Thursday, February 28, 2008 

Topic: Bias Against Online Advertising

Reference: “If Online Marketing Is the Future, Why Are Some CMOs Stuck in the Past?” Knowledge@Wharton. Http://knowledge.wharton.upenn.edu/article.cfm?articleid=1892. February 6, 2008.

As I have chronicled here in past postings, marketing continues to be a challenge for many organizations including private ones. There continues to be a real split between traditional marketing approaches and the scientific focused approach fostered by the Internet and other mediums. Attempting to rationalize these differences in meetings, overall outlook, and budget allocation is painful, slow, and at times ineffective. Despite the clutter cutting impact of text messaging campaigns, search engine optimization, and the tagging of experience searches with targeted information, there remains a real bias in marketing toward the use of mass media and large investment approaches. The alternative channels of new media seem to convey higher relevancy to specific audiences and offer better cost effectiveness.  However, traditional methods are harder to alter. There is a confidence that brand is better served by mass markets, mass impressions, and massive ad spends. The recent Super Bowl advertisements by companies like Under Armor clearly indicate the mass market mindset. The reasons for the wall in marketing mind share are many and include tradition, classical training, and the perceived efficiency of delivering mass market messages. In the referenced article the commentator points out some startling facts about this marketing bias. “Americans spend an average of 14 hours a week online and 14 hours watching TV, but marketers spend 22% of their advertising dollars on TV and only 6% online, according to data complied and analyzed by Google.”  They also indicate that tracking TV advertising is only 25% reliable, while Internet advertising can be traced at a 75% rate. “Potential advertising revenue is a motivation behind Microsoft’s $44.6 billion bid to acquire Yahoo”. At its core the commentator points out that one reason for the mass market bias is the people in control of marketing at the CMO level. Perceived shortcomings include a lack of understanding of new media methods, opportunities, and efficiencies. Web initiatives are usually not highly thought of, are delegated to lower staff levels, and are budgeted based on what is left after regular media buys. “It’s going to be impossible for a CMO in the next three to five years to do their jobs effectively and not understand Internet metrics very well. The Internet has influenced the way we look at television. It has impacted the way we look at advertising.” This means that the skill set of the CMO has to be questioned, reviewed, and discussed with all levels of management. It also means that the strategic issue of advertising spending on the Internet and through new media channels has to be put on the table. If resources are not being shifted to new channels, new pilots, and new research then marketing is not being managed correctly. I have found that resource flow has to be impacted before minds can be changed. I am also interested in other ways to address this issue.

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