Blog
Agencies still clinging to traditional media in lieu of digital growth (Part 1)
May 5, 2011 by Bill Yackey — Manager, West IP Communications
It is an interesting time for ad agencies – they are constantly being bombarded with new digital media strategies from all angles, laced with promises of “getting ahead of the game.” At the same time, their traditional media outlets, such as TV, newspapers and radio, are still performing well. Many of them continue to remain focused on their core channels while assigning smaller teams to handle new or digital media initiatives until they can prove their value.
Fans of the AMC show Mad Men saw something like this happen in when a junior exec proposed the idea of a television department (this was in the late ‘50s), and the partners put him on the case to get him out of their hair. Until, of course, television advertising begins to take off and then becomes an integral part of their agency.
We are seeing a similar shift to digital advertising campaigns that has been going on the past several years, and it is laden with the same challenges as TV in the ‘50s. According to a recent survey by Strata, a media buying/selling software company, digital’s growth is stunted by several obstacles, as reported by MediaPost last week. For those in the DOOH industry, these challenges may sound familiar but nonetheless aren’t pleasant to hear.
Strata said that the major hurdles facing digital are:
- Achieving cohesive campaign goals
- Lack of advertiser demand
- Weak channel effectiveness
- That “clients still do not fully comprehend the value of this form of media.”
- Clients are “currently unimpressed with the reach of such new avenues."
The report says that 59 percent of respondents say clients don't truly understand the value of digital advertising.
Where does DOOH stand in the digital mix?
Several weeks ago at MediaPost’s DOOH Forum 2011, Patrick Quinn of PQ Media shared data from the Global Digital Out-of-Home Media Forecast, which included a perennial chart of DOOH’s share in the overall U.S. media revenues. While Quinn reported that U.S. DOOH is growing (spending grew 15.1 percent to $2.07 billion in 2010), its parent category, out-of-home, only accounted for about four percent of U.S. advertising revenue in 2010 ($7 billion). Which means DOOH revenues represent a smaller sliver of that pie – PQ said DOOH made up 30.7 percent of total OOH U.S. revenues, which means DOOH brought in $2.1 billion in 2010 (up 15.1 percent from 2009, however).
Television, newspapers and radio, which most would consider traditional channels, still accounted for more than half of total $183 billion in 2010 U.S. ad revenue.
If it ain’t broke?
Every day, we read about new and innovative digital advertising campaigns, from DOOH to mobile to experimental, so why do agencies still choose traditional media more often? Two reasons: It’s easy and it works.
The methods for buying print, radio and TV are well in place and media buyers have spend years mastering these systems. The work now is often done through automated platforms, which also provide accurate data on the performance of the campaign. On the other hand, digital campaigns are often new frontiers in and amongst themselves, requiring extra time to pioneer and innovate new ways of reaching audiences. Fun and exciting, but time consuming on the agency side. Like the pre-TV era Sterling Cooper agency in Mad Men, it seems to be just easier to do things the way they have always been done.
In part two of this blog series, we’ll look at what the DOOH industry can specifically do better appeal its medium to agencies by making the buying and reporting processes easier and using what agencies like about traditional media to help sell against it.
