The Taking of Midway Island as it Relates to Web Advertising

Seven months after Pearl Harbor and flush with victory, Admiral Nagumo commanded the powerful Japanese fleet that was charged with taking Midway Island. As the easternmost American possession in the Pacific, Midway had enormous strategic value. Nagumo’s fleet consisted of four aircraft carriers and some of the best battle-tested pilots in the Japanese navy, all escorted by a bevy of battleships, cruisers, and destroyers. Nagumo was brimming with the confidence that his task force would easily overwhelm a little spit of land defended by a handful of Marines.

What Nagumo didn’t know, of course, is that the Americans had cracked the Japanese top secret Purple Code, which provided them with the information that Midway was the target. So three American carriers were deployed to attack the Japanese fleet.

As they neared Midway, Nagumo felt supremely secure standing on the bridge of his flagship. His plans had all worked perfectly to date, and there was no reason to suspect this mission would be any different.



But Nagumo’s plan broke down quickly, marked by three distinct events. First, one of the Admiral’s adjutants raced to the bridge to report that torpedo planes had been sighted. No problem for Nagumo, who quickly dispatched several of his fighters. The torpedo planes were soon erased as a threat. But this was followed immediately by the arrival of another adjutant, who notified Nagumo that American fighters had been spotted. This was more troubling, as it was clear to the Admiral that fighters could only have come from carriers, and there weren’t supposed to be any carriers around. So he sent his fighters up to meet the challenge, but he was clearly unnerved. Finally, with the air battle in doubt and having to deal with how and when to refuel and re-arm his planes, a third messenger ran to the bridge with a one-word message for Nagumo: “Submarine!”

At that point, the wheels came off. No longer able to deal with the complexity of the situation he faced, Nagumo issued orders that confused his crews, resulting in a mix of fuel and ammunition being left on his carriers’ decks just as the American fighters arrived. Within minutes the Japanese fleet lost all four of its carriers. The Japanese conquests had reached their zenith; from that point on, the Empire began to shrink.

It’s a wonderful story, a great example of how a sequence of challenges can derail even the best-laid plans.

Without stretching the analogy too much, it’s easy to draw a parallel to the Web advertising industry. In its early days, flush with investor capital, sites were selling their inventory with supreme confidence to advertisers and their agencies. The Web was clearly the Next Big Thing, ready to steamroll other media out of existence.

The first event - the ‘torpedo planes’ - was the drop in clickthrough rates. When rates had been around 5%, Web advertising was a compelling buy. But when they dropped — and they dropped quickly — marketers’ confidence in the new medium was shaken. Not irreparably, but shaken nevertheless.

The second event - the ‘fighters’ - was the plunge in the media economy. All of a sudden advertisers’ media budgets began to shrink, and there was less money for everyone. The Web, commanding a relatively small share of voice, took its second hit. Many sites whose revenues were based on advertising were acquired, merged, or simply ceased to be.

The final event - the ‘submarine’ of the story - was the abrupt slowdown in the general economy. This clearly meant there would be no quick recovery in media spending, no cavalry to save the day. And so the Web advertising meltdown accelerated.

Today the Web advertising industry is at the post-Midway stage. Strategic plans must change, as we’re seeing with companies that had been leaders in Web advertising — companies like DoubleClick and Yahoo! The industry needs to reexamine the needs of the marketplace, and how they can best be fulfilled.

Or we’ll wind up like the Japanese navy.

-- Michael Kubin is co-CEO of Evaliant, one of the web's leading sources for online ad data.

Next story loading loading..