What’s in this article:
- The 4th installment of the Relationship Marketing series
- A look back at the advertising revolution since the ‘90s
Remember the ‘90s? Laugh tracks punctuated the hottest sitcoms; ska, grunge, and bubblegum pop dominated the radio; people actually watched TV and listened to the radio. As we covered in our previous installment of the Relationship Marketing series, the 1990s was a period of transformation led by the mainstream adoption of the internet. AT&T likely didn’t realize it when they dropped the first banner ad in 1994, but it was a turning point for a marketing industry that now had entirely new ways to connect directly with customers.
A lot has changed since then. The laugh tracks have been replaced by pseudo-documentaries and single-camera setups, while Nirvana and Pearl Jam now headline classic rock playlists on Spotify. The biggest glow-up of the last 30 years, however, belongs to the internet. What was once a clunky, expensive process that tied up phone lines and charged by the minute has become a mostly streamlined utility.
These days, we don’t think twice about having the ability to communicate with anyone in the world instantly. With high-speed internet, smartphones, email, social media, and messaging apps, most of us are constantly connected to our favorite people — and our favorite brands. But before away messages, status updates, and pocket computers could become the norm, the internet went through some growing pains.
Party Like It’s 1999
During the halcyon days of the late 90s, mainstream internet adoption led to new innovations in marketing. Ad agency, WebConnect, helped popularize the concept of targeted ads, with which marketers are still familiar today. The following year, revolutionary ad placement service DoubleClick (which was later acquired by Google for $3.1 billion) introduced DART, or Dynamic Advertising Reporting and Tracking. At a time when most people thought “cookies” referred to chocolate chip or oatmeal raisin, DoubleClick was using these trackable tidbits of data to serve up banner ads to the intended audience on behalf of its advertising partners.
Despite inspiring a debate about internet privacy that’s still raging today, DoubleClick’s targeting solutions ushered in a new era for marketers. Hyper-targeted advertising allowed marketers to connect with specific consumers in a way that could only work on the internet. Instead of casting a wide net hoping to catch a few fish, companies could make the most of their ad budgets by appealing to the right audiences.
There were also missteps during this period, and one of the biggest was the creation of the pop-up ad. These annoying, invasive ads quickly became associated with low-quality products, obnoxious messaging, and harbingers of viruses and malware. Internet users were already savvy enough to find ways to avoid these intrusive pop-ups, and today many browsers have built-in pop-up blockers. Marketers who tried this approach found that you can’t simply shout at customers in hopes of gaining their attention; the connections needed to be more organic and genuine. (Even the creator of pop-up ads came to realize this, and he apologized for his creation in 2014.)
The Bubble Pops
By the year 2000, the dot-com biz was booming. We had survived the Y2K threat and emerged victorious into a new millennium. The future had arrived, and so had many internet startups looking to make their mark. To understand the increase in internet presence at the turn of the century, one only needs to look at Super Bowl ad trends, where companies pay millions of dollars for 30-second placements. In 1999, only two online companies advertised during the Super Bowl; by the following year, that number had jumped to 17, with websites like Pets.com, Monster.com, and ETrade.com shelling out $2.2 million for commercials like these.
If you think an investing services website bragging about wasting two million dollars aged like milk, you would be correct! By the end of the year, several of the dot-com Super Bowl XXXIV advertisers were defunct or liquidated — and they weren’t alone. On March 10, fewer than two months after that fateful sportsball game, the NASDAQ stock market index peaked at 5,048.62 before embarking on a “precipitous drop.”
The dot-com bubble had burst.
In addition to throwing the financial markets into a frenzy and putting countless people out of work, the dot-com bust also changed the trajectory of the advertising industry. During the boom, some startups were spending as much as 90% of their budgets on advertising, hoping that a massive marketing push would drive in customers and skyrocket their valuations. The good times couldn’t last forever, and marketers had to rethink their relationships with consumers going forward.
From “Going Online” to Always Online
As the surviving dot-com companies found their footing in the early 2000s, the internet was undergoing another tectonic shift. Think back to a typical Friday night around the year 2000; you’d open AOL, listen to the sweet sounds of that dial-up modem, and make an appearance in some chat rooms or browse your favorite websites. Back then, “going online” was an event all by itself, but that wouldn’t be the case for long.
In October 2005, Merriam-Webster added the term “Wi-Fi” to its dictionary, defined as being “used to certify the interoperability of wireless computer networking devices.” The term Wi-Fi was actually coined back in 1999, but its addition to the dictionary represented its new mainstream status. A number of internet providers around the world began offering Wi-Fi connectivity between 2002 and 2005, and devices like PDAs and early smartphones started hitting the market.
Wi-Fi changed the way people interacted with the internet and ushered in an era of constant connection. People were spending a significant amount of time online; not going online, but just being online. Even when not sitting at computer screens, millennials left away messages to let their friends know where they were and when they would be back. This persistent connection between consumers and the internet was attractive to advertisers, who were moving on from the dot-com bust to find new ways to connect with increasingly tech-savvy audiences.
These connections included advertising on nascent social media channels. Social networks had been around in some form since the dawn of the commercial internet, but they took on a whole new life when people never had to sign off. From 2005 to 2008, the most popular social media outlet was MySpace, with a then-mind-boggling audience of 100 million users per month. Naturally, marketers wanted some of that attention directed to their products, so MySpace released a self-serve ad platform in 2008. Advertising became a part of the social network experience; as users debated their top eights, branding took hold in the background.
Unfortunately, MySpace’s time as the dominant social media platform was already coming to an end.
The Social Dilemma
Meanwhile, a student-created website coded in a Harvard dorm room was undergoing some changes. By the end of 2005, thefacebook.com dropped “the” to become Facebook, a social networking site for college students with six million users. Creator, Mark Zuckerberg, and co-founder, Eduardo Saverin, started hosting ads shortly after the social network’s founding in 2004 to “offset the cost of the servers,” as he told his college paper. The 20-year-old Zuckerberg likely had no idea Facebook ads would make him one of the wealthiest people on Earth.
By the end of the decade, MySpace would be a distant memory, while Facebook reigned supreme. However, new challengers were invading the space — and bringing with them an advertising revolution.
Check back next month for the fifth installment of our Relationship Marketing series!