There seems to be a lot of finger-wagging and “I told you so’s” out there these days. Ever since the spring 2000 dot-com meltdown, the “talkaloti” have rolled their eyes and nodded knowingly that they all saw this coming. It’s open season on the dot-coms, with profane web sites making a sport out of kicking ’em when they’re down.
In February 2000, Forrester Research predicted that drkoop.com would dominate the online health market by 2002. While there can be dramatic comebacks (see Apple Computers), it’s clear that drkoop.com is in critical condition and on life support, and the prognosis is not good.
Everyone has his or her opinion on why things have soured. Some say it’s a natural selection process that, in the long run, is healthy for the online economy. Others are saying it was greed beyond imagination that left investors holding the bag. And then there are those who blame the marketers.
The new market meant new marketing rules, a new way of looking at customers. It wasn’t “word of mouth,” it was “viral marketing.” It wasn’t signing up for a newsletter, it was “permission marketing.” It wasn’t putting the customer first, it was “CRM.”
Meanwhile, as the experts were evangelizing the targeted appeal of the Internet, the dot-coms were flooding the market with their commercials, direct mail, and other marketing banter. Companies like Monster.com made headlines by blowing their wads on one Super Bowl commercial. TV viewers felt that commercials were more like an inside joke who was the hippest advertiser with the most obscure ad? rather than an attempt to communicate to the public.
The whole thing has been a marketer’s wet dream: Spend as fast as you can. Reports from Competitive Media Reporting revealed that companies such as AltaVista were spending 20 cents out of every dollar they earned on promotions, marketing, publicity, public relations, and advertising. Another report showed that companies such as drugstore.com were spending $100 to gain a customer who would spend less than $30 on their sites.
You do the math.
The Public Relations Cavalry
Traditionally, executives have considered public relations as “free advertising.” But at roughly $50,000 per month for a PR firm, suddenly free is very expensive. In headlines like “Make Noise or Die,” the industry press has reinforced the notion that noise, buzz, whatever (or the lack of it) will be the determining factor in a start-up’s success.
Even the beleaguered drkoop.com blames the bad publicity among other things over the last few months for its stock’s free fall. So, despite the questionable timing of the top executives selling their stocks and the fact that first-quarter revenue was $4.7 million against its loss of $24.8 million, it was the bad press that did drkoop.com in.
Even the best PR guru can’t save that.
Perhaps it’s time to go back to the basics. Let’s crack open our marketing textbooks and review, shall we?
First of all, even the most creative marketing talent and astute public relations professionals can’t salvage a bad business plan or bad management. What they can do, however, is advise the geniuses who develop those business plans on whether or not the audience will buy the idea. It’s called market research. Remember the adage: Marketing fills a need; it doesn’t create it.
Second, “relationship marketing” is redundant.
Third, branding takes time. Even Internet time. And branding exists in the minds of consumers, not the marketing department.
The major fallout for marketers and professional communicators over the last few months has been to put our roles in perspective. We definitely have the attention of the CEO which is a big difference from the old days. This is a good thing. Yet we have run the risk of giving ourselves more credit than we’re due and, also, more blame, too.