The Problem with the Time Spent vs Dollars Spent Argument in Advertising

Mary Meeker is out again with another fantastic presentation on the state of technology and media.  As usual, the presentation is incredibly good, thorough, and – even for people who live and breathe this stuff – enlightening.

One issue.

The whole “dollars will follow eyeballs” argument simplifies the shifts happening (and sometimes not happening) in the space.  Meeker is not the only person to use this line of argument.  For those not familiar, the thinking goes like this:  The percentage of time spent on x medium is higher than the percentage of the ad spend for that medium.  Dollars will follow eyeballs and catch up because advertisers will figure this out and course correct.  It was used for online vs. print and online vs. TV and is now regularly used for mobile vs. browser/TV/Print/etc.

The inevitability of this argument was tremendously motivating for me and my peers in 2001 when I sold advertising for CNET Networks.  “Get our share of the pie!” was the rallying cry for a very soft online ad market.  “Of course the time spent will influence ad allocations.”  If people didn’t see that they didn’t “get it.”

The market “got it.”  Soft of.  Time spent online continues to grow as does ad spend but there has been no equalization between the two metrics.  Now huge amounts of time are spent on mobile devices and the industry is just starting to figure out how to sell ads here.  Clearly print has suffered tremendously at the hand of the web.  But TV?  There is still record spending with TV advertising.  This is where the argument starts to fall apart.  It isn’t the percentage of time spent that matters but the perceived effectiveness of a medium to accomplish an advertisers goals.   For a variety of reasons, advertisers feel like TV is (often) the better medium for brand advertising.  EVEN AS THE PERCENTAGE OF TIME SPENT WITH TV DECREASES!  As long as people continue to spend time with TV and it is judged to work the spending will continue.

I am not alone in the assessment that online in all of its forms can and often is much more effective.  As an industry, internet publishers must do a better job proving effectiveness.  There is no inevitability to the equalization of ad spend and time spent by medium.  It is entirely possible and likely that the consumption trends continue to change in web/mobile’s favor but it is also possible that the revenue potential of browser/mobile based platforms never match the percentage of time spent with those mediums.

Let’s all stop hanging our hopes on this argument and redouble our efforts to prove effectiveness with these mediums.  The trends all point in the direction of the web and mobile but the ability to meet the promise from an ad spend perspective is entirely tied to effectiveness.  Let’s not take anything for granted here.

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