Omnicom urges clients to move ads online

Omnicom's Daryl Simm is advising his clients to take advertising funds digital.
Omnicom's Daryl Simm is advising his clients to take advertising funds digital.

Daryl Simm, the agency's CEO of media operations, advises advertisers to move up to 25 percent of their ad budgets from TV to online video

As a growing number of people turn from regularly scheduled programming to streaming their favorite shows at their convenience, advertisers are looking for new ways to leverage digital broadcasting. In that spirit, Omnicom Group, which oversees $54.4 billion in advertising spending for companies like PepsiCo, Visa and McDonald’s, is advising its clients to move 10 to 25 percent of their advertising budgets from television to online video.

In an interview published on The Wall Street Journal's CMO Today blog, Omnicom Group CEO of Media Operations Daryl Simm said that online video campaigns make it easier to measure the effects of an advertising campaign. He said the shift highlights an increasing level of accountability. 

"Accountability is an interesting subject as marketers try to balance the desire for immediate sales or transactions versus brand building and association," Simm said. 

How much an advertiser should move from TV to online video should be determined by the audience it’s trying to reach, he said. For example, a company trying to reach online gamers should commit more of their advertising budget to online video than a company that specializes in packaged goods. 

"We are counseling our clients to move between 10 percent to 25 percent of TV dollars to online video, depending on the target audience," Simm told CMO Today.

The shift in advertising spending needn’t be a negative for the television industry, he said. "A significant portion of the dollars are actually going back to TV owners for their online properties."

That’s not to say Simm thinks the shift will be easy. He said there is a long way to go before there is enough quality content online to satisfy advertisers’ needs.

"There is a need for even more premium and relevant content," he said. "I do think we have hit the apex and we are moving into an environment where there is more talent — actors, directors, producers and brands — wanting to enter the online video space. That holds a lot of promise for online video. The amount of quality online video is still an issue."

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