Marketers agree that today's fragmented audience is slowly, steadily growing online into a solid component of the media mix.
"The challenge for advertisers is that the equation is additive," said one respondent to a survey by the American Advertising Federation. "You can't eliminate a medium; you really need to be everywhere the consumer is."
This remark helps explain the organization's finding that online advertising continues to grow at a slow and steady clip. Released last week, the "AAF Survey of Industry Leaders on Advertising Trends 2004"reports online's primary function in the ad mix has clearly materialized: It plays a supporting role in broader, integrated campaigns.
The conclusion -- though not a new idea -- reflects a vital adjustment over the past decade thanks to an increasingly fragmented audience that can no longer be reached through one single medium. Although the effects have not emerged overnight, factors such as digital video recorders (DVRs) and perhaps the Internet itself have created a landscape where television and print ads are not enough, depending on the demographics an advertiser seeks. More than three-quarters of the survey's respondents believe DVRs' capability to skip television ads will make a significant impact on the dominance of the 30-second spot, thus leaving the door open for progressive growth among non-traditional ads.
Anticipated Impact of DVR Technology on the 30-Second TV Spot
Source: AAF Survey of Industry Leaders on Advertising Trends 2004
As recently as last year, many respondents believed the DVR "threat" was limited at best -- or even a load of hype -- but more industry pros have become believers over the past 12 months. Now that many advertisers see the need for expanding the breadth of their reach, Web-based ads potentially play a sizeable role in the strategy.
"Online is an area that has gained a lot of respectability with the respondents, and there seems to be more confidence in it," says Mary Hilton, a spokesperson for the AAF. "They say online advertising has made significant inroads, and many consider it part of the traditional media mix now. It is now outside the norm to have a plan without an online component to it.”
A bigger slice
The proof is in the spending. In 2004, respondents reported that online media spending accounted for an average 8.35 percent of the total media budget, up 5 percent from 2001. That amount is expected to increase to 17 percent in the next three years.
Percentage of Media Budget Allocated to Online Ads
Source: AAF Survey of Industry Leaders on Advertising Trends 2004
Because online media buys are taking a growing chunk of the budget, and because the online ad industry has become more seasoned, many survey respondents questioned the longstanding definition of online as a "non-traditional" format.
"Most of the people who responded to the survey are leaders who have been in the industry for more than 15 years," Hilton notes. "They've seen cycles of what's been hot over a great length of time. If they are saying online is considered a significant way of reaching the audience, I think that speaks to its level of acceptance.”
The survey attributes the increasing value of online media to its manner of complementing traditional ad counterparts and its ability to target audiences. Working with these distinctions in mind can reinforce online's strengths.
"What we're finding is that industry leaders find online advertising complements and enhances the overall media mission," Hilton explains. "People are finding it's a great way to bolster traditional marketing. Much like any other media, if you have a broad-reaching campaign using newspaper, magazines and TV, online is yet another place you're going to reinforce that branding.”
Benefits of Online Advertising
Source: AAF Survey of Industry Leaders on Advertising Trends 2004
Creativity is king
As advertisers have become more optimistic about online marketing's abilities -- and as consumers have grown more accustomed to it -- agencies are able to shift focus from defense to offense. ROI and justifying the expense of advertising will always influence decisions come budget time, but the survey shows renewed interest among industry leaders in "developing ideas that break through the clutter" and "using creative to change consumer behavior."
"I help clients make leaps of faith that research and traditional marketing practices can't bridge," replied one respondent, a brand consultant. "There is a genuine lack of courage out there. Confining agency activities to what is ‘safe' or ‘easily measurable' through focus groups is to guarantee over time the development of perfectly unremarkable advertising that is invisible, irrelevant, bland and meaningless.”
As marketers seek fresh, effective approaches online and offline, online ad agencies have an opportunity to really shine. Hilton cites Burger King's "Subservient Chicken" viral promotion as one fun, clever, advertainment-oriented idea that fits the bill. Ads like this advance online's value by flaunting its greatest asset: the freedom to experiment with interactivity and off-the-wall ideas -- sometimes with fantastic success.