We Don’t Sell Drill Bits; We Sell Holes

Although it’s been talked about before, today’s Research Brief from the Center for Media Research finally said out loud what many of us have known for quite some time, “Online Ad Budgets [are] Stolen from Traditional.”

The article quotes Forrester’s report showing US online advertising reaching $26 billion by 2010. Similar rosy reports abound from eMarketer’s projections of paid search spending up 40% in 2005, to the March ABM Online Revenue Strategies summit in New York where everyone was talking about large double-digit growth in their online businesses. Sounds like the media boom of 2000, doesn’t it? Not quite…

Let’s face it, overall ad spend in both consumer and B2B isn’t increasing much, if at all. Instead, budgets are being shifted from traditional media to more “efficient” means of advertising like web, email, and mobile. The pace and extent of this change may be different market to market, but the shift is inevitable.

The total advertising pie isn’t getting bigger so the only way to grow your business is to invent a better way to make a hole. You know the story…

A leading manufacturers of drill bits hired a new CEO. During his introduction to the company, top managers from across the company presented how well their specific drill bit divisions were doing. After hearing all the presentations, the CEO gathered the top managers together and dropped a bomb-shell. “There is no market for drill bits,” he said. “The only market is for holes and as soon as somebody invents a better way to create a hole, we’re out of business.”

Folks, there is no market for magazines, trade shows, TV / radio programs, newspapers or web sites. The only market is for information and entertainment; and for ways to connect people who want products and services with those who provide them. We don’t sell drill bits, we sell holes