Digital versus Traditional Advertising? Wrong Question

There is a debate that has been raging in Advertising quarters for almost a decade now – which is better Digital Media or Traditional Advertising. The fact that this question is being asked at all shows that most advertisers and institutions don’t get consumer behavior in the interconnected world. Considering that agencies are in advertising, you’d think they would get it right? Considering the declining ROI in traditional marketing approaches, you’d think marketing staffers would get it too right?

Over the last couple of years the debate on Advertising spend has centered on where the money is going. In March 2008 General Motors shocked the traditional advertising world when they announced they were shifting US$1.5Bn of ad spend to the digital space and while some shift towards digital has been hailed as ‘game changing’ most advertising spend is still heavily biased towards traditional media. Susan Wojcicki, Google’s vice president of public policy and communications, was quoted in Digital Media Buzz as arguing that Ad spending has not caught up with consumer behavior.

“U.S. users spend 12 hours per week online, which represents about 32 percent of their media time. However, online advertising makes up only 13.6 percent of advertising spend in the U.S.”
Susan Wojcicki, VP – Public Policy and Communications, Google

This is accurate, but what is holding back the shift? Long entrenched marketing behaviors, lack of digital skills in-house, lack of agency drive away from traditional media buy, or lack of understanding of changing consumer behavior…

It’s probably a combination of all of these. The fact that most financial institutions, for example, have minimal social media or mobile advertising spend today shows either a complete lack of understanding of consumer behavior, a lag in internal adaptation of ‘digital’ or organizational inertia that is just too hard to shift?

I think all of the above contribute, but the real problem lies in the ‘campaign’ mentality. Brand marketing is very well suited to traditional media, because it is about creating a ubiquitous recognition of your brand, logo, image or message. To fit broadcast mediums for product ROI advertisers created the campaign – really mini product or service branding initiatives designed to create recall at a time when customers are compiling their ‘evoked’ set of purchase alternatives. But while the campaign worked in the 70-90s utilizing broadcast, this is no longer the case in the digital world.

The question over Digital or Traditional is the wrong question. The question should be, how do we better engage customers today so that they are compelled to buy?

Campaigns on traditional media are struggling in the one area that digital is increasingly effective – measuring ROI. Measurability is a strong advantage in the new world because the ability to understand why, when and where customers need a product or service should be considered the Holy Grail. But traditional broadcast methods such as TVC, Radio, Newspaper, Direct Mail, and static outdoor, only work efficiently when it is a static message directed at a wide audience that doesn’t need to change.

It was for this reason that Pepsi started its shift to Direct Response Marketing this year as they moved their entire SuperBowl TVC budget to online and social media. At the Sears Annual General Meeting Edward Lampert explained that even a major retailer is having to conceptualize a shift away from broadcast methods to much more targeted conversations with customers, something that static media can’t deliver.

“It’s not just us broadcasting to customers any more, he said. “It has to be interactive, and it has to be relevant.”
Edward Lampert, Chairman of Sears

Retail organizations, whether banks, financial institutions, or retailers like Sears need to understand that Brand advertising can survive and thrive with traditional media, but campaigns are effectively dead in the IP-conversation space. Companies need to re-gear their marketing teams toward conversations, not just telling their customers a message and hoping for brand recall at purchase time.

In the next 5-7 years TVCs will largely disappear because consumers aren’t watching them, why? Because we’ll either be downloading or TiVo’ing and Ads won’t be a part of the experience. Newspaper will shift to digital format so that ads in that space will go from static to just like web banner Ads. Radio will survive, but perhaps be delivered differently based on subscription feed models. Billboards just like Newspaper will move to digital format also. The question over Digital versus Traditional is kind of redundant. The way media is morphing everything is going digital, even traditional.

What marketers and advertisers need to work on is the conversation, not broadcast. It takes a lot more competency internally, and initially the cost of delivering conversation marketing is alot more expensive than traditional broadcast production. However, the ROI in direct response, permission or conversation marketing blows anything in the traditional media measurability space away. We have the technology now to target messages at customers at the right time, across the right channel, but we’re not using it because we can’t fit campaigns into this model. It’s tough – but reengineering our approach to customer engagement is the only way through this discussion.

Marketing staffers better go back to school, and fast…

Comments

  1. I agree that the campaign mentality plays a large part, and that’s not helped by the agencies who offer “social media” solutions which are still just campaigns. It’s also tied up with the ability to weigh up the risk of change, and that’s tied to internal rewards and internal buy-in etc. and the challenge of understanding HOW to change across a corporation when you are “only the marketing department”. THAT’s where your agency can’t help you.

    Microsoft was recently found to be most social media savvy company in the US. See http://www.walteradamson.com/2.....hange.html

    They didn’t get there by campaigns, and they now have a huge potential advantage over their rivals, consider IBM at #49. They now have the ability to leverage any campaigns they do run in much more engaging ways with their customers and potential customers, and also to involve customers in determining how those campaigns should be shaped. They can also engage with their channels mucy more deeply and give their channels the ability to repurpose and communicate with THEIR customers and prospects.

    By the way IBM is no slouch in social media, but in this survey they didn’t come near Microsoft. The survey measured the “penetration” of social media across the firm.

    Microsoft is into a journey which many other firms are still debating or just starting. Procrastinating will only leave firms further behind. But is takes a good process and model and a business-oriented social media team and coordination. That’s no easy task, but there are these models if you find the right help.

    Walter Adamson @g2m
    http://xeesm.com/walter

  2. nice post. thanks.

  3. Iyad Bitar says:

    Most of my experience in Middle Ease and reading through you blog I’m in bit of ease because I thought the problems you are talking about are only related to ME region and advertisers/agencies in Europe and US has overcome them.

    Advertising market still controlled by big Ad agencies who have a strong legacy in traditional communication and they stepping into digital strongly because they know it is the future but the problem is they are bringing their traditional legacy with them and with it their traditional thinking. It will not work! they have to put it on the side for while and build fresh point of view for digital and this will not happen if they don’t personally experience the digital medium, every week I see one of the CEOs/MDs of big agencies on a marketing publication to announce or say how good and strong they are at doing Ads and how they digitizing themselves. Why doesn’t he have a blog and say whatever whenever he wants? I ask myself. There is no problem if he still wants to appear on magazine but why doesn’t he say the same on the blogsphere if he that enthusiastic about digital?

    thanks for you post and sorry for the long comment

    Iyad Bitar (@iyadbitar)
    iyad-bitar.tumblr.com

    • bank2book says:

      Iyad,

      Good feedback. In the Middle-East the Lebanese Mafia in the Ad Agencies do have things tied up. :)

      It might take a bit longer for MENA region to embrace digital ad engagement. Interestingly, if you look at adoption rates in the Middle-East they are very high. Samba and Tadawul in the KSA get more daily internet traffic than Citibank and NASDAQ in the USA. And I’m sure you have a feel for the iPhone adoption rates in MENA too.

      It won’t be long before advertising has a big change in MENA.

      BK

  4. Iyad Bitar says:

    Your reply reveal good knowledge about Middle East market.

    True the Internet penetration rate is one of the highest in world and anyone who work or observe marketing here in ME region will noticed the monopoly and this where I believe digital medium is a great opportunity to break this monopoly because Ad agencies are confused and they don’t now how to do it right still

    Thank you,

    Iyad Bitar (@iyadbitar)

  5. Wonderful insight

  6. I would like to say “wow” what a inspiring post. This is really great. Keep doing what you’re doing!!

  7. Eaton Weaver says:

    fantastic post as usual!

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