Web comes full circle, developers doing better stuff but making less money?


Pardon my somewhate randomized ramblings……

Significant changes keep swirling online as the internet becomes the key mainstream content vehicle, oceans of content continue to flow online, and mashups empower developers to flesh out even the most extravagant ideas with powerful tools reaching far into the rich data stores all over the web. Even market makers like Google, Yahoo, MSN don’t know how it’ll all shake out, and they are supporting many excellent mashups and APIs and developers to make sure bases are covered as the “real” battles for all that online spending heat up.

Where content was king it’s now just a pawn, and creating (large) communities in addition to a large content collection seems the best way to keep a web based company afloat in the stormy and rising online sea of sea changes.

*Unlike the gravy days of soaking up adsense revenues with auto-generated content, it appears online content providers need something “extra” es that will distinguish them from the other sites doing similar things.

The Internet in many ways, has done a partial circle back to quality stuff.

In early days it was non-competitive and fun and info focused.

Then came powerful commercial focus and info bias and heavy SEO for profitable terms.

I think the “new” transition is focusing on people/information, and rewarding those who create communities and bring *people* into contact with *people*. (e.g. Flickr, Myspace, Facebook, etc, etc). Increasingly, NON commerical sites like Wikipedia and DMOZ are taking on the roles that for a few years were provided by a plethora of auto generated, information poor – category rich sites that provided obscure topic details in a bland format.

51 thoughts on “Web comes full circle, developers doing better stuff but making less money?

  1. THis could be compared to the quality of say IBM’s first generation computer to what we have today.

    Or pong to gameboy.

    Most markets correct themselves in time.

  2. I agree with the above most sites are just their to not create communities and create something that tricks us to believe they are right. Msn, my space creates a community and allows us to safely enjoy the web instead of being scared to logging and find that some other site.

  3. I can that the future of the web is going to be tricky as we have newbies joining in thousands a day and with the various google shake ups and other major players changing the way they allocate web PR. Then its all going to be a hairy 2007. I expect the internet marketeers to do well even in this turbulent times.

    Andy.

  4. I agree, a succesful online community is the most important part of the web today.

  5. I admit getting on the web, and understanding how it works is hard and fustrating! I am working hard to get my site up and running, but with the intense compitition that is now running it remains very, very, hard!

  6. Also alot of the info on getting noticed on the web is out of date. All the e-books on how to you site top of the search engines are out of date by the time you have finished reading them.

  7. One of the interesting issues is in regard to sites like RentACoder that have no real checks and balances on the quality of developers that are professing their skills.

  8. These days it is we are dealing with the realities of a change from the Service Economy to the the final leg of the knowledge based Economy.

    Where knowledge is king, and staying ahead of the curve with the Internet technology keeps you ahead of your competition.

    I am always at work updating my various websites with new scripts and handlers to help me automate as much of my sales process as possible. However with 23 sites online I always seem to be behind the 8 ball. The next phase will make things more difficult in ways. When we get to the point when sales of knowledge drops down, then we will have to start selling the technology.

  9. I totally agree…Msn and such things lik MySpace create a large community which allows us to enjoy the web, by keeping in contact with distant friends.

  10. I’ve had to update many of my websites, as well. I do alot of reading on myspace & other blogs to keep up with everything web related. If it’s important, people usually talk about it pretty openly.

  11. I’m having to devote an awful lot of time to keep up with blogs, my space and various other things too and find its hard to maintain good quality sites.

  12. All the e-books on how to get ranked topof the search engines are out really of date. We paid a rather large sum for an SEO e-book and half the links and tips wouldn’t even work any more!

  13. Be very careful with SEO, there are many people out there who claim will get your website high rankings. And yes they do. But they do it in ways that affect your future ranking status. There are simple search engine optimization info you can gather for FREE on the internet. The main thing is to advertise to your targeted audience in my eyes. Thats where your most reliable traffic will come from.

    The internet is constanly changing and making life difficult for online businesses. There is more and more shops appearing all over the place making running a succesful business really difficult as profit margins drop.

