• by Dave Morgan , Featured Contributor, April 12, 2007

I was fortunate to hear an extraordinary talk last night at the Interactive Advertising Bureau board dinner by David Kenney, the CEO of Digitas. He spoke about the challenges that online advertising faces. His message was simple, engaging and, in the end, a clear call to action. Online media buyers like Digitas and the entire roster of Publicis agencies and their clients would like to spend dramatically more money in online advertising, but they can't. He even quantified it. Last year, Publicis recommended to its clients that they spend $10 billion in online. They were only able to spend $3 billion. Why? Because there are three enormous bottlenecks in our business -- and until they are solved, we should not expect the industry to grow as fast as it could.

Here are the challenges that he identified:

• Operations. Operational bottlenecks in the online world have created a "wall" that is almost impossible for buyers to surmount. When it comes to managing insertion orders, billing, reconciliation (of everything from impression counts to audience metrics to billing and invoices) things are, well, horrific. The agency-side costs incurred in dealing with this is overwhelming the agencies and making it impossible for them to manage online advertising buys cost-effectively, certainly as compared to what they are used to in television and print, where the "friction" costs are so much less.

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• Metrics. Online advertising -- certainly the most quantifiable form of advertising -- can be measured by lots and lots of different flavors of metrics, and we do. This is bad. There is very little consistency in our metrics and how we use them. Not only does this magnify the industry's operational problems, it also hurts the industry's credibility with agencies.

• Talent. There is a talent crisis in our industry. There is no other way to describe it. We need many more smart, creative, well-trained and highly motivated folks to make our businesses work. Virtually every agency in the U.S. has an inordinate number of open positions. If they don't have the people to manage the planning, buying and execution of online campaigns, the money will not flow. It is that simple.

  Kenney's points are right on target. We had better take them as seriously as we take the headlines touting our industry's opportunities. If we don't acknowledge, address and solve these problems, we are going to find much, much slower growth than we want. We need to heed this call.