There’s a favorite graph from over the years, even before Terry Kawaja’s slide, that’s a favorite of those lobbying on behalf of the Web. It’s the one below, which shows the amount of time spent online versus the budgets allocated there.
It was used most recently during famed Internet analyst Mary Meeker’s annual data dump on the state of digital media. It’s telling that she’s still returning to this oldie but goodie. According to Meeker the time spent comparison now justifies a $20 billion opportunity in mobile advertising. The problem with it is it isn’t true. Well, it’s true that there’s a gulf between budgets and time, but that’s irrelevant — at least to the people who control the spending.
The reason is simple, according to Rob Norman, CEO of GroupM: the chart doesn’t tell you anything about what people are doing in digital media. How much of that time is spent with email or online banking or any number of activities that have nothing to do with consuming content in an environment receptive to advertising. Translation: online time spent can go through the roof, but the budgets won’t follow unless that’s time spent with real media that has real brand advertising opportunities.
“Her number overstates almost certainly by a substantial margin the amount of time spent online with content consumption,” Norman said.
The chart is also indicative of the different ways of viewing media when it comes to Madison Avenue and Silicon Valley. For the latter, the “mega trend” is simple. People spend more time with a medium, be it the Web or mobile, the dollars follow. That’s why there is a frequent encouragement of venture capitalists that porfolio companies not waste much time early on developing their ad revenue model in favor of focusing on users above all else. It fits with the Valley’s engineering ethos — and works quite well in many cases. The problem comes that many of these businesses dutifully build up their user bases “to scale,” only to find that they can’t “turn on the revenue faucet” with advertising. To be more precise, with brand advertising.
“I don’t think this gap closes completely because the Internet is never going to be from a paid advertising standpoint the brand building medium TV used to be,” said Bryan Wiener, CEO of 360i.
Newsletter publishers say they continue to see uptick in revenue despite advertising slowdown
At a time when larger media companies are feeling the pressure of the economic downturn and advertising slowdown, newsletter businesses continue to be in a period of revenue growth.
TikTok’s CEO faces bipartisan skepticism in first Congressional hearing on security concerns
The hearing comes amid calls to remove TikTok from government devices and in some cases even ban it entirely.
Media Briefing: What to expect at the Digiday Publishing Summit
As DPS draws nearer, top pain points for publishers are coming to light.
SponsoredHow advertisers are leveraging omnichannel attribution and measurement to power CTV
Sponsored by MNTN Connected TV advertising has joined and expanded the larger ecosystem of campaigns that advertisers deploy. As such, omnichannel marketing strategies now encompass television and mobile devices, tablets and other screens such as out-of-home. And as customers engage across these different touchpoints, brands are seeking and moving their measurement and analytics efforts to […]
New app launches through Apple hoping to win with ‘zero-party data’ when others haven’t
Caden's new app lets users connect data from their Uber, Amazon, Netflix and other accounts in exchange for money. Will it take off?
‘The next level for us’: The New York Times eyes better retention for games in subscription drive
The games division is focusing on finding new ways to mine the inherent competitive nature of games like encouraging people to play multiple games in a single session or through new achievements and rewards for progression.