Sunday, October 21, 2007

Skate to Where the Puck Is, Not Where It Used to Be

Wayne Gretzky supposedly attributed his success to ordinary players “skating to where the puck is” while he “skated to where the puck is going.” (A tip of the hat to one of my favorite professors, John Greening of Medill) Of course, if it were that easy, we’d all be in the Hockey Hall of Fame. Fortunately, sometimes it isn’t even that complicated.

If everyone else is skating to where the puck used to be, then all you have to do is skate to where it is now. I realize that this sounds absurd, but look at the state of marketing today.

You would think (hope? expect? assume?) that marketing dollars follow consumer behavior. But, no. Changes in marketing spending seem to be a lagging indicator, not a leading indicator or even a current indicator. A recent Booz Allen Hamilton study for the Association of National Advertisers found that the 80% of Americans who are online spend as much time on the Web as they do television, yet marketers spend only 5%-10% of their ad budget on digital media.

Their plan to snap into action is to increase their digital marketing spending by 2010 – most of them, anyway. One hopes that despite the wording of the question, they are planning to increase their spending in 2008 and 2009, and not wait until 2010.

This inertia has been noticed elsewhere. A Forrester study released last week found that business-to-business marketers also indicated that they are responding to the behavioral shift of their customers to the internet with less than alacrity. Fortunately, that is not always the case: Intel was quoted in the New York Times that it is shifting ad dollars to the web because “We’re going where the consumers have gone.”

I would expect two things to happen as a result: marketers who are early to the web will gain market share which they may be able to hold against latecomers and the shifting of ad dollars will greatly accelerate the revenue growth rate of ad-oriented websites. Let’s see if this happens, and I’m also assuming that advertising on the web is effective, but that’s a topic for another day.