Last month, Publicis Groupe digital agencies Razorfish and DigitasLBI agreed to purchase $US100 million worth of advertising inventory from Google, a bundle that will include space on YouTube, Hangouts, and Google’s mobile and banner ad networks.
At the time, we described it as a move that “should terrify TV execs,” another example of how marketers were slowly starting to shift their budgets from the dying medium of television to online video.
If you ask Razorfish CEO Pete Stein, this shift is happening because television just isn’t providing brands with the relevance or the flexibility they can find online.
Though brands remain comfortable advertising on television because it guarantees a certain-sized audience and costs less than premium online video, Stein says they will ultimately learn they can get more value from real-time marketing on the web than from pre-planned purchases on television.
“It will be interesting to watch brands come to the realisation that online is actually the better buy given its targeting capabilities,” Stein said. “I really do believe that the ‘tipping point’ will be when the lines between offline and online completely disappear and I’m looking forward to brands becoming more progressive about these opportunities.”
For years, these companies have sought to reach consumers through what is commonly referred to as “the advertising campaign.” A slogan or general message, like “Just Do It” or “I’m Loving It,” is decided on by a company’s top brass and its ad agency. Then television, print, and outdoor ad spaces are purchased well before the ads will actually be seen by the public. Generally speaking, a company would run maybe two or three of these in a given year and call it a day.
But now, consumers aren’t just reading magazines, or watching television. They’re spending countless hours living on blogs, Twitter, Facebook, YouTube, Pinterest, and whatever big social media platform comes next. Though brands have produced more online content to meet this demand, Stein says they’re not devoting enough of their budgets to promote it.
“You might have a really great piece of content that you hadn’t planned for that you love and is great for your brand,” Stein said. “Maybe you have a plan to spend media against it, and you have dollars that you can use to spark that conversation. It’s just not always going to happen organically.”
Stein posits that brands are hesitant to move money out of the campaign and into real-time, digital marketing for a number of reasons. For one, he said brands and their media buyers are simply comfortable doing business as they always have in a system that is still working for them.
Another barrier to brands taking money out of the campaign is that a multi-pronged digital strategy forces chief marketing officers to coordinate the efforts of numerous content creators and social media specialists, both in-house and at the agencies, who all need to stay on the same message.
Since executives don’t have the time to oversee every single piece of creative run in a real-time strategy, this means junior level employees are given increasing responsibility to manage the brand’s image in public, an amount of control many executives are loathe to hand over.
“Right now there’s not enough of a reward for marketers to take some risks,” Stein said, adding that the social nature of the internet often allows brands to reach huge audiences with strong content. “I think the value has to be shown in the fact that you get a huge amount of earned value on top of what you pay for.”
Stein says that this earned value is what makes real-time marketing worth investing in, along with the added value brands can get in tailoring their creative offerings based on the context in which they’re reaching consumers. For him, these deeper connections can make up for the fact that online doesn’t yet provide brands with the scale they can find advertising on television.
“The thing that gets your brand remembered is often frequency,” Stein said. “It’s like a guaranteed formula that you’re going to get that frequency on television, so I think that’s where we have to help them see we can help you get that frequency, or that the connections are much deeper online so that you don’t need that kind of frequency.”
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