I went back to Gladwell's book to get a sense of what can happen when you reach a tipping point to see what it all means--and more importantly, how we should prepare. Hush Puppies footwear, which Gladwell uses early on to stake his claim, is alarming in that regard: from 30,000 pairs of shoes sold in a year to 430,000 pairs of shoes sold in the next year. And four times that--1.7 million pairs--in the year after that.
That works out to about a 1300% increase in the first year. Assuming $8.3 billion in Internet ad spending this year, if we sold like Hush Puppies, we should sell over $155 billion as an industry next year--and, with a fourfold increase in the following year, $460 billion in 2006.
We're probably better off with forecasts being made closer to home. Sanford C. Bernstein & Co. proposes that online spending will reach $22.5 billion in 2010. The nice thing is, compared with the forecast for this year from PricewaterhouseCoopers of $8.3 billion, if the industry grows 20% per year, it will comfortably surpass $22.5 billion by 2010. Happily, 20% is an Internet growth rate comfortably relied upon over the last year by legitimate forecasters.
So, six years from now the Internet will have added $14 billion of sold inventories to the current $8.3 billion, and will be bigger than network television. Only cable will be bigger--challenging online for supremacy in a specialty-content age. But cable's days will be behind it, and the Internet's will be ahead.
Thinking, then, about the effect of tipping points, I wonder where we will put $14.2 billion more dollars online over the next six years, and how we will be accountable for it.
I imagine we'll account for some of the increase in price, which many companies in the Internet space are already reporting. Price, however, will be reasonably capped on sites (particularly brand sites) where demand puts pressure on competitive share and separation and where it creates excessive clutter for users, particularly paid subscribers. After all, $22.5 billion is a lot of advertising. This will force distribution over greater portions of the Internet with two positive effects: 1) the improved quality and experience of content across-the-board as independent publishers step up to meet demand, and 2) transparency as buyers insist on strict accountability, including audited placement and delivery of all advertising.
Money talks, you see. In the process, money learns. The erudition of $22.5 billion is considerable compared to the street smarts that got us $8.3 billion today. Accordingly, post-tip may be post-pop, and post many other things that would normally hide under the bed or in the closet. People will be looking in those places and poking sticks in the corner. It is very hard for $22.5 billion to go unobserved, which would defeat our advertising purpose anyway. It must hide in plain sight, where it matters and where it adds value--behaving in context and wasting neither time or space.
"In the end," Mr. Gladwell concluded, "Tipping Points are a reaffirmation of the potential for change and the power of intelligent action." Which means, perhaps, that the inevitable consequence of growth doesn't have to be compromise. We can get bigger and better. In the media business, we have suspected for years that the Internet is a positive force for change that matters to both users and advertisers. That's the point to finally tip over.