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Searching for Continued Growth


The purpose of this week's Interactive Advertising World conference in New York is to promote the Web as an attractive medium for both consumers and marketers. Growth and potential stand center stage and speakers after speaker present the future in a rosy light.

Timed for release at the opening of the conference, the Interactive Advertising Bureau's (IAB) first half revenue report did just that. It says that 2004 has been a banner year for the interactive industry so far, and projects that it will get even better before the year's end.

Geoff Ramsey, eMarketer's chief statsmaster, joined several other experts in a number of discussions during the show that put some hard data behind the excitement.

At the outset of the first day, he quoted Starcom's Rishad Tobaccowala, who recently said, "Those marketers who aren't interested in online may be out of a job soon if they don't prepare to engage the empowered consumer."

Indeed, based on data from myriad researchers, eMarketer predicted that online will continue to grow by 23 percent in 2005, with most of that growth coming from retail, pharmaceutical and consumer packaged goods marketers.

Deutsche Bank Securities analyst Jeetil Patel, however, cautioned that growth rates will likely decelerate a bit in 2005, as 2004 spending is buoyed by both the Olympics and the presidential election.

Analysts are declining to predict just how much of a deceleration the industry is in for, but one thing they agree on -- search will continue to grow.

As Rob Middleton from Fathom Online said, "Search has proven it can be very successful with small businesses," and because the number of people shopping and, more importantly, buying online continues to grow, it's obvious that search is a contributing factor to that growth.

Ramsey also added that we're "just beginning to see local search come into its own." While the total volume of searches is growing, he doesn't expect that to increase dramatically over the next six to 12 months.

So where's the growth going to come from? It's going to come from pricing.

Middleton predicts that prices are going to increase. The good news is, he says, is the ROI is still extremely competitive for clients. Also, part of why search has been so effective to date is that it was still largely undiscovered by both consumers and advertisers back in 2001 and 2002, but now marketers "have to be diligent and make sure you're not overspending."

Ramsey thinks that what can really drive local search is "pay per call." He says that many small mom and pop operations still don't have Web ssites, but "if you're engaged in a program so that you're paying to get a call on an 800 number, that can really take off."

New sectors of search are also moving to the forefront.

Ramsey says that the travel category has a high Net centricity factor (the percent of total business of a category that's done online) because travel is a high ticket item with lots of attached information. Other categories where you see a lot of people shopping are where you see a lot of search activity.

Middleton agreed, adding that this is the first year we've heard a lot of big automotive pitches going on by companies where online isn't as directly tied to their sales funnel. "It's starting to catch on."

Working in an outdated model

Terry Young, CEO and founder of sparks & honey, shares this story:

"I worked at a number of different agencies back in the day, and I remember constantly finding myself amongst groups of advertising executives who couldn't get away from working under the same traditional paradigm that we had been working under for many decades. They seemed to only want to talk about 30-second spots and wrapping digital campaigns around those spots. I knew in my heart that this was simply not where the future was going.

"I was so disenchanted by the fact that the advertising industry was not evolving fast enough and not keeping pace with the amazing change that was happening in the digital environment. I found myself going to work every day frustrated. Everyone just wanted to sell the same old thing, and the CMOs had gotten used to buying the old same thing. It wasn't that the job was bad -- it was just that the model was outdated.

"Looking back, all of this definitely served as the catalyst for me to do something different and eventually build sparks & honey with the understanding that we could actually produce content and be there in real-time without being held to some sort of traditional calendar-based media. Finally, more people started to realize that you could think about digital media from a cultural standpoint. Data is what allows us to do that."

The professional equivalent of a 16-year-old girl

Jay Miletsky, CEO of MyPod Studios, reminisces:

"I was working at PFS Marketwyse in the mid 1990s, and it was a time Photoshop was getting big and we all had the AOL connections. We were in the middle of doing a lot of marketing for interesting campaigns for clients such as Washington Mutual and doing some branding for clients such as Hershey's.

"In 2008, we rebranded ourselves into Mango Marketing. At the same time, it felt as if the whole marketing industry changed. I absolutely hated it. Everyone wanted their clients to engage in social media campaigns. No one was interested in doing anything traditional any more. Nobody wanted to do print, and radio was well on its way out the window. As an employee at a digital agency, I found it so insanely boring.

"I dreaded coming into work every morning and having to update Facebook fan pages and Facebook campaigns. If just one person wrote a negative post on Hershey's Facebook wall, it was if the entire city would shut down. Everyone was just so freaked out. We had other clients who only wanted us to create viral videos for them, but I could never seem to make anyone understand that having a video go viral is like hitting Powerball twice -- you just can't predict it! I mean, at the time, who would have thought that a video of two babies biting each other would get 350 million views?! Let's just say that expectations were very high.

