Summer's done, kids are back to school and we cruise into the final quarter of the best year in the history of the online advertising and marketing business. Even though it's autumn, a million well planted flowers are blooming. The ubiquity of broadband connectivity has ushered in the online entertainment age. "Rich Media" has become a redundant term. Quality sites are either selling out their inventory or coming darn close. And social media and user-generated content have brought back that 1998 retro-bubble glow! Yes folks, it's a great time to be in our business.
Forgive us all for being just a little nervous.
Among those who've been at this for more than a few years, this is no time to sit back and relax. We've seen the promise of the business squandered once before, and we sure-as-hell don't want to see it happen again. So I'll be playing the role of Cassandra at this afternoon's performance and sharing some thoughts on how we might wisely use this period of prosperity to really build a dominant business.
KNOW WHO YOU SERVE: Yes, public internet companies have to answer to investors and start-ups must toe the line for their VCs and angels. But let's understand that their fixation on short term growth is quite often at odds with the realities of building a stable, long-term media business. Yahoo! has something like a billion dollar quarter and still gets beaten up by the analysts? 'Waiter, a side of perspective please!' The street is going to do what it's going to do, but let's at least not continue to propogate this nonsense. Ridiculously inflated expectations for CPM, profits and usage don't serve anyone but the drive-by entrepreneurs and speculators. We all know what a great media business looks like. How about we start serving that master instead?
VISUALIZE REAL CAREERS: We all bitch about the shortage of good people and we all continue to poach all the best talent from one another. (OK, so we're also poaching a lot of questionable talent as well.) If a B- or C+ sales rep or media supervisor can double her salary and get equity in a market like this, bully for her. But until we've got the courage and conviction to fix the root problem, this nuttiness will continue unabated. The issue is that no one in our business is imagining what a real career in this industry can look like. Experienced 35-year-olds are on their fourth or fifth job today and they expect each will be the one they cash out on. Stop selling snake oil and start building the supply of good people and really managing their careers. In our recent survey of sales people, two thirds told us they were most interested in "satisfying work that's fairly compensated." They don't come into this with bizarre expectations... it must be something we're doing!
OUT, OUT FOUL CLICK! To marketers who are only interested in clicks to their websites, here's the number: 1-800-BUY-SEARCH. The fact that the value of online advertising is still tethered to the quarter of one percent who might click on an ad TWELVE YEARS LATER is insane. Folks, any business that accepts the idea that 99.75% of its yield has no value, has no chance -- and no real rationale -- for success. If you think I'm overstating this problem, go talk to some of the marketers who are pumping dollars our way: You'll be shocked at how many of them are equating "accountabilty" with "clicks." We can tell an advertiser exactly how many people saw their advertising and how many times; we can do instantaneous research to determine brand lift; we have sophisticated direct response metrics to determine financial yield from a campaign; media mix modeling and cross media optimization tell us what online does to the overall efficacy of a plan. Yet the big lie of click through continues. Repeat after me: If you want clicks to your website, go buy some keywords. If you want to build awareness and demand and tell a compelling story to your potential customers, stick around. Stop waffling. It's time to choose.
TAKIN' IT TO THE BOARDROOMS! If an online publisher tries to build its business without ad agencies and media buying shops he's a fool. But if he tries to win by ignoring clients and working only with agencies, he's an even bigger fool. Let's be straight: The agency business is going through yet another gut wrenching metamorphosis (picture the poor man/beast in "An American Werewolf in London"). Behind closed doors, agency execs candidly acknowledge this. So here's a shout out to both publishers and agencies: Yo, pubs! If your people don't understand marketing principles and aren't comfy in the boardroom, you've got a problem. They're probably just pushing electronic paper back and forth with agency media planners. They're transacting, not creating value, and you're probably overpaying them. Yo, agencies! Being in the idea business today means channeling the great work coming from publishers. Too often you're watering it down, sanitizing it and making it smaller and safer. Your clients want to be venture capitalists and you're too often running hedge funds. The client demands and deserves innovation... somebody is going to bring it to them.
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