What the research is saying is that online media is not meeting the needs of US consumers as well as more traditional media types. How do we know this? First, modeling shows traditional media are profitably reaching consumers. That is both consumers and advertisers benefit from the exchange. Firms are executing rationally. Second, we know that ROI for Internet ads are not meeting requirements for advertisers. Most firms have reached saturation points for online spend. Again we know this by data. Third, National comparisons are largely irrelevant for analytical purposes. Firms allocate resoruces for profits not to create national comparisons.

Now on to why. The US media markets are likely far larger and far more efficeint than those found in other nations. The logic that other nations are more efficeint is just absurd. Meidqa markets are larger. Media markets in the US are more dividible. Measuremet is better in the US. In sum ther is no mystery. Stop wishing and start focusing on serving consumers and clients.

I dont watch tv because its just crap and ads. And now the lovely internet is fast becoming the same.

Second, and relatedly, there are still too many major marketers and media companies which treat online advertising as a decided after-thought and place the digital marketing strategies in the hands of amateurs. 25-year Direct Mail vets, moonlighting Web operations managers and ceremonial appointments which are encouraged to not rock the legacy boat vs. producing legitimate innovation in the medium where more of their customers choose to spend more time.

Lastly J&J is a good example of a major consumer marketer which has said enough is enough. It has sat out the Upfront because the firm did the math and got fed up with an outdated, unaccountable advertising process.

Secon, the legacy of advertising executives (on the marketer side), as well as agency business models and incentive structures, are defensively holding onto the margins and familiar operations of existing media planning/buying behaviors. It’s a preservationist mentality, for the individual people, and the divisions that represent those legacies, especially in the big ad holding companies.

Finally, complexity of the “great Internet advertising advancements of the past decade” is a huge factor. It’s a massive problem when an industry begins to characterize itself by inaccessible silos and geekery. Perhaps the biggest problem with this mentality is that it spawns black boxes and breeds a “keeper of the flame” mentality. That ultimately thwarts advancement. This complexity epidemic has spread to virtually every corner of online advertising, especially search, the fastest growing online sector. The result is a darkening cloud of frustration, inefficiencies and skepticism building among many marketers small and large, despite undisputed benefits and unprecedented ROI. I’m not suggesting all the great new advertising technologies and capabilities aren’t wonderful and exciting, but the blunt, underlying pain of convolution is nearing its threshold. Marketers don’t need any more features, options, solutions or clutter. What they need is relief and clarity.

-Max

In the past few years major changes to the UK TV market have happened and we have gone from 5 free-to-air TV channels to free-to-air multi-channel digital TV. Before advertisers only had to place there ads on 1 of 3 of the TV channels which carried ads to reach a fairly high proportion of the viewing public; but with multiple digital channels fragmenting the audience they are much less likely to do so. I believe this is happening in all markets but in the UK going from 5 to 40+ channels almost overnight is a big change and shifting ad spend online is one response to it.

So with a compact, homogeneous market to address it makes a lot of sense to move ad-spend online in markets like the UK than the US. If this strategy works then I would expect the US to catch up very quickly.

I’ve read you here before on how TV spots move product, but honestly does it move Tide or Coke in measurable quanitities? Isn’t it about brand enhancement for many advertisers? Please give us an example of a big glamorous TV ad moving product.

Phil,

What does this — “most publishers use content as a proxy for people” — mean? That most publishers have few readers.

And as for measurements, I’ve never understood why advertisers want the Neilsen/Comscore approach when they can read the stats directly off SiteMeter or similar.

Plz fill me in if I’m missing something.

There are so many people selling inventory online, but there are two issues that prevent them from deserving big brand $$. They don’t know how to package inventory on their site properly to find audiences, and most publishers use content as a proxy for people.

It doesn’t take a genius to know that traditional measurement methods like Comscore and Nielson (panels) aren’t working online since media is very fragmented.

If people are measuring correctly, media will be bought more easily.