TECHKNOW: The people and products shaping your future - Lessons from Silicon Valley

TECHKNOW: The people and products shaping your future - Lessons from Silicon Valley - On the face of it, the advertising industry should thank its lucky stars for the explosion of the internet. The race to build brands online is diverting hundreds of mill

by ROGER TAYLOR
Last Updated: 31 Aug 2010

On the face of it, the advertising industry should thank its lucky stars for the explosion of the internet. The race to build brands online is diverting hundreds of millions of dollars from venture capital firms straight into the hands of ad agencies and media companies.

But many in the advertising industry are starting to ask whether the money is worth it. Strained executives from New York's leading agencies have been phoning each other in desperation asking how to deal with the cash-rich young net heads.

Madison Avenue and Silicon Valley have deep communication problems. Most of the internet crowd are young geeks who have no experience of the way advertising and marketing work. What's worse, they are used to working on different time scales. They can build a site one day, tear it down and rebuild it the next. They do not always appreciate that you cannot shoot a 30-second commercial and then say 'maybe we should do it a different way'.

But the real problem is fear. With huge fortunes riding on the success or failure of their promotions, the internet kids are too jumpy to decide on a strategy and then stick to it. The result is agency executives stuck in endless meetings trying to get their clients just to decide a line and hold their nerve.

The internet poses far bigger problems for the advertising industry than just troublesome clients, and a new service from Canada - iCraveTV.com - is the start of what could become the norm. The company, which broadcasts TV programmes over the internet, spells the beginning of the end for TV advertising. Along with digital TV recorders such as Tivo and ReplayTV, you will soon be able to download TV programmes, save them and replay them whenever you want with a few clicks of the remote control. And that means there will be no reason to sit through the ad break waiting for the next half of the show to come on.

Some companies are already starting to abandon advertising revenues in anticipation of the changing environment. With technology making it easier for people to get what they want when they want it, the watching public are becoming less tolerant of intrusive advertising for products they would never allow into their homes anyway and web companies are responding to that mood. Some are even making a point of the fact they do not carry advertising. Sports sites such as Quokka.com and a newer company Extreme Sports carry no advertising or, if they do, it is relegated to the margin because, they say, youthful audiences regard it as a sell-out. Of course, this is all just a clever new marketing pitch.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today