Click-through rates are measly, and 90 percent of consumers ignore all online advertising. Is there any hope? Travelocity's CMO sees a way digital can finally eat traditional's lunch.

Advertisers tend to go where the consumers are, which would indicate that more and more money should be shifting away from traditional marketing and into digital. However, according to statistics, this simply isn't the case, with newspapers and magazines still commanding higher CPMs.

The harsh truth is that online advertising just isn't getting the job done, according to Travelocity CMO Jeff Glueck. The average click-through rate is a measly 0.1 percent, and 90 percent of consumers don't even notice online ads.

"People are ignoring ads on the internet -- I can tell you that people ignore anything they think is an ad," Glueck said at the iMedia Brand Summit in Coconut Point, Fla. "We have trained consumers to ignore ads for the most part.

People in this room will say, 'The DVR is killing TV, why would you advertise on TV?' But many of us are peddling ads with a 0.1 percent click-through rate, and 90 percent of people ignore them."

Glueck speaks from experience. A self-described "digital guy," Glueck has regularly split his $100 million annual advertising budget down the middle between digital and traditional, and this year, digital is commanding closer to 60 percent of the budget.

Travelocity put $300,000 into a MySpace campaign, complete with a profile for its famous mascot, the travelling gnome. The gnome quickly added 30,000 friends, but according to Glueck, his MySpace profile "didn't generate a dime in sales."

So how much of Travelocity's sales are truly driven through digital media? Astonishingly, only about 9 percent. Even more surprising is the most effective channel for Travelocity's advertising: magazines. By purchasing ads in a travel magazine or newspaper supplement, Glueck is already reaching an interested audience, often times for less than he spends on some online advertising.

"I think it's really important we do not sit back and say the reason money isn't pouring into digital marketing is because we're afraid," he said. "It's because marketers have to drive ROI."

But how does a publisher prove that digital can actually drive the bottom line? How do they break through with advertising that truly works? The answer lies in context and relevancy -- something that has fallen by the wayside, according to Glueck.

"The thing that has been forgotten in the rush to monetize so many online activities -- Facebook, MySpace, email, you name it -- has been the importance of context, relevance, and intent," Glueck said.

Television ads are highly compelling, but they don't offer relevance, he added. Search -- which commands the lion's share of online marketing -- is extremely relevant, but not very compelling. In the case of Travelocity, the company finds its success in offline channels such as magazines through a combination of relevency and context.

One place Glueck sees a lot of hope for online advertising is the blurring line between publishers and ecommerce sites. Amazon is not traditionally thought of as a publisher, but 30 percent of its revenue comes from other sellers that use the Amazon check-out service. Amazon pages also display relevant advertising -- such as ads for TV installation on the page for a flat screen TV -- that don't appear to be traditional ads. Travelocity sells homepage ads for travel destinations, but they're delivered in-context, removing the stigma of a traditional advertisement.

So how else do you achieve context and relevancy? Travelocity has found success by marketing on Trip Advisor, which is simply a collective of frequent travelers who share advice. For now, intelligent ad networks and retargeting can achieve the context and relevancy needed for effective advertisements.

Looking toward the future, Glueck thinks Facebook and its new engagement ads, which let members voice their opinions about the ads they see, present a huge opportunity for marketers. "I actually think I'm getting more relevant ads than the ones I would normally ignore," he said.

He also sees great potential in Hulu, but only if marketers are able to target their advertisements rather than purchase run-of-site. "The power of digital marketing is to make TV relevant, but they're not doing it. That's my plea. Start making the power of the internet available," he said.

In Glueck's mind, a successful digital marketing industry, one that will ultimately siphon off some of the dollars marked for traditional, is one where advertising is practically content.

"Are ads offering value and utility, and are they loved by consumers as content?" Glueck asked. "I challenge the industry to think about that and not think about spraying banners at the target demographic."

Rich Cherecwich is associate editor, iMedia Connection.