The news was great, just not great enough.
I refer to the real-time ebb and flow of public opinion that surrounded Yahoo’s second-quarter earnings announcement. It came midweek, after market close (and before the news of the Overture purchase, which really reshuffled this deck of cards). In the days before the announcement, the stock price surged and phones leapt off their hooks. “Is it here?” the market asked. “Is this the online advertising rebound we’ve been waiting for? How great is this?!”
Then the announcement came. Earnings were stellar and met analyst expectations.
“Oh,” said the market. “Met expectations, huh? Well. Shoot.” The stock price dropped off, losing much of its gains. My colleague Nate Elliott tells me this was a whole lot of profit grabbing. I can see that. But the sell-off continued because, according to the business press and traders’ message boards, shareholders were a bit disappointed. They anticipated not that the company would meet estimates, but exceed them. In a sense, Yahoo didn’t meet expectations… at least not the inflated ones held by those who set the Way-Back machine to 1999, when Internet companies routinely beat expectations. Not doing so in 2003 was a bit of a letdown.
The online advertising rebound is real. That is, the rebound of companies — publishers, advertisers, agencies, and other service providers — are correctly using the Internet’s technology to achieve advertising and business goals. What the stock market does with this news is beyond my scope of interest (for the purpose of this column, at any rate).
The Internet bubble didn’t burst because there wasn’t one. The “let’s make a whole bunch of cash with some poorly thought out ideas using the Internet” bubble burst. Stock indices have risen and fallen over the last several years, but some numbers have climbed: the number of people online, the number of households with Internet connections, the amount of time spent online, the amount of traffic, and the amount of email sent.
All of that creates a good, healthy environment in which a rebound can occur. What’s making the rebound actually happen and gain momentum is an alignment of priorities between publishers and advertisers. A few examples:
- Multi-agency alignment. The integrated-marketing vision is simple: have all media work together to communicate one message. The dream wasn’t fumbled due to a lack of vision, but a lack of organization. Either clients segregated media into different silos or the work was divided among multiple agencies, which didn’t communicate. Clients came to realize this and began engaging single-ad-campaign stakeholders to uphold the concept and align different internal and external teams. These people work like symphony conductors, getting multiple, disparate groups of people to generate one beautiful, integrated sound.
- Publisher flexibility. I’ve built a script to insert the phrase “publisher flexibility” in every bit of advice I write (OK, not really). It’s the key to sustaining the Internet as a viable advertising medium. The less publishers think “sell inventory” and the more they think “build solutions,” the higher the quality of the creative product.
- Media purchase negotiations. Pay-for-performance models did a great job of bringing advertisers back to the Internet. I still worry about nontraditional risk offsetting from clients to publishers, and sometimes agencies. That will keep a lid on risky creative, which hampers the medium’s development. I want to see more publishers and agencies try to convert at least some of their clients from pay for performance back to CPM, but they must do so on the heels of positive campaign performance.
- Long-term planning. A sure sign of a rebound. The best evidence I’ve seen of long-term planning by advertisers is inclusion of brand goals in Internet campaigns. Branding is a long-term endeavor. Immediate feedback — clicks and conversions — are not always the best indicators of success. A decision to focus on brand goals connotes a decision to stick with a medium over a long period.
I’m not a stock-market analyst, so I can’t offer advice on which company’s shares to buy or sell. Those who watch Internet advertising are only concerned with catching short-term profits from company movements. They’re not in the best position to determine if a rebound is happening. This space was created (out of thin air, really) from within. It’s from within any growth will occur.
Meet Gary at the Jupiter ClickZ Advertising Forum in New York City on July 30 and 31.
Nurcin Erdogan Loeffler, head of strategy and innovation, Vizeum China, outlines the seven ways businesses can future proof their digital strategies.
Chief marketing officers have shared their views on technology, innovation and how they see their roles transforming into the near future at an ... read more
Every brand would love to see its hashtag trending on social media, but what if it’s for the least expected reason? Should you ... read more
In today's multichannel world how can marketers use data to ensure the experience a customer receives is relevant to them?