It's Déjà Vu All Over Again

  • by September 27, 2001
Funny how the past can reveal so much about the present and even the future. In response to the umpteenth article about the state of online advertising, I decided to do a bit of digging in order to trace back the origins of television.

I was astounded with the results. Here are the beginnings of the history of television as it has been recorded. (my comments are parenthesized)

- 1920's: RCA and other would-be manufacturers begin technical experiments (kind of like the ARPANET and origins of the Internet)

- 1930's: Networks and advertisers are preoccupied with radio. TV's development continues slowly (substitute TV for radio and Internet for TV)

- 1940-45: World War II pre-empts further progress (when I originally saw this I thought of the Internet bubble, but now this takes on a completely different meaning. Enough said)

- 1946-49: TV looms as the medium of the future, but technical and manufacturing problems cause delays (ain't that the truth!)



- 1950: Mass production of TV sets begins; Advertisers tentatively support the new medium (have we not met before?)

- 1951-54: TV expands with colossal impact; Penetration rises rapidly to the 50% mark by the mid 50's (this is where our story begins...)

The similarities are uncanny; they suggest that we may in fact be on the right path after all, but just haven't been able to see the road ahead too clearly. Let this then be your glimpse into the future.

We're all familiar with the fact that it took the Internet 5 years to reach 50 million users - compared with 10 for cable; 13 for television and 38 for radio. But what about 50% penetration? As noted above, it took television something like 15 years.

The Internet took just 7 years to hit 50% penetration. This compares with 30 years for the computer, 40 for electricity and more than 100 years for steam power. Note the radical change in frame of reference. The reality is that we shouldn't be comparing the Internet to other media at all. For one reason, the Net is so much more than a medium (see end of article). For another reason, it has fundamentally changed the way we communicate. It has also affected productivity and the way we do business much the same as the other innovations it is being compared to.

Studies revealed that 50% penetration was the "magic milestone" after which electricity's effect on productivity was visibly reflected and tangibly evidenced. The explanation behind this conclusion lies partly with the law of increasing returns, and partly due to the fact that it took time for behavior to be altered and for the true benefits to be applied: think ordinary toothbrush versus an electric one, as opposed to automating the manufacturing process or lighting the factory.

The irony with the Internet is that although we've hit both 50% and 50MM milestones, we're still lagging behind in the behavior and application categories. We're still getting comfortable with the medium - both on a personal (we're still "experimenting" with buying a book online and then returning to our nearest Barnes & Noble store shortly afterwards) and professional (when last did you update your Intranet?) level.

Another similarity I noticed was the likeness between the portals and the major networks in terms of majority share of reach, as well as command of the percentage of total advertising dollars.

Yet, both networks and portals are losing ground to cable and niche players respectively. Digital cable has contributed to the former, whilst innovation and a more discerning consumer have contributed to the latter. A sagging economy has led to more aggressive value-laded integrated network deals; it has also led the portals to embrace agencies with their various alliance programs. I could continue...

Which brings us to online advertising. I feel comfortable with the idea that we're still experimenting. There's a lot to be said about experimentation. It seems like a natural precursor to innovation and evolution. It certainly makes sense given the level of technical stumbling blocks, which always seem to be rearing their ugly heads in our campaigns.

...and so the next time someone tells you that Online Advertising is dead, tell them to go and look at their history books. Also give them this quote to think about:

"Television: A medium.
So called because it is neither rare nor well done."
- Ernie Kovacs (Television personality in 50's)

- Joseph Jaffe is Director of Interactive Media at TBWA\Chiat\Day in New York. His primary focus is to highlight interactive's value and benefit to meeting his clients' business and branding objectives.

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