Monday, August 27, 2007

Another dot-com bust?

Since the housing market started to implode, many industry professionals have wondered if digital marketing will face another dot-com bust, this time fueled by limited credit opportunities and advertisers reducing their investment in online marketing.

Catherine Holahan's article in today's BusinessWeek article titled 'Tech Stock Oasis: Can it last' points us in the opposite direction, and she claims a possible recession might dramatically increase the change of investment from offline to online marketing:

"For one, it is generally cheaper to reach 1% of households using the Internet than it is to reach them via print and television campaigns, says Tim Vanderhook, chief executive of ad-targeting network SpecificMedia. Many premium sites charge $30 to $200 for every 1,000 people who see an ad. Television ads fall in roughly the same price range for cost per 1,000 views. However, nonpremium sites without clearly targeted content—a category comprising most of the Web including e-mail sites, social networks, and most user-generated content sites—charge $20 or less. The nonpremium price typically increases a few dollars when ad networks apply additional targeting, but is still often cheaper than advertising in other media. As a result, when marketers needs to trim the budget, but still reach as many people as possible, they are likely to opt to spend less on other media formats and more online.

S&P's Kessler also says a marketing budget crunch could accelerate the shift of advertising dollars from traditional media to online. "Online is a lot less expensive, and you can spend it in small bites," says Kessler. "When you do television buys, they are generally big commitments where money is required up front."

Not directly related to this article but still very relevant, AdAge reports today that Beam Global Wine & Spirits (Jim Beam, Sauza Tequila, Courvoisier Cognac)is shifting their overall marketing strategy from advertising to word-of-mouth tactics.
Beam's CMO Rory Finlay Web 2.0 quote: "A brand that's dynamic is much more interesting to talk about than one that sits in the corner shouting at you."

Hats off to Beam Global Wine & Spirits. They seem to understand that building a community around their brand infuses new life and offers people the opportunity to make the brand their own. People are passionate about their alcohol choices and they want to share their passion with others.

Many elderly people resign just to die very soon after because they isolated themselves from the outside world. They don't learn, experiment or try new experiences. In order for brands to stay alive and relevant, they have to connect with the outside world: Learn, experiment, experience.

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