Advertisers are Missing the Internet Connection, OPA Report Reveals

Article ImageIf you're reading EContent, no one needs to tell you what an important medium the internet has become for delivering content and reaching consumers across the world. But, according to a June 2006 study conducted on behalf of the Online Publishers Association (OPA) by the Center for Media Design at Ball State University, advertising dollars aren't keeping up with skyrocketing consumer web demand.

The OPA study followed 350 Americans through their daily routines, logging, every 15 seconds, which media they were using and how they were using them. While television remains the dominant at-home medium, the web is now number one among all demographics in the workplace, where it reaches 54.6% of consumers. Despite the fact that only 8% of all 2005 advertising dollars were spent on web advertising, the internet accounts for 17% of all media consumption—behind only TV and radio, and beating out all forms of print media. Additionally, the web is the only medium that ranked in the top two for consumption both at home and in the workplace.

Not only are people logging on in record numbers, but the connected consumer is also proving to be a worthwhile investment. The OPA study compared spending patterns of people whose primary form of media was the internet and those who primarily watched TV or read the newspaper, and it found that internet users spent almost $4,000 more per year on retail purchases than TV users did, and almost $600 more per year on entertainment and recreation.

The study also delves into what makes the internet such a powerful medium for advertisers—its interactivity and ability to combine with other media and extend their reach. If a company runs a TV or print ad that directs consumers to a website for more information or extra features, the OPA reports that those consumers are likely to log on and visit the site, extending their familiarity with the brand and expanding the time in which advertisers can reach them. And the study found just how much further traditional advertising would go when paired with the web: TV's reach increased by an average of 20%, and print media's reach increased a dramatic 40%.

Advertisers are slowly tuning in to the possibilities of the web, but ghosts of the dot-com past are making them hesitant to invest in the internet the way that they invest in television or print ad campaigns—and probably will for some time, according to Adam Berkowitz, CEO of ID Society, Inc., an internet marketing and web design agency. "Although the internet has revived itself, and the reallocation of marketing dollars to online advertising has been on the rise, these budgets will not overcome traditional media," he predicts.

Another obstacle to increased internet ad revenue is the lack of a consistently profitable business model. Pay-per-click advertising has resulted in the loss of hundreds of millions of dollars for advertisers, pop-up ads irritate more than they educate—so what's a company looking to throw their hat into the internet arena to do? Berkowitz predicts that savvy marketers will look for new ways to cash in on constantly connected customers. "An initiative in the early stages of use today with a lot of upside opportunity for marketers is Flash video capabilities on wireless devices," he says. "The key is for advertisers to use and evolve the dynamic properties of the internet to attract customers, and develop relationships with them in an engaging and compelling manner to keep them coming back and spreading the word to their peers." No matter when advertisers decide to tune in to the multimedia appeal of the internet, the OPA makes one thing clear: There will be an audience waiting for them.