Posted by As if watching the major label music companies implode and the pending mass destruction of the newspaper and publishing industry were not scary enough, it turns out that Marketers are not all that progressive when it comes to embracing the digital channels.
That was the overall thesis according to some recent research from the IBM Institute for Business Value according to a news item today on AdWeek titled, Marketers Lag in Shift Online:
"IBM found that between 2007 and 2008, the proportion of consumers saying they used social-networking tools soared to 60 percent from 33 percent; for online and portable music services it more than doubled to 46 percent; mobile Internet nearly tripled to 41 percent; and access to mobile music and video quadrupled to 35 percent. In contrast, 80 percent of the ad executives interviewed expect the industry to be at least five years away from being able to deliver cross-platform advertising, encompassing sales, delivery, measurement and analysis."
Five years is a long time. In the Internet age – where things are moving increasingly faster – it could well be an unattainable goal for the advertising industry.
Here’s what Saul Berman, IBM global leader and co-author of this research had to say:
"It’s very hard to accelerate analog dollars into digital pennies. Where will the money come from? The answer may be, ‘You’re going to make less money.’ The money may be going somewhere else in the value chain. The music industry didn’t lose money, the music companies lost money. Companies like Apple, which manufactures devices, make money, as [does] ring tone providers, retailers like Best Buy and concert promoters."
Is Berman suggesting that advertising agencies morph into website design shops or developers of iPhone applications?
One of the main issues with these types of reports and insights is the focus on pure advertising dollars (hence the "digital pennies for analog dollars" comment). A strong Digital Marketing agency is not just about banner ads (err, display ads) and email blasts. It’s also a lot more than figuring out your sweet spot for search engine marketing optimization. The brands that will win (and are winning) are the ones that are focusing on creating a great web experience. This includes the website, the ability to be found, and the creation of valuable content (text, images, audio and video) all coupled with an intense focus on web analytics and ongoing optimization based on shifts in the marketplace and the will of the people.
Most brands still fail to realize that their consumers are all online and they’re connecting to one another.
Marketers don’t have to wait five more years only to realize that they are now twenty years behind. Everyone – both on the agency and client side – can fix this laggard attitude starting right now.
The real questions are: how much longer can you afford to wait? How much longer do you think you can ignore the digital channels? How many of your customers and potential customers are already there, connecting, sharing and building?
Never another podcast episode or article 
Agree Mitch. Most marketers are behind the times if only by the basic measure of % of $ spent on new media vs. usage of by their audience. But even if you got that right my concern is most marketers are approaching the new media like the old media and are trying to interrupt you with entertainment (good luck with that) vs engage you in true conversation. So..yeah.
I agree as well. I just started reading Mom 3.0 by Maria Bailey (trilliondollarmoms.com) and she addresses this very thing. She says that we need to market “with” them and not “to” them. Our communities are moving from our physical neighborhoods to online – right or wrong, that’s just a fact. Ultimately, the payoff will be big. It is a word-of-mouth world out there – or should I say word-of-typing-fingers. I have changed where I spend my advertising dollars and how I reach people. We are seeking relationships even with our grocery stores. So if they have a section on their website about early childhood nutrition, guess where I’ll be shopping? And guess who I’m going to tell? You got it!
I’m getting a little tire of “analog dollars into digital pennies”.
Another newspaper when down today in Michigan (announced). One of the editors used a similar phase saying he’s not sure how the switch will work when online ads cost only 10% of print ads.
Please. The cost to distribute is only 5% (my guess) of the print media.
Plus, the same old story. They set that rate. Eyeballs are eyeballs and they need to reintroduce its value.
Many marketers are in the same boat.
If they wait they will fail, because others will exploit the true value hidden within their “digital penny’s”
Five years? They should’ve changed their policies and ways of doing business TWENTY YEARS ago.
The problem that they still don’t seem to get, now that they are finally acknowledging there actually IS a problem, is that we have already changed fundamentally the way we take things in, the way we share things.
