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This Month in Dot-Com Wackiness: That's $7 Billion with a 'B'

5/03/11

By Ken Magill

Editor’s note: It’s been almost exactly 11 years since the dot-com economy imploded in spring of 2000. Over the weekend, I went into the garage and dug up back issues of the various publications for which I’ve written. I’ve been writing about Internet and email marketing since 1996.

As a result, I’ve decided to start publishing an occasional column looking back at some of the wackiness that was the dot-come boom and bust. Here is the first:

Commercial Email to Be $7 Billion Market by 2005: Jupiter

Ever the dot-com cheerleader, Jupiter Communications in May of 2000 issued a report predicting commercial email’s perceived benefits—swift time to market, cost effectiveness and strong return on investment—would drive U.S. businesses to spend $7.3 billion on the channel in 2005.

Jupiter predicted email’s growth would come at the expense of direct mail, cannibalizing it by 13 percent.

According to the Direct Marketing Association’s Power of Direct economic impact study published in 2006, U.S. businesses spent $300 million on email marketing in 2005. The DMA also said marketers spent $18.9 billion on catalogs in 2005, a figure the DMA predicted would rise to $20 billion the following year.

Also according to the DMA, U.S. commercial e-mail generated $16.5 billion in sales in 2005 while U.S. direct marketing-driven sales hit $1.806 trillion.

Jupiter’s prediction was, shall we say, off just a smidge.

House Committee Votes on I-Tax

Also in May of 2000, the House Commerce Committee cleared legislation aimed at heading off a hoax.

During the previous year, an email had been spreading like wildfire claiming that under a fictional bill dubbed 602-P the U.S. Postal Service was going to impose a 5-cent surcharge on every email delivered in the U.S. to offset losses the USPS has suffered as a result of email.

Rep. Fred Upton, R-MI, and others drafted legislation to outlaw the non-existent 602-P. It is unclear if the bill went any further than the Commerce Committee.

However, New York Senatorial year-2000 candidates Hillary Clinton and Rick Lazio apparently weren’t aware of the Commerce Committee’s efforts. In a now infamous stupid-political-debate moment, moderator Marcia Kramer of WCBS-TV in October of 2000 asked the candidates their opinions of 602-P unaware she had been duped by a question sent in via email.

Both candidates, unaware they were discussing an urban legend, condemned it.

Interestingly, Lazio reportedly was a co-sponsor of Upton’s anti-602-P legislation crafted the previous March. Apparently, he forgot.

NWF Plans to Launch ISP

And still in May of 2000, the non-profit National Wildlife Federation planned by April to launch an ISP dubbed NWFNet and charge subscribers $15.95 a month.

The idea was to create a new revenue stream by providing content and services aimed at people active in environmental issues.

The NWF planned to get 25,000 subscribers in its first year. Given the timing of the announcement, it is unclear if the service even launched.

Firm Announces Targeted Pop-Up Ads

In May of 1999, an Overland Park KS-based firm named Interactive Innovations announced it had developed I-STARS or Internet Strategic Advertising Response System, a proprietary ad - serving system that was to serve targeted pop-ups.

“I-STARS displays advertisements to internet users based upon their search of destinations anywhere on the Internet. Consumers are incentivized to download I-STARS with free software offerings,” said a press release announcing the firm had agreed to receive $2.5 million from Ameridian Ventures in exchange for up to 51% ownership of the firm.

One of the software packages was some type of call manager. The other was a website blocking application. Both required people to hand over personal information.

Interactive Innovations president, Karl Zetmeir, predicted advertisers would achieve 20-percent response rates with his targeted-advertising technology.

Then again, maybe not.

Apparently Ameridian and Interactive Innovations found out consumers weren’t real hip on downloading software in order to receive an ad format everyone hates.

A search for Ameridian indicates the firm disappeared in 2002. A search for Interactive Innovations brings up a Colorado-based search engine optimization and social media marketing firm founded in 2007.
 

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