By most accounts, this has
been one of the most memorable years in the relatively short lifespan of online
advertising. Thanks to an improved economy, many people in our industry will
never forget 2004. Two trends dominated our industry – one strategic and one
tactical. On the strategic side, we have consolidation. On the tactical side we
have emergence of the incentive promotion sites. Consolidation will always
occur. It does not impact day-to-day operations, occupying at most an academic
exercise in guessing who is next. Incentive promotion sites, however, have
shaped much of how business is done and how our industry is viewed. They also reflect
other broader changes occurring in the space.
Not long ago, those running
incentive promotion sites enjoyed relative obscurity. Here were companies doing
millions in revenues monthly, their ads being seen by more than one hundred
million people combined, yet virtually no end-user to whom they targeted knew
their name. Very few companies could, even if they wanted to, advertise to
millions of people and not have their audience know the company putting on the
promotion.
For
better or worse, depending on whom you ask, the period of relative obscurity has
ended. One can find articles written in numerous publications about the
incentive promotion industry. Many paint fair and honest pictures of what is
involved including college students even having websites discussing their
success. Some of the articles portray the industry incorrectly and with bias.
Either way, legitimate press now exists that covers the business model. It’s a
disruptive force that will, oddly enough, ultimately insure the incentive
promotion sites’ survival. Rather than simply focus on acquisition, the major
players will now be forced to build out the businesses, putting resources into
customer service, best practices, and setting the stage for equal competition.
The
"coming out" of the incentive promotion sites parallels the emergence of several
companies that appeared to take comfort in their behind the scenes roles. This
year’s Ad-Tech saw many companies with incredibly enviable fiscal positions step
out of the shadows and let the world know they existed. In many respects their
presence is almost a watershed moment. Here are incredibly successful companies
that have not needed external validation to excel. It can be argued that their
doing so was not for their personal benefit but to display to the outside world
that they have passed the point of no return. They have committed fully to the
internet, linking their fate to that of the industry. What they did was a vote
of confidence, a group giving their support to a particular candidate.
In
aggregate, much of 2004 resembled a marathon runner finding their stride, the
industry starting to settle into its groove. As it does, a lot of conversation
centers around what the upcoming year will entail. Continuing with the metaphor
of a runner finding their stride and a political candidate receiving the endorsement
of a well-heeled organization, those two themes will remain prominent in the
development of internet advertising in 2005. Also, along with emergence and
validation, adoption will be a major trend of next year.
Internet advertising has not only reached critical mass but has proven
its viability, the latter crucial for adoption by those companies often
reluctant to test out new media. That is why some predict far greater adoption
of brand advertisers than ever before. 2005 will see more than an incremental
increase in the brand dollars spent online. The very targeted and able to be
tracked nature of the internet that made it an obvious target for direct
response advertisers will now attract those more typically interested in
broadcast advertisements. This will make 2005 the year of the publisher as rates
will be pushed up by adoption of the brand dollars. It will be a year of
transition. The emphasis will be on legitimacy and robustness. Internet
advertising can no longer call itself new; or like the incentive promotion sites
hide behind a veil of obscurity. The spotlight is on us all, and only those that
feel comfortable being seen will succeed.
Jay Weintraub
