The Problem With Digital Media: It's Cheap

  • by , Op-Ed Contributor, September 29, 2014


One of the biggest problems clients’ have today is reaching their audience. We’ve talked endlessly about media fragmentation and the era of distractions, but the real problem seems to be that people are migrating to places where it’s harder to reach them.

We’ve gone to ever-smaller screens, from cinema to TV, desktop to mobile. Worst of all, we spend ever more times in apps, the cookie-free environment with the smallest possible real estate to work with.

While we see the explosive growth in online and mobile budgets, we’ve an extreme tension between investment and excitement of online advertising and the day-to-day frustration with ads that don’t work, click-through rates that border on negligible and ad unit innovation that moves dials for ever shorter periods of time.

The money may be flooding in, but digital display remains oddly subdued; it’s not working for many people. Media owners sell inventory far beneath what they feel is right, brands fail to connect meaningfully with people, and the consumer experience of the modern Internet is lousy: a world of interruptions, distractions and deliberate slight of hands, while your attention is stolen for pennies on the dollar.



It shouldn’t be like this. If marketers were told in 1980 that one day people would be spending time on a device that you can target with incredible data, show rich media in, measure every aspect of, update in real time at the point of purchase, it would be the most exciting canvas their imagination could imagine.

Yet with remarkably few exceptions, you can feel more exasperation than excitement.

The problem we have with online media is that it’s always been cheap, and it’s hard to value something that doesn’t cost much. It started as the place where you placed the leftover cash after the real advertising was planned or where smaller brands that couldn’t afford proper advertising went while money continues to shift from TV to online. Somehow, online remains like the misshapen offcuts of advertising; it has created a vicious circle of decline that hurts everyone.

Cheap media has meant that media owners needed to offer more inventory to try to maximize yields from eyeballs on site. We see pages designed to maximize screen space for ads, cramming ads into every corner and reducing the quality of the browsing experience. The failure to recover lost money leads to media owners creating more stackable content that’s cheaper to produce, more viral and topped with click bait in order to create more inventory to sell.

The ambition and quality of content online goes down, all in the act of making more ad space.

The growing abundance of ad space means that even in a world of rapidly increasing digital investment, CPM’s remain stubbornly low. Even the most successful sites like Facebook, still make one-quarter the ad revenue per unit time than more primitive media like print.

When media cost are low, expectations are low, attitudes are crappy and production budgets stay low. All online ads become rudimentary, cheap desperate ploys designed to attract attention, based on the assumption nobody is watching anyway. It’s a land of sporadic targeting, hit and hopes. We’ve so much attention on ad targeting, we end up with Google magazine-style ads, where even adding a background stock image is too much hassle for the little it’s worth.

And the circle continues ever downwards.

Advertising’s inherent value lies in it being expensive — expensive ads are like well-built banks, they are outward signs of stability, confidence and an intention to last. Cheap ads mean nothing, the subtle message from the medium is not that you have a big ad budget, but you have a keen intern.

But imagine if we turned it around. Could the spiral of decline reverse into a virtuous circle? Imagine a time where each Web site offered one advertiser run of page, much larger ad units, with rich video content, but for far more money.

We’d then see production budgets rise, creatives would see this as a new valuable medium to work their magic, awards for online would become more meaningful.

We’d see audiences relieved from the lack of distraction do something they’ve not done since 1998: They’d notice the ad, they may read them, play with them, even click on them.

Online advertising has chased precision targeting as a core attribute, but traditional advertising didn’t need that. What if broader targeting and broadcasting were an opportunity? Why couldn’t online ads move away from lower funnel and up to glossier upper funnel activities?

What about better calls to action -- why do we rely on the clicks to visit microsites? What if an impression was enough, or what if we moved to click to add to basket, click to add to Google maps, to send to friends, to add to bookmarks to get mobile coupons?

Online advertising needs to wake up to its potential. It’s got money flowing, but its ambition remains muted. It’s going after better targeting, faster buying, more advanced trading desks, yet it somehow lacks the true belief it can be something that people notice and care about. It needs to reverse course; it needs to get bigger, bolder, more expensive, more rare, more beautiful.

It deserves to seek to be noticed, not to seek to be cost-effective.

9 comments about "The Problem With Digital Media: It's Cheap".
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  1. Ed Papazian from Media Dynamics Inc, September 29, 2014 at 5:38 p.m.

    Interesting article, Tom. But one question. You say that digital advertising is cheap. If you mean CPMs, I'm not so sure that is true. A typical TV CPM is around $10 and cable, alone comes in at closer to $6. Typical online CPMs are around $10-12 and online video CPMs for "untargeted" ads are closer to $ 23, without adjustment for ads that are never displayed on the user's computer screen. So, are you referring to some particular, very cheap unit, like standard banners, or am I missing your point?

  2. Tom Goodwin from Tomorrow, September 30, 2014 at 10:16 a.m.

    Given the wildly different nature of impressions online, how they are bought, paid for, etc it is of course possible to massage figures ( probably by forgetting everything that isn't premium, non video!) to get them close to the figures you quote, but it would be misleading to.
    You also have seem to have made the assumption that "true" online ads are video and that somehow Banners are not reflective of online. While the market is obviously moving towards videos ( due to the reasons I documented) , more ad units bought and sold online are still the banner ads you so quickly cast aside as somehow not reflective.
    In a premium environment this move to Video, which pisses off consumers, wouldn't be so necessary, there are no intrinsic reasons for banners ineffectiveness other than how we treat them.

