Martin Sorrell: 30% of advertising budgets totally misspent

Today’s Financial Times prints a few highlights of an interview with Martin Sorrell, CEO of WPP. Asked about monetization of mobile advertising he gives a general diagnosis of budget allocations in mobile, online and print.

  • Advertisers spend 20% of budgets on print  – consumers spend only 10% of their time there.
  • Advertisers spend 20% of budgets for online – consumers spend 30% of their time there.
  • Advertisers spend 0.5% for mobile – consumers spend at least 7 % of their time on their mobile devices (and this is definitely a fast growing segment considering all the new developments on the tablet sector).

Reverse calculate these numbers and your result is at least 30% spent on the wrong channels.

So how do you re-allocate? It’s probably not possible to achieve a budget which is exactly in line with your target groups media and communication habits. But you should not be 30% off – that’s simply not necessary and you could be made responsible for wasting money.

  1. Do a little research about your target group’s media behaviour. Do not forget to account for the growing segment of communication channels, because the line between media and communications is broadly blurred today. List time spent on different media as a percentage.
  2. Calculate a re-allocated budget that matches  the media percentages.
  3. Check: There are hidden cross benefits. For example: you have a terrific video (ad spot or product documentation, whatever). You place it on TV but you can also put it up on YouTube, trying to get viral viewership. In this case you need to allocate production cost to online/YouTube and not only to TV.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s