Subscribe to Advertising & Marketing Review!|
Contact Ken Custer at 303-277-9840.
The Net Return On Investment
by Glen Emerson Morris
Copyright © 1994 - 2010 by Glen Emerson Morris
All Rights Reserved
keywords: Internet advertising, Internet marketing, business, advertising, Internet, marketing.
For more advertising and marketing help, news, resources and information visit our Home Page.
Return on investment is not any easy calculation with the Internet. The Internet exists
in a kind of statistical limbo; it has no sales figures to speak of, and no ratings
service provides numbers on a regular basis. This is why Wall Street is having such a hard time deciding where to invest money on the Net. Why is Netscape so popular?
It's valuation is primarily based on the market share of it's Internet browser software,
a product the company gives away. The Netscape browser may be free, but at least
Wall Street knows approximately how many of them have been given away.
For the next year or two, Internet advertisers will face the same statistical limbo
engulfing Wall Street. This shouldn't discourage advertisers from going on the Net
now. In most cases it will pay to be on the Net, though proving it will be another
matter. In most industries, it's easy to spot the winners by their sales figures or ratings.
The Internet can't provide sales figures, because without a cash secure encryption
system, the Net isn't secure enough for sales. Yet. Ratings services are just beginning to take a look at the Internet, so it may be a year or two before reliable ratings
are available on a regular basis.
The Net is at a point similar to television in 1950, when television was still behind
radio in ratings and rating services attention. Like early TV, the Internet is attracting
talent and money far out of proportion to its provable impact. That kind of investment usually pays off, even if the returns can be hard to estimate. Like early
TV, the Internet will succeed now, in large part because so much talent and money
have been spent on a basically good idea.
The Internet is proving to be more than just a good idea. There is a quality of the
Internet that is beginning to reoccur in different stages of it's life, concerning
the way the Net influences return on investment. When the Internet became widely
available to the academic community, it facilitated the free sharing of information. Colleges
and Universities were willing to make research information available free on line
for mutual access. This accelerated research and brought us our high tech world sooner than it could have been otherwise.
The Internet will affect business as profoundly as it affected academia. It has already
taken the concept of free exchange a step further. Academics just shared ideas, businesses
are using the Internet to give away products, and not just Netscape. One of the exhibits at the Apple Developer's section of the 1996 San Francisco MacWorld,
included an ad-on to the Apple Open Doc system that would search the Internet automatically
to find and acquire any component you might need to view a document. This is a very essential compliment to the Apple Open Doc standard, which uses the approach of
giving away the software parts needed to view documents, and charging only for the
software needed to create the documents.
Open Doc is another technology which promises to do a lot for advertising, by making
it cheaper and easier for consumers to view multimedia ads, by giving away the viewer
software. It also follows the trend of giving things to consumers, in hopes of getting far more back later, somehow, as a delayed return on investment. We have entered
a unique period in history, one when the worth of a company can be judged by what
it can afford to give away. This new ability may become a necessity in the future.
Businesses want customers, but they don't want employees. If the current automation
trend continues, 5% of the world's population could support 100% of the population
within another 20 years. The question, "How will the 95% of the population that doesn't
work be able to afford to buy the necessities of life from the 5% of the population
that does work", is worth considering long before we reach that point. Somehow, the
necessities of life have to be made so inexpensive that they can be given away free,
and people only have to work to buy the luxuries.
Recently, the famed scientist and writer Arthur C. Clarke predicted that a source
of free energy would be discovered within a few years, possibly before the end of
the decade. If Clarke is correct, it may be possible for businesses to give away
the necessities of life, so consumers will be able afford the luxuries. The Internet is proving
this kind of economic system just might work. It's a statistical long shot, but investing
in consumers may provide the best net return on investment.
Back to top