Most important, the need for advertising and marketing in this new world is not what it used to be. They have to redesign and rethink from the ground up. Meanwhile, we’ll go on doing what we’re doing over here, enjoying our content without ads. 🙂
I think it’s important to realize that even though Digital can be “less” costly than print to distribute, if you’re not set-up for it… you’re not set-up for it. It’s a different culture, type of team to develop and a completely different sale.
It’s like asking the the fruit stand to become an electronics retailer… easier said than done.
Mitch,
Point well taken.
But, having spent a generation of time watching the wrong headed attitudes and poor decision making first hand in the media industry. My jaded attitude is strong – they set themselves up for this failure.
2009 didn’t have to be the year of last minute attempts to make reactionary decisions to save an entire industry.
Rosh
I believe you are wrong on this.
Dead wrong.
Marketers are actually more in touch with the current digital channels than the vast VAST majority of industries and population.
Many organize entire divisions around understanding and engaging the principles at work.
They are not some dullards sitting in a cave waiting for a social media Jesus to stop them from drooling on themselves.
Plus, all marketers are consumers as well.
So how on earth can you assume then that marketers are behind the everyday consumer in terms of understanding the medium?
You are correct in preaching to those that are high users of these digital channels – those that actually use many of them to the highest potential – that is your place in this niche, supporting and pushing those fully engaged people.
But you ignore how small that segment still is.
Just because those few voices resonate loudly in your world does not make it necessary for every marketer to immediately make that small crowd priority number 1.
Todd, I think you need to re-read this post and click on the links to read them. I’m not saying much of anything, just Blogging about a report done. It’s not a personal opinion.
Mitch,
I think you hit right on the spot. I’ve been through 3 important agencies in my working life, and at least in Latin America, marketers are definitely behind on everything that has to do with new media. And it’s not like Todd believes, that there is more noise than actual people getting into digital media. On the contrary, digital media consumption is growing astonishingly in the region and, most importantly, across different social classes.
My guess is (and I have been struggling like crazy to make clients understand the importance of digital technology and content sharing) is that there is strong interests that the industry, both agencies and clients alike, are going to defend. How do you shift your business to digital when almost everything that you earn comes from TV expenditure commissions? How do you give up that much money? Do we really think that TV companies are going to let agencies drive their business elsewhere?
Sadly, as with every great technological and social improvement, most of the companies will only change when they see that there is really no point on keeping things as they were, that is, traditional advertising, the one that Seth Godin calls interrumption marketing.
But just as you said in the beginin of your post, Marketers may be walking down the same path as major label music companies.
Regards from San Jose de Costa Rica
Ramiro
Just to add to my prior comment. I’m reading the document “beyond advertising” and I came across a quote that fits this discussion:
“Massive Passives are least likely to participate in innovative types of media consumption, yet this segment is the “cash cowâ€? expected to keep delivering a large portion of revenues”
This massive passives are the ones that traditional marketers believe will continue to deliver revenues, and therefore, protect the industry as we know it. We need to change that perception and lead CMO’s to see that that segment is decreasing in size very fast.
Mitch, the whole blog is your opinion.
You had five people specifically say they agree with you, but the one who says differently needs to go back and re-read the article?
The Title is “Marketers Are Behind the Times”.
You state that one industry is imploding and that two others are on the verge of mass destruction.
Not your opinion?
On a complete side note:
Engaging the customer and reacting to their needs and opinions is the pinnacle of “New Media” …
yet you telling me to re-read the article and that you didnt mean anything by it, is basically saying “Hey, dipshit. I didnt mean to get your panties in a bunch.”
On a lighter side note:
I really enjoy your articles, this one just got by boxers all pinched up.
Appreciate the back and forth Todd. It does say, “That was the overall thesis according to some recent research from the IBM Institute for Business Value according to a news item today on AdWeek titled, Marketers Lag in Shift Online.”
And yes, I was adding some color on these reports and the news item (in terms of what I thought they were missing).
By the looks of the comments, it reads like people are agreeing with the findings in the report and news item.
As long as you enjoy reading and are passionate about commenting, that’s what’s most important. I’m definitely not looking for agreement on everything… that would be boring… and that would not make for an exciting Blog.