• by Jim Meskauskas , August 15, 2002

The grousing continues. As the year has worn on past the half-way point, folks within the industry still wonder why they are not getting their fair share of the advertising budget pie, while those who only write about the business are in awe that the industry still survives at all.

So the question remains, why is it that this fine industry of ours does not get the respect (read: MONEY) it deserves? Why is it that no matter how much research we pump out, research demonstrating how effective the medium is as an ad vehicle, it doesn’t see more of the ad dollars that are allocated towards getting a brand’s message out there?

Well, I’ve been thinking about this, and I think I have a few reasons as to why this is the case.

And if y’all think about it, these will make sense. Because in one form or another, you’ve all encountered these unique quandaries in their own special manifestations, but you may have not thought that these quandaries were the prohibitions to the development of this still young business of ours.

So, let me lay out some of the barricades preventing this fine industry of ours from singing like the Mormon Tabernacle Choir.

We need to make this business more efficient. The efficiency of the exchange is part of the problem, certainly. The difficulty of buying and selling online media, given all of the “parts” involved, erodes profitability. As a result, the segment needs more money to hold afloat the detritus of bad systems. If it were as easy to buy online media as it is to buy broadcast, an agency could charge a few points for committing buys. As it stands, agencies are forced to go to clients and tell them that it is going to cost them 10 to 15% to do a transaction that, in broadcast, would only cost the client 2 or 3%. This is an ongoing problem.

Accountability, while a great thing, is why there is such a squeeze on online budgets and the work they must accomplish. Because I can see what is going on, I feel the need to exercise more control, which manifests itself as holding the money just a little bit together. Why spend a large sum of money wildly if I can let it trickle out while watching the slow march of data come forth and tell you what you should be spending your money on?

Identifying just what online media actually is certainly contributes to the slow movement of dollars to the space. Just where should the money come from? Is online advertising a direct marketing effort? Is it a PR effort? Will it be used strictly for branding? What if you want to accomplish all of these things? Where should the money come from? As it turns out, companies have separate monetary dispensations for different approaches to accomplishing their marketing objectives. So, just what budget should the spending come from?

A lack of “tangible” experience is part of the difficulty of promoting online. We can “share” Super Bowl ads, and we can “share” an episode of “West Wing,” but we cannot share a pop-up. The fact that it is a “one-person-at-a-time” engagement stymies it communalism as a medium. As much as we hate to admit it, the CEO of the company still wants his golfing buddies to see his ad on TV and talk about it when they are out on the course.

Agencies themselves don’t do much to draw spending to the medium because they don’t really incentivize their talent to work in the space and create their best product for it. The margins aren’t there for creative, and the margins aren’t there for media. Management of a top ten shop isn’t going to motivate their staff to suggest online media when they can get a much larger budget for broadcast. If I can accomplish the same thing online with 10% as much as it would take to impact an audience offline, why is a public holding company of an agency going to allow for it? They got investors to please. Now, if instead they thought about their clients…