The Rising Market(ing) Share Of New Media

Fascinating article in Business Week (registration required to read the article) on the Association of National Advertisers conference earlier this month. It seems that Google's chief executive Eric E. Schmidt asked the advertisers some tough questions, like "if you're spending $46 billion a year on broadcast TV, how do you know if you're getting your money's worth?" Google is now raking in about $3 billion on its pay-per-click (PPC) offerings, and of course, has a ready answer to that question. It's very easy indeed to track your return on investment with Google's AdWords, as well as similar programs from its competitiors. If you manufacture Prada handbags, would you rather pay $100,000 for an ad in Vanity Fair, or spend that same amount on PPC, knowing that consumers will go directly to your website where they can buy the bag?

Jon Fine, the article's author, writes, "Google provides an automatic return-on-investment measure for a marketing world increasingly obsessed with ROI. If someone clicks on a company's link, it pays; if someone doesn't, the company doesn't. This comes as corporations are demanding better accountability for their massive ad spending.
    "At the conference, execs from some of the most traditional companies (who control some of the biggest marketing budgets) described big shifts away from traditional media. Wachovia Chief Marketing Officer Jim Garrity said his research on ad effectiveness would sadden broadcast TV execs but gladden employees of Yahoo! and -- yup -- Google. Joseph V. Tripodi, a good-humored old-school salesman, is Allstate's chief marketing officer. He told me Allstate's spending on 'nontraditional media' -- from the Internet to sponsorships -- increased from 5% to 25% of its marketing budget in recent years."

Fine says Old Media executives (that is, traditional recipients of marketing and advertising dollars like newspapers, TV, and magazines) expressed "quiet terror" at the conference.

Nobody thinks traditional media are going away, or won't remain valuable advertising outlets, but if Google and other search engines cut into their revenues by significant percentages like those cited above, there will be some massive changes to the marketing landscape.

At Smart Marketing, these are crucial questions. We are moving more and more of our clients' marketing efforts (and dollars) into New Media: websites, search engine strategies including PPC, blogging, e-newsletters, and so on. As a consequence we now have two full-time employees in our Internet Marketing department. Since that represents about 20 percent of our staff, you can almost track the growth of New Media marketing by the make-up of our team.

(We interrupt this article for some shameless bragging and bold assertions.)

Attorneys have typically lagged 50 years behind other kinds of businesses in their marketing efforts. We're making sure that when it comes to Internet marketing, our clients, at least, have a significant advantage over their competitors, who will take years to catch up — by which time, we will be on to the next cutting edge development.

But if you are not a Smart Marketing client, it's okay. It doesn't mean you're a bad person.