Every report in the industry today points to a rise in online advertising spending from large advertisers, and a decline in TV ad spending.  This year, for the first time ever, the upfront Ad buy closed more than a month later than usual – a sign of indecision and tension in the TV ad market.  Today there is a feature piece about a "revolutionary" new ratings system from Nielson that promises to give advertisers a picture of "how many people are actually watching commercials, not just programs."  That’s a load of bull shitake, as Guy Kawasaki would say.  The real problem smart marketers have with TV ad spending is not about viewers fast forwarding ads, or even that people’s TV viewing habits are changing.  The dirty little secret of the ad business is that there is no way to offer useful metrics back to advertisers.  Here are the reasons:

  1. Ads are "mentally skipped" when viewers check out, stop watching or don’t pay attention.
  2. There is no interaction with TV ads, so you cannot estimate the level of engagement.
  3. TV is on in lots of homes, with no one watching.  This social trend is ignored and skews metrics.
  4. Targeting is still based on assumptions of demographics about shows – which may or may not hold true.

In itself, this secret would not be so bad.  But when marketing directors and those in control of ad budgets put these factors up against the increasingly sophisticated metrics they get online – there is no comparison.  If online can tell me what message resonates with a customer, what they purchased, who they told about their purchase, and how soon they came back to make another purchase … that is all vital information.  The metrics for TV advertising cannot even begin to approach this.  Without this level of detail, it is very difficult to hone TV ad messages, and nearly impossible to optimize them mid-campaign.  The end result is that money poured into TV advertising is a sunk cost, and a gamble for effectiveness.  The good spot can work wonders for a brand in terms of awareness and building a buzz and impacting bottom line sales.  For mass reach, TV still has a place. But with more marketers learning for themselves about TV advertising’s dirty little secret and forced to report back on ROI to top management, it no surprise that online advertising is beginning to look better and better.