March 05, 2009

Traditional vs Digital Smackdown

The subject of today’s sermon is going to be the effectiveness of traditional advertising versus some types of non-traditional online advertising. Before we begin, however, a few caveats:
1. Don’t be afraid of the graph. I know ad people see a graph and their brains start to hemorrhage. Just be cool, I’ll explain it.

2. I am excluding “search” from this discussion. I don’t know what the hell search is, but it ain’t advertising. I'm also excluding banners because I hate them.
The point I’m going to try to make is that traditional advertising usually performs within a fairly predictable range of effectiveness while online advertising like viral videos, social sites, and blogs have a far greater upside, but are also way more likely to be a failure.

So here we go.

A fabulously effective tv campaign may be three, four, even ten times more effective than an average tv campaign. But a fabulously effective online posting/website/social site will be hundreds even thousands of times more effective than average.

There are two factors that make effectiveness in these two realms so different.

First, in traditional advertising, media buys create what is essentially forced exposure. If I execute a competent media plan, there is a very high likelihood that the people I want to reach will see my campaign. This means that no matter how mundane or misguided my message may be, I will receive some value from my investment, even if it is strictly brand awareness.

The second differentiating factor is that in online media creativity is much more highly rewarded than in traditional media (I am using the word 'creativity' very loosely here to mean "that which is popular." As Van Gogh will tell you, that which is popular is not always creative, and vice versa.) My tv spot will get the same amount of exposure regardless of how imaginatively it is done. Because of the viral nature of the web, something that is popular online will get thousands of times the exposure (views) for no more money. The vast majority of online efforts, however, go completely unnoticed.

The graph you see below is a simple expression of this. The hypothesis is that if you graph the effectiveness of traditional radio/tv/print/outdoor ads, you will get something that looks like the bell curve (in blue). There will be a small number of efforts that are unusually ineffective, a small number that are unusually effective, and most efforts hovering around the middle.

The graph for online efforts, on the other hand, will look a lot like the “long tail” (in red,) with a very small number of websites/viral campaigns/social sites that are hugely successful and a very large number that are essentially invisible.

This graph demonstrates the hypothesis that there are a few digital efforts that are highly effective, but a large number that are completely ineffective. Traditional efforts tend to hover more toward the middle. It is not to scale.

What is missing from this, of course, is the cost factor. The investment you need to make in traditional media is usually, but not always, higher than online. If anyone has a way to adjust this for cost, send it in and I'll be happy to share my Noble prize with you.

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