It’s a new year — and my how things have changed! Wasn’t it just a year ago that high-flying dot-coms cornered the market on multimillion-dollar Super Bowl ads? And start-up money was a simple commodity, available to fund the narrowest of business concepts submitted on the backs of cocktail napkins?
Maybe it’s just me, but I’m not missing any of the massive ad campaigns from companies whose ad budgets were bigger than their potential revenue for the next three years. For one, I can carry an issue of both Red Herring and The Industry Standard without straining a major muscle group.
More important is that major lessons can be learned from the past year’s start-up marketing excesses. Whether responsible for marketing in a start-up or in a major business concern that has vast resources, we can all benefit from the events of 2000.
Spending lots of money on marketing doesn’t ensure business-model success. Certainly, boatloads of advertising didn’t save the likes of eToys.com, Pets.com, or More.com. Pure-play e-tailers found it hard to compete with their click-and-mortar counterparts. The biggest advertisers fell the furthest and fastest.
Smaller, niche, and specialty-oriented e-tailers with high user motivation but limited ad budgets seem to be making the grade, but their biggest novelty is that they make money.
The B2B segment had its share of big spenders that are now out of business as well (more on that later). Not that “old economy” companies can’t shoot the moon on losers, either: Can you say, “New Coke” and “McDLT”? The point is that marketing cannot (with all due respect to Pets.com) save a dog with fleas.
National network TV advertising is mostly for mass consumer and business products. I’m still perplexed why marchFIRST, a new-economy advertising firm, did national broadcast and print advertising.
Do all people who have television or read travel magazines need to know who these guys are and what they do? I think not. From a branding and new-business perspective, marchFIRST could have spent a fraction of its dollars — yet reached a more focused and interested audience — by advertising in marketing and business publications.
Which brings us back to all the flashy and expensive image advertising from the B2B segment last year. That advertising may have been useful if those companies were profitable, still in business, or didn’t have to lay off more than half of their employees. The point is, talk to your core audience — well before you branch out to mass media.
Hype only brings pain when you can’t live up to it. The hype machines ran rampant last year, with the PR industry easily racking up its best year ever working for big-spending start-ups that were trying to break through the clutter.
Unfortunately, they all became part of the same mass of noise. So the hype got bigger, which is fine if you can live up to it. (Live by the sword, die by the sword.) Those whose boasts were the biggest got the biggest headlines when things went south. The moral: If you can’t walk the talk, it’s best not to talk at all.
Stay within your means. In essence, the biggest lesson we learned in 2000 is that while you should strive for big goals, stay within your means in attempting to accomplish them. Companies with no immediate potential for revenue and profits should not be spending millions of dollars on marketing.
Marketing should earn its spending money: If you can generate the business and the revenue, you should get the budget to keep doing it.
Oh, one other thing we learned last year: Pets can’t drive.
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