> $50 billion for worldwide search advertising (of which Google captures a huge majority) sounds like a lot, but it’s only a small percentage of total ad spend, projected to be $545 billion in 2014. The vast majority of that spend is not about direct response – i.e. ads that spur you to make a purchase on the spot; rather most of the money is spent on brand advertising.
Essentially his point is direct response is ~10% of brand advertising, and that other players are better positioned than Gooogle to capture that.
But what if that ratio itself were a legacy assumption? And thus, why should we take his following statement at face value:
> The idea behind brand advertising is to build “affinity” among potential customers.
I posit that brand advertising has traditionally been orders of magnitude larger than direct advertising because options for quality direct response advertising were limited. But thanks to the rise of the web and mobile, we're now moving into an era where the line between brand advertising & direct advertising is blurring. Not just that, but the time/distance between a customer's latent desires to purchase action is also shortening, thanks to 24x7 e-commerce.
In this world, why should direct response be 1/10th of brand advertising? Heck, why should direct response always be distinct from brand advertising?
Sure, companies will continue to run brand adverting, including ads masquerading as stories (advertorials once, "native ads" today). But the split (or even distinction) between direct response and brand advertising will continue to reduce.