This is the first of six blog posts by guest writer Russell Dauterman. They will discuss how the Internet is downsizing the economy and how this will make it much more difficult to overcome the current recession. These posts will also show how the Internet is making a major contribution towards improving our environment. “When the recession ends,” he says, “it will not lead to the recovery of our way of life before the recession; rather the Internet and other advances in technology will create a new civilization”.

The other five posts will cover Retailing Physical Goods, Retailing Digital Goods, Transportation (Email and Bill Paying), Teleportation for Business, and Teleportation for Personal Use.

Advertising

The Internet has created a new advertising venue that offers lower ad prices and delivers better results. This gives the Internet a superior competitive edge over other companies. As a result few of these other companies will survive.

The companies most affected by Internet advertising are newspapers, magazines and TV stations.

Newspapers and magazines can eliminate their high costs of paper, ink, printing and distribution by becoming online only companies, but just as they have not been able to retain their print advertising, most of them will not be able to acquire enough online advertising to survive. Advertisers have already developed their own successful online advertising programs.

Many companies currently advertise products on their own sites. They also use the resources of other online companies such as Google, Yahoo, MSN and online retailers. They can list jobs on their own sites and use online job listing companies like monster.com. They can work with online retailers to provide the product information consumers need to make purchases. As a result, they no longer need to rely on the old media.

Consumers can advertise items and services on eBay, Craigslist and many other sites at lower costs and get much higher readership than they can in magazines and newspapers.

The Internet is gaining ground as a news source. It has recently surpassed newspapers as a source of news. Nicholas Carlson, writer for Silicon Alley Insider reports, “40% of 1,489 respondents in the December [2008] survey identified the Internet as their leading new sources. 35% said newspapers and 70% said TV.”

As the Internet gains news readership, TV stations are in danger of losing their advertising revenue they can no longer get by using interruption ads that break the continuity of their programs. If consumers want to see a movie or documentary that doesn’t contain advertising, they can download it or watch it on cable. TV advertisers have lost their monopoly.

Even though the Internet utilizes computer monitors that are like TVs, the Internet is not a form of TV. The advertising techniques that used to work on TV and the print media will no longer work because the Internet provides a viable alternative.

As David Meerman Scott points out in The New Rules of Marketing and PR, “The Web is different. Instead of one-way interruption, Web marketing is about delivering useful content at just the precise moment that a buyer needs it.” Scott continues, “Forced to compete with the new marketing on the Web that is centered on interaction, information, education, and choice, advertisers can no longer break through with dumbed-down broadcasts about their wonderful products”.

The animated, blinking ads that prevent Web viewers from seeing what they want to see will no longer succeed as viewers switch to sites that don’t interrupt them and hurt their eyes.

It’s worth noting that Google has been the most successful at delivering product information. It doesn’t have to use blinking lights and animated ads to force viewer’s attention because they come to Google to find what they are looking for. Companies that insist on the old, obsolete forms of advertising such as Microsoft’s msn.com are struggling.

The Internet’s new advertising capabilities will force the newspapers, magazines and TV stations to downsize or close.

Within the next three years, most newspapers and magazines are likely to close as they continue to lose ad revenue. Those that survive will do so as downsized companies that are online only. The primary news providers have the best chance of continuing if they can obtain enough ad revenue.

TV stations will either have to downsize or change their formats if they hope to compete.

As newspapers, magazines and TV stations downsize or close, hundreds of thousands of workers will lose their jobs. This will reduce spending and make it more difficult for the economy to recover from the current recession.

Fortunately, the environment will benefit from this because it means millions of trees won’t have to be cut down to make paper, and millions of gallons of gas won’t have to be consumed to transport trees, paper and print media.

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About the Author:
Russell Dauterman has taught philosophy, humanities and logic. He has extensive experience selling books and computers. He currently writes blog posts and designs databases.