Commentary

This Is Not The End...

By David L. Smith, President, Mediasmith, Inc.

There is a lot of talk these days of doom and gloom. It started with the Internet advertising slowdown that began last year and that has now spread to offline. Even the long-term television network marketplace, a bellwether of "firm" commitments has weakened with a reported 20% cancellation rate for Q2 commitments made last year.

So, is the media ride of the 90's gone? Was the Internet an overly pumped up concept that could not deliver? Amazingly to me, there are people out there who believe just that (you may be one of them!). My response, which has been quoted elsewhere recently, is from the speech that Winston Churchill gave at the Lord Mayor's Luncheon shortly after the RAF had won the Battle of Britain, clearing the skies over England of the Luftwaffe when people were asking him if the war was won.

"This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." That's the way that it is with the Web, and the media business as a whole right now. We have gone through a period of intense learning. Some people really believed that they were going for short-term riches and the easy dollar. But now, we have to chalk it all up to (some very expensive) R&D.

The value of what we have learned should not be underestimated, however. We are now ready to take what we have learned and apply it to the companies with long-term viability, those of the "Global 2500".

If you are among those with questions about the viability of the Web, be sure to see Iconocast Publisher Michael Tchong's current "road show" which shows the continued growth of the medium. Or, ask your Yahoo rep for copies of the slides being shown at their Agency Summit road show relative to the branding impact of Web efforts.

The Internet has changed the media business forever. Was the e-commerce push of 1999 and the first half of 2000 a failure? Sure was for the investors. It was also probably 2-3 years earlier than it should have been in the scope of things. But a whole bunch of VC's got carried away (one VC recently, in public, called it a mass hallucination), and an insane amount of money got pushed into the marketplace too early. Then again, feeding frenzies have never had any relationship with logic.

But does that mean that e-commerce is not going to happen? No, it is actually going to happen in a very similar form to what we have already seen. After all, were companies like e-toys really lacking anything besides critical mass? They had an easy-to-use interface, good selection and low prices, quick delivery and a good customer base, albeit not enough customers.

We have learned a lot. The term media mix is forever changed. It used to be that we used television for awareness, print to reach that upscale group with a more detailed story, radio for frequency and promotion, outdoor if you could not use the other media or needed location info, and newspapers if you ha

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