions (a recent stat said that 74% of U.S. consumers go to the Web for information on buying electronics).

Social media brings true brand evangelism to the forefront and gets as close to true word of mouth marketing as one vehicle can possibly achieve.

And the scope of possibilities in search alone will bankrupt some ad budgets just trying to maintain proper position for a 100% share of voice. Put simply, no brand is having trouble spending their budgets online.

This question is a no-brainer now. The Internet can take the budget and be very effective, but it's difficult to grasp just how much work it would be to spend that money correctly.

Spending $10 million online requires more time and attention than it does to spend $10 million in television. You can spend that much in TV with 4 people, but online it will likely take 10-12 people, and that is the lesson we've learned over the last few years. Spending the money means being accountable -- and being accountable takes time and attention, unlike in TV when spending the money just requires a phone call. TV is not an accountable medium, and the old adage of "I know half of my advertising is working, I just don't know which half" is where that comes from.

If you spend $10 million online, you will know exactly what was working and what wasn't -- but for my money, that's a good thing. If I were going to spend $10 million on paid advertising, I would certainly want to know it worked, wouldn't you?

So to answer the question: no one gets accused of spending too much in online these days. Sometimes they get accused of undervaluing the execution and the analysis of these efforts, and that could be their downfall.

8 comments about "Has Anyone Been Accused Of Spending Too Much Online?".
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  1. Nelson Yuen from Stereotypical Mid Sized Services Corp., December 16, 2009 at 1:02 p.m.

    .... going to wait for the old school pundits to bash the author out of ignorance and self preservation.

  2. Nelson Yuen from Stereotypical Mid Sized Services Corp., December 16, 2009 at 1:02 p.m.

    btw - great article.

  3. Stephen Shearin from ionBurst Media, December 16, 2009 at 1:29 p.m.

    Great question, great answer, and great analysis regarding the number of people required for proper execution where accountability is a factor. I also enjoyed the trip down market-maturation lane. Good stuff as always.

  4. Jim Courtright from Big Thinking By The Hour, December 16, 2009 at 1:35 p.m.

    Who spent too much online? Two words: Bud TV.
    Not that their premise was wrong. Brands like Budweiser can build their image through cool unique content shared on the web. They simply had the wrong content strategy. And spent way too much doing it.
    First of all, they tried to mirror traditional broadcasters by creating lots of content as if wanting to fill a 24/7 window, when all they needed was a single piece of content, no longer than a minute, maybe once a day. Unfortunately the creatives at Buds agency seemed like they were more inerested in testing out sitcom ideas on the public so they could cut Hollywood deals than they were in connecting the Bud brand to consumers.
    Plus agency creatives don't know how to produce video content without roping in high priced production houses to execute. Again, Bud paid the price.
    Lastly, they all seemed to forget the age restrictions for liquor brands reaching viewers under 21. The signup process was so cumbersome that lots of people simply passed on it.
    Better had they channeled all that creativity and developed a single piece of daily content, sharable on mobile phones, that was so cool that people would be willing take the extra time to sign up for it, to be first in line to see it and share it.
    Is there a place for Bud to do great video content on the web? Absolutely. The just need to separate the content creation from their broadcast agency and maybe hand it off to a digital one.

  5. Corey Kronengold from NYIAX, December 16, 2009 at 2:37 p.m.

    On the money as usual, Other Cory.

    Maybe we're over thinking it here, or looking for a more complicated answer to what you called "a simple question."

    Are you spending too much online? If you spent more, but didn't get any more back, then you've hit your limit.

    If you can still generate positive ROI, then theoretically there's no reason to stop spending, right? You stop when its no longer worth it.

  6. Joshua Chasin from VideoAmp, December 16, 2009 at 3:13 p.m.

    In answer to your headline question, "Has anyone ever been accused of spending too much online?"

    Yes. My wife.

  7. Brad Fowler from Core Digital Marketing, December 16, 2009 at 4 p.m.

    great read.. i love to pass articles like these along to traditional execs...especially at the CMO level where they still have a myopic focus on TV and are too afraid to step outside of their comfort zone, that being the Reach / Frequency metrics they've grown up with...

    you pose a great question that has yet to be answered that i know of... WHY is TV not held to accountability like Digital can be? of course this is a double-edged sword for the online industry as there are too many metrics, once we have a uniform system of measurement more and more $'s will go online.

    at least with online we know where we waste dollars. tv is spray and pray.

    core digital marketing

  8. Paul Spyksma, December 16, 2009 at 4:24 p.m.

    Cory, did it occur to you that the person who asked the question wasn't really looking for an answer to that particular question, but was trying to see if you could discuss budgets objectively? To the man who only has a hammer, every problem looks like a nail.

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