@d:tech Gets Real
The reason for this change is a drought in the cash flow department. As client companies' budgets have grown smaller and venture capital funding has gone away, many suppliers within the industry have found it necessary to lay off staff or shut their doors. It seems as though for the first time Internet marketing suppliers' horizons are now no longer endless.
"The whole moniker nowadays is the path to profitability," said Darian Heyman, co-founder of Beyond Interactive, Ann Arbor, MI, a digital advertising agency. "Companies are more worried about more immediate profitability issues."
Beyond Interactive would know as well as anyone. It cut 63 people from its total domestic staff of 225.
Heyman said one of the major differences is that client companies will be less likely to buy into the grand schemes and future capabilities that will likely be pitched to them.
"In the past, companies were more open-minded," he said. "Now they are more discerning about following through on things. [They are more interested in] the short term. They demand more immediate gratification."
Companies within the industry echo these thoughts as they move toward the goal of profitability. Internet loyalty provider FreeRide.com laid off 45 percent of its staff; MyPoints.com unloaded 123 employees; and Promotions.com announced it was letting go 13 percent of its 180-person staff. All three companies cited that they were looking to streamline in order to be more profitable.
Some employees may wonder if they still will have their jobs at the show's close. WiredEmpire, a licenser of e-mail marketing tools, went out of business in late September and didn't tell employees at the Direct Marketing Association's net.marketing Conference & Exhibition in Boston until the last minute.
The out-of-work employees left behind a piece of paper with a hand-drawn tombstone that read "R.I.P. 9-25-00. Those who never take a shot have no chance to score." Parent company Marketing Services Group Inc. had eliminated all 53 jobs at the company.
The party scene may be affected by these changes as well. In the past, Internet companies such as DoubleClick threw lavish bashes complete with fabulous venues, all-you-can-eat shellfish, top-shelf liquor and not a name badge in sight.
But those days may be gone, Heyman said. "I'm curious about the party scene to see if it's come back down to earth. I went to one event where there were performances from Cirque du Soleil and glasses of Veuve Clicquot being passed out," he said. "I'm assuming that's not going to be happening as much."
It isn't all doom and gloom, though. Despite the current fallout, Jupiter Communications Inc., New York, predicted earlier this year that online advertising revenue would quadruple by 2005. The numbers released in a report called for online ad revenue to top more than $16.5 billion by 2005, up from $3.5 billion in 1999.
The survey found that marketers planned to increase Internet ad spending at a higher rate than other mediums. Seventy-three percent of those Jupiter surveyed said they would increase online ad spending over the next year.
"Ad spending is still well on track to exceed two and a half or three times last year," said Jason Hester, content director at @d:tech World, which is operated by eMarketWorld, Richmond, VA.
"It's part of the accelerated business cycle this industry is in. It's grown so fast that when we do hit bumps it's faster and harder, but we are recovering faster as well."
@d:tech hasn't felt the pinch as the number of show exhibitors are up 25 percent from the number of companies at the May show in San Francisco. There are 175 companies scheduled to exhibit. Attendance is also expected to be 25 percent higher as Hester is expecting approximately 4,000 attendees.
"Things have changed some, but everything I'm hearing from my speakers, even ones from companies that have had layoffs, is that they are in high spirits," said Hester.
Regardless of the current conditions, Lisa Cohen, a spokeswoman for marketing technology and customer acquisition network L90, Los Angeles, sees this as the must-attend show of the season. "There are so many conferences, but at this one in particular we look to really extend brand. It's an important one because all of the players are there. It's a good mix of advertisers and Web publishers. It's a good chance to get in people's faces in person and let them know how our company can help them become profitable," said Cohen.