Fortune 500 companies have always approached online advertising with a bit of hesitation. Yes, they do search - but not until smaller players had done it for years. Yes, they do blogging… ditto. A familiar pattern, one that’s driven by caution, and the need to explain their actions to shareholders.
A recent article on MarketWatch suggests that this caution might be exaggerated to an unhealthy degree:
There is a growing divergence between how consumers spend their time and how advertisers allocate their marketing budgets. Last year, U.S. consumers spent nearly a third of their total media-consumption time engaged with online or interactive media, a dramatic increase from just two or three years ago. At the same time, Fortune 500 companies allocated only 6 percent of their marketing budgets to online media in 2006, up from 5 percent in 2005
6% budget versus 30%+ mindshare? Quite a discrepancy. What’s happening here - are these companies being misadvised? It’s possible, but considering the number of online acquisitions we’re seeing by big ad agencies, it’s not likely that they’re downplaying the Web.
The Fortune 500 need to sit down with their vendors and re-evaluate how they allocate their funds and their attention. Yes, it’s hard to concentrate on a $1 million AdWords spend when you’re also responsible for a $100 million TV campaign. But maybe that split, in and of itself, deserves a second look.
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3 Comments
Its beyond me how a company can spend $100 million on a TV campaign trying to capture the minds of a target audience with catchy slogans and memorable buzz words and then leave huge gapping holes in their campaign by not considering the fact that their audience searches the internet for exactly the same. What’s up with that?
Agreed - they are not closing the loop. Some advertisers consciously acknowledge the fact that TV ads provoke search activity. Pontiac’s “Google us” campaign was the clearest example of that. But most F500 execs don’t see the value of having an effective online catcher’s mitt. The fact that ROI measurement is still so feeble only perpetuates that behavior.
The awesome thing about the pontiac ad was that people actively worked to bomb those natural results, so its important to not only use search, but make sure you are doing it well.