| Last
week, David wrote that South Korea is 67% wireless, and users are
playing MMOGs (Massively Multiplayer Online Games). "We are
constantly looking for the next new medium, and if South Korea is
any indication, wireless critical mass results in different habits.
Apparently the population is playing games, doing IM and email and
other online activities wherever they are. They probably feel that
it beats reading a book or magazine while waiting for that meeting
to start."
Tim Kridel wrote: "Nice column. My only quibble is with the comment, "No worries about busy signals using this technology [SMS]." Unless the mobile operator has spent the money to ensure that its SMS infrastructure has enough capacity to handle thousands of simultaneous SMS messages, or hundreds of thousands during a peak period such as a contest, messages will delayed. If there's no guarantee that all messages have an equal chance of immediately getting through, then SMS isn't viable for contests like those in radio, where the first or 15th caller wins. Worse, by some estimates (e.g., Keynote Systems), about 7.5% of all SMS messages are lost. SMS is a useful technology, but it has drawbacks that can limit its applications." Check out more comments on The Spin Board. |
Friday, June 6, 2003
The Inevitable Seasonality
By David L. Smith Everywhere I go, people want to know if the turnaround is happening. It sure feels like it. From the ebullient feeling at iMedia to individual conversations with buyers and sellers nationwide, it is clear that something is happening. John Durham of Interep says that June and August are starting to look decent. The jury apparently still being out on July.I have a couple of observations. 1) I believe that the turnaround is at hand. 2) Summer will suck.
This "turnaround" as people call it is really not. By definition, whether in the tech sector or any other sector, a turnaround is when the customers who have stayed on the sidelines come back into the marketplace. This Online media business was built on Interactive companies (notice that "dot-com" has become a pejorative that we avoid using?). Those Interactive companies, to a large degree, are gone. There are not enough Amazons and eBays left to buy up the ever-increasing amount of inventory available for sale.
Thus, bringing in the second factor. The inventory side of this business continues to grow. More people are spending more time Online every day. While the advertising side has teetered and some have fallen by the wayside, the pageview counts of content continue to gallop ahead.
As many agree, the fresh shot in the arm that the Online advertising market needs will come from the mainstream, traditional companies. Flash. This just in. Not all of them are believers. When people ask me if I see the trend of the turnaround, I am cautious. Why? Because this will not be a trend of companies coming back into the fold. It will be new customers accepting the impact of our new medium. One company at a time. When companies do come in, there is often some testing, then internal education and sell through of the test results, then an attempt to segue this new medium into plans that are sometimes set over a year in advance (note the TV upfront that just happened and the cable upfront that is going on right now).
The last observation in this turnaround is that one must be aware of how these new customers allocate their monies in other media. Sure, there are "year round" advertisers. But the 52-week solid schedule is not as common as it used to be. Many advertisers flight their TV, radio and even their print. Many TV flights are concentrated in the mid-February to late May period, picking up significantly after Labor Day through mid-December. Sure there are advertisers in the other periods. And there are significant advertisers during the summer (like the beer and soda companies) that actually increase their levels. But the fact of life is that there is much more broadcast inventory available in July and January than other months.
The summer lull runs roughly from Father's Day to the point in August where "back to school" promotions happen. It's a fact of life. So, when the inevitable article runs around July 20, talking about how the turnaround is faltering, show your expertise and explain to the complainers that it is just the summer lull. This fall, our industry should pick up its growth in a big way. Will we party like it's 1999? Hardly. There are still many companies that need to be converted and that's the job of an entire industry. But the momentum started this spring will continue, after a short, scary summer vacation.
What can you do about this? Change your promotion planning. It may be too late for this year, but if you are a seller of Interactive, you need to start laying down 2004 selling plans now. Find those categories or advertisers that do advertise in January and July and construct something special that make sure that they include you in their plans. That can help to even out the inevitable seasonality that we're all going to have to get used to.
David L. Smith is President and CEO of Mediasmith, Inc.
