So, is it all over? Is the Internet a lost cause for media, a black hole for advertisers? Was all the early skepticism warranted and the later enthusiasm just “irrational exuberance”?
Should all of the still-open dot-coms just send their employees home and close up shop? Should advertising agencies liquidate their interactive units and forgo the medium altogether? In the infamous words of Jim Morrison, is this “the end / Of our elaborate plans, the end of / Everything that stands, the end”?
The End of the Beginning
The answer is, Of course not. Sure, enthusiasm for online advertising has waned. True, layoffs plague the Internet industry. But this is hardly a sign that the end is nigh. Schwab lays off 2,000 employees, but no one declares that the financial services industry is dead. Maytag lays off 6,000 workers, but no one is writing articles declaring the washing machine industry defunct.
I think there are two principal reasons why the pendulum has swung so quickly from one extreme to the other.
- Consumer backlash. There is anger out there among many consumers of Web content. These folks are badmouthing the Internet, the online marketplace, and especially the Web frenzy of the last two years. Why? Because once upon a time, these people were made to feel like Luddites if they weren’t on the Web, and they were made to feel stupid if they weren’t getting rich off of it.
- Press overreaction. Most journalists writing about online advertising are not, nor ever have been, advertising professionals. They are freelance writers who aren’t always that familiar with our industry. Their ignorance sometimes leads to misleading statements that spread fear. And fear leads to anger, anger leads to hate, and hate leads to suffering (thanks, Yoda).
When they finally got onboard, either through investments or as employees, it was only to see the online world crumble about them and “dot-com” become a dirty word. This anger has bred an enthusiasm for “kicking the dog.” The press is just giving the people what they want, and in so doing is exonerating them for creating this Tulip Bulb frenzy to begin with.
The doom-and-gloom declarations of the press are really overstatements — a counter-swing of the same pendulum on which the “irrational exuberance” had been riding. What’s happened is that we are simply at the end of the beginning. The research and development phase of the Internet as an advertising medium is finally starting to wind down. Ad spending conducted with wanton abandon is all but a memory.
What we need now is for the various media companies left in the online space to pony up the cash for research to prove the viability of the medium. While NBC, Disney, and others have spent millions and millions developing their own unique brands of digital media, what they haven’t done is any research demonstrating the medium’s value as an advertising vehicle.
This initiative needs to be advanced in coordination with other third-party media organizations. The Interactive Advertising Bureau, The American Association of Advertising Agencies, and the Advertising Research Foundation all need to get involved, if only symbolically. There is a lot of talk about how online advertising can be used as a vehicle for branding and awareness, but no one seems to be able to refer to a significant piece of research to support that position.
A lot of companies have “proprietary” indicators that show some form of branding or awareness is taking place. Folks are tossing out terms like “buying power indexes” and “purchase intent,” but that isn’t very meaningful. Those who can benefit the most from this medium’s success need to invest a few bucks into making the case for using the Web for advertising. We all understand intuitively that it works; we just haven’t figured out exactly how and what works best.
Look, nearly every means of communication human beings use serves as an advertising vehicle in one way or another. If those who have the most to gain simply set out to prove that what we have here is worthwhile, the advertisers will follow. Really.
Ultimately, when have the dollars not followed the eyeballs?
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