Tip of the Digital Advertising Iceberg
June 13th, 2007 by Benjamin KuoI dropped back again to Digital Hollywood in Santa Monica for a few hours Tuesday to sit into a few sessions. Despite the sign below (and a clear lack of parking anywhere within walking distance of the two hotels), I did get a chance to sit in on both a pitch session for companies looking for venture capital, and session on advertising strategy.
Repeating a mantra I have been hearing from many early stage (non-funded) startups, one of the companies in the pitch session very clearly stated: “our competitive barrier to entry is the ‘network effect’ we have” — “not the technology”. I’m constantly amazed by the extremely early startups who claim they will be the “next MySpace”, that their site are “Web 2.0, AJAX, and social networking” compliant and that their competitive barrier to entry is the fact that “we’re first with this idea.” I had posted earlier on what you might look for to determine if you’re in a bubble; unfortunately this looked a lot like the “idea and an MBA” plans I saw so much of during the last Internet boom.
However, on a different note, it was interesting to hear a panel of ad agencies speak on Advertising Strategies (with speakers from Deutsch, Nielsen Media Research, The Media Group, Universal McCann, Starcom, MindShare Interaction, and Bond Art and Science). The consensus seemed to be that we’re only at the beginning of the shift to including digital and online in the advertising spending mix; one of the speakers, John Montgomery of Mindshare Interaction mentioned a rapid acceleration of movement of advertising to digital; and a transformation taking place with the industry. However, it sounds like there’s still an inordinate amount of attention (and dollars) paid to television and cable advertising. It seems to me that we’re still at the tip of the digital advertising iceberg, and that there’s a lot of money still shifting into the online space.