"There were times in which I felt like I had turned into a professional equivalent to a 16-year-old girl updating her diary every day. There I was, updating blogs and encouraging people to upload pictures of dogs so we could vote on the cutest. It literally felt like my creativity was going stale before my very eyes. I didn't know what could hurt more -- doing work like this or shoving bamboo shoots under my nails."

Dumped in head-first

Ken Solano, group media director for digital at Prime Access, recalls this moment:
"I started out at a four-man digital shop that specialized in selling self-help books. The hours were long, the days started at 8 a.m., and we were teetering on the brink of collapse more times than I remember. This was 11 years ago, and the digital space -- albeit clearly destined for big things -- was still very different from what it is today. Social media was still regulated to message boards, and I would have to create about four different profiles for each board to infiltrate conversations and appear authentic. I knew nothing about digital, yet here I was, managing everything from affiliate marketing, social media (message boards), display media, and even video media.

"Looking back, I see that first agency team as being at the cutting edge of video media. I also felt like I was a part of something huge and revolutionary. Plus, my CEO told me that [because] I survived a year working for him, I would be able to survive at any other agency. He was right. Advice -- dive in head-first. If you are not obsessed with all things digital, you'll find out very quickly. On the flipside, there is a chance that you'll actually love what you do."

Church website entrepreneur

Andy Tabar, digital marketing consultant, tells this story:

"I was just 14 years old when I started my own digital business. It was the year 2000, and there I was, using portals such as Angelfire and GeoCities to create my own personal website. It didn't take long for people to start asking if I could build a website for them, so I would. My dad told me our church could use a website, so I made one for them. I was doing everything for free. I eventually realized that I actually had a talent, and I could actually start selling myself.

"Throughout the years, I have worked and collaborated with a ton of different clients, and have been open to their ideas for their digital space. I have always felt that it was healthy to have a bit of debate. Of course, there were also cases where clients were dead set on using a one-size-fits-all approach or a template or downright copying what someone else did. When I was asked to do that, things became difficult. I thrive in an environment that thrives on debate, but also allows the chance for data to carve out a path."

Bad training with a bad boss

Lizbeth Cardozo, co-founder and CEO of Tiny Milkshake Media, remembers this:

"The worst job in the digital and online marketing industry was the last job I had as an affiliate manager at a small ad network where I stayed way too long. I was new to the industry. My background was in traditional advertising, marketing, and sales so training in this new industry was necessary for my success. The lack of training, focus, and leadership was a recipe for failure. The fact that the company went out of business last June was just a testament to this.

"The first two weeks I started working at this company, I was eager, hopeful, and excited about learning a new industry, but to my disbelief I learned that my training consisted of just getting on the phone with clients, navigating through an online platform that was cumbersome and unintuitive, pitching campaigns I didn't yet understand, and 'the boss' instant messaging me what I should say or how I should respond with terminology that sounded like Swahili to me. I sounded like a moron, and people saw right through it. It was embarrassing and a horrible way to be introduced to people that I needed to earn respect from in the industry.

"I recognize 'the boss' really tried hard to teach me, but some people simply aren't meant to be leaders. In fact, I've learned that the best leaders understand they are actually there to support and inspire their employees, so they are even more motivated and empowered to work harder for them and the vision. In the end, 'the boss' was a difficult teacher, but a teacher nonetheless."

Cold calling in uncharted territory

Will Akerlof, president of Liquid Advertising, recalls this moment:

"I had been working in traditional advertising since I got out of college. In 1996, I knew two guys who had created an online PR firm called iAgency, so I contacted them to see if they wanted to offer any advertising on the site. At the time, the idea of online advertising was so very new. It seemed as [though] everyone was just inventing everything from scratch.

"We started cold-calling companies, and luckily for us, we noticed ears were perking at the idea. We didn't have to educate them on the nuts and bolts of online advertising because there wasn't much to know at that point. If you even dabbled in the space, you had the knowledge you needed. I specifically remember clients shrieking in delight as they watched their once-static images move and their reactions to being able to track click rates and receive data back in less than 24 hours.

"I operated as a one-person operation for many months at that firm, which would never be possible these days. All in all, it was challenging, but it was also a great time to break into the business."

The stress of crowd-funding

Matthew Granish, digital media director at Prime Access, concludes with this:
"I come from a slightly different background. My first job was managing a website that raised funds for a non-profit organization. Back in 1999, the notion of 'crowd-funding' was pretty non-existent, yet here we were -- building a digital platform that was supposed to function properly, contain decent content, and generate donations from generous individuals.

"The stress of that job was on-par with some of my most nerve-racking days today, but it prepped me for the agency life and, most importantly, for the constantly shifting digital space. Plus I learned the ins and outs of monetizing content."

Tricia Despres is a freelance writer.

On Twitter? Follow iMedia Connection at @iMediaTweet.

"Frustrated" image via Shutterstock.

Masha Geller is Executive Director of Marketing at Verve Mobile, the established leader of the location-powered mobile advertising and publishing technology solutions marketplace and the trusted partner of hundreds of leading brands and media...

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