    With regards to communities i agree a good community is always fun and nice to come across but bare in mind many scammers / fraudsters are starting to gather your personal information from your profiles and are able to get loans / finance / credit cards out in your name.

    :0

  14. Yes good point Lee, i too have herd fraudsters can gather enough information from internet profiles to get credit in your name. Be very careful

  15. Idendity fraud is the fastest growing crimes in the UK. Myspace, Msn etc. can give these fraudsters quite a lot of personal information. Be extra careful……..

  16. Hi Joe,

    You are absolutely correct!!

    But what bothers me is that the evolution of the web is moving so fast!!

    When i finally start to understand a little SEO the parameters change.

    Its not easy…

  17. I think the reason for the lower rates is due to foreign programmers offering to do the same work for less. Also due to the economy most businesses cannot afford to pay the higher rates.

  18. I totally agree with what has been said and I have myself fallen into some of the pitfalls mentioned previously. There will always be a degree of risk to take but you should always be smart and do your homework.

  19. Just to emphisise seo budgets – my site has only been up and running a few months and it has a pr4 and reasonable amount of traffic. All done on a tight budget.

  20. ADVERTISING; Help! My Brain’s Being Eaten by a Zillion Dot-Com Ads!
    A gerbil shot from a cannon, a hammy actor crooning a song woefully off key, a college student who burps the alphabet: These were just a few of the colorful images used in the past year by dot-com companies flooding the airwaves with ”edgy” advertising. To analyze why dot-com advertisements are so wild, whether they work and where they go from here, a group of advertisers — some old hands, some new faces — and dot-com clients, including one, Michael Zapolin, who appeared in his own Super Bowl ad, assembled recently in New York, watched one another’s commercials and exchanged views. The moderator was Warren Berger, a contributing editor at Wired and editor of the advertising magazine One.
    WARREN BERGER — So many dot-com ads, including the ones we just looked at, seem to feature off-the-wall humor, outrageous situations, quirky celebrities. Why do these offbeat approaches seem to be popular?
    MICHAEL ZAPOLIN — With all the names out there, even if you have a really hot name, you still have to burn that into somebody’s brain — so that a day later, a week later, when they need what you were talking about, they can recall what you were doing. There’s not a lot of ways to burn something into the brain unless it’s just totally nuts.
    ELLIS VERDI — I’m concerned, though, because half of the dot-com ads, I don’t even know what they’re selling; I don’t know what the benefits are to them. At some point I’ve got to understand what advantage the site offers to me.
    ROY GRACE — I agree a lot of them sacrifice relevance for impact, but when I see a gerbil shot out of a cannon, I never forget it.
    ROBERT BOWMAN — We were the first to do the ”Look, ma, no hands” advertising, really. We were relatively new to this. And we got an A in Marketing 101: Get your name out there. But we didn’t tell them what we do and why it’s important. So this past Christmas, we ran ads that talked about overnight free delivery. Our traffic doubled and our sales tripled.
    GEORGE PARKER — But many of these spots are not aimed at the end user anyway. They’re aimed at the investment community. And all they need to know is your name, not what you’re selling.
    MR. ZAPOLIN — It goes beyond just somebody coming to your site and buying product. We had four segments to kill. No. 1, consumers coming to the site. No. 2, the Wall Street community. They’re sitting there and the ad comes on TV and the guy’s wife says, ”Are you taking them public?” And he says, ”I don’t know, I’ll call them tomorrow.” And then there’s the individual investor — in the dot-com space, it’s 80 percent individual investors, wanting to know, ”Can I put money into your company?” And then fourth, partner companies who want to advertise on the site. It would have taken us a year and a half to go out and see all these people.
    MR. VERDI — But at some point, somebody’s going to say, ”I can’t give you another dollar until you show me some level of accountability.” And the accountability has to be in the marketplace.
    SHERI BARON — I’m sure everyone in this room has sat with venture capitalists and presented the big idea to them. And they’re not measuring advertising in the traditional way — because they are not advertising people. To be honest with you, I don’t want a venture capitalist responsible for developing my advertising strategy. But at that moment, all bets are off and everybody is playing different roles.
    MR. BERGER — How involved do the V.C.’s get? To the point of vetoing ads?
    MS. BARON — It depends on the company, whether it’s a well-funded dot-com start-up in Phase 2, or still in Phase 1.
    MR. VERDI — I think the V.C.’s are going to learn their lessons, too. You can see it already. At one time, $25, $30 million was easy to get. Now it’s $15 to $20.
    MR. BERGER — Is it difficult to find the balance between creating an entertaining commercial like the ones we saw and giving the basics for consumers — what is this dot-com, how is it different from 16 others?
