John Houghton's New Media Blog

According to Adage, GM is making some bold moves to bolster it’s marketing strategy by switching half of it’s $3 billion budget into digital advertising. The rest of the auto industry is sure to follow:

“Online is getting to the point where it may be more important than the 30-second TV spot.”

-VP-Marketing Joel Ewanick, Hyundai Motor America

Of course, we have known for some time that audiences have been moving online and it was only a matter of time before the bigger and more conservative advertisers jumped in. It is important that GM figures out how to spend their $1.5B as the digital advertising options abound. In the past, early adopters who have figured out the best way to spend online have taken advantage of bargain prices and furthered their market penetration.

Online allows for quick learning cycles and it is important that advertisers take advantage of the quick turn around. Take AdWords for example. After trying different combinations of keywords and landing pages, an advertiser can devise an effective campaign; however, this takes focus and energy. A lot of companies choose keywords, don’t monitor their stats and logs, don’t change their keywords for months, and as a result end up wasting money.

I hope that GM finds effective ways to spend its money. Their ROI will be good for the digital advertising industry and provide efficiencies for the economy. There is no greater drain on the market than both traditional and online advertising that doesn’t reach its target market. The saving of efficiently connecting buyers and sellers will trickle down to all of us.

I looked in today’s online Wall Street Journal and they still have posted in their Ecommerce/Media section the May 15, 2006 article TV + The Web = ? (subscription required) which quantifies facts that we have known for some time: Americans are surfing the web more than they are watching TV. Even though a year old, the article is still featured because we reached a key milestone which begs the question: If people have migrated from TV to the web, then why do advertisers continue to spend the majority of their budgets on TV while only a small percentage goes to web? There is still a lot of figuring out to do and it is not obvious where on the internet advertisers should invest; however, savvy advertisers are investing and learning and those that learn the fastest and execute first will win. The ones who sit back and wait for a clear model will find it hard to catch the early adopters.

I produced an audio documentary on the history of media my podcast New Media Currents which shows that the pace of technological and social change continues to increase at an exponential pace. Early adopters used to be considered money wasters and it might still be true that you should wait before buying the latest desktop software; however, when it comes to finding avenues to effectively sell the core competencies of your company, you should not wait. You should be learning as much as possible and executing your strategy. It’s a matter of survival.

Some of you may already know this, but I didn’t quite realize that outdoor advertising is still ahead of internet advertising.  TV spend is still about six times larger than outdoor but is growing much slower.  According to the Wall Street Journal and ZenithOptimedia,  last year’s worldwide outdoor advertising spend was $23.2 billion, up 6.1% from the year earlier, while spending on TV ads was $146.8 billion, up 3.8%, and internet advertising was at $18.1 billion, up 28.77% from the previous year.  The ad buying market still has a lot of catching up to do since a lot of the folks I know spend more time on the internet than they do watching TV or being in the vicinity of an outdoor ad.  That being said, I see a big market for LCD outdoor advertising.

User generated content; how about when a company generates its own content?  Anheuser-Busch, the makers of Budweiser, are getting into the game and are launching their own production company that will make “humorous shorts and sitcom type programs to be broadcast over the internet.”

It’s amazing to me that despite the amount of time consumers spend online, only 4% of corporate ad budgets go to online advertising (versus traditional, such as TV).  I’ll do some research, but it seems that certain demographics, such as 18 -24, are spending more time online than they are watching TV.  What’s the take away?  The take away is that online and new media advertising is unexploited territory. Those companies that are smart and willing to take risks in new media could see big returns.