Has America Online (AOL) ceased to be an Internet company*? Is AT&T still a telephone company? In the accelerated pace of Internet Time, companies change their 'core business' too fast for the naked eye to see. There are a few industries remaining that have not been impacted by Ecommerce.

In fact, whether they do online business or not, the need to have a Web presence is radically altering the performance of institutions as diverse as restaurants, schools and newspapers. As for hardware companies, while a company like Dell computers, doing approximately $14m a day in E-commerce, may seem like the norm, others are still experimenting with the concept.

Take the case of a company like Tupperware, once a case study of why marketing does not always need the media --and advertising. Tupperware was the classic example of ‘on-to-one communication’ before it became a mantra. It's marketing model was nothing but agents getting housewives to host Tupperware Parties in their living rooms. The hosts were rewarded with products, and their only undertaking was to invite friends and eighbours (no purchase necessary!). At a time when mass marketing was king of the hill and the mass media was its scepter, Tupperware scored high in terms of efficiency (no wasted ad dollars) and immediacy (sales closely followed the pitch). Moreover customer loyalty was high because a Tupperware user, once converted, sought out similar products ranging from children's' toys to household items that had nothing to do with the boxy, airtight containers for storing leftovers in the fridge.

If only it would last.

Fast forward to 1999. With sales slowly plummeting, Tupperware has ventured down Ecommerce Boulevard. It makes sense. In a world where information is as big a commodity as anything else (every online Encyclopedia, TV station and bookstore has already discovered this), Tupperware has used the site to provide just that. Because you can't host a 'party' without a party consultant or a distributor, the Web is a perfect accomplice. Seamlessly integrating what must be a huge database running on its back end, this site is not the kind of electronic brochure that a lot of hardware company sites end up being.

STIRRING THE MEDIA POT
But when you're product is silicon, not plastic, bits and bytes not biscuits and beverage, it’s not only your distribution system and inventory control that will be impacted by Ecommerce. America Online, the company that has 18 million subscribers, is slowly becoming a threat to conventional media companies such as ABC, Time Warner, and a slew of other magazines and newspapers. Yet their symbiotic relationship with content providers, vendors, subscribers and even their 'competition' has transformed AOL and Yahoo! into a different breed of company altogether. Like carpetbaggers and colonialists, a pioneer’s prerogative is to uproot the fences and redefine the topography. Yahoo’s advertising contract with the online brokerage company, Web Street Securities had no resemblance to a media agreement –it was structured more like a mortgage payment. WebStreet.com had banners on many Yahoo! pages, plus a guaranteed 77 million page views (the number of times visitors would click on a banner and go to a WebStreet page) over a 7-month period. But if they were late with the $142,857 payment every month, Yahoo! would charge them a 1% late fee. (The deal went sour, but that’s another story). You think this is expensive? It’s actually small change compared to the multi-million dollar long-term contracts. Excite, a portal site, charges somewhere in the neighbourhood of $60 million for a 3-year contract. We are talking of free sites here. Their only revenue comes from advertising and strategic partnerships so you expect them to get creative on their rate card. Does that make subscription sites’ ad positions more affordable? Not in your wildest dreams. At AOL, subscription fees alone (it charges members $21.95 a month) are not what makes it such a profitable company. The ability to deliver 18 million viewers, makes its advertising spots invaluable to companies who want to target specific demographics. Unlike conventional media that cannot guarantee complete customer loyalty, or have no in-depth knowledge of its users, AOL has enviable personal data about its user base who unhesitatingly divulge this information when they sign up with the service. If a hypothetical advertiser is looking for left-handed architects who drive 3-door pick-up trucks with leopard-skin upholstery, they’ve probably got that group as well. Besides, unlike TV viewers who can flip channels, AOL subscribers don’t have that option --which translates into a captive audience. It explains the asking price. AOL has a $500 million deal with First USA bank that will last 5 years. To put things in perspective, that’s more Microsoft Corp’s entire advertising budget for print and TV combined! Because these represent huge revenue streams for an online company, it begs the question: Is AOL in the business of (a) wiring and managing a global village (b) delivering consumers to advertisers?

While you're chewing on that one, switch your mind conventional publishers. The Wall Street Journal, Reader’s Digest and Business Week who also have a paid subscribers and loyal readership, have been experimenting with online versions. But they are not ‘conventional’ media companies in the way you might imagine. Reader’s Digest which is well known for being published in 19 languages (it has a whopping 48 different editions!), makes 65% of its revenue from the sale of books, music, videos, audio books etc through direct marketing. Because of this, its Web site –one of the last big media companies to put up one— is much more than stories and humour-pieces rendered for the Web. These are ‘dynamically generated’ pages. In plain English this is the ability for the company to harvest information such as which site a visitor is arriving from, how long he spends on each page. This information is stored for use by, you guessed it, the Reader’s Digest direct marketing division! Its in-magazine product sampling, retailer-specific household targeting, and impending venture with WebMD (a health site) are all key to its survival. So what does that make your seemingly tame family magazine? A print medium or a marketing company? A company that thrives on circulation or data mining? Old media or new?

