Looking at The Bright Side

March, a month that New Yorkers say enters like a lion and leaves like a lamb, entered like a full den of lions who hadn’t eaten in days. Judging by the recent stock market rally, where had you bet on the index as a whole at its low earlier this month you could have made a 20% return, you might feel like more than just March is leaving like a lamb. From a counter-social if not slightly masochistic viewpoint, it’s probably for the best that reality doesn’t reflect this temporary rising tide. We as a culture made some dumb decisions, and we haven’t quite learned the lesson. Regardless of what happened, it looked as though Internet advertising would escape the least harmed, with analysts and executives relying on the continued shift of dollars to online to make up for any pull back. As we wrote when first mentioning the upcoming state of interactive, it never smelled right to us. And, while the numbers from the first quarter of this year are still at least a month away, more and more people are starting predict not just the first quarter over quarter decline in online ad spend (Q4 2008 to Q1 2009) in eight years but even a year over year decline. Being the occasional pessimist we thought 2008 might see a decline from 2007, so it doesn’t come as a huge shock to think that 2009 might not exceed 2008’s spend levels.

We also said in our most recent article that while things unequivocally suck, especially for those in credit reliant sectors such as finance, housing, and automotive, despite a little of that gloom spreading to online, things for us really don’t suck that much. When we looked out at the landscape, we saw not impaired visibility but increased opportunity. When companies need to make money, some really good things happen. While the negative drivers of this economy that will pull down the Internet ad economy differ from those that pulled down the 2000 – 2002 economy and then fledgling Internet ad economy. the benefits of that shakeup will apply for this one as well. The good news for those who didn’t have to go through the 2000 – 2002, this time might again suck, but it won’t suck anywhere nearly as badly. Back then we saw companies closing their doors practically daily. While everyone knew at the time that Internet advertising has a bright future, those in the space didn’t feel that lucky. Those doing well did so in an environment where all those around them were falling off. Those doing poorly simply became a statistic. It was damned if you do and damned if you don’t. But, we are a stronger industry as a result of those times, and we will again become a stronger industry. Here’s why.

• Solidarity – Those newer to the industry might see a group of people that they don’t recognize but have heard about – the founders and early employees of the pioneering performance advertising firms. They will see them spending a lot of time together both in and out of the office. Years ago, they were where many of their peers are today, hunkering down and figuring out how to thrive in an environment where the odds seem stacked against them. Those pitted in a situation of adversity that endure come through the other side stronger and closer than they entered with bonds that will last beyond work. It also makes for more committed employees to the company for which they worked during this time. Like hazing at a fraternity, the reason for the punishment isn’t to harm anyone but to fool with the psyche, where the mind rationalizes the unpleasantness by associating great value to the entity for which they sacrificed.
• Business Not Ego – One of the best outcomes of a down cycle is that people become people again. They need to make money now. All the high flying press and/or buzz starts to mean very little when their funding providers threaten to pull the plug. Even those who found it easy to make money and as a result didn’t answer emails and in general gave off a very defensive / closed off posture have changed their tune. It’s so refreshing to find people actually open to new ideas and to finding ways to make money. People now listen to what others say instead of just coming to a conclusion in the first ten seconds (or before talking). And conversations have real substance, not just fluff.  

• Values Driven Future – While not universally true, a large number of companies that made it through the first Internet ad recessions have found themselves still doing well during this one. Even when things started to get better on a macro level they didn’t get complacent. They have seen how things can get, and they instill a culture that doesn’t presume nothing but smooth sailing ahead. They do spend more; they do loosen up when times become less turbulent, but they don’t ever let up on the culture of accountability. This doesn’t imply the company has no fun or that employees can’t be successful. It means that like people removing their egos, the company as a whole does as well. The entire organization becomes less political and more aligned.

We won’t downplay the challenges currently being faced or those that we will face, but having survived something presumably worse than this (at least for the Internet advertising economy), it’s good to know that bad news and difficulties will have positive impacts that will make us even better once things do improve.