• by Tig Tillinghast , May 24, 2002

Internet advertising started out as a “national” medium, which at once sets it apart from all the others, and also may point to why the medium has so far failed to penetrate the vast regional and local markets.

Even television started out in a city-by-city manner. And after maturing for many decades, the majority of spending in each of print, radio, TV and direct remains mostly local. Depending on which numbers you believe, local and regional media accounts for between 55 and 60% of ad dollars spent. The Internet’s claim to that enormous money pool isn’t even big enough to count as a rounding error.

This was brought home to me – literally – by a talk with my dad. He runs a hardware store in a very rural New England town, and he spends a lot of money on direct mailings. He does all the efficient local print, TV and radio opportunities, and then spends the rest of his marketing budget on mail drops to new homebuyers, and other traditionally hardware-minded households.

He keeps asking me, “What about the Internet?” And I have to keep telling him “It’s just not there yet for someone on your scale and your level of targeting.”

It’s really embarrassing. Here, his son goes off to the big cities doing the fancy-shmancy “internet advertising,” and he keeps coming home to tell his dad that what he does isn’t all that useful. (He wanted me to be a lawyer, but that’s another story.)

Part of the problem remains the penetration issue. Most of us have long ago dismissed the US market as “penetrated” by the Internet, but this just isn’t true relative to other media. Everyone has a mail address, but only two thirds or three quarters of us can be reached online. And it’s a lot harder to find our online address. I can buy my dad’s zip code of mail addresses for about 5 or 10 cents apiece, but I can’t even get more than 10 or 20 email addresses in 06239, never mind pay less than a buck for them.

To the national advertiser, this isn’t something to cry over, but to the vast local and regional media markets, it’s a deal breaker.

The Internet has been a large boon for some local businesses, as it allows a local shop to get national customers. I just looked at a kayak yesterday from a local store in Elkton, MD that does a significant portion of its sales online. This is a place that allows bare feet, and will stay open another hour just to give you time to come over. But, aside from putting up their website, they don’t see value in spending marketing dollars online. At least not yet.

About two years ago, several media technology companies waged a press release battle about how great their targeting services were going to be. Engage and DoubleClick come to mind right off. We were going to, seemingly, be able to target people at the street level with certain spending habits, personal behaviors and demographics, all at once and in real-time. It seemed as though local spending in the other media would become obsolete.

I’m not sure where these targeting products went. I know they existed, or at least some very clever demos existed. Perhaps the combination of “privacy” concerns, Internet bubble bursting and lack of upfront local media spending kyboshed the young products in the cradle.

Now that the markets have become more rational, I think it’s time we rolled some of these back out. Without the local option, the medium is competing with one hand tied behind its back.