Re: Ad market growth forecasts

From: Brandi Jasmine <brandi_at_brandijasmine.com>
Date: Wed 07 Mar 2001 13:16:43 -0600

DANIEL COLLICO SAVIO <COLLICOD_at_advance.com.ar> WROTE:

>I do not agree with your 20/120 estimation;

I think I typoed there - it was 20/100 - and regardless
of the source of the statistic, a pretty small sample
I think you'll agree.

>it could be helpful to exhibit whatever reliable
>information you have to back up this assertion.

If I could recall the exact newspaper I would have
quoted it - it would have been the Toronto Star, Globe
& Mail or the Toronto Sun. Most likely the latter -
fits well with coffee and donuts.

>Tens of billions of dollars in market cap value have
>evaporated.

I am no stranger to pain here. I have a few thousand
worthless options in my ex-employer that I can wallpaper
the bathroom with.

>Because dotcoms -generally speaking- have no
>profits and few revenues, and because dotcoms have high burn
>rates (the speed at which they use up their VC funding,
>often at several million dollars per month). More reasons?

No vision, no connection to the daily reality of doing
business, no compassion for their overworked, underpaid
employees that they are working to death to get to the next
funding deadline ... been there, done that, didn't buy the
stock options THANK GOD.

>They are funded entirely by VCs, and sinceVCs are pulling out
>of the dotcom market, most of the dotcoms will go bankrupt
>very fast, very soon, very hard.

And maybe that is not such a bad thing. A lot of these
"dot.coms" were bad ideas to begin with. The whole thing
was top-heavy from the start. No way was it sustainable.
The business fundamentals never went away. We now have
proof of this. Yet the VCs are out there right now sniffing
around for the "Next Big Thing" like circling sharks
smelling blood in the water. Right now you can hear them
whispering "wireless advertising" in the same tone of voice
you once hear "plastics"! ... but that's another hyped-over
concept ultimately doomed to failure (for totally different
reasons, but that's a whole other thread - wireless content
will work, wireless advertising won't).

>So, analysts expect that 50-75% of dotcoms will close. A

I won't challenge your sources as you challenged mine ;)
... but that's a pretty generous range, and presuming those
figures are accurate ... what are the figures on how many
small business in general close in their first five years?
Isn't it usually quoted somewhere around "over half"? The
point here is that your chances for success or failure are
no greater or lesser depending on your choice of venue.

>final word: the main issue here is not the dotcom debacle,
>but how this effect influenced the online advertising
>industry, which now should be focused in "brick & mortar"
>clients.

It was always going to be that way. The whole thing was
designed for failure.

Traditional advertising executives wanted online advertising
to "go away" all along. They still do. In "Ogilvy on
Advertising" - a classic, written well before the dot.com
boom - Ogilvy points out this unfortunate tendency of
advertising executives to shrink away from reliable tracking,
because it points out their weaknesses. As long as they can
say "Well, it's for BRANDING", they don't have to really
come up with any reliable measuring stick. The customer is
left to sort it out from the balance sheets, long after the
campaign is over.

What really killed online advertising? Performance
tracking! The very thing everyone said they wanted turned
out to show them how ineffectual they really are. So they
dropped it like a hot potato and ran back to the safe old
familiar untrackable advertising, where they would not be
forced to account for their success or lack thereof.
Terrible irony that.

But the long term holds a bigger picture. Hot, eager and
hungry advertising agencies (and online businesses in
general) who truly get what people want online, will now
be able to make an honest buck - provided they can show
performance. That will be the key. As it should have been
all along.

Kind regards,

Brandi Jasmine
Writer, Digital Photographer, Illustrator
        www.brandijasmine.com
www.astrology.ca - www.twostar.com
      brandi_at_brandijasmine.com



Received on Wed Mar 07 2001 - 13:16:43 CST