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Wednesday, 18 July, 2001, 11:02 GMT 