After reading the report from IAB, I recalled a saying I read several years before," future market is not based on the computer but the internet".
The economic value of ad-supported internet ecosystem is absolutely huge. The statistics show that ad-supported internet offered 5.1 million jobs, both direct and indirect, and generated $530 billion revenue for America in 2011 alone. That is arresting and developed me two considerations towards the ad-supported internet issue.
My first consideration is how can we get a share of these profits? As we discussed a lot on the topics of how to market online before, I don't want to address this question in the position of a marketer but a student entrepreneur.
Here I want to share my own experience. I attended a networking event titled "1st annual inter-collegiate mixer for entrepreneurship" held by ePowerhouse, a MIT start up providing the online platform for innovative entrepreneurs, on 20, September in Cambridge. Ten student start ups from MIT, BU, Babson, WPI and so on attended this event to be appraised and elected as the most innovative start up. When I go through these student start ups, I noticed that nine of the ten start ups are internet-based social platform or app development. In accordance to the statistics in the report, which indicates Massachusetts ranked fourth as internet firms having highest employment number and consumer service layer accounts the highest employment in ad-supported internet industry, Internet-based firm is really attractive even to the student entrepreneurs in this digital-friendly state. Then how can we business people take a ride with this trend?
Firstly, business idea must be different and on-demand. The value proposition is fatal, thus making a differentiation is necessary. People are no more surprised at novel service offered since the internet makes nothing is impossible. But platforms provides pinpoint on-demand service still make sense. Researching on the customer behavior related to the internet is helpful. In addition, internet is also awesome to serve the niche markets.
Secondly, co-founder is fatal. In the point of most business people, we lack the technology ability. In this circumstance, it is important to seek technological co-founders. As the scenarios I mentioned above, co-founders who are expert in web writing and app developing are best candidates to enter the ad-support internet industry. Otherwise, a ideal business plan without physical technology support to turn it true is meaningless.
Thirdly, marketing matters. Developing a internet-based platform doesn't cost much, either writing a website or developing an app. I view it as a significant factor leading to the prosperity of internet firms. But how to make your platform famous among the strong competition and access to your target customers? If you searched on the Google, you will find the internet is flooded by tons of internet-based business platforms. But I am sure that you never heard most of them before. Are they bad business ideas? I give a doubt. I think most of them didn't do a good job on marketing. E-marketing is important but internet-based companies can not only rely on the internet to promote themselves but combined the activities off-line which are able to reach massive target customers. Especially in the start up step.
My another consideration is that is this arresting phenomenon is a temporary bubble and how is the market prospect?
In accordance to the statistics in the report, ad-supported internet accounts for 3.7 percent of US GDP, which increased from 2.1 percent in 2007. The total employment increase in ad-supported internet industry is 197% from 2007. But I view this industry dependent heavily on the middle-high end market and young generation-oriented market since most service the internet platform offered are not people's basic need but higher needs in the need pyramid. And young generation adopted the internet hobby most. Most internet-based platforms' target customers are young people. I am wondering will the ad-supported internet industry will among the heaviest attacked domains if the economic crisis happened again?
Article: "Economic value of ad-supported internet ecosystem" by IAB
Link: http://www.iab.net/insights_research/industry_data_and_landscape/economicvalue
Wantang, the angle you choose from a student entrepreneur is really creative. I like the three points that you point out, especially the first and the third one. In terms to the co-founder, I understand your concern about the business people involved into the technology field. However, I want to argue that in reality, most of the business students actually have the background of technology, and even if they don't once they set up the business, they can hire people to do the technology work, not necessary to share the part of the company. In addition, I want to add one more point - how to raise the initial funds is critical. It is essential to find a angel investor for your start-up company. Fianlly, I think your consideration about the intern bubble is reasonable, as we can see from the historical doc-com bubble.
ReplyDeleteYou are absolutely right that business people can hire technology people to work for them. In opposite, technology people also can hire business people to take care of their business! Here more precise description of my thought is that during the start up phase, a technological co-founder can address the practicality and feasibility of the business idea before you enter the real market. In another word, before the cost generates.
DeleteThanks for your query as well~
Wantang, I agree the three points you made for people to follow the trend. Internet did change our lives a lot for sure. And we have to adjust our behavior to make sure we can survive in such a competitive environment. You considerations for internet industry is reasonable since most of recent users are young people. However, to see it broadly, internet is not only for B2C but also widely used in B2B industry. Say laggers don't use internet to read news, but how about newspaper companies? Journalists definitely use internet to hand in drafts and the system newspaper companies use in office must be based on internet. So if we see this way, we can see how large the potential market internet has.
ReplyDeleteRight, that's a good point I didn't consider before. The internet-based things are too massive to consider comprehensively ;-)
DeleteThanks.
Iris,
ReplyDeleteWhat a GREAT job!!! I believe that the entrepreneurship class we are taking has great influence on us. We start thinking of problems from an entrepreneur prospect.
I like your three points on how to take advantage of the Internet trend for us. They are very original and innovative. I totally agree with your last point that “Marketing matters”. The importance of e-marketing hasn’t been realized yet. One reason is that we marketers haven’t figure out a beneficial and mature model to influence our customers. Everything is online now and Internet keeps data. Marketers with the huge amount of data can make difference. The key is how to apply the data to strategy.