MEDIA AS INFO-MEDIARY
Then there’s the other business model (pay-per-view) that E-commerce copied from the Cable TV market. Wall Street Journal and Business Week have stepped in to an area where other print media companies fear to tread. Web surfers are given free access to their site, but not to all ‘editions’ on the online magazine. Unless you’re a Business Week print subscriber, you cannot access the Cover Story, the Daily Briefing, and archives of the two most recent issues. Likewise AdWeek, the advertising industry’s publication with 6 regional US editions, is not entirely free on the Web. Non subscribers can view certain parts of the magazine. But unless you’re a $14.95 a month online subscriber, you cannot access to databases of ‘Agency Report Cards’, the 4As-membership directory, brand reports, and magazine archives since 1992. Also available are BrandWeek, and MediaWeek, two coveted agency- and brand -specific offshoots of the magazine, plus their vast, directories. The New York Times, requires visitor registration, and no fee, but it provides advertisers with much, much more data about its 7 million online readership than print advertisers get. These ‘technographics’, provided in aggregate form to protect readers’ privacy, are remarkably specific. The advertiser is then assured that his banner or promotion will only be seen by the audience that he wants to reach. How is that possible? Simple. When a visitor logs on (using a password), the pages he of she accesses will be electronically tagged with only those messages that are compatible with his / her interests (Interests that were provided at the sign-on, remember?). As such, what seems like ‘free’ access is actually being paid for by the advertiser. It’s as if the visitor has implicitly struck a bargain with a group of advertisers, using the publisher as ‘info-mediary’,

To look at it another way, personal information is the price one pays for customization. If you doubt this is the new currency (See ‘Eyeballs for Rent’ in the September issue of LMD), consider how the idea of ‘Personal TV’ is threatening to change television. A company called TiVo is marketing a small set-top box that can download TV programming guides (via a telephone line), and then use this data to ‘record’ programmes that a TV household usually watches. The device on the face of it, seems like an upgrade from VCRs. Storing programming on silicon wafers not tapes. It initially upset many broadcasters because, being a digital recording, it could not only help viewers ‘time shift’ their viewing, but could undermine the broadcasters’ power: to force viewers to watch ads --which, after all, is what sustains the medium. But TiVo struck a happy compromise with TV stations. While viewers can zip past ads, the technology will not allow one to blank the commercials out entirely. But the biggest advantage to broadcasters –and advertisers—is in the ability to customize the advertising to the viewers as well. Instead of forcing a 45-year old engineer watching the Oscars to endure the same in-your-face Levi’s ads as his 18-year old neighbour, a TV station can sell the same airtime to different advertisers who are targeting different demographics during the same show. Break this into regions, economic and ethnic communities (via cable), and it’s a very powerful targeting tool. Because programming guides need to be accessed from the Web sites of a company such as TV guide, the concept seems to be not so much a hardware breakthrough as a new media thinking at work. In New Media thinking, consumers are not just benefactors, they are also its currency. Much like the way many Web sites like Yahoo! and Amazon.com allow you to customize your preferences, (stock quotes, weather, books and music) your smart TV could one day download and record only the programmes you trained it to look out for.

With so many ways of delivering audiences to advertisers and vice versa, many in the print media are still hesitating. They assume two things. (1) Existing subscribers would not pay an additional fee for an online versions. (2) Non-subscribers to the print versions would be least likely to use an ‘intangible’ product, so why waste resources on them? They ignore the business model that’s always sustained newsprint products: Advertising. However intrusive, advertising has been the oxygen of content providers and will soon breed a new kind of media. Not the kind of media companies we are accustomed to. What if UPS or Reuters (both in the business of delivering ‘content’ in very different forms) gave its heavy users access to advertising supported content relevant to their respective needs? Remember Reuters already packages different products to pager companies, Web portals and cellular networks. The company that once distributed financial data via pigeons, has always anticipated, rather than adapted to meet its market’s needs. It already has a prototype ‘medium’: a hand-held computer (the ‘MarketClip’) which receives wireless financial data. It’s an exciting time to be in advertising, if you’re not threatened by the new media. Turn that sentence around, and it’s equally valid.

Content and creativity, telling and selling. Like it or not, there’s no limit to how powerful symbiotic relationship can get.