I ask you to indulge my regression and let’s revisit the sector about a decade ago. The internet was booming and it was all the rage to attract “eyeballs” to your site. All one had to do was have buzz, sock puppets, and funny names. Like new math, new marketing was the thing to do. Making money, well, it was all about that eyeball land grab. They figured out that the one with the most balls, won. We know that didn’t work, and eye banks are the only ones who need more eye balls!
We had lost our way. We needed to monetize our efforts and show ROI. The earliest firms to recognize this, NetGenesis and Accrue, made some great efforts, but there was a missing ingredient: demand. The earliest systems were used by forward leaning retailers, some merchandisers, and direct marketers who understood “conversions” and the concept of utilizing empirical data to make decisions. But those demand agents were few and there weren’t enough early adopters to drive vendors to success. Some might argue that their untimely demise was based on how difficult the software was to use and cost. Others might argue that the demand side of the equation was not there. The truth is that both were correct.
Marketers were more concerned with brand, color, and font than conversion based on ROI. And few marketers then knew what to do with the emerging internet as an effective marketing channel. Business schools didn’t teach internet marketing at the time (and rarely do today) and most didn’t ‘get’ that the internet is inherently a direct marketing vehicle with brand promise as a secondary offering.
They only people who did buy these early systems were in IT. They were interested in the technographic information about browser types, OS use and 404 errors. They were they only ones who could install the software, but they really weren’t interested in behavioral information and web site optimization outside of making sure that the pages rendered. In fact for most of them, the marketing data got in the way of doing their real job, keeping the systems and networks up and running.
During 1997 presentations I often asked the audience how many of them would consider themselves either a marketing person, broadly defined, or an IT person. Back then only about 2 or 3 out of a hundred considered themselves non IT. The last presentation where I bothered to ask the question, the numbers had flipped.
So, what had happened? The first; ASPs allowed IT to get out of the loop and we saw a spike in the marketing adoption rate. But mainly, the dot com bomb forced clarity and sobriety. We needed to show ROI. And the industry learned a remarkable lesson: there is a strong similarity between both on line and off line marketing "objectives." So instead of hearing from a customer that they have “an information site” with un-clear monetization objectives, they began identifying site objectives around principal types: Media, Commerce, Lead Generation, and Self Service. Like an off line business, each of these models has a clearly defined objective of making more money (selling), saving more money (streamline process), creating more “stickiness” (the media model) and creating greater customer loyalty and retention. That’s it. It’s not eyes balls. Slowly an industry was born, with new organizations, and colleges offering internet marketing courses as part of MBA programs.
That's enough history, I'll pick up here tomorrow and talk about the current state of the industry and the shared challenges we face.