Advertising’s Digital Disconnect

NEW YORK — If the Internet accounts for 17 percent of U.S. media consumption, then why does the Internet account for just 7 percent of companies’ ad budgets?

Offering more questions than answers here at the Advertising Research Foundation (ARF) conference, the panelists generally concurred with ComScore Chairman Gian Fulgoni when he described an “emerging media lag.”

“Large advertisers tend to be very conservative, and they’re not going to shift their advertising dollars unless they can prove ROI,” he said.

For all the data that can be obtained through people’s online activity, which is the essence of ComScore’s business, Fulgoni admitted that the industry got off to a bad start by trying to tie all measures of an ad’s effectiveness around the click.

Ads are about more than simply trying to get a consumer to take a specific action, Fulgoni noted. All ads are about driving sales, to be sure, but the concept of building a brand has been largely neglected in the online advertising community’s fixation upon the click, he said.

Microsoft recently gave this shortcoming a formal acknowledgement with the announcement of its Engagement ROI metric, which it promised would measure the proportional impact of every ad in a brand’s campaign, not just the last ad clicked before a customer took a certain action, such as buying a product or downloading a white paper.

ComScore has its own product to measure the impact of all ads in a campaign, and an increasing number of digital agencies are getting more serious about trying to take the measure of all the exposures a person has with a brand before taking an action.

To achieve this, Fulgoni said, advertisers and companies like his own must produce better data. Cookie deletion, for instance, poses a real problem. Citing survey data that showed that 30 percent of people report regularly deleting the cookies from their computer — some as often as four times a month — Fulgoni warned that simply tracking the number of cookies placed on people’s computers can create a measure of unique monthly visitors to a site that is inflated by as much as 80 percent.

Old world marketers and ad pitchmen may seem like relics to the digerati, but the fact is, the panelists said, they still pull a lot of weight at the big advertisers and agencies.

“Those white-haired guys don’t get as excited when you tell them that you’ve got the world’s largest campaign on YouTube,” said Lee Doyle, CEO of the North American operations of Media Edge, a global ad agency.

Venerable names in the consumer packaged goods business, advertising heavyweights like Proctor & Gamble and Unilever, have taken a lot of flack for their slowness to warm up to digital advertising.

“Consumer-packaged goods built their brands on television,” said Peter Daboll, who holds the title of chief of insights at Yahoo. “The rule book hasn’t been written about how to build brands online yet.”

It is a well-understood truism in advertising circles that marketers are very protective of their brands. They think of them as their children, they often joke. Turning a brand loose in a no-holds-barred milieu like the Web demands a certain loosening of the grip among brand managers working for the advertisers and agencies, the panelists said.

Nevertheless, the awakening is in the works, said Ted McConnell, who serves as manager of digital marketing innovation at Proctor & Gamble (NYSE: PG). McConnell said that, like it or not, the brass at the biggest U.S. advertiser are beginning to realize that its target customer is spending more time online, and the ad dollars must follow.

“There is an evolving need to be where she is,” he said. “We’re beginning to reach an inflection point where over the next couple years you’re going to see P&G really coming out.”

Part of the transition involves a restructuring of how an agency handles a campaign. In concert, the panelists argued against what they called “siloed” thinking, where an agency would treat print media as one category, television as another, radio as a third and digital as another altogether. They argued for a holistic approach to a campaign, where the various media buys would be coordinated and mutually supportive.

Lee described the gradual obsolescence of the traditional marketer who specialized in a particular medium, while ignoring all others.

“It’s not an either-or proposition,” he said. To the advertisers and media buyers Lee meets who are reluctant to abandon their television buys for digital, Lee’s advice is blunt: “It’s not an either-or proposition. Stay on TV, but you’re an idiot if you’re on TV but not on digital as well.”

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