Two weeks ago, it was Mr. Hotchkiss who got me thinking about display ads on search results pages. Today it's Mr. Simon who sparked some internal debate, Herman's Head-style.

Last Monday, Mark wrote that the digital media industry is in a 1999-like bubble. He painted a "doomsday scenario" in which Google misses badly on earnings, leading to a stock sell-off and the ripple effect of advertisers pulling online ad budget.

Ahh, the Good Ole Days

Mark suggests that we could be in for a crash similar to what happened in 2000/1 when "irrational exuberance intersected with fast-talking technology optimists, half-baked business plans, immature technology, credulous analysts, and too much stupid speculative money."

I won't dispute Mark's comments about those crazy years or his observations that many of these same elements are in abundance today. I will, however, contest his assertion that this bubble will burst and have an adverse affect on search and online marketing.

As I see it, there is one big trend that has become pervasive in major digital media organizations that was missing in the early 2000's. This concept is certainly not new but it was the first thing to get tossed out the window when things went south. I'm talking, of course, about a commitment to user-experience.

Banners, Pop-ups, and Spam, Oh My!

At the turn of the century, when it came to Web publishing, everyone was trying to get rich quick. When the market softened and advertisers pulled back from the as-yet unproven online marketing channel, the focus quickly shifted to trying to stay in business.

For those of us in the online ad world at the time, that meant more banners, pop-ups, stand-alone email, co-registration, you name it. In fact, we did name it. And, for a while, it worked. At L90, we created an ad unit called the PowerAd - which was a glorified pop-up that spawned the advertiser's Web site in a new browser. Sure, these ads converted - at first. But users quickly learned to ignore them, if not desert altogether properties that displayed them.

As for email and co-reg -- as soon as times got tough, many brokers and list management firms starting selling and re-selling user data regardless of the privacy language used when the file was originally obtained (for the record, L90 kept its nose clean here.) With a complete disregard for the user-experience, companies began blasting their email lists with multiple messages each day in an effort to monetize their audience (ick, just that phrase alone reeks of abandoning user-centricity). Sure enough, response rates dropped from rates as high as 25%-30% to less than 0.5% -- and that was for email opens, not clicks or conversions!

And it was not exactly a banner time-period for those trusty display ads, as publishers began littering their site with any and all units the IAB would shake a stick at. There were sites that had 468x60, 120x600, and 300x250's all on the same page -- and that was just above the fold! Let's not forget about the sites that sprinkled 120x60 buttons below the fold like Martha Stewart decorates a cupcake. Just as with email, response rates on display ads tanked, causing marketers to pull back budget.

Looking back now, it all seems so foolhardy. But at the time, there was really no other option. No one had created a model that could actually make money while still respecting the user-experience. It was an either/or proposition. And certainly no one had created a model that aligned publisher's interests (generating the highest-yield per page) with those of advertisers (achieving the highest scalable ROI.)

Along Came a Spider

We all know how the story goes. But it seems some of us have forgotten the implications.

Google, piggybacking off the Overture model, created a system by which publishers can make money and advertisers can hit ROI goals without popping or spamming or even showing graphics altogether.

What's most important here, though, is that Google stuck to its guns when opportunities presented themselves to make money hand over fist by relaxing its stance a bit. A great example is YouTube. Rather than dumping pre-rolls over its billions of video streams, Google instituted a user-initiated text overlay that is, gasp, relevant to the content being viewed.

In weighing this decision, Google realized that caving to the demands for immediate monetization of YouTube would only deliver short-term gains. So it waited for nearly a year to fine-tune an ad-unit that wouldn't disrupt the user-experience. And it seems like shareholders were willing to be patient with the gentle giant, if the rise in Google's stock price from $500 to $640 in the year following the close of the YouTube acquisition is any indication

But, What If...?

Well, I've run out of room for this column and I do want to play out Mark's "doomsday scenario" so I'll pick it up here in two weeks. I'll explore what might happen if Google does indeed miss a quarter badly. And I'll look at other factors bubbling up to the surface that will insulate those of us in search from feeling the effects of a potential burst. For now, though, let me just say that when it comes to user-experience, once you pop, you can't stop

This commentary is insightful. I recommend it to others.