    MR. GRACE — The basic rules apply. People don’t come home at night to watch the commercials, so it behooves you to make them entertaining — whether it’s a dot-com, soap, an automobile. Even more so now, because there’s this fierce competition for air. In the history of the world, have there ever been so many new companies? There’s this wonderful, manic desperation.
    MR. VERDI — It’s a very exciting time, but I also think that it’s a chance for agencies to be irresponsible. All of a sudden a creative person who’s always been told they can’t do this or that has newfound creative freedom.
    MR. BERGER — Putting aside the investor audience, are most of these ads targeting a younger audience? Does that explain why there’s so much of a certain style of humor, such as the campy William Shatner ads?
    DAVID WECAL — Actually, we’re very serious about that stuff. The truth is, I think mainstream America is pretty edgy. If you look at the Priceline work, you can say it’s a little out there. But here’s a campaign that was talked about on the ”Today” show, on ”Entertainment Tonight” — it was interesting to mass culture. I think we underestimate middle America in terms of, like, how edgy their humor is.
    MR. BERGER — Bob, let me ask you, what exactly was the effect of that ”gerbils” campaign on the business?
    MR. BOWMAN — Traffic spiked way up in December of ‘98. We had 37,000 new customers when the gerbil ads were flourishing. But of those 37,000, only 8,000 came back to buy over the next 10 months. In the holidays of ‘99 — when we were running our boring ad about overnight free delivery — we had 100,000 new customers. Of those, already 35,000 have come back. So by telling people what we did, we got visitors who actually might become customers. We did the outrageous stuff, and obviously Priceline’s ads have been edgy. But we finally retreated and said, ”We have to tell people what the value proposition is,” whereas Priceline has sort of kept with the same edginess — they’ve still not told people that stuff is really cheap.
    MR. BERGER — David, will there be a second phase to that campaign? Do you envision it as something that will evolve, where you’ll have less of Shatner singing and more information?
    MR. WECAL — I think he dances in the sequel. No, we’re doing a second round, but — you know, there is a balance. I guess I’m going to answer Bob’s question with another question. When you switched back to more responsible advertising, did you feel like you were changing the image of your company?
    MR. BOWMAN — We were worried about that. In ‘98 our ads were outrageous and our site was colossally boring. In ‘99 our ads were boring and our site was interesting and fun — so we tried to keep the edginess in our site, figuring the ads won’t be as irreverent.
    MS. BARON — In truth, this business is a direct business. There may be some mass businesses like a Priceline, but, in the end, it’s not like all of a sudden, overnight, we have quadrupled the capacity for consumers to buy things. So one of the things that’s going to happen is that once we get past this first stage of getting your financing and getting your name out there, then it becomes a business like everything else. You have to go out there and see who your customers are and then refine your targeting as you move on. You may not be in mass television all the time telling your story.
    MR. BERGER — Mike, what kind of traffic did the Super Bowl ad generate — and how did it taper off in the weeks afterward?
    MR. ZAPOLIN — We had about 500,000 people come through within 24 to 48 hours. What happened was, it spiked real hard, and then it came down pretty hard — but before the ad we were running at a few thousand people a day; now we’re over tens of thousands of people. But aside from traffic, I got a call from every investment bank on Wall Street, and I’m raising money right now at 10 times what I raised my first round. I mean, you know, so much money that it’s ridiculous.
    MR. BOWMAN — As Mike points out, when you spike up to another level with a big ad campaign, it’s temporary — but when it settles back down, it doesn’t go all the way back down. Because with everyone you capture, you keep moving to different plateaus and that’s the game. Once we rope somebody in, and they’ve looked at our site and particularly if they’ve been a customer, we now have their e-mail address; we know who they are. So we don’t necessarily have to rely on mass media to keep people coming back.
    MR. ZAPOLIN — One thing that we found from the Super Bowl, it was like we could do this giant focus group where half a million people came into our site and told us what they really wanted. We just watched where they went and what they looked for.
    MR. PARKER — But I have a question about these advertising budgets. I recently read about a $25 million advertising account of a dot-com company aimed at serious marathon runners — of which there cannot be more than 50,000 in the entire U.S. If you do the math, these people are maybe going to go through a pair of shoes a month, a few pairs of shorts, socks. So where does this $25 million budget become justified?
    MR. WECAL — They all say they have $25 million.
    MR. PARKER — Yeah, I know, but a lot of them do. And of course it’s V.C. money to go in and capture a share of the market, but if you extrapolate it out, it doesn’t make sense.
