Two think-pieces from opposite coasts examined the advertising business and the Internet economy's impact on it. Reporters from the New York Times and the San Jose Mercury News concluded that the current contraction in dot-com ad spending - which was responsible for last week's hits on DoubleClick (DCLK)'s and Yahoo (YHOO)'s stock valuation - represents little more than growing pains. Both reporters saw a trend in large advertisers using the Web to build brand, not to pursue click-throughs.
A whole lotta soul-searching was going on at the annual conference of the Association of National Advertisers, according to the Times' Stuart Elliot. He quoted MVP.com CEO John H. Costello: "We're seeing five years of industry consolidation being compressed at Internet speed. It's taking one, two, five months." 3Com (COMS)'s Bruce L. Claflin summed up his company's approach to marketing, and it must have gladdened the hearts of the advertisers in attendance: "3Com has changed to a 'brand-centric' company that markets technology," instead of one that "developed products and ... assumed they'd create a brand."
The Merc's Deborah Lohse interviewed advertisers and industry analysts to reach similar conclusions about the move to brand-building in Web advertising. Lohse cited Coca-Cola (KO) brand awareness ads early this year as a turning point. Coke ran simple banners ("Coca-Cola. Enjoy.") on such sites as mtv.com and sony.com, with no intention of driving click-throughs.
Both reporters noted that industry watchers expect the growing availability of high-speed Internet connections to accelerate the use of the Web medium for building brands with feel-good images and animation. Dancing babies, anyone? - Keith Dawson
Advertising: Struggling With New Ideas
New York Times
Online Advertising in Transition
San Jose Mercury News