Throwing Out the Book: The New Business Rules for the Internet. Part 1 of 2

A new era in business is emerging. As the internet gets stronger and stronger as a resource, companies are trying hard to adjust to the change. Some have oriented themselves well in the new medium, but most simply don’t understand. This is not to say they don’t know how to use Twitter or SEO, but they haven’t fully come to terms with what the internet and consumer blogs truly mean. The internet is much harder to control than any other entity big business has ever tried to face. This is because it wasn’t established for big business, it was made for the full exchange of information (created of course by Al Gore…kidding). The internet can be the best business asset ever created or it can be responsible for the outright destruction of a company. The good news is, no matter what the outcome, the company normally deserved whatever resulted or is resulting from it.

 

Quality of product is now the name of the game, not how many people you can get to buy something. As people who surf the internet get smarter, and search engines get better at finding the quality content, all the tricks of the trade are becoming obsolete. Link bombing, faking consumer reviews, e-mail spamming, these are all dying practices. Software, music, and movies now have an optional price that more and more people are turning to, and that price is zero dollars. This is not a trend, this is a permanent change. Instead of crying over spilt milk, these industries need to simply come to terms with the situation and adjust. When it comes to software, meaning computer programs, this is not as big of a problem, due to businesses purchasing the programs legally, and the fact that most people that use these programs regularly don’t tend to download. Though they should be wary, and consider making their products cheaper, because as the next generation takes the reigns, downloading of programs will become more and more prominent.

 

When it comes to the movie and music industries, I fully believe that they deserve what is happening to them. CD’s should not cost twenty dollars, and it should not cost so much to go to the movies. Luckily for us, the internet changed the market completely, adjusting the prices of all movies and CD’s to zero. Granted, this is an illegal act, but it has reached the point of jay-walking. What these industries need to do is adjust, and provide people with reasons to pay them for their products. In terms of the movie industry, they have the advantage of being able to offer high quality movies on bigger screens than your computer can provide. However, I think they need to lower their prices, or they will further alienate their customers, because a free movie on your computer with microwave popcorn sounds pretty good when compared to 20 dollars at the movie theater.

 

The music industry has a much bigger problem on their hands. Quality used to also be on their side, but now you can download almost any CD in FLAC quality (same quality as CD’s) for zero dollars. Other than the fact that it’s illegal, there is no reason to buy CD’s. What is even worse for the music industry is that it isn’t going to get better; it’s going to get worse. As the Baby Boomer generation dies off, and a new generation emerges, they will be ingrained with the idea of downloading being the proper way to obtain music. However, there is good news; the record industry will never truly die. It may not be in the form (CD’s) that it currently is today (kind-of), but new music will always be demanded and there will always be a market for it. The record industry needs to provide incentive to make the value of purchasing a CD more than just the CD. I have come up with a way to do this, but I won’t write about it here, due to me not wanting the idea stolen from me.

 

Downloadable products are not the only industries affected by the new face of the internet. Due to blogging and social networking sites, people can exchange information about products much easier than ever before. This means bad products are isolated immediately, and as more and more people are born and brought up internet savvy, products will be forced to get better and better. This is a great thing, as it makes businesses run better and adjust to consumer needs. The internet is also a great asset to businesses who wish to make their products better and directly connect with their customers. However, there is one industry that is trying to move to the internet, and though most people disagree, I personally think the move is the wrong one.

An Untapped Marketing Goldmine

T.V. commercials are a dying industry. Not in the sense that they will be eliminated altogether any time in the near future, but they are certainly not the focus of any good companies marketing strategy. The T.V. commercial is being overtaken by online marketing. This is due to things like TIVO, On Demand, DVR, and other programs that make it easy for customers to simply skip the commercials and go straight to the program they are watching. There are also many websites that offer T.V. shows for free, straight on your computer, which even though they contain commercials, have much less of them, and I would personally consider it a web commercial anyways.

However, commercials do not have to be something that people want to avoid like the plague. There is one time of year that many people watch a show solely for the commercials, and that is the Superbowl.  This is because Superbowl commercials have a reputation of being really good. I have found this to only be somewhat true, as a lot of companies launch new ad campaigns for the Superbowl, which can be hit or miss. The important aspect to this is the fact that people actually want to watch commercials. This is the only instance I know of where this is true. For me, this is a marketing goldmine; however, it also leaves some questions. Why is this the only time that people want to watch commercials?

