Learning From the Downturn
The interactive biz is turning around. Lessons from the last few years' mistakes.
The interactive biz is turning around. Lessons from the last few years' mistakes.
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:
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.
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.
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.