General Strategies

Bubble Burst Onliners’ Status; Second Boom Hasn’t (Yet) Brought It Back

This story was written by Jennifer Nastu, co-editor of MediaBuyerPlanner.com.

In the early days – back when people were saying, “Have you heard of the Internet?” – marketers looked askance at careers in interactive marketing. It was risky and low status. It would take the half-decade from 1993 to 1998 for it to become the hot market that college students everywhere sought to join. In the couple years of the first internet boom, ad agencies paid premiums of 20 percent to hire interactive media buyers, promoted inexperienced account and creative staff and in many cases caused a cultural rift between the new media and the old media experts.

“You used to be a freak – the only kid on the block with interactive experience,” says Anne Holland, publisher and managing editor of MarketingSherpa. “Companies couldn’t even decide whether to put you in the IT or marketing department.”

Then vast amounts of money began pouring into online media commitments. “We were transforming the world, working 20 hours a day,” says Tim McHale, a 20-year ad industry veteran who has worked on Nike, Starbucks, and GM accounts, to name a few. “[Media] people were jumping in because they didn’t want to be left behind. It was an erroneous indication of what we thought was yet to come.”

That distortion of the market brought with it resentments. Print planners with six years of experience at one agency wondered why the online planner with two years of experience was paid $10,000 more per year (the answer: the agency needed to hire 13 more in order to meet client contract requirements).

Interactive growth peaked in 2000, a time during which interactive people waltzed from party to party and companies flaunted sudden wealth as, in itself, an indication of success that deserved funding. When spending dropped precipitously in ’01 and ’02, loads of traditional marketers couldn’t help thinking, “Serves them right.”

Many marketers conflated the come-down of the venture funded online companies with a lack of legitimacy and efficacy of online marketing – a confusion that would last for two years of interactive spending doldrums. While online spending never really decreased much (initial indications of lower budgets had more to do with earlier overstated billings than real reduction in marketing budgets) the vast structures created in anticipation of mega growth found themselves starved of revenue and, more importantly for the most egregiously over-built of them, starved of the optimism that allowed for irrational financial markets to pump more money into their sustenance.

Then, another change: a sudden upward swing happened in September of 2002, and from then, “Revenue grew 100 percent from the 2002 calendar year to the 2005 calendar year,” says Mike Azarra, VP internet business for CMP Media.

But has the rise in interactive marketing been reflected in the status of the interactive marketer? Industry insiders shared thoughts on how the industry has been affected by interactive marketing, and where interactive marketers stand in the hierarchy.

Advertising’s changing landscape

Interactive marketing grew to 3.7 percent of total U.S. ad spending in 2004, up from 3 percent in 2003, according to a PricewaterhouseCooper’s survey sponsored by the Interactive Advertising Bureau.

But even as money has been cautiously filtered back into the medium since 2002, interactive marketers have found themselves straining to push up a hill the same boulder they dragged up a few years ago. “That’s because the industry as a whole had to overcome the gag reflex,” says McHale.

Two things, he says, have brought back respect for the industry.

First, technology has only grown. “People are not throwing out their computers. Technology penetration has flowed into senior level people in all media because they need to be accessible 24/7.” Cell phones and BlackBerries helped executives loseWeight Exercise their fear of the medium and begin to embrace it.

Ad targeting has also helped. It means we’re seeing fewer “silly ads coming to us that have no relevance,” says McHale.

Before the dotcom crash, “You had a lot of self-absorbed commercials where the creatives were talking to themselves,” agrees Larry Chase, founder and publisher of Web Digest for Marketers and former TV creative from Doyle Dane Bernbach. “They were putting out a lot of branding impressions for nothing.” By putting an end to creative for creative’s sake, online ads gained relevance, and online marketers gained respect.

Now, of course, as major companies like Proctor & Gamble shift dollars away from TV toward the internet, traditional ad agencies are scrambling to snag a piece of the interactive pie.

But because the medium is more labor-intensive — because of analytics, testing, and maintenance, for example — and because media buying is different online, those traditional agencies are not making money on it, says Chase. “They’re trying to do [interactive] the same way as traditional advertising,” he says. “When you’ve been doing something the same for past 50 years, there’s a lot of resistance.”

The resistance comes partly from fear, as dollars shift. Newspapers, in particular, have felt the hit, and even TV is losing ground. Online marketing is, indeed, pocketing more of the marketing budget, but it’s not the only medium doing so. Promotional marketing has steadily risen in rank in the last few years, as companies such as Mini USA pull stunts like driving across the country with the Mini placed atop an SUV.

Who’s sexy – and successful?

Interactive is sexy, and getting sexier, says Harry Joiner, author of the MarketingHeadhunter.com blog. Even traditional marketers get excited about interactive possibilities.

For example, last year Joiner was contacted by the VP of interactive for Eddie Bauer to help the company find a creative director. “He said, ‘Listen, before I give you this search, I’ve got to tell you what I want. I’m not hiring a person, I’m hiring a result.” He sent Joiner to Ford.com and had him click on the F150 truck, a page which apparently had all sorts of nifty features that would increase the heart rate of any truck enthusiast. “He was incredibly jazzed about it,” says Joiner. “He said, ‘I want to hire the guy who did that.'”

