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Brand Advertising (or the Lack Thereof)

Yesterday I wrote a bit about brand advertising on the web and out of curiosity today I looked up the top digital advertisers versus the top overall advertisers. I didn’t spend a ton of time with this, so if someone finds better numbers please let me know. Anyhow, the top 10 advertisers from Q1 2010 are pretty much exactly what one would expect:

  1. Procter & Gamble Co
  2. AT&T Inc
  3. General Motors Corp
  4. Verizon Communications Inc
  5. Pfizer Inc
  6. News Corp
  7. Johnson & Johnson
  8. Time Warner Inc
  9. Walt Disney Co
  10. General Electric Co

Now I’m sure there’s been some movement in that, but the basics are pretty consistent: P&G tops the list with a roughly 40 percent bigger spend than anyone else. Following that are some carriers (AT&T, Verizon), entertainment companies (News Corp, Time Warner, Disney) and then some all around giants (GM, Pfizer, GE).

Compare that list to the top top 10 internet advertisers from 2009:

  1. Scottrade
  2. TD Ameritrade Brokerage
  3. FreeScore.com
  4. Verizon
  5. E Trade Financial
  6. Sprint
  7. Netflix.com
  8. Scottrade Stock Brokerage
  9. LowerMyBills.com
  10. E Trade Financial

Other than Verizon at 4 and AT&T at 12, not a single player from the overall list shows up in the top 50 (from 2009). Now this could be for a few reasons I guess (not measured properly, spent in non-working), but generally when you look at that second list you see a whole bunch of direct response advertisers. No one has been able to convince big brands in any sort of serious way that the web is a viable medium for doing brand advertising. This isn’t a new idea, but I had never thought to compare the two and it’s astounding to see that second list.

February 13, 2011

Comments

  • Ian Sohn says:

    Also interesting that list 2 is dominated by financial services, whereas list 1 has none.

  • Ike Raoul says:

    What you see in the second list is a bunch of online brokerages competing for customers among people actively online.

  • Rob S says:

    My life began as a dot-commer, but I’ve spent the past 10 years working on analytics including working with leading brands in the CPG space on these very issues.

    Digital faces two big challenges I see that prevent big CPG brands from making them the focus of their spend.

    The first challenge is the scale of digital. The ability to be everything to everyone means no single digital channel possesses the same scale as traditional mediums. Digital peeps will claim that digital possesses a higher ROI, but that’s only partially true. What’s necessary is a comparative tool for promotional levels; the marginal efficiency curve. This curve provides the ROI for any lever at a given level of spend. Digital may have a high ROI at $5 million, but that ROI flattens quickly as spend increases. TV for big brands has a lower ROI at lower levels of spend, but actually surpasses digital when spend reaches tens of millions. I’ve seen curves for big brands that reach their optimal point for digital spend around $6 million, and TV around $50 million.

    The solution to this is to leverage multiple channels within digital, but this becomes difficult when you’re trying to project a focused message.

    The second reason the brands list in digital are online businesses is they can prove causation easier. Online businesses have a direct path from ad to purchase. The clickstream. Ad > click > visit > action. CPG firms must infer the result by considering it with all other promotional levels, so they incorporate it within a marketing mix analysis. The lack of appropriate time (start/stop) and geography (where the action occurred) measures make this directional at best (which is why I think social ROI is a fallacy, but that’s a separate conversation).

  • Lewis says:

    I think the #3 online advertiser is FreeCREDITScore.com. That’s experian, which owns LowerMyBills also. I’d be really surprised to see that 1. Freecreditscore (formerly freecreditreport) wasn’t in the top 10 and 2. Freescore actually spent more than the big boys.

  • martin bihl says:

    i think rob s. is on to something – not just the nature of the difference between purchase of cpg products and digital products, but also because the way online media was sold in to cpg businesses has traditionally been “your customers can click to your site” as a point of difference (which also, theoretically at least, justifies them spending a lot of money on their site).

    the idea that web advertising isn’t about clicking, but about delivering a compelling creative message is, if not anathema to most marketers, at least complete contrary to what they’ve been taught.

  • Bob Davidowitz says:

    good info and thanks for digging up the top 10 lists!

    it makes sense DR has so aggressively embraced digital display as it’s such an accountable form of media. while large scale sellers (networks and exchanges) desperately want to lure big brands into display, spend some time scrutinizing this inventory and you will quickly understand brands’ trepidation. with some exceptions (i.e. Undertone, Brand.net), the publishing quality of the exchange/network inventory is nowhere close to the standards of brand advertisers. Despite the attractive CPM’s, scale and targeting offered through networks/exchanges, brands prefer to pay a premium and know exactly what they are getting

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