Somehow I seem to always be out of the room when the Kool Aid is being passed out.
I profoundly didn’t “get” the AOL-Time Warner merger and loudly listed the 1001 reasons why it was a disaster for Time Warner to anyone who’d listen. No one did. Including the New York Times, the Wall Street Journal and Fortune which all gushed over the union like a pre-adolesent girl over a pop star.
Late 1990s San Francisco felt to me like a party that had gone on way too long where people had had way too much to drink and folks were way too eagerly pairing up with people whom in the light of day they’d have second thoughts sharing an elevator with.
I sold every NASDAQ stock I had, shorted some I didn’t and bought what seemed at the time to be a “crazy” amount of gold. In turns out that the only crazy thing about the volume was how little it was. Had I been a little more “reckless” I’d be long done. I also physically moved myself from the glorious Bay Area to what was then considered a backwater, the Hudson Valley of New York. The value of the house I bought quadrupled in value in six years. It did seem like an awfully good price.
Today, I’m reading my favorite newspaper, the Financial Times and this headline caught my eye: “Jostling for space on the web’s next frontier.”
The article recounts recent deals in the Internet world:
- The ad group WPP bought 24/7 for $637 million
- Microsoft offered to buy Aquantive for $6 billion
- Goolge paid $3.1 billion for DoubleClick
And what new frontier are they buying into? Display ads.
I hate to burst anyone’s bubble, but not long ago display ads went by a different name: banners ads.
Having played an important role in the history of the banner ad, banner ads are close to my heart. (One of my students, former Hal Riney & Partners adman Rick Boyce was the guy responsible for selling the concept to corporate America. He got his own indoctrination into what we called “billboard ads” from a small workshop I put on in June of 1994.)
As fond as I am of banner ads, or display ads as they’re being called now, we learned something very important about them in the 1990s. For the most part, people tune them out.
What has changed since then?
Not much other than a new generation of people who somehow missed, slept through or didn’t read about the spectacular collapse of the banner ad model, believe that this “new” thing – the display ad – is where the future online action will be.
Really?
Here’s some illumination from someone who sells these dogs for a living, Mike Kelly, head of advertising for AOL:
“Marketers have gotten to the point where they understand that interactive advertsing works.
They are ready to ramp up their spending on the web, and this means a lot more spending on display ads.”
Let me translate:
“The shallow thinking posers who spend corporate America’s ad dollars have finally woken up to the fact their customers actually use the Internet.
And now that their peers are throwing buckets of money aimlessly at the thing in the hopes of appearing that they have a clue, everyone else feels comfortable doing it too.
In short, no one is going to lose their job spending millions on online display ads that don’t do squat.”
Will a ton of banner – I mean display – ads be sold to advertisers?
No doubt.
Does this represent some new frontier?
Very doubtful.
On the other hand, there are virtues to drinking Kool Aid.
Look at the prices these banner ad serving companies are selling for. Look at all the revenue Google et. al. will book as billions of dollars flee the collapsing television-newspaper industry and look desperately for someplace, any place, to go.
In fact, there’s a lot of money to be made in Kool Aid. Just make sure you’re the one selling it, not drinking it.
Onward to the future!
– Ken McCarthy
P.S. For over 25 years I’ve been sharing the simple but powerful things that matter in business with my clients.
If you’d like direction for your business that will work today, tomorrow and twenty years from now, visit us at the System Club.
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