  3. Ed Papazian from Media Dynamics, September 30, 2014 at 10:58 a.m.

    I didn't forget TV's "premium" CPMs , Tom, My figure of $10 for TV's CPMs is an overall average including all dayparts and network types. As for banners reflecting online better than video ads, that may be for the bulk of non-branding ads but banners do not excite the traditional TV advertiser-----I'm talking about the branding function at advertisers not their sales promotional-direct response cohorts. As for making better banner ads-----I'm all for that. But who is going to do it-----the publishers or the advertisers? So far, the latter----again, I mean those engaged in branding----have been deserting print media in favor of electronic media, mainly TV and digital video....but not online banners. Why is that? The reason is simple. They want that oft cited combination of sight, sound and motion, not mostly passive presentations. When it gets its act together, digital video can provide those three elements, not cheap banner ads.

  4. Tom Goodwin from Tomorrow, September 30, 2014 at 3:05 p.m.

    I've no idea what sort of maths you're doing to get a TV CPM of $10, the range $25-45 seems more likely, and regardless comparing CPM's of TV and Desktop and Mobile seems strange, they are different tools for different situations with different possibilities. We need to think more about differences not be trying to think of them in comparable ways,
    I don't think we should be getting stuck in the detail about " who is going to do it" , although creative agencies should be excited for what is possible. It should be about about accepting the reality that the entire situation works for nobody and once we all accept that it needs to be mended, we can then do the boring thing of figuring out who should do it. It should be something we all fight to do. The way we keep repurposing old units from the past is an embarrassment to the fine imaginations, ambitions of our profession.

  5. Ed Papazian from Media Dynamics Inc, September 30, 2014 at 3:49 p.m.

    Tom, if you think that $25-45 is a typical range for TV CPMs-----and we're talking total people reached, not a particular demographic-----good luck in your intermedia comparisons. The number I've cited reflects an average for "30s" and "15s" across all dayparts for the broadcast networks, syndication and cable. What's your figure based on? As for somehow reconstituting banner ads so these "cheaper" units will function more effectively for branding advertisers, the same thing might be said for magazine ads. Of course "creatives" should try to do their best for their clients in any medium with any kind of ad format. So what?

  6. Tom Goodwin from Tomorrow, September 30, 2014 at 4:38 p.m.

    I'm not sure why you bother to manipulate figures to make a point that few, if any, would agree with. Of course in specific cases Digital media is expensive, in specific cases all media can be considered cheap or expensive, but my entire piece is about a general attitude and marketplace.

  7. Ed Papazian from Media Dynamics Inc, September 30, 2014 at 5:16 p.m.

    Tom, I'm not "manipulating" numbers but I agree with you, there are bigger issues than CPMs and I also agree that all ads in every medium, including online, should be maximized for effectiveness by the "creatives". As far as comparative TV vs. online CPMs, it might be interesting to hear from some of the agency and TV people on this. I wonder how many, who actually buy or sell media think that a typical TV CPM ----for all viewers-----is $25-45?

  8. Brian Gardenhire from Camelot Communications, October 1, 2014 at 11:33 a.m.

    Yes Ed, TV is evaluated based on a target audience cpm, which is upwards of $25-30 typically. Untargeted digital video can be had at somewhere in the $12 neighborhood. Ideally, targeted TV and digital video are addressed on a level playing field as platform-agnostic planning best leverages competition.

    Tom--interesting article. This phenomenon has been in place for a long time. I remember old-school planners in the late 90s citing low cpms as a reason not to "do digital". Today, consumer push-back on intrusive ads is felt most readily with interactive media. That's what is preventing publishers from pursuing the high-impact approaches you reference. BTW, with all the time spent in apps now, and free apps being wildly popular, it would seem that we would start to see more intrusive ads in those where users will tolerate them (between game levels, etc.).

  9. Ed Papazian from Media Dynamics Inc, October 1, 2014 at 11:56 a.m.

    Thanks, Brian, but I wasn't referring to a particular demographic, rather to a total viewer CPM for TV ----as I clearly stated. I'm sure that some sellers will offer untargeted CPMs for video ads at $12, however that's not the average. Moreover, targeted video ads go for $35 and up , although I guess that you might find some exceptions to that rule. One of the things I do----and have done for decades-----is tracking media cost efficiencies. I stand by my original statements regarding TV versus the Internet. Moreover, if the finding that 50% of online ads are not even viewable is true, TV's advantage in terms of being the cheaper way to reach people is even greater that I indicated. The basic point I made was that Tom's basic premise seemed to be that TV is a very expensive medium and advertisers were missing the boat by not taking advantage of online's cheap rates-----I interpreted this as meaning CPMs---- by not making more effective online ads. Of course, I agree that all advertisers should try to put out their best effort when devising any ads in any medium. But I don't buy the argument that online is so cheap that it deserves special attention because of the way it prices its ads. If you want cheap, why not focus on out-of-home billboards?

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