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Michael Sprouse joined Epic Advertising as Chief Marketing Officer on June 1, 2007. His current responsibilities include overseeing all marketing strategy for the company, media buying, direct marketing programs, public relations strategy and outreach, internal communications, corporate development and cross-platform initiatives.

Prior to Epic Advertising, Sprouse served as Senior Vice President of Marketing for Playboy Enterprises, Inc. In his time at Playboy, Sprouse helped to oversee a business transformation as the youngest senior executive in the company's 54 year history. His marketing leadership opened up many public speaking and PR opportunities including the Keynote presentation at ETail (twice) as well as numerous press mentions.

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Market Chaos: What It Means for Us

Written on
September 25th 2008
Author
by Mike Sprouse  |
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surfing-with-dory_small.jpgADOTAS EXCLUSIVE — If you are reading this, congratulations. You have lived through one of the craziest, most unfortunate, most misunderstood and debated series of weeks in our financial history. For those who think they can predict what is in store for our profession 30 days or a year from now, well, I’d like some of what you’re having.

The easy thing to do, as many have, is predict that online advertising and spending will slow down. Frankly, this is a vague and potentially flawed sentiment. If the Fed Chairman can’t predict the bailout’s effects 60 days from now in front of Congress, I have a hard time believing anyone in our industry can claim omniscience about what will happen in online advertising to support that “it will slow down”.

I don’t have a crystal ball and mine would be far foggier than most pundits anyway, so I don’t preach any of this as gospel. I’m not what you would consider a heavily-vested market “player”; rather, I’m probably like many of the people who read this publication. I work in the online marketing industry. I’m highly interested in seeing our country’s financial health not just for my generation, but future ones. I want to see my 401k appreciate, I’m hopeful Social Security is healthy when I’m old and gray, and I also think that macroeconomic conditions start the ultimate trickle-down effect for everyone in any industry. With that, here are “5 things I think I think” for online marketing professionals these days:

1. With great challenge or struggle always comes opportunity.

Not every advertiser or marketer will feel the effects of the recent financial crisis equally. In fact, certain sectors may potentially thrive. There could be new opportunities that arise in the performance marketing sector that perhaps aren’t present in the branding world or impression world. If you believe all advertising is done on a continuum, then you won’t see the movement of brand dollars to performance dollars as “robbing Peter to pay Paul”; however, this period of time could very well be where incremental dollars can be spent (and made back) focusing on performance. For companies who depend on specific offers, products, services or campaigns to market, then you know that there will be opportunity. For every action, there is an equal and opposite reaction.

2. This could be the time for “survival of the fittest”.

A while back, I wrote a column about the 314+ (give or take) ad networks that are out there and stated that with no external market factors or major changes that alter the online ad ecosystem, that number would not dramatically decrease. Well, we are going through perhaps the largest “external market factor” possible. Events of this magnitude could likely be the force that moves us more rapidly than I predicted towards some industry consolidation. This harkens back to my initial point above, however, about opportunity: there could be heightened M&A opportunity, better chance for partnerships that maybe didn’t look so good before, and more company’s having a “heart to heart” with themselves over how they need to compete. They may even ultimately make themselves healthier through better controls, for instance.

3. Though the chaos occurred in the financial sector, it impacts businesses in every sector.

This refers, specifically, to the way companies in our space actually do business each day. Most companies have credit lines. Most companies carry debt. Most early-stage companies look for funding. Finally, most companies distribute and receive payments on “net” terms (like Net 30, 45, 60, etc). I won’t go so far as to say all of this will change dramatically tomorrow or next week, but I will say that companies at the very least will have to take a close look at their goals, expectations and practices, and re-set a few things in the way they conduct, or look to conduct, business.

4. Upcoming macro changes will not solely affect the way that United States-based interactive marketing companies do business.

Though I’m slightly biased because I live in New York, it is widely held that the Big Apple is the financial capital of the world. Wall Street, large (former) investment banks, NYSE, expense accounts and big media are all ingrained in the fabric of the city. Many important decisions made here are made on behalf of the rest of the United States - and the world. Many of the world’s economies look towards the US at least as an indirect indicator of capitalism’s financial health, if not a more direct association in some cases. From Canada to Western Europe to the Far East, there will be a similar ripple effect in online ad business practices, funding, and the like. What we in the online advertising space feel here, you can believe others around the globe will feel as well to varying degrees causing equal apprehension.

5. The long-term prognosis should be “Proceed with Caution” but should not be ultimate “doom and gloom” for online advertising.

For those of you who remember years ago, at the now famously dubbed “Dot Com Bust”, you probably understand that the events of that time dramatically altered not only online companies but the financial markets forever. I remember reading articles by experts that claimed the online era was not only forever changed, but that it was “over”; that “online” was not a sustainable medium. What occurred then marked the end of four-hour foosball tournaments and empty promises; and the beginning of an era of relative accountability. What happened? Years later, companies have been built and have grown with entirely online-focused business models, and offline companies are trying to maneuver their business models to better leverage the online medium.

A vaguely similar thing is happening now in terms of accountability within the financial markets, though on a much more dramatic and broad scale than the Dot Com Bust was in this example. A new era is being ushered (forced) in which affects us all. Is it highly unfortunate? Yes. Will many of us have to pay the piper in some way for the poor decisions of others? Probably. Will it change the way we do business? Yes – but perhaps for the better ultimately. I do think, for online advertising professionals, we are one part of an incredibly resilient economy which has the ability to reinvent itself much the way Dot Com’s did earlier in the decade, which ushered in the “adolescence” of greater market opportunity, great new companies, great technology and more sound businesses.



Reader Comments.

Pardon me if I’m wrong but isn’t Azoogle/Epic responsible for pushing both sub-prime mortgage leads…which has ultimately led to the entire financial meltdown?

Practically the entire DR industry has fueled our current problems.

Something to think about…

Posted by Noah.tv | 12:12 pm on September 25, 2008.

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