On the shelf in my office sits one of my favorite items: the Pets.com sock puppet, a historic symbol of the dot-com boom and bust.
The sock puppet, a blatant rip-off of Conan O’Brien’s Triumph the Insult Comic Dog, was a pervasive and popular mascot for the company, which tried to be the Internet’s first pet supply superstore. Despite $180 million in funding from Amazon, Pets.com couldn’t scale up quickly enough and as the bubble collapsed, the company was mercifully put to sleep by its board.
The dot-com boom was, in many ways, an incredibly successful wealth redistribution scheme based more on excitement about the future than actual market opportunities. If you had a cool idea, a well-written executive summary, a promising Forrester forecast to back it up and a good ad agency to mock it up, you had a good shot at getting some kind of funding.
Startups were everywhere, and large corporations were suddenly investing millions in online divisions and tech infrastructure to prevent a possible loss of pre-existing market share. Many ad agencies, media buyers, writers, graphic designers, coders and the savviest investors were the beneficiaries of this optimistic view of the future.
During this time, I was working as an advertising creative director and marketing strategist, and worked with a number of dot coms, ranging from news and entertainment portals to large healthcare and apparel sites. In nearly every case, their success was dependent on a huge increase in Internet adoption. Convinced of imminent Internet stardom, many of our clients ignored our cautionary advice and made big bets on the future based on ambitious forecasts. It didn’t matter that in 1999 Amazon posted a $900 million loss. Our clients were convinced a massive society-wide transformation was upon us. We just gave the best advice possible, tried to temper expectations, and made sure we got paid on the front end.
As it turned out, the societal changes didn’t come fast enough for many dot-coms. The majority of the public wasn’t quite ready to trade their yellow notepads and DayRunners for Palm Pilots, or to buy dog food on Pets.com and wait for a full two days for it to arrive. Some people still preferred the instant gratification of stores to online shopping. Likewise, traditional advertisers used to TV and print metrics simply did not accept the (inflated) value of banner ad impressions or the new metrics associated with them. Their reluctance and the entrenched business models of advertisers, agencies, media buyers and retailers slowed the whole rate of change down.
One forecast after another failed to verify, and slower than expected traffic and unsold or discounted CPMs (cost per thousand impressions) killed revenue projections. Cash ran dry and with that the dot-com bubble collapsed into a heap of devalued stock options and company rec room ping pong tables. A full $5 trillion in market value evaporated just like that.
Fast forward to today and talk about technology dominates our industry’s conferences. Obama’s 2012 techniques are the buzz of the town, and tech companies are hyping the transformational changes to come. It feels like 1998 all over again.
The Campaign Tech Boom
Political consulting is going through its own tech boom, fueled in part by the roles the Internet and mobile devices now play in voter behavior. Much of the new software we’re seeing in the exhibit halls is truly awesome, even mind blowing in their potential applications. The emergence of online ads, targetable to voters among specific demographic and psychographic criteria, is already revolutionizing the political new media ad business. But while overall investments in new media, data and technology are rising, these investments still represent a fairly small part of political campaigning.
Let’s face it: if your campaign spent more than 10 percent of its media budget on new media, that’s considered fairly proactive.
Technology companies and new media consultants are emerging as accepted, essential parts of the campaign consulting team. But that has also drawn in new players, leading to increased competition and fragmentation of the available business. Increasingly, TV consultants are bringing new media in-house or partnering with new media specialists. Data and software companies are now everywhere, with very similar marketing claims. The net effect (pun intended) is a larger chorus of technology promoters, but not necessarily a better case for blowing up traditional campaigning.
The technology needed to completely upend traditional political consulting practices (and, for that matter, consumer advertising as a whole) already exists. But will the forces of change be negated, or at least radically slowed, by standard operating procedure and entrenched business models? History indicates they might.
Imagine the total addressability scenario: television ads are delivered directly to the TVs of specific audiences, regardless of cable zone—similar to how we’re delivering pre-roll today to computers. The campaign chooses an audience and the media buyer purchases impressions—not spots or timeslots. The campaign is only charged for an actual impression of the ad on a television that is turned on and actively displaying the ad. They get data back on how many people watched the commercial versus how many people switched to another channel or simply fast forwarded through the spot. The metrics change from cost per point and GRPs to CPMs, or even cost per engagement. Campaigns are able to see real time analytics from their TV commercials and essentially get instant feedback on how good their ad is. This level of targeting and feedback—all of which currently exist in the form of pre-roll ads online—might happen pervasively in the TV business.
Certainly the largest corporate advertisers and campaigns have a vested interest in pushing for that level of data acquisition and accountability. The differences between your TV and your computer are swiftly blurring with the popularity of Internet-enabled TVs and technologies such as Apple TV and mirroring. New media consultants are gleefully talking about the role of online video and how important we will all be in this new schema (as if TV consultants won’t adapt themselves).