Most people view commercials as a hindrance. This includes ads, billboards, etc, but I think commercials have the worst reputation of all because they actually pause programming. In the case of the Superbowl, some people are actually watching for that pause in programming. I can only assume most of those people are hoping for a chance to laugh or to be entertained. This is not a new discovery, and this is not a new concept. Funny or entertaining commercials are the best ones, people point them out to other people, they watch them on YouTube, and people are told to quiet down when they are on. This should be the goal of every commercial.

Obviously not all commercials are going to be funny and/or entertaining. If they were, then all stand-up comedians would be funny, and all sitcoms would be as good as Seinfeld. The problem is, though many people can collectively find something funny, it is much harder to produce the thing that everyone finds funny, because people tend to overestimate their own work, and be much more critical of others work.

My proposal is this: A show or network becomes extremely selective in the ads they select to air. They could even charge more for ads to appear during that show or on that network. Only those they deem worthy would appear, and therefore people would watch the show or network specifically for the commercials, just like the Superbowl. The best ones could notoriously be in the middle of the show to optimize viewers. All they would have to do is a press release to advertise, because new marketing techniques are reported on pretty heavily. This would utilize the newspapers, and news sits, and blogs, to do all the promotion they need.

There is no reason for commercials to be viewed in such a negative light. We know for a fact that people will want watch commercials if they are good, so we just need to provide a way for them to do that. I think a show would be better, because a network has a lot of commercials play every day, and I don’t think enough good commercials are made in a year that can fill a day’s quota. But a popular show could definitely do it, and it would surely increase ratings, and therefore more companies will start developing commercials specifically for that show’s audience. A marketing goldmine.

Merging Markets

The electronics industry all seems to be going in the same direction. It seems like its one big race to the same destination, everyone is invited, and on the way they everyone  is trying to absorb everyone else.  Cell phones are turning into cameras, computers are turning into phones and visa versa. The Internet is becoming a TV, just with less commercials, and a million times the content as On Demand provides. Pretty soon we will own on electronics thing, that will encompass all of our electronic needs. And It will be awesome, and I can only assume it will be made by apple (as long as Steve Jobs stays with the company long enough).

The key aspect of all of this is of course the internet. This medium has completely changed the face of the business world, and it is not going anywhere. The information superhighway can be a blessing or a curse for any company, depending on how they choose, or choose not, to embrace it.

People use the internet for everything now, so unless you have a small group of clients that are eternally loyal and you have no ambition for expansion, you want to make sure you are a part of it. This doesn’t mean just making a website, even if its a really good one with many pages and great coding. It also goes beyond blogging and social networking. The important thing to realize is every single market at this point and time is unstable. As one industry crashes, they are bringing others down with them. Right now, everyone should do what they can to be like Walmart, without the whole evil aspect to them. But everyone needs to start thinking about providing products with low cost to the consumer. When Americans don’t have money, they still buy stuff, just not when they have to pay a lot for it. Free is best, low cost is fine, but expensive is just not in right now.

The airline industry is a perfect example of incorect tactics to improve sales. Insted of trying to get their customers to like them as a company, they are adding in extra costs that are discouraging customers to fly with them. No one wants to pay for water on an airplane, and even if they do, they will hate you for it. This will lead them to try another airline, even if it happens there too. The point is, they will view that airline in a negitive light, and find an alternative. Even though air travel is down significantly from a decade ago, commercial aviation is still a competitive industry.  Therefore it is important to have your company stand out from the rest. I can see the commercial now:

Remember when flights over 3 hours had food? Remember when drinks were free, and movies were shown on flights that were domestic and not just continental? We do. At American Airlines, we have decided to go back to they way things were, because sometimes, its good to think retro. American Airlines- Won’t you join us?

It is great to have so many flights going to so many places. But customer loyalty has completely gone out of the business. People are thinking of it as a downswing in air traffic, but an upswing isn’t in sight. When a company is doing well it expands, it seems only logical that a company should cut down its size when its too big for its own shoes. However, this may not be possible for a company like AA to do, costs may be too large for it to simply close down some of its hot spots. However, it could be a good opportunity for a new company, but good luck finding a loan right now from a bank to start an airline.

The point is, when money gets tight, client loyalty takes priority. This is because if someone with little money is going to spend it, they are going to be careful who and what they spend it on. So, either provide cheap goods, or get the consumer to decide you are worth it. If you don’t have either of these bases covered, good luck, your going to need it.