I was the early financial backer of Ad:Tech way back in 1996, the wild wild west days of the Internet industry. In fact, when Ad:Tech was started by Skip Brickley -- its first venue in New Orleans in 1995 -- he didn't even know he was launching an online marketing show. The show was designed to be about many different technologies that might combine to transform the traditional advertising business. The internet-involved people who attended that first show just kind of took it over. They needed a forum to discuss the opportunities and concerns of the nascent online advertising field.
I got involved to finance its expansion shortly after that first show. In those early days we debated whether Ad:Tech's entire focus should be simply advertising on the internet; or, should it continue trying to cover all technologies that affect advertising generally; or, could it attempt to cover ALL sectors of the emerging internet industry. I argued for dropping non-internet matters from the show, since I did not know what "advertising technology" was other than page design and makeup, and for expanding with multiple Ad:Tech shows and other shows for the internet industry beyond online advertising. We followed that strategy to much early success, at a time, to be sure, when ALL Internet businesses, profitable and unprofitable, looked like great successes.
Skip and I had a falling out, and in 1999 and he bought me out. In retrospect, I was lucky to be the one who sold because values were high and money was easy. Skip was headed for a big fall two years later after a span of profligate spending and way-too-rapid expansion. By 2000, he had three Ad:Tech shows in the U.S. and two abroad and had also spawned spin off shows about e-healthcare, e-travel, e-automotive and more. However, venture capital market conditions reversed in the big Internet implosion of 2000/2001 and he could not raise the money to keep the balloon inflated. His company, eMarketWorld, went belly-up in early 2001 and sold Ad:Tech, its only asset of any value, to iMark Communications.
Then came the lean years, when attendance dropped from its 2000 high of 5,000 or more at the New York show to probably 750 or less in the fall of 2001 in San Francisco. Late last year, iMark sold to longtime manager Joel Davis of JDEvents, who is carrying on the show in S.F. and N.Y. venues for 2003. Registration and sponsorships for this years' events are back up near the 1999/2000 levels.
So, Ad:Tech mirrors the rise, fall and rise again of the Internet industry. You've got to hand it to Ad:Tech. It has stuck around even when it looked like the industry was unraveling. It has been supported by the true believers who continued to exhibit and attend when they were pretty lonely activities. The industry's need to assemble periodically and exchange news and information about the hoped-for revolution has continued unabated through all these periods. The various hangers-on disappeared when the smell of quick money went out of the business, but the true work of the industry has continued and Ad:Tech has soldiered on.
And now, Joel and the new owners seem to me to be in a good position to ride the coming real and sustainable expansion of the Internet advertising industry. The loose money is gone, replaced by solid investments by long-term players in real and substantial services that deliver value and profit to business organizations. And ad dollars are starting to flow back into the industry. Goldman Sachs just issued a report upgrading the sales and earnings projections for the public Internet companies they follow, including Yahoo, Overture, Lycos and CNet. The reason? Ad dollars for 2003 look to be above forecasts, with a target of 10% industry growth expected by Goldman.
We feel it at MediaPost, which, after all, is feeding from the same trough. After a lousy first quarter, below 2002 levels, we have had a spurt of new business that puts us substantially up for the second quarter and looking to a strong third quarter as well. We're holding our breath because we've seen bursts of temporary enthusiasm before. But, somehow this optimism seems like it has legs. So, don't play Misty yet for those of us in the online advertising industry.