Ken Doctor at Nieman Journalism Lab takes a hard look at the digital ad stats and trends and pulls out this nugget: The American Association of Advertising Agencies (AAAA) has estimated that it costs twice as much to manage the placement of digital ads as compared to print and broadcast.
“If traditional services are assumed to require staffing and fees that imply an effective commission rate in the range of 12%–15% (with media planning and buying services assumed to be 1/3 of the total), Digital can typically require resources equating to an effective commission rate ranging from 25%–30% (with media planning and buying services assumed to be 1/2 of the total),” says the 2009 report.
So, the 30-year-old media buyer finds herself in a system that’s overburdened. TMI, too much information flowing in, too little time to absorb and make sense of it and not enough staff to work it. One result: More money spent on bigger ad buys, which, of course, take less time to place.
More from his report:
- In 2009, total of online advertising spending in the U.S. is at about $23 billion.
- The top 10 websites (Yahoo, AOL, Google, NYTimes.com) take in 72% of that revenue, and they continue to take more of it (3% more than 2008).
- “It’s simply easier to buy the big sites than smaller ones. That’s especially true when we consider how new and how immature the digital ad spending landscape is.”
- The Newspaper Association of America (NAA) says daily newspapers online ad revenue gets about $3.5 billion of that, about 15% total, “a number that I think is a bit high,” Ken says.
- Now services like Centro, one of the news industry’s top suppliers of digital advertising, are demoing a streamlining product to automate the digital media buying process. (about $100 million in ad business moved through Centro to media overall in 2009) is demoing a streamlining product. It is called Transis, and it was unveiled at AAAA’s early March conference.
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