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Online Inequities

  |  January 25, 2002   |  Comments

Here in the world of online, we're the Cinderella of the medium, except there's no Fairy Godmother to pretty us up so the advertising princes fall in love with us.

It's always amazed me that the movie industry -- a category that, all told, sells only about $8 billion in movie tickets each year -- gets touted as one of our major industries. That's about the equivalent of the retail bakery industry. To put it in perspective, the hardware-store and floor-covering industries each bring in around twice as much revenue as movie ticket sales.

So why is it that Hollywood gets so much news coverage?

Offline Fripperies

Two things set the motion picture industry apart from the others. First, a shockingly large portion of its gross revenue gets spent on promotion. And, second, the media are simply agog. They love to cover stars and entertainment, and news programmers love to have images of celebrities moving past yearning crowds with flashbulbs popping. It makes for both good footage and good demographic pandering when they seek to broaden news audiences to younger and more female groupings.

This example of style outweighing substance is the best one I can think of to explain why the television medium takes such a disproportionate share of advertising budgets.

According to Taylor Nelson Sofres's CMR, the top 100 advertisers spent about $28 billion on TV in the U.S. in 2000. That works out to about $100 per American. In the same year, those companies spent about $350 million on the Internet. That works out to about $1.27 per American.

We learned last week, from the Online Publishers Association and Millward Brown IntelliQuest, that those folks who get the Internet at work -- about three-quarters of Internet users -- consume more Internet hours than television hours. The study they conducted in November indicated that about 30 percent of these working users' media hours were taken up by TV, versus 34 percent of their media hours taken up by the Internet.

So how can we explain why the leading advertisers spend 80 times as much per user on a medium that is used less than the Internet by the most desirable audience?

Online Lacks Fripperies

The online medium lacks the sizzle that sells television to ad executives at agencies and advertisers. We don't have launch parties for banner ads the way we do for new television campaigns -- complete with minor celebrities, catered dinners, and dance parties with young ad execs.

In the agency creative departments, three-quarters of the time it takes to make a commercial might be spent on location searches and casting meetings with B-list Hollywood stars. The middle management of the client and agency gets to visit the shoot, eating from the same catered buffets as the directors and talent.

Our award ceremonies aren't -- thankfully -- televised. Creatives in the agency don't think to themselves, "Gosh, after all these great TV commercials, maybe my creative director will finally let me do a banner campaign."

Here in the world of online, we're the Cinderella of the medium, except there's no Fairy Godmother to pretty us up so the advertising princes fall in love with us. If this were the world of broadcast journalism, we'd be Nina Totenberg, better than all the others but not the vacuous personality people want to see on TV.

What Will Change

Some things won't change. The movie industry will always get a disproportionate share of publicity. And television will -- for the immediate future, at least -- get a disproportionate share of the media budgets.

But such a blatant inefficiency doesn't last long where money is concerned. A media buyer could go her whole professional career never finding a greater inequity of spending relative to value. I expect that the attention will continue to focus on the glamour of television, but we will see the media budgets rapidly narrow this gap. Heck, with online budgets increasing to become a significant fraction of TV advertising, we might even be able to throw better launch parties.

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ABOUT THE AUTHOR

Tig Tillinghast

Tig Tillinghast helped start and run some of the industry's largest interactive divisions. He started out at Leo Burnett, joined J. Walter Thompson to run its interactive division out of San Francisco, and wound up building Anderson & Lembke's interactive group as well.

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