Trading Analog Dollars for Digital Pennies

As a long-time P&L manager and strategic marketer for consumer businesses (aka agency client), I find this an interesting phrase to express a common thought about advertising investment, especially among digital/interactive agencies. This is speculation on my part, but I expect companies will ‘harvest’ savings from reduced investment in traditional (analog) advertising in the difficult business period ahead. I don’t think this will be a surprise to anyone. However, those savings, whenever they eventually again become added back to marketing budgets (2010?), will be cautiously invested …as pennies.

Retailers and Direct-to-Consumer businesses will react the most quickly, as their returns on investment have been impacted almost immediately. More traditional manufacturer/supplier advertisers, selling through retail trade partners, will continue to experience even disproportionately lower sales going into 2009, as many of their sales were ‘pre-booked’ into the Q4 holiday season (with retailers then carrying the greater inventory risk).

But where the phrase “analog dollars for digital pennies” has typically carried a sarcastic frustration amongst the digital marketing world, I think – my opinion – that this may now be a very positive opportunity for digital media. Less expensive, and more efficient, will be the orientation among advertisers going forward, like never before in recent years.

The likely result? Again, my opinion, but I see two important ramifications for marketing: First, big-dollar traditional media will be placed under tighter review for demonstrated benefit to any business. Nearer-term sales metrics, not consumer research scores, will be EVERYTHING. That will create a vacuum …an opportunity. So, and secondly, filling this opportunity, digital media, will benefit by focusing more on working harder with measurable results. However, unproven media that is only for sake of being ‘new’ won’t cut it. When dollars are tight, there is no need to hurry to be first into the latest media space (just like there is now no hurry to get back into the stock market). But digital media programs that demonstrate the ability to leverage a solid positioning with clear benefits to drive preference or response (and sales) in the marketplace, a USP, will get a very favorable review, if constructed as the most efficient investment in a challenging business environment.