Agencies must rethink their dot-com advertising
As the stock market continues to yo-yo, some advertising agencies might need a backup plan--the one they've been using may not be good enough. I think the fate of dot-com advertising can be summed up simply, "Without a real brand, you will have no dot-com advertising."
With the explosive emergence of the Internet, many dot-coms hired agencies to get rich quick. Although criticized for their lack of marketing knowledge, these startups were a boon to the ad business. But, as interest rates have climbed, the stock market has become unpredictable and IPOs are being withheld, postponed or canceled. Dot-com financing is drying up, and venture capitalists are more tightfisted with money today. So how does this affect advertising?
Companies that offer real brands will not only thrive, they will grow. You can't use advertising solely for the purpose of launching an IPO. Those dot-coms that pursued that strategy are now in big trouble and so are the agencies that took them on.
Agencies need to follow traditional marketing principles, even for the new Internet companies. They need to go through this checklist when taking on a dot-com: 1) the prospective company must have an idea or product that consumers or businesses want, need and will pay for; 2) they must have the ability to deliver it; 3) they must have a complete understanding of the brand; and 4) they must want smart, innovative creative work.
In addition, I strongly believe that agencies should stick to the creative and media they think is right for the client, not what the client dictates. Certainly, you need to deliver the correct message; however, it is critical you deliver it in the way the agency feels is most effective.
With a dot-com, you need to develop the brand and develop it quickly. Time runs at Internet speed for these accounts, so strong creative is important. Sometimes fast money clouds the mind. Everything we've learned and worked so hard to attain is forgotten. Keep focused and stick to the rules of good advertising.
Agencies that took on clients to make a quick buck will be in the same place as the get-rich-quick dot-coms: nowhere. And the shops that took on too many dot-coms could be in serious financial and business trouble.
As the market reacts to interest rates, all companies will be affected, including the blue chips. Stock prices may go down for a while, but, as is the experience on Wall Street, if you are in it for the long haul, you will do fine. The same holds true with advertising and good dot-coms. If the company is in it for the long haul, it will bounce back. Advertising belts might get a little tighter, but business will not dry up.
Advertising will follow key brands. It's important you investigate and understand the client and the brand. If you do that, you won't be scrambling later on when the clients go away.