The Association of National Advertisers (ANA) recently completed its annual meeting in Phoenix. In addition to consuming a lot of shrimp and chardonnay, the 1,200 attendees (a 25% increase over last year, according to the ANA) seemed to be focused on two main issues: digital marketing and consumer behavior targeting.

With respect to digital marketing, the ANA contracted with Booz Allen Hamilton to conduct an online survey (184 marketers took part) to determine what marketers are thinking about and doing in the digital realm today. It turns out, these corporate marketers are not as plugged into digital media to the extent you’d think. In fact, less than a fourth of those polled considered their companies to be "digitally savvy," citing such issues as "lack of experience in new media" and "dearth of digital talent."

The study ultimately found that "digital marketing still lags the shift in consumer behavior" driven by the web. According to the survey, while 80% of Americans are now online and spend as much time on the Internet as the TV, most marketers still allocate only 5%-10% of their ad budgets to digital media. You could drive a double-wide mobile home through that gap.

So, what’s holding back the marketers from truly going digital? Why are they still just dipping a toe or two into new media when you’d think they’d be diving in head first? I would cite several factors, including:

• They still don’t really know how to use digital media and marketing. Beyond banner ads (which most agree can be a big waste of money), search, viral videos (are they just a fad for marketers?) and the occasional microsite, how do you really engage your consumers and customers online? If you can’t adequately answer that question (and not just BS your way through it), then you probably won’t be increasing your digital media spend anytime soon.
• They are unsure and not convinced of the ROI of marketing/advertising digitally (see above points).
• Effective targeting has been viewed as challenging, but that is changing now with the growing trend toward behavioral online marketing (the other big discussion point at the ANA meeting).
• Marketers still are leery of online measurement techniques and metrics. At least with offline, it’s the "devil I know." There has not yet been a lot of consistency in terms of audience tracking and measurement online. That is also starting to change.
• The psychology of the "new" and the "herd syndrome." Marketers are loathe to risk too much on a new medium, so many are still just testing online rather than jumping in with full ad budgets. As such, you frequently hear about how P&G is putting an increasingly greater share of its ad dollars into digital media, but they are still aggressively buying in the TV upfront market every year. Even a leader like P&G isn’t willing to break from the offline marketing herd…yet.

I am sure there are plenty of other roadblocks (structural, strategic, financial and psychological) that have slowed the growth of digital marketing adoption. However, I continue to believe one of the biggest issues is the lack of innovation and new ideas from the marketers’ advertising partners, the agencies. Frankly, as much as agencies are creatures of trends, they still are surprising laggards when it comes to innovation in marketing, communications and related technologies. Again, a big part of this is that they are creatures of habit. It’s also their business models. The big ad agencies (and even lots of smaller ones and the interactive firms as well) were built literally on the backs of TV spending, or creating big online ad campaigns and million dollar consumer websites. These activities typically don’t require or demand a lot of innovation. It is pretty much filling up pipelines with nice images and clever messages.

I hate to sound so cynical about my agency brethren, but I really think this is a problem which is causing many clients to hold back on making a bigger commitment to digital. Another dimension of this problem (and it goes back to the structural issue of the agency business model) is the fact that agencies still don’t get fairly compensated for their ideas. They give away their most valuable commodity, their strategic and creative thinking, for the narcotic of execution (building and placing ads and websites). They have been trained (by clients and themselves and a lot of history and tradition) that execution is where the money is. Consequently, they end up providing the valuable thinking free as a "value add" (just let us create those new spots for you!). Of course, ad/marketing agencies are the only service partners who do this, and it does not serve them well at all. 

This is anything but a new problem for the agency business. It remains a huge reason why the marketing industry still does not get the respect it deserves in the inner sanctums of the business world. Unlike, for example, major consulting companies and law firms, where big time senior partners now frequently bill out at rates exceeding $1,000 per hour. Do you think Lee Clow, the legendary creative director of Chiat/Day, could get away with billing his time that way? His ideas for clients over the years have been worth much more than that.

If ad/marketing agencies truly got compensated for their thinking and ideas, they would put more time and effort into driving innovation…online and otherwise. Until that equation changes, we’re unlikely to see the real innovation that I believe the ad/marketing agency sector could and should deliver to clients. Ultimately, it is the proper role of agency partners to help "lead" clients to even more effective use of the new digital channels, media and marketing technologies that will spark a new marketing revolution for the 21st Century.

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