Online Display Market Is Being Overhyped

The inconvenient truth is that for all its new-media spin, display advertising is "old" media -- a commercial message to be placed next to editorial or entertainment content. And we know by now that measured-media growth has pretty much ground to a halt as marketers continue to increase their dollars in unmeasured disciplines such as web development, public relations and database marketing at the expense of paid advertising. Ad spending among the top 100 U.S. advertisers last year grew a paltry 1.7%, with measured media only up 0.3%. Measured-media spending is in decline in Japan, and it's not much better in the UK. Sure, dollars are shifting within those media budgets, with some moving out of traditional media into interactive. But most of the top 100 advertisers that wield the big budgets are still primarily TV and print spenders. The question is: Should the fact Procter & Gamble spends only 1.5% of its marketing budget on display ads be viewed as a warning signal by online ad sellers, or as an opportunity? Instead of thinking of how much more P&G could be spending on Internet advertising, sellers should be asking why it doesn't spend more. For all its glory, the Internet still has not proven itself capable of being a primary branding medium. Most ads online are response-based and work best for brand marketers when they complement a branding campaign in other media.