Consumer Products Giants Migrating Piles of Ad Cash to Internet
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Written By Reprise Media | April 18, 2006 | Share This
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A front page story from today’s Wall Street Journal details the plans of many large consumer goods companies - the Cokes and Pepsis of the world - to seriously ramp up their online ad budgets. Several well-known firms - among them General Mills and Kraft - intend to double the amount they spend to promote goods online this year. As Paul Kedrosky rightly points out, the companies are starting with “small-ish bases” of internet advertising, but even five percent of the ad budget for your basic Anheuser-Busch translates to a lot of dough.
The changing economic game naturally poses problems for ‘old-media’ advertisers used to a certain way of doing things. Techdirt links to another WSJ feature, this one about how current methods of compensating commericial actors might not survive an explosion of ‘new media’ ads designed to run on cell phones or play on web pages. Since actors are paid a small fee every time someone sees a commercial of theirs, ad agencies are complaining that they’ll be nickel-and-dimed to death by countless high-tech ad views. Actors, meanwhile, say they don’t earn very much at all - many indeed do not - and less cash could mean dire consequenses for them.
A related story from USA Today (via MicroPersuasion) examines marketers’ recent fascination with a very specific (and low cost) online outlet: YouTube. Although NBC scorned the free advertising offered by the video-sharing site, companies like Nike and Warner Bros. recognize YouTube’s word-of-mouth power. A couple of firms (E!, MTV2) have made deals with YouTube to help distribute content, but Nike simply availed themselves of YouTube’s free upload mechanism to share a digital video of a soccer star wearing the company’s shoes; it quickly attracted 3 million views. We wonder…does Ronaldinho get a royalty every time a YouTuber checks out Nike’s handiwork?
Topics: Advertising: Online |