Tobaccowala: Digital Media Costs Rising High

  |  June 7, 2005   |  Comments

The Publicis Groupe Media and SMG Next honcho says digital media costs will overtake network TV.

Fragmentation and consumer control will drive the cost of digital media upwards by 20 to 30 percent annually over the next several years, predicts Rishad Tobaccowala, chief innovation officer at Publicis Groupe Media and president of SMG Next.

"At some stage it becomes more expensive to buy Google than to buy network television," said Tobaccowala, citing the pay-per-click auction environment and the costs of re-aggregating audiences once reached via a single network TV buy.

Tobaccowala spoke about the challenges facing media buyers at an online advertising conference in San Francisco this week.

"Less and less are you going to have products that are very broad-based," he said. "We have a different economic model for our television-based plans, and a different one for the re-aggregated plans, and the second one costs 10 times as much."

Tobaccowala also predicts media buyers will simply have to pay more to capture people's attention in an increasingly consumer-controlled culture.

"The cost of getting someone's attention is going to go up much, much more," he warned.

Some of those costs will be driven by targeting and measurement technologies necessary to reach increasingly fragmented audiences, while others will stem from the need to make creative more attention-getting, Tobaccowala said. Combining rich data with outstanding creative ideas is what's needed in the future media environment, he opines.

"We believe the future is left brain and right brain. We believe it's both," he said. "It's not going to be the tyranny of numbers, nor is it going to be the petulance of artists. You can program and numericalize as much as you want, but sooner or later you're going to need the people and the ideas."

While the media honcho was very positive about the future of digital media, he cautioned against the return of 1999-era arrogance, saying it could hinder attempts to forge important partnerships.

"People say, 'media will take over everything; data will take over everything; digital will take over everything; search will take over everything,'" he warned. "And the truth of the matter is nothing will take over everything."

Tobaccowala gave the keynote address and spoke on a panel at the OMMA West Conference and Expo on Monday.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...