Hunting for Bucks on the Internet.

As an advertising guy in the Modern Age, I can't tell you how many people prance through our agency cyber-doors looking for ways to increase their advertising effectiveness. After I give them the usual Internet-Is-Only-Part-Of-The-Marketing-Media-Mix speech, they inevitably respond with The Question. The Big Kahuna. The Grand Inquiry: Can you really make money on the internet?

The answer is definitely yes. Sort of.

If you're really heavy into hype, you probably have this image of pony-tailed kids in sneakers becoming instant millionaires every half hour. You probably read about new ventures in the Business Section about new technologies that will revolutionize the internet and the world as we know it.

Of course, if you're NOT into heavy hype, you probably know that for every pony-tailed millionaire profiled in the press, there are a few hundred thousand whose ventures vaporized within 24 months of their publicist's first published press release. That's about how long it took for sites like "The Spot" -- once heralded as "the future of entertainment" -- to slowly wither and die, with nary a cent left in its estate. Hailed as "the soap opera of the internet", The Spot never generated anything even close to a profit. Its parent company died a quiet, ignoble death in early 1997. Two years earlier, to hear the press trumpeting its creator as "the next Brandon Tartikoff", you'd have thought it was going to be the next Microsoft. Or at least NBC.

It was more like DOA. And the reason was because almost every internet revenue model I see is seriously flawed from inception. The truth is that you really can generate revenue from internet sites. But the way you generate it comes from where you'd least expect it. It varies by industry -- and your expectations. It reaches far beyond a mere "alternative channel for goods and services".

Most internet pundits are still trying to push the "internet advertising banner" model as a means to generate revenue. I'm here to tell you that it ain't gonna happen. Not never. Not no how. It's not going to happen because even if your site actually can attract a few million visitors a day (which yours will not), every piece of anecdotal and quantitative research keeps turning up an annoying little statistic that says people don't click on the banner ads. And when people don't click on the banners, advertisers don't get visitors to their sites -- which really pisses them off. After all, if you spent the better part of your work year building a delivery system that didn't deliver, wouldn't you get a little irritated?

Of course. But that's why you've got to keep your eye on the ball. You've got to stick to your core business -- but you've also got to make some real changes.

To make bucks on the internet, you've got to be more than "internet-ready". Your business has to be primed for the process. And that means more than letting some college kid design you a home page for $25. It means really thinking about the ways your business operates -- and how integrating the internet can enhance those operations.

You really want to know where the bucks are on the internet? Well, I can tell you where they AREN'T, and that should be your first clue. They aren't with the huge mega sites. And don't fall for that press hype, either. Almost all major websites are still running at a loss, with the possible exception of Yahoo and a handful more.

The REAL bucks are much, much lower on the food chain. Sites you've never heard of, but are doing quite well, thank you. Sites that were created based on updated marketing strategies instead of outdated technologies. And when you think about it, that's makes a whole lot of sense: the businesses driving internet profitability are mainly managed by small-timers who see the real promise of the net as free, unlimited access to their marketplace. These are guys who see the internet as one huge TV infomercial -- and rightly so. They eschew mass market mentality and focus on niches which are easier to identify and quicker to dominate. They know their users' quirky loyalties and buying habits.

And these aren't just the "product" people. The same thing is happening in the service sector, too.And at the risk of sounding self-serving, let me offer up my own company as an example. Because if we HADN'T radically altered our business for the internet, it's doubtful we'd be in business today.

The name of the game in advertising is quick response. This makes the internet perfect for clients, but it's totally contrary to the way traditional agencies are structured. For example, most traditional agencies have a relatively convoluted communication chain: it starts from the client, to the account exec, to the media and creative people. Add the tiered chain of commands for each department, and it's a wonder that anything gets back to the client within months, let alone days.

We eliminated all those tiers and give the creative/marketing people clear lines to the client. instead of relying on account people to interpret the client's input, we retrain our creative to understand the marketing and we discipline the client to understand the concept of "garbage in, garbage out." The result is quicker, clearer communication, which results in quicker, more accurate ads.

By streamlining the input process, over 98% of the first ads presented to clients get produced. That saves weeks of revision time and gets the ads out faster.

Technologically, we create everything digitally. There isn't a pencil or marker to be found anywhere. No mounting boards. Why? Because we create everything digitally. And by creating everything digitally, we're that much closer to the final product. No "tightening up" is necessary. No client surprises or claims of "You never said it was going to look like that!"

Finally, because we're 100% digital, rough and final concepts -- be they print, radio or TV -- are easily transmitted to our clients' private web sites, allowing them to view their work much more quickly and economically. No Federal Express charges. No overnight or two day delivery.

We're a service sector site. Our site doesn't generate huge volumes of traffic. There isn't an ad to been found anywhere on the site (other than the ones we feature in our portfolio). But it is by far the most profitable marketing investment the company has made since 1986. In fact, the last quarter of 1997 was the first year in which business generated from our website outpaced business from all other sources put together.

Our business came in from all over the world, from all kinds of industries. But the reason it came in wasn't due mainly to the fact that we had a web site. It came from the fact that we're one of the little guys in advertising and marketing. Before we ever designed our site, we re-designed our whole way of doing business: committing to a 100% digital format, restructuring our client contact and billing procedures -- those were just some of the operational changes we had to make in order to make the business more efficient and profitable through internet integration.

I'm glad to say it worked. For us, the minimum ROI has been roughly 100 to 1.

Are there bucks on the internet? Absolutely. But it's doesn't happen through banner advertising or technology or fashion or fads. It happens by knowing the animal you're hunting, and more importantly, the weapon you're hunting with.

Rob Frankel

Rob Frankel is a speaker, consultant and president of Frankel & Anderson, America's first award-winning, 100% digital advertising and marketing agency, providing Advertising, Marketing & Killer Creative to clients throughout the world. You can reach Rob directly at http://www.RobFrankel.com or toll-free (throughout North America) at 1-888-ROBFRANKEL, and see/hear samples of Killer Creative at http://www.frankel-anderson.com

Copyright 1997, FRANKEL & ANDERSON * Advertising, Marketing & Killer Creative * http://www.RobFrankel.com * Toll-Free in USA & Canada: 1-888-ROBFRANKEL * Telephone: 818-990-8623 * FAX: 413-778-0909 * http://www.frankel-anderson.com