Another week, another crisis in Internet advertising. "Web advertising at a crossroads"--I could write that headline every week in this publication.
Last week, debate raged on two fronts: consumer privacy and the amount of ad revenue entering the industry. In a way, they're related: If strict privacy regulations are enacted, they could have a chilling effect on how much money marketers invest in the Internet.
ASSUMING SOMETHING INSIDIOUS
The privacy debate bothers me, but not because I'm a privacy freak. It's the assumption that because it involves the Internet and computers that there's something insidious going on here.
I don't care that marketers are using my personal information to target me. If I had to dictate what they could say to me and when, it would make my life less enjoyable.
What does it matter that my local Jewel grocery store knows I buy three bagels every week: two plain and one cinnamon-raisin? Or that the DoubleClick ad network knows how many times I've seen an ad on one of the sites they rep?
Even if I chose to guard my private data, the solutions the Web industry is offering to quell fears won't be practical to implement.
One group, led by Netscape, wants each consumer to install a personal profile on his computer hard drive, and dictate how Web sites use that information.
INCENTIVES FOR INFORMATION
Another initiative, the Platform for Privacy Preferences, wants to haggle with consumers, offering little incentives at every site in exchange for personal information.
If I want to get customized news, the last thing I want to do is argue with the Web site about what it gets from me in return.
A third idea, from ad serving company MatchLogic, is also iffy. By convincing consumers to fill out surveys online, it hopes to create a huge database for advertising.
The peace offering to concerned consumers: They'll have access to Preferences.com, a Web site where they can go to update their personal information files.
Right. And I'll call up Jewel to tell them to stop sending me coupons for cream cheese.
All these Internet proposals are laudable, but I'm not sure any of them can be implemented. When it comes to private data, most consumers either won't know what's going on, or won't care.
REVENUE LOWER THAN EXPECTED
A hullabaloo of a different sort is going on around Internet advertising revenue.
Last week, the Internet Advertising Bureau reported its first-quarter tally and, as has been predicted, the numbers were good, but not stellar. The first quarter was slower than expected for a lot of Internet publishers that didn't plan for a post-holiday slowdown as marketers reassessed their spending plans.
Total spending for the quarter was $129.5 million, up 18% from the fourth quarter's $109.5 million.
Advertising Age predicted last December that Web advertising would amount to $500 million in '97, half what analysts projected. Judging by the first quarter, that prediction is still accurate.
Is it time to panic? If you're dependent on advertising for revenue, it sure is. I firmly believe that while advertising is a cog in the wheel, it is not what will make the Internet go 'round.
As with the privacy debate, Internet publishers who seek revenue need an alternate plan.
If the advertising revenue glass is filled halfway, you have two options: You can work like the dickens to top it off with more ad revenue, or you can simply find another glass to fill with a completely new source of revenue.
Internet advertising will continue to grow, but the real money may be in selling data and statistics or providing services such as travel or financial planning.
While I applaud efforts of publishers, researchers and ad reps to demonstrate effective Internet advertising, I'd like to see more demonstrations of effective Internet marketing and communicating, long-term goals that are worth betting on.
Copyright June 1997, Crain Communications Inc.