Grace Kite wrote an article titled Is Online Marketing the New Rent? (Sept 16, 2020).
« Now that e-commerce is so prevalent, fewer businesses need to maintain a physical presence with a high street shop, but they do need to maintain a virtual presence and that’s why they purchase these ads… Their job is not to drum up demand. Instead, as a recent article in The Economist pointed out, they are “the new rent”. »
« Their purpose is to help people who are already on their way to a business to arrive safely. They replace the sign above the shop front, the lights that stay on inside, the shelf-space, and even the entry in the yellow pages. »
« In 2019, 49% of marketing budgets were spent online. If even half of that spend went to rent-like ads, it was likely a serious drain on CMOs’ abilities to build demand using advertising. »
« This is one possible explanation for the IPA’s recent finding that effectiveness has been declining in awards entries. Perhaps advertisers are being forced to allocate too much budget to activities that don’t drive incremental sales. »
« the analytics digital marketers use need an overhaul. At the moment they don’t separate rent-like ads from demand-building ads. They count everyone that walks past the sign above the door and claim everything they buy as driven by the sign. »
Or as Ian Barnard put it on Twitter, demand generation versus demand harvesting.