$6.3 Billion Understatement
From Press Release land .. and the The Wall Street Journal
"The U.S. online ad market started a turnaround in the second half of
last year, says research from PricewaterhouseCoopers and the Interactive
Advertising Bureau:"
Well, what else would they say?
"U.S. online ad spending for the fourth quarter totaled a
record $6.3 billion — a rise of 2.6%."
OK, that's good. The interesting thing about "online ad spending" numbers is that they massively understate the dollars that are spent in online marketing. The IAB (the web publisher's advocacy group and don't forget it) is naturally going to tell Price-Waterhouse to define "online ad spending" as transactions between an advertiser and a web publisher. Fair enough. But, big but, the definition of what constitutes "online ad spending" could be looked at in a much different way.
What if we defined online ad spending as any transaction that creates an impression, whether it is a transaction between a publisher and an advertiser or between a consultant and an advertiser. By this I mean that as dollars have flowed (and plenty have) into "social media" and the old standby "web development" and various kinds of "optimization", none of that gets recorded as "online ad spending." And yet all of those dollars are doing exactly what ad dollars are supposed to be doing.
This creates some interesting winners and losers:
The Winners: Social Media & Optimization budgets
The winners are optimization-focused and social savvy agencies (of all kinds, btw) and consultants who understand that their economic future and their clients' both get better every time they can convert a dollar earmarked for traditional "media" into fees for services such as ghost twittering, landing page optimization, content creation and on and on.
The other winners are the advertisers who recognize this. At a recent OMMA panel moderated by AKQA's @TomBed, Marty Collins of Microsoft's Windows answered my question regarding their ROI tracking on cost-per-impression for social media versus the cost-per-impression for traditional media by saying, "social media blows traditional away. It's not even close." (To be fair, she went on to add that her view, which I agree with is that not all impressions are created equal.)
The Online Ad Losers: Web Publishers
The losers, oddly, and notwithstanding the $6.3 billion "measured" by the IAB, are the publishers. Smart media consultants, ad agencies and PR agencies are recognizing that for fees that stay with them they can create impressions at a fraction of the cost of "traditional" online media. All the better if they get to keep a much larger portion of the "media" budget as fees –rather than acting as a bank for the advertisers and skimming, at best, 15% off the top. So the smart gatekeepers over online spending are rapidly building rationales for massive cuts to the "online ad" spending the IAB is boasting about
Will this turns into a wave? Is it possible that "online ad spending" is the wriong metric. Maybe it's online ad spending + fees collected by smart agencies and consultants. And, my guess is that that (unmeasurable) number is growing at a way faster pace than 2.6%.
What do you think?
