• by Tom Hespos , November 19, 2002

Having been in close contact with many publishers, buy-side colleagues, marketers and industry analysts, I can say that it looks as if the interactive business is beginning to experience a rebirth of sorts. This time, the spoils belong to the smart ones who can make it work, and not the hypesters who pulled the wool over everyone’s eyes in the first go round.

There seems to be more of an interest in interactive marketing these past few months. Clients are looking to make more of a commitment to this medium in 2003. The dollars are starting to follow the eyeballs, proving that this axiom of media is still indeed true. There is still a sense of cautiousness, however, and we need to be sensitive to it. The old saying still holds true, “Burn me once, shame on you. Burn me twice, shame on me.”

There still seems to be some confusion as to how to steer the ship forward, as it were. The analysts that have been calling Underscore have been asking which companies in the space are going to win the day and why. Most of the companies I tell them I believe are going to be winners in the space have a few principles in common that I think we should all aspire to adopt, if we haven’t already.

Here are the cornerstones on which a company needs to be built in order to thrive in the Internet’s renaissance:

Sound Business Principles - There is a major backlash against corporate America in the works right now. Many people got burned when the Internet bubble burst. The subsequent rash of corporate scandals didn’t help the situation. There are a lot of people who feel screwed by upper-level executives at companies that improperly booked revenue, hid debt, inflated expectations and essentially ran off with investment money. It will take quite a bit of effort to gain back investor and consumer confidence. The only way to do this is by offering consumers and investors sound principles by which you conduct business. This means a solid business plan and the means to support it and see it through. No one will reward a company whose sole revenue stream comes from “getting bought by a bigger competitor.” And no one can depend solely on advertising anymore either.

Moral Correctness - Consumers, investors and the marketplace in general have very finely-tuned moral compasses. They know when a company is not dealing with its customers, partners and other companies in the space in the way they ought to. Acting in a morally inappropriate way can suck the life out of a company. It makes employees less faithful in the company’s mission. It makes potential partners less likely to want to do business. And it makes consumers suspicious and resentful.

Lately, it seems as if certain companies in the space don’t want to acknowledge the spirit of the law, even as they follow the letter of it. We’ve seen companies try to obtain intellectual property protection that they’re not entitled to in the first place. We’ve seen frivolous lawsuits designed to antagonize or harass, and not to correct a problem. We’ve seen companies change their privacy policies to allow for profit-taking at the expense of the consumer.

One might think that the consumer is unaware or doesn’t care much, but they are aware and they do. Anyone pursuing such a strategy should know that it’s going to handicap them later.

Consumer Choice - Consumers in a capitalist society like choice. And they’re better served by it. We’ve seen a lot of moves in this industry that may comply with the law, but are anti-competitive in spirit. Let’s just put it this way: If you’re anti-consumer choice, you’re acting in direct opposition to what consumers want. Unfairly bullying smaller competitors or otherwise trying to unfairly squelch the competition does not go unnoticed. Let your company succeed on the strength of its offering. And if the competition has a leg up, turn your efforts toward improving your offering, not toward tying up your competition with unfair or frivolous lawsuits.

Consumers feel an affinity toward offerings of their own choosing. If you make an attempt to reduce their number of choices, their loyalty to you will not be as strong as if they have chosen you from a range of possibilities.

Patience - The Internet “Land Grab” is over, folks. Companies that pursue market share at the expense of the viability of their business will not be rewarded. Now is the time to grow companies at a respectable but realistic pace.

We’ve all come to realize that no one is going to “take over the Internet.” We may entertain dreams of dominating the mainstream or a specific category, but we shouldn’t let those aspirations rule our choices, which is what they did during the dot-com boom. And look what happened – We ended up with a bunch of companies that had a respectable share of voice within their category or to consumers in general, but with nothing compelling to offer. Let’s not let that happen again.

Public companies are always under a lot of pressure to show increased share and profits quarter after quarter. If that’s not your style and you’re not comfortable with fighting investors and a board of directors over the proper way to grow a business, consider not going public. Grow your company organically instead. Don’t take outside money from people who have unrealistic expectations. Grow your business based on what you think is the proper strategy and direction.

Industry Involvement - Folks, interactive marketing still has a lot of kinks to work out. The truly successful companies will be the ones leading the charge to work these kinks out. There are a ton of issues: Ts & Cs, Reach and Frequency, privacy, rich media, ad standards. The list goes on for a mile. Consider that if you and your company make a contribution toward resolving some of these issues, the rest of the industry and your colleagues will appreciate your investment. Consumers will indirectly benefit as well, as resolving some of these issues will help to move the industry forward and consumers will get some benefit as a result.

One of our industry’s greatest assets is this notion of “coopetition” – the idea that we’re all in this thing together and that we need to work together to resolve some of our common challenges. Let’s keep this spirit alive.

A good way to get involved in the industry is by volunteering for one of the IAB’s committees. Visit their website at www.iab.net and check out the “Committees” section. If any of the topics interest you, or if you think you can contribute some value, talk to Adam Gelles over at the IAB and see if there is a way you can contribute.

Yes, folks, the Interactive Renaissance is here. And everyone needs to decide how they’re going to contribute to it. Play your cards right and you’ll go down in history as one of the people who helped give rise to the rebirth of Interactive marketing.