Things are still a bit shaky, but the interactive biz seems to be turning around. Advertising revenues are up for the first quarter, driven in large part by search. E-mail growth seems to be holding steady (though spam is becoming a major impediment); some are even saying 2003 spending should be on par with the boom days. And though I don’t have figures on Web development activity, my own Web development business has really taken off in the past month. If it’s happening here in sleepy Baltimore, I bet many of you are seeing the same thing.
But where are we going? Are we headed back to the crazy late ’90s with its attendant excesses and irrational exuberance? Has the market matured to the point interactive is just a fact of life? Are we on the cusp of a new boom?
Maybe. Now seems the time to look over the dregs of the last couple years and use the pain as an opportunity to learn. As an industry we’ve made a lot of mistakes. With business picking up again, we should strive not to repeat (not-so-past) history:
- Results matter. Back in the day, people would scoff when anyone mentioned return on investment (ROI). Metrics were seen as impediments to “vision.” What did click-throughs, pass-alongs, and leads matter when we were all awash in money? Yeah, right.
Not having much money really focuses people, as evidenced by the continued growth over the past few years in paid search and direct email. Though many still (rightly) argue over online’s effectiveness as a branding tool, measurable results are what get clients excited. Now they’ve tasted what can happen when hardcore metrics are applied, it’s safe to say we’re not going back. Any online advertising (or advertising in general) better have a financial model and measurement method built in if it’s going to get sold through.
- We can do more with less. As budgets shrank and revenues declined, many (if not all) of us had to make a lot of tough decisions about who we were keeping on board. Layoffs have been distressingly common over the past couple years, and those cut loose have had a really tough time. But from a business perspective, it’s hard to argue getting leaner and meaner hasn’t been good for the industry overall.
Businesses were forced to take a hard look at who should stay and who shouldn’t. Most of the “what the heck do they do” dot-commer titles have disappeared. Those who stayed had rock-solid skills, got results, and were entrepreneurial enough to make a place for themselves in a shrinking market. Unless things get really nuts in the near future (not likely), the leaner workforce will continue to do more with less. Expect profits to rise long before payrolls.
- It ain’t about the technology. Can you think of a single piece of new technology that saved your business over the past two years? Probably not. With all the fads and trends, nothing arose that completely changed the way we work or made a huge impact in the marketplace. Instead, the marketplace took what it needed, cast aside the junk, and assimilated new tech into the big picture. Rich media, wireless, interstitials, Webinars, IM, whatever… they’ve all become part of the mix without becoming the dominant force. What’s worked has been smart ideas using appropriate technology backed up with powerful strategy and precise measurement.
- Online works more like offline. Much of the tech that was homegrown in the boom years has now become off-the-shelf. Technology is more of a commodity, and agencies can focus on their core competencies rather becoming IT companies. Clients are smarter online services buyers and increasingly comfortable with splitting out things such as email list management from creative or media buying from media creation. In effect, the online world is a lot more like the offline world… and that’s a good thing. Companies can usually only do a limited set of things well; being everything to everybody generally isn’t the best answer.
- Effort matters. At one time answering a request for proposal (RFP) really meant just creating a “Frankenproposal” from boilerplate and sending it out. When times got tough, that approach quickly stopped working. We all got a bit complacent in the good times. The bad times have reminded us nothing is a given and everything we do matters.
As painful as it’s been, the downturn was probably the best thing to happen to the online world. It forced us (and our clients) to focus on what matters — selling stuff and serving customers — and made us reexamine the way we worked to create more efficient, effective systems. The downturn has been the forge that purified the industry and made it stronger. Let’s remember the lessons as times get better.
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