Most of us remember the state of the Internet economy after the dot-com bubble burst in September of 2000. I, for one, have vivid memories of walking into a Soho Starbucks in the middle of the business day and seeing the place full of lean 20somethings dressed all in black, sobbing into their lattes, "My options! My options!"
But pretty soon (at least in hindsight it seems soon) the industry was back as a vital part of the media, marketing, and retail economies, this time with profitability having replaced multiples of revenues as a means for evaluating company performance. In short, we bounced back better than before.
So how will digital media fare in this recession-slash-depression?
In economic times like these, consumers, who are ultimately remarkably resilient, make choices -- some difficult, some not so difficult -- about what is important, and what is expendable. Instead of going to a movie, maybe you rent a movie. Maybe you stop taking the newspaper, because you know you can read it online. In November, in a column in this space titled "Depression-Era Digital,"
I quoted one agency media researcher who told me that in this economy, consumers will have to make "hard choices about what paid media they needed, truly needed."
I'm hearing stories about people dropping satellite radio, cutting back on cable TV, even cancelling landline telephone service (I know my wife wants us to do just that.) Indeed there is a growing trend among some 18- to 24- year-olds to eschew TV ownership entirely, choosing instead to stream their favorite shows online.
But I'm not hearing that anyone is opting to cancel their broadband connections, their Internet accounts. MediaPost recently reported
the results of a study that found 70% of males 18-34 would sooner give up TV than the Internet. And that is not surprising. The Internet has become a digital lifeline: a place where, if push comes to shove, you can get your newspaper, your radio, your TV. It is a must-have.
But what about the field of online metrics?
Like consumers, businesses also need to make choices.
If the Internet remains the most robust ad medium in these tight times, then metrics become more important than ever, because advertisers will be more concerned about effectiveness, efficiency, and ROI than ever before. In short, the market robustness will be driven by quantification and accountability.
In tough economic times, companies look to trim non-essential costs. In many organizations research is viewed as a cost center, not a revenue driver, and thus becomes a ripe target for cost cutting. So let me make a plea here that research -- the function itself, the people staffing that function, and the syndicated and custom work the organization utilizes -- is not
expendable. Research expenses should be held to the same standards as other expenses -- that their contribution to the organization's bottom line be tangible and quantifiable. But this is a standard that has always been appropriate.
Well-designed, well-interpreted research informs business decisions, including very specific and immediate ones relevant to buyers and sellers of online advertising. Is this campaign working? Am I delivering the desired target with a sufficient reach and number of average impressions? How much time are people spending on my site? Am I able to differentially monetize the more-loyal visitors? What impact does video have on my site's engagement? What share of advertising am I getting from the automotive category? Is there any way to increase that?
Some of my colleagues in this space (Judah, Jodi) might refer to the tools that help answer many of these questions as Web analytics. But to me, all of it -- even Web analytics -- is research, and all of it is vital to the enterprise's ability to make the right business decisions. Over on the Web Analytics listserv, there's been a thread recently about, "is the web analyst obsolete?" Good lord, no. The practitioner who understands how to turn insights from data into guidance for business decisions is more valuable now than ever before. And if you come across a really good one, hire him or her. And if you have a hiring freeze, send me the resume.
It is possible that we will see a "thinning of the herd" in the online metrics space; some companies might not survive these times. This is probably not the best time to be working out the kinks in a new business model. But this process is probably healthy, and best for the long-term viability of the herd itself.
So my message this week is to hang on tight. As Bette Davis said in "All About Eve": "Fasten your seatbelts, it's going to be a bumpy ride." But the Internet is as robust and resilient as the American consumer, and research (including audience measurement, Web analytics, ad effectiveness and other work) is essential to our collective continued success. So let's all champion research in our organizations -- and bond together over the importance of doing so.