fans still cheering for their team
February 26, 2001
BY MICHAEL KRAUSS
all the bumps and turbulence of the past year and the so-called
dot-com bomb, many interactive marketers are feeling a bit confused.
By the end of last year, the New Economy bellwethers were all
heading south: Year over year, Amazon.com lost 83% of its stock
market value, Priceline.com was off 85% and Yahoo! was down 86%.
Investors were either licking their wounds or counting their cash
on the sidelines, while the short-sellers raked it in. Some who’d
jumped to start-ups were out of jobs, and folks who’d stayed
put at the established companies were sneering. But many leading
Internet luminaries are still committed and unrepentant about
their vision of the technology’s possibilities and its ability
to create value for marketers.
Heneghan, founder of Internet advertising and marketing solutions
provider Giant Step: In the early ’90s, Heneghan tried (unsuccessfully)
to convince Steve Case to place advertising on AOL. That was back
in the days when AOL was a bulletin board service and monochrome
monitors were common.
has failed is a lot of these dot-coms," Heneghan says. "Unfortunately,
the media and everybody else chose to hype them. They’ve
really ignored the true stories. It’s the Fortune 500s and
how they usethe new technology." Using interactive techniques,
"We cut the cost to reach a GM customer by 60-something percent,"
been around technology for a while, you know that things move
in cycles and that it’s a footrace, not a sprint. It’s
about delivering concrete results, not hype.
I chatted with an analyst from Cambridge, Mass.-based Forrester,
who asked where I thought the marketplace was heading. I said
it’s heading the same way it’s been heading in each
of the technology cycles we’ve seen over the past 25 years:
Technology solutions that add value will continue to emerge, companies
that build business models on meeting fundamental customer needs
will prosper, and organizations that use technology to establish
barriers to competition will flourish.
sound mundane and boring compared with the hyperbole-filled language
of dot-com marketing polemics like The Cluetrain Manifesto.
Manifesto, for those who might need a refresher, provided 95 theses
for the few who didn’t "get the Internet" and
its impact on the rest of us. It’s still a great read, and
the underlying thinking about the future of relationships with
customers is both accurate and bold. The problem with The Cluetrain
Manifesto and much of the dot-com rhetoric, however, was the tone
of elitism and arrogance.
seeing today is consistent with what’s taken place in the
past. There’s going to be a continuing evolution of new
technology solutions, but surrounded by a lot less hype. Businesses
like Pets.com that popularize puppets instead of their core offering
will be road kill. We’ll also hear more in the next few
months about technology being applied once again to achieve cost
reductions and productivity gains. We’ll see the quiet introduction
and commercialization of new revenue and value-creating technologies
such as mobile wireless, broadband and peer-to-peer computing.
the Sturm ünd Drang surrounding the dot-coms, e-business
will simply become business as usual. A few major new brands will
prosper; names such as eBay, Yahoo! and maybe even Amazon will
Go back to
the 1960s and recall IBM CEO Thomas Watson Jr.’s bet on
the company’s investment in the 360 architecture. Then look
at the rise of the glass house of centralized computer processing
and how that gave us new productivity. Follow the path down to
the inevitable migration from centralized, departmental systems
solutions to distributed processing and Ken Olsen’s and
Gordon Bell’s VAX minicomputers. Don’t forget the
migration from typewriters to office automation brought on by
An Wang. Recall the time of Jobs and Wozniak and the Macintosh.
Consider Bill Gates’ DOS-to-Windows and Office PC software
empire. Computing got really personal. And at the organizational
level, we found new ways to link departmental computing solutions
and migrate from islands of computing to systems integration and
client-server architecture. Enterprise resource planning and true
enterprise-wide computing emerged.
In other words,
over the years, each new technology trend has given rise to another.
For every peak in the technology wave, there’s been a trough.
We tend to focus on the New Economy, the Internet and e-commerce,
but the story of technology reshaping the marketing and business
landscape goes far deeper and far longer than the hype of the
past few years. Most marketers tend to grow uncomfortable with
ambiguity and the lack of a clear path ahead. Pundits like my
pal at Forrester are trying to predict the future and describe
what the next blockbuster will be.
days, technology empowers marketers in many new ways and enables
them to deliver unprecedented value. The next blockbuster may
come through the new mobile and wireless technologies, or through
Customer Relationship Management software, or through what are
called "Metaprise" solutions—nondifferentiating
infrastructure systems and technologies that are shared by a group
of competitors to enhance productivity without providing a comparative
advantage to any one industry player.
still opportunity in logistics and supply chain solutions, and
peer-to-peer computing is in its infancy. Or maybe the value is
in better overall campaign management and the ability to assess
the cost and benefit of each individual marketing investment.
it could be all of the above. So don’t despair, even if
Merrill Lynch Internet analyst Henry Blodget cut his growth outlook
for the online advertising industry a second time, predicting
it will remain flat at $8 billion for the year. That’s still
an $8 billion business.
My take is
that we’re in the eye of the storm. It’s time to buckle
your seatbelts, because the ride is only just beginning. Those
who prepare and invest now will prosper most when the next round
of turbulence hits.
is a partner with DiamondCluster International in Chicago.
He can be reached at email@example.com.