Joiner says that the hottest interactive marketers are those who come from the direct space. For them, Joiner says, it’s all about money: they think, “I don’t care what the site looks like. I’ll test anything to see if it works, and the measurement of how it works is based on cost per lead and cost per sale.”

Chase agrees. “Web analytics, CRM, it all comes from direct marketing. Online marketers think they invented it, but they didn’t. [Direct marketers] hold the primary skill sets, but they don’t know they’re sitting in the catbird seat.”

As for agencies, the most successful are those that fully integrate all media, where it’s about the idea, not the discipline. “In those agencies, interactive is huge,” says Paul Davidson, COO of independent marketing communications partnership Worldwide Partners. “It’s, ‘Let’s bring the brand team into the room, discuss it, come up with some ideas.’ In those agencies, TV isn’t the star.”

In the more traditional, non-integrated agencies, interactive is still mysterious, Davidson adds.

But, counters Joiner, they’re working to understand it. Companies like JWT and Ogilvy may not be making money at interactive yet, but they love it, because it’s the future. “It’s hip, it’s cool, and you can tell what the return is.”

Historically, agencies were either creative- or account-driven. “I always found it ironic that media people were low man on the totem pole, and yet they handled all the money,” says Chase, who himself cut his teeth in the industry as a copywriter. “That’s where things can go wrong in a big way.”

He adds, “In the pecking order, they didn’t get the respect.” But industry perceptions of the media buyer have shifted.

In part, this may be because some larger agencies have realigned, centralizing buying into a media buying arm. “The agencies, in a large way, have realized it’s about money. You want to optimize the media spend as much as possible across the board,” says Chase.

At the most basic level, because the media buy online is more complicated, it takes up more time — for example, during pitch meetings. Clients sense the growing importance of the buy in part because more time is spent on it.

In other words, media people are finally getting their due — and online, they have an unprecedented opportunity to be creative. “It’s an exciting time for media creatives,” Chase says. “There, I coined a new term.”

Another shift in perception surrounds the specialization of knowledge. “In the early nineties, I went from being a generalist – Campbell’s Soup kind of stuff – to focusing on high tech,” Chase says. “Headhunters said, ‘Don’t do that, you’ll put a cap on your career.’ Old school advertising could be very surface-y. You didn’t have to do a lot of research for a 30-second commercial.”

A white-paper campaign, on the other hand, that needs to conform to the habits of a particular group of Gen-Xers, requires a depth of knowledge to figure out how a message is going to play. “It’s much harder, and you have to know more,” says Chase. “Now, it’s cool to do that.”

Steve Ennen, director of communications for American Business Media, agrees. “We deal with CEOs who put a great deal of value on this specialized knowledge,” he says.

Upshot: No, Status Lags in This Second Net Boom

So, interactive no longer needs to prove itself, and when ePrize, for example, posts a job opening, “I’ll get a thousand resumes,” says Josh Linkner, CEO of interactive promotion agency ePrize.

But does that translate into a higher relative status for those online experts?

No, according to Christopher Morris, director of MBA career management, Wharton School of the University of Pennsylvania. The students there look at marketing as a path to becoming a general manager in big business — in other words, at a CPG.

Undergrads at the school feel the same. “They want to go to work for consumer goods companies and ad agencies. Are direct online marketing opportunities becoming more popular? Not that I know of,” says Patricia Rose, Director of Career Services.

The Office of Career Development for New York University’s Stern School of Business has also “not seen a trend here among students. Only a few are interested in online marketing,” says a spokesperson.

Mostly, this is an issue of perception, says Cindy Gallatin, adjunct faculty member for Quinnipiac University. Gallatin, who teaches marketing and ecommerce, says, “I don’t think the students are cognizant of the fact that the dollars are shifting. They don’t think of [interactive] as an isolated career, but they are becoming more aware.”

One online agency chief in New York said that when he offered to organize a seminar for corporate recruiting hopefuls at his alma mater on online buying, “you could hear crickets chirping.”

The Art Institute of California-San Diego offers an interactive media program — but students interested in the program want to go into the entertainment industry, says Jean Branan, Director of Career Services. As for interactive marketing, “It’s probably the most successful as far as salaries and job listings, but we don’t have a lot of signups. A lot of positions go unfilled.”

“MBAs don’t know anything,” says Joiner. “A lot of people are coming from catalog and direct mail, and a lot are branding people who are self-educating. They’re hungry to learn, and they’re reading everything they can about the medium.”

Again, he adds, the direct mailers have an advantage in mentality: you pump in money and expect something in return, and if the return is worth it you pump in more. Brand marketers are more abstract. “They’ll say, ‘Let’s have a website and make it look really cool,’ and they don’t realize that it’s going to take forever to load or it’s not friendly to search engines.”

But that reliance on people with a direct background may in and of itself help cause the lag in recognition of the interactive experts. Agencies have long pooh-poohed direct marketing as a “below the line” enterprise, an endeavor not worthy of an ad agency. In the hierarchy of media status, television sits unmoved at the top, followed by print, with online and radio duking it out for the right not to be the least-favored medium among those deemed acceptable by the mainstream agencies.

Precedent, and early indications from the second boom, show that this may change, as a spurt in demand, coupled with a dearth in supply for experienced online professionals may again force online expert salaries to spike – one objective standard that makes it difficult to paint traditional marketers as more valued.

This story was written by Jennifer Nastu, co-editor of MediaBuyerPlanner.com.