Environment Still Matters

Jay Lauf

Monday, December 6, 2010 There is a slide from Morgan Stanley analyst, Mary Meeker’s recent presentation at the Web 2.0 conference (you can view it here) that points out the disparity in ad spending trends relative to media consumption trends. For example, the graph shows that in 2009:

• The percentage of time people spent with print was 12%, but print accounted for 26% of ad spending

• Conversely, time spent on the Internet was at 28% while ad spending online was only at 13%.

The focus of a post from my colleague, Alexis Madrigal (again, available at the link above) was on the $50 billion gap between the Internet percentages--if ad spending online was keeping pace with the increase in time spent, there would be another $50B spent – and whether that indicated we’re simply at “Peak Advertising”.

I deal in the world of premium audiences and high-end advertisers, so for us, I wonder if this isn’t more an indication that marketers are still struggling with how to use and value online advertising. While the Holy Grail digital has represented is measurability, we’re not really there yet.

This topic has been endlessly wrestled with. Predictions of either a new-found appreciation for branding and awareness advertising online OR for the eventual automation of online ad buying to maximize cost-per transaction efficiency are rampant.

In either instance, I pose that, like nearly all other media, the environment matters…and there are plenty of sketchy online environments. For every declaration I hear that “we can now target the user we want to reach wherever they go, so the outlet/site is no longer relevant,” I hear the exact opposite point made by both general populous (i.e. – not people in the ad or publishing business) and marketers. The environment DOES matter; the quality of the journalism (yes, I believe that word applies to bloggers and other purveyors of online material) and of the aesthetics reflects on the brands that support those pages with their ad dollars.

I’ve always felt the marketplace is the ultimate arbiter of which products or services are priced correctly. Perhaps what this data reveals is that for premium brands--which are typically paying more for higher-priced, premium outlets like magazines and top-rated TV shows--there is still an enduring faith in print (and the qualities it provides in terms of environment) and confusion about how to deploy digital. I’m not naïve enough to assume that the trend lines don’t continue to show a shift to digital at the expense of other media, but I do suspect that the online pendulum for some advertisers will swing back to the subjective assessments about quality that has always helped the media cream rise to the top.

Jay Lauf is vice president and publisher of The Atlantic.

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