Online ad salespeople talk about engagement, but there's also distraction. A full-page ad or a page-dominant ad grabs a huge amount of mind share. In contrast, a web page contains many distractions: embedded links, active graphics, scrolling text, video, and more. Your online ad fights for attention in ways your offline ad simply does not.
And there are other differences that can justify discrepancies in relative pricing…
A branding ad, for example, doesn't require measuring the number of people who see it. The mere fact that you have a quarter-page ad on the Op/Ed page of Friday's New York Times is huge. It's enough to attract many of the people who are important to you. When advertisers think beyond reach/frequency/eyeballs to focus on their desired outcomes with specific target audiences, the argument that online is so trackable begins to lose force, particularly in light of current cable TV experiments with similarly specific ad targeting. Savvy advertisers know it's more important to figure out the relative contribution of each ad in a series that nudges prospects toward a purchase. Just knowing an ad has been delivered to a computer is a sub-par argument these days.
In addition, there is relatively little competition for specific audiences in the print world. How many other offline availabilities deliver the same audience as the Wall Street Journal, the New York Times, or TV's "The Oprah Winfrey Show"? In the online world, however, there may be literally thousands of websites all delivering the very demographic you seek.
Another factor may simply be structural. Karna Crawford, EVP, chief media and connections officer at Engauge, a total marketing solutions agency, thinks that: "When you can buy huge scale one time with a quick hit, that's worth a premium. 'American Idol.' 'The Super Bowl.' That's a huge audience available for a finite period of time. Because people are so engaged with the content, the advertising is more likely to be paid attention to. And a lot of products want to advertise there, which also drives up the price. The digital space doesn't command such a premium because your audience has exponentially more opportunity to take control and move away."
Historically, advertisers have been hesitant to push dollars into something new and unproven. "Think of the internet now versus 1995," Crawford says. "Wireless isn't proven in many instances, a lot of advertisers still don't know how to use it, don't feel confident about the expected ROI. So the prices are significantly lower than a video ad on ESPN, which is tried and true. It's the same adoption cycle you'd see for any other product."
The practical value of online advertising is also determined by the needs and strategies of the advertisers. Todd Riley, senior vice president, digital media & integrated strategies at Doner, headquartered in Southfield, Mich., the largest independently-owned advertising agency in the world, points out that, "The real benefit of the online space is the ability to engage, now. For example, a car purchase requires a lot of research. Digital media has the ability to make many relevant connections to content to help the process along. A can of Coke, on the other hand, can be purchased by anyone at anytime, so engagement is nice, but much less important."
Given all this, the inability of online advertising to fully replace the income lost from offline advertising probably reflects that advertisers simply don't perceive it to have an equivalent value.
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