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Online Spend From US Agency Clients Still Has Significant Hurdles To Overcome




The Internet side of the marketing world has always felt that ad agencies as a whole, and in particular the largest, have been behind the curve for a long time. The gap has closed considerably in recent years but those who claim digital marketing superiority still thumb their noses at the larger agencies that have built their business on traditional media.

Why has digital been slower to be adopted by these agencies and their clients? A study from STRATA (via eMarketer) may give some insight.

According to these findings a total of nearly 50% of the agencies polled are citing lack of channel effectiveness or lack of client demand as the reason for not increasing online ad spend. Roughly 25% of the respondents say there are no obstacles.

So there are two views that can be taken here. The first is that the digital industry still has work to do from a ‘proof of concept’ point of view. It is safe to say that measurement and proof of effectiveness can be elusive. A lot of what is used as proof that there is power in the Internet space is around what I’ll call ‘volume metrics’ which are number of followers on Twitter or Likes on a Facebook page. Those measurements are limited at best.

What area CAN be measured though is in search through paid search campaigns and any web analytics tool from Google Analytics up to the most expensive and complicated analytics package you can imagine. One of the most interesting capabilities of the online space is to measure effectiveness and certainly much more finitely than even traditional media measurements like ‘eyeballs’ (which is the offline equivalent of volume metrics but companies have purchased on that hollow measure forever).

The fact of the matter is that there is still a considerable amount of work in producing hard numbers to see results across the whole spectrum of the online space but should that be enough to keep companies out of the game with their agency?

The second view is that agencies that have a foundation in traditional media just don’t understand digital thus their clients are not steered in that direction. I find it hard to believe that 23% of the agencies surveyed for this can say with confidence that lack of advertiser demand is the reason for online spend not to increase is lack of advertiser demand.

Of course it would be helpful to know who these agencies are that were surveyed and who their existing clientele are. Maybe in the SMB space there is a perceived lack of demand which is actually, in most cases, just a lack of understanding of the digital space.

So how do you interpret results like this? Is the onus on the digital industry to provide more confidence in the channel through better metrics or is it on the agencies to get their clients up to speed? As with most good answers it is likely to be a combination of the two but what can you do today to help bridge this gap and move more advertisers into the area where there are no obstacles to increasing online spend?

  • Cynthia

    As soon as I saw the numbers in the chart, I zeroed in on the “clients didn’t ask for it” wedge as you did. Isn’t it an ad agencies job to tell the client what’s best for them? That’s why you go to an expert for their opinion. Besides, if any client in this day and age isn’t asking about some kind of digital advertising then they have a problem. Who skips the internet entirely these days?

  • http://www.belzomedia.com jason martin

    Exactly Cynthia.

    Most agencies go the route of having a client consultation BEFORE doing research on the client and their industry.

    Agencies need to FIRST research the clients company, industry, and competitors. Then schedule a consultation and be prepared to educate them on how to corner the market on the web for their particular industry.

    They will respect you for doing the initial legwork for free and it will increase the odds for getting them to trust you implementing a larger online advertising budget.