As we said then: "Enron is starting out in the spot-TV market, but eventually plans to move to other media platforms, including print and the internet. Enron's plan promises guaranteed long-term pricing for both the buyer and the seller of TV time, using traditional stock-market financial derivatives such as options, 'calls' and 'puts' to allay risk. Essentially, media would be traded in much the same way pork bellies, crude oil and Treasury bonds are."
Enron never did get anywhere trying to corner the media market, but it caused a lot of fear and trepidation. "You can't treat media as a commodity, ignoring content and creativity," said Ed Erhardt, ESPN's top sales guy.
And now a scheme to create an online auction to buy and sell TV time as if it were on eBay is generating similar angst. I don't think such commodity-like schemes will work, because more and more network TV is being negotiated as part of broader multimedia deals, worked out between buyer and seller with a lot of creative input on both sides.
But the ad world has always been a sucker for the magic bullet that's going to change the way advertising is bought, sold and evaluated. I remember in the old days the Townsend brothers gained prominence by proclaiming that advertising would be absolutely effective if clients slavishly followed their 27 rules of copytesting.
Google is the latest to gain cultlike status, partly because of its mantra "Do no evil." Whenever anybody stakes out such hallowed ground, people think they're up to something very, very sinister. I have never seen such fear and loathing strike the ad business.
But let's put things into perspective: Google isn't really an ad medium; it's a very complicated device to generate sales leads. It's never going to build brands, and when it ventures forth into more traditional internet ad venues to try to do so, Google shows its vulnerability.
As The Economist pointed out this month, Google, "having made many enemies, must now fight many battles; and Google, perhaps out of hubris, appears to be getting distracted. This month, for instance, Google unveiled a free online spreadsheet program, which, like many Google products, has little to do with web search and is meant to needle Microsoft."
One of the fallacies of human nature is that we think when people and/or companies move away from their core competencies they are equally invincible. It makes about as much sense for Google to move into the general-advertising arena as it did for Enron to try its hand at predicting ad rates.
Besides, Google has plenty of trouble in its own backyard: It's already had to repay $90 million to companies that claim they were charged for fraudulent ad clicks.
One indication there may be lots of hacking going on is that a high number of clicks often doesn't result in a high level of sales. Just as some people with lots of time on their hands fill out those "bingo" cards in magazines requesting services, people idly click for more info without any serious intent of buying.
Return on investment is becoming the name of the game in internet marketing (clicks are only the start), and advertisers are spending big bucks to buy analytical tools to try to figure out what drives traffic and click-throughs.
So, alas, advertisers are once more discovering there are no silver bullets. One thing that's always been true, though, is that good advertising is created by people working together to understand the elusive consumer, and all the fancy logarithms in the world won't change that equation.