    MR. BOWMAN — I think the investment market’s already changed. We just completed our quarter two days ago, and when we announce earnings we will spend a lot of time on our customer-acquisition cost and we’ll divide that by our number of new customers — and unless that number’s both low and falling, people will sit there and say, ”You don’t have a model that works.”
    MR. BERGER — Returning to the ads, there’s been a real saturation over the last year. Is anyone concerned that consumers may be overwhelmed by the amount of ads ending with dot-com?
    MR. GRACE — I think there’s a numbness. I know it’s happened to me. Listening to the radio, one company after another: dot-com, dot-com, and you just start to turn it all off. And it has nothing to do with the content or the message. It has to do with, Enough!
    MS. BARON — I don’t think the consumer says, ”Dot-com, dot-com, I don’t want to listen to it anymore.” I think they do their own editing. And then it gets back to where we started, which is, if you’re relevant to them, they will accept you into their lives.
    MR. ZAPOLIN — It’s funny, I’ve been hearing this even before the Super Bowl — everybody’s sick of the dot-coms. But last night I turned on ”Law and Order” and it’s ”The Dot-Com Murder,” you know? Nobody’s really sick of it because it’s such an integral part of our lives. And part of our commercial was saying, ”You know what? If two guys like us can have a dot-com and an ad on the Super Bowl, then the dream lives.”
    MR. BERGER — I’ve heard agency people say that dot-com clients sometimes treat the advertising like fun and games. And Mike, here you are, appearing in your own Super Bowl commercial, doing a funny routine . . . as if you’re out there having a good time, while the meter’s running at $2 million for 30 seconds. What would you say to that?
    MR. ZAPOLIN — I’m obviously an egomaniac. But when we sat down with the agency and they gave us 15 different storyboards, we said —-
    MS. BARON — You said, ”Where’s the one with me in it?”
    MR. ZAPOLIN — No, we said to ourselves, the only way we can be unique is to try to give our own story, and to portray that we were low-tech for novices, to say, ”I don’t know more about computers than you but I’m just trying to help.”
    MR. BERGER — I want to ask the agency people to evaluate dot-coms as clients, generally speaking. What do they fail to understand about advertising and how it works?
    MR. GRACE — They don’t have a huge amount of marketing skills. Which is wonderful. And it’s also terrible. You know, they aren’t ready to look at advertising and marketing as a science. I think they’re more willing to have some fun.
    MR. PARKER — If they’ve had business experience before, then they’re usually pretty good. If they just graduated from Stanford with an M.B.A. six months ago, then some of them have pretty weird ideas. And so it can be good and bad. I mean, you may come up with something wild and wacky like shooting gerbils through a hole in the wall, and these guys say: ”Yeah, let’s do it. And we’ve got to be on the air next week.” Whereas if you’re dealing with Procter & Gamble, you’d have to research it. And you’d never get away with it to begin with.
    MR. GRACE — You’d have to change it to squirrels.
    MR. PARKER — The other thing is, I have friends in agencies around the country who are steering clear of dot-com companies because they have huge debts that these guys don’t pay up.
    MR. WECAL — But they’ve also woken up the rest of the clients — they’ve provided shock treatment for the advertising industry. You have clients that are not dot-coms that want a little of that fun; they want to be talked about. So it’s giving us the opportunity to prove that advertising can be powerful for a brand again.
    MR. BERGER — This has been noted before, but it’s ironic that new media is spending so much on old media. With dot-coms relying so heavily on TV commercials, does it suggest that advertising on the Internet is not a viable way to build a business right now?
    MR. PARKER — The last couple of years has proven that advertising on the Internet doesn’t work. Even when you get the hits, you get visitors but nothing else. I mean, right now, as it’s structured, Internet advertising is probably one of the worst ways you can spend your money.
    MR. BOWMAN — I think every new medium launches through the old media. You rely on the old media because that’s the mass market; that’s how you reach everybody. And then you get more targeted and specific.
    MR. BERGER — So is this just a temporary bubble now, as far as all the TV commercials are concerned?
    MR. VERDI — I think it’s a bubble. As the numbers come in from the fourth quarter, I think the expectations for the advertising were much higher than what the delivery was, and I think that reality is going to start setting in. That doesn’t mean that there isn’t an incredibly important role for advertising. But it is going to find its place in the mix.
    MR. BERGER — Any thoughts on how dot-com advertising will evolve from here?
    MR. PARKER — I think it will become respectable as the bigger companies get into it. They’ll want to take less chances, so they’ll focus-group research it and what will happen is what happens to all advertising that goes through that process. It won’t be as funny. It won’t be as edgy.
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  21. I use msn nine and yahoo to talk to friends overseas all the time, great way to keep in touch without any expense

  22. I totally agree with all of you guys. Internet is a specie that began as computer to computer communication but has evolved into bigger than a beast. Now, because internet is flooded with billions of websites, there is a information overload. People are basically feed up with having go to sites that simply don’t have any content but advertisement — Google Adsense, Yahoo ad, etc. When I need to find information on something that I need, I don’t just google for that info but goto specific forums or communities where people are conversing on topics that I might me looking for and a solution. Believe me, I get a lot of my info and solutions on the forums than just going to sites.

  23. The internet is the way to go! What a great way to work – no boss, choose your own hours, it’s the best life!

  24. Couldn’t agree more. I was a litte ify about myspace and other sites until I really checked them out. You never know what your going to get with some people and myspace allows you to keep in touch with those you know and love and can still be kept secure from those you do not want knowing the ins and outs of you life

  25. “…People are basically feed up with having go to sites that simply don’t have any content but advertisement — Google Adsense, Yahoo ad, etc… ”
    Agreed! Even if there is content on a site, I tend to distrust any advirtisements there.

    “When I need to find information on something that I need, I don’t just google for that info but goto specific forums or communities where people are conversing on topics that I might me looking for and a solution. Believe me, I get a lot of my info and solutions on the forums than just going to sites….”
    Well, that is the problem though: how do you find the ‘specific forums and communities’?

  26. I thoroughly appreciate your comments on people connecting with people. Without relationship, all we are (either on the Internet or in the workplace or neighborhood) is information . . . information on who we are, where we came from, etc. The need to connect with others is driving the internet, even if it is for a few laughs on YouTube to relate on a level the work above “information”.

  27. THE SAD PART IS THAT IT WILL PROBABLY GET WORSE,IE MORE COMPLEX.
    ALL IN THE NAME OF “LET’S GET RICH”
    THE LOVE OF MONEY IS STILL THE ROOT OF EVIL !

  28. Eventually connecting to internet would be the only thing people will be able to do or the only way to communicate with others. Great article

  29. I agree, internet is helping “bring *people* into contact with *people*.” Nice article.

  30. I really agree with the comments made in the article. The internet community is a must as far as I am concerned.

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