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For the beleaguered television networks, the explosion of dot.com advertising is helping to push up rates 10% to 20% this fall. "It's created an unnaturally tight market," notes Jon Mandel, co-managing director of ad buyer MediaCom. The online magazine Salon recently rolled out a provocative $4 million TV campaign featuring digitally crafted odd couples, like celebrities Chris Rock and Linda Tripp, dancing at a dinner party. "We needed to cast a wider net," says Patrick Hurley, Salon's vice president of marketing. "We're not going to put our head in the sand and pretend that other media don't exist."
Instead of being beholden to powers like Procter & Gamble, the networks get to call the shots. For instance, they're insisting that many start-ups pay in advance. "Everything's sold out," says Fred Reynolds, chief financial officer of CBS, which in addition to its TV empire owns a vast collection of radio stations and billboards. Though most of the old media won't trade ads outright with the dot.coms--the kind of bartering that takes place all the time in cyberspace--they will use the slots as currency. Rather than pay with stock or cash, CBS has swapped nearly a billion dollars in ads and promotional opportunities for sizable equity stakes in start-ups like MarketWatch.com SportsLine.com and Jobs.com
Madison Avenue, while enjoying the skyrocketing demand, can barely keep pace with it. Agencies that used to take two to three months to craft a corporate identity are being asked to create a winning, edgy commercial in just over a week. Online brokers Ameritrade and E*Trade, which are both in the middle of hundred-million-dollar ad campaigns, have led the way in using irreverent humor to get their message across.
Ameritrade's slacker-punk pitchman, Stuart, a sharp, hilarious contrast to the suits around him, has helped sell its slogan "Believe in Yourself." Career site Monster.com is taking a subtler approach. In its now famous spot, debuted during last year's Super Bowl, bright-eyed kids recite such lines as "I want to be forced into early retirement." Says Monster CEO Jeff Taylor: "Funny's good, but you have to end up with a good, lasting impression once you grab their attention."
After watching a series of outrageous "Can you top this?" ads make an ever diminishing impact, a few dot.coms are apparently coming to the same conclusion. Outpost is going ahead with a less jarring ad. Technology supersite Cnet, which made a splash with an ad featuring a man's visit to the proctologist, is altering the course of its $100 million attack, opting for a clear message over shock value.
It's hard to blame the dot.coms for wanting to make some noise. They know that for every AOL, 10 dot.coms are going to be DOA before the frenzy is over. Within a few years, the windfall could end for old media too. Dot.com spending is expected to plateau once the winning companies are in command and more consumers shift to the Net. It could result in an Internet take on an old Marxist theme: When new media arrived to hang old media, the networks sold them the rope.