Six pros and cons of interactive advertising and how it can affect the industry.
I've questioned the sanity behind some of the media valuations in my blogs lately, from Twitter's $1 billion-plus valuation to Groupon's claims of being worth $15 billion. To many people, including my humble self, these valuations seem downright crazy, especially when faced with the realization that more than a few of these companies haven't made a single dollar in revenue and have no real plan on how to make money. Still, there are pros and cons when it comes to interactive advertising and how this could affect the industry, and I'd like to quickly examine them and hopefully get some feedback from you guys and gals. (Note: feedback doesn't mean "I tweeted it…ain't this interesting?")
First, I'd like to look at the pros of these valuations:
Now, the three big cons of the valuations:
My last point is the most important. Despite all the hoopla about various products, services, and technologies online, interactive advertising is what makes everything go 'round. Whatever term you want to call it to get attention (e.g., social media), it's all the same: interactive advertising. As an industry, we are the water that keeps the ecosystem of the Internet going, and our expertise is the only reason these sites succeed. When Facebook wanted to learn how to develop revenue, it didn't hire a "social media" expert, but instead interactive advertising veterans who developed a system that made the company money. We need to remember that and hopefully remind the media and the investment community of this fact.
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Pace Lattin has been working in interactive advertising since its inception. From being a co-owner of the company that sold advertising in ClickZ before the turn of the century to founding a major interactive advertising publication, he has been involved with all aspects of the interactive advertising industry. He is currently the executive director of the Executive Council of Performance Marketing, an industry organization that represents over 100 C-level executives.
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