The challenge of online advertising

Peter Kafka of The Wall Street Journal’s ‘All Things D’ blog has been following Google’s attempts to position YouTube as a successor to television closely.

If this is to happen, key to its success will be getting advertisers to spend as much money with online advertising channels as they do on broadcast TV.

To date, that’s failed and most of the online ad spend has come at the expense of print media – the money advertisers spent on magazines and newspapers has moved onto the web – while TV’s share of the pie is barely changing and may even be increasing.

The challenge facing web advertising is discovering what works on the new mediums.

McDonald’s Behind The Scenes campaign in Canada is touted as one of the success stories of YouTube advertising (although Kafka isn’t fully convinced).

McDonald’s modest ad tells a story, flatters viewers by telling them they’re smart enough to go backstage, and still ends up pushing pretty images of hamburgers in front of them. It’s advertising sort-of masquerading as something else but not really – a pretty clever approach if you ask me.

Where advertisers and industries go wrong is in trying to apply old ways of working to a new technology, something they do every time a new technology appears.

Probably the best example of this is the movie industry – if you look at the early silent movies, they were staged like theatrical productions. It took the best part of two decades for movie directors to figure out the advantages of the silver screen.

Shortly after movie directors figured out what worked on the big screen, the talkies came along and changed the rules again. Then came colour, then television, then the net and now mobile. With each technological shift, the movie industry has had to adapt.

It isn’t just the movie and advertising industries facing this problem; publishers, writers and journalists are struggling with exactly the same issues.

Want more articles like this? Check out the online marketing section.

Most of what you read online, including this article, is just old-style print writing or journalism being published on a digital platform. Few of us, including me, are pushing the boundaries of what the web can do.

American radio and television pioneer David Sarnoff figured out how to make money from radio and TV in the 1930s with a model that was very different from what the movie industry was doing at the time.

Sarnoff built Radio Corporation of America into the world’s leading broadcaster and the modern onine advertising industry grew out of RCA’s successful model.

Today both the broadcasting and advertising industries are applying Sarnoff’s innovations of the 1930s to the web with limited success. Just like movie producers struggled with theatrical techniques at the beginning of the 20th Century.

Figuring out what works online is today’s great challenge. Google is throwing billions at the problem through YouTube but there’s no guarantee they will be the RCA of the internet.

We may well find that a young coder in Suzhou or a video producer in Sao Paolo has the answer and becomes the David Sarnoff of our time.

The future is open and it’s there for the taking.

What do you think is the key to success of online advertising?