NFIB

Why Online Advertising Isn't Dead
04/ 15/ 2002

by Michael Grebb

By now, every business understands that we are wallowing through a major Internet advertising slowdown. A tough economy and increasing skepticism over the effectiveness of online marketing has conspired to slash ad budgets. For many online businesses--those unfortunate enough to depend largely on such advertising--the last year has been like a post-party hangover. A really bad one. Watching a bubble deflate like this can be discouraging. It's enough to make any small business owner, who already struggles daily to spend advertising and marketing dollars wisely, to just fall back on the old staples: Local newspapers, radio and TV (preferably really cheap cable ads).

But guess what? News of the death of Internet advertising has been greatly exaggerated. And that's good news for small businesses, which should view this slowdown not as a malaise worthy of a stiff drink but instead as an opportunity. If you're a business that wants to advertise on the Internet and reach a theoretically global audience with less effort than has ever been possible in the past+ well, then now might be a far better time to jump in than when the cyber-iron was hot a couple of years ago. The reason is that in the late nineties, dotcoms were arrogant enough to think that the bubble would expand to the outer reaches of the known universe. So it wasn't exactly easy to get advertising deals online. But all of that has changed. The Web sites that haven't gone out of business are desperate. And you know what that means...deals, deals, deals! Any business with a few thousand bucks in the bank can dangle that in front of a Web site in trouble and get a nice, long-term advertising contract, locking in bargain rates for a couple of years. When the Internet recovers (which it most certainly will), you'll be sitting on much better rates than your competitors who waited for times to get good before jumping back in again. Think about that.

Of course, none of this is to suggest that small business owners with a little cash should make the same mistake that Web sites made in the arrogance department. It's tempting to gouge someone when they're stumbling aimlessly around the desert, thirsty for any liquid you choose to give them. Always remember that treating a desperate Web site fairly now can pay dividends later when the power shift evens out again. Above all, don't just look for the most desperate, cheapest ad vehicle. It's far more important to find a niche site whose visitors make up your core audience than a random but hungry site that claims eight gazillion hits per month.

Merrill Lynch and others expect the online ad slump to continue at least until mid-2002. So you may have some time to go out and scout deals. But not that much time. After all, despite the meltdown on Wall Street, more people are using the Internet than ever. According to Forrester Research, in 2001 consumers spent $3.9 billion online by the end of May, and that's about $500 million more than consumers had spent by the same time in 2000. Just think how big a piece of that pie you can grab if you could just get the word out on your products. With so many deals out there right now, opportunity knocks.

Grebb is a Washington, D.C.-based writer focusing on technology and Internet issues.

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This article originally appeared in the September/November 2001 issue of MyBusiness Magazine, NFIB's member magazine.

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