Advertising

Those projects that come to nothing

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After I pulled data from umpteen sources and crunched it for Details, Details, I looked at the resulting graph and saw that I had found… nothing. If I was a journalist, I’m sure my hard-bitten, cigar-chomping editor would have chewed me out, “There’s no story here, Neumann!”

But that’s the way it is. I was hoping for some trend or abrupt change that would tell me something I didn’t know, some result I could attribute to a cause.

Let’s look again at the nothing, the ad dollars per hour of online use. I’m going to correct for changes in overall spending per hour of media use, because the period in question was a bit up and down for the ad world. Below is a graph of Online ad dollars per hour as a percent of total ad dollars per hour, from 2001 to 2007.

Data sources the same as for Details, Details.

Why is this not much? Because it is a graph of efficacy. This is what we online marketing people do. The online media folk and the online app folk and even the Verizon DSL technicians get people online and get people to spend more time there. This graph factors that out.

Macroeconomic conditions determine how much is spent on advertising. This graph factors that out.

All this graph shows is how much an advertiser is willing to pay to get their message to a consumer over the course of an hour online as a percent of what they are willing to pay over all media. If it is 50%, then that probably means the advertiser feels they are about 50% as likely to sell something in an hour as they would be otherwise. The ads are half as effective.

So, an increase of 5% over four years is not much of anything. Nothing, really.

What happened in this period? Here’s a few things that apparently changed nothing:

Starting in 2000, Google revolutionized the purchase of intent.

Starting in 2002, Tacoda and the scores of companies following its lead, revolutionized what advertisers know about the people seeing their ads, allowing precision targeting.

Starting in 2005 (or thereabouts), Right Media and its followers revolutionized the purchasing of ads across the huge internet media landscape.

What has all the work done over the past ten years to build the infrastructure for a true one-to-one ad marketplace gotten us? Are advertisers, with all the data and mathematics and optimizing they have available, really getting no more for their money than they were ten years ago? I find it hard to believe, personally. What am I missing? Or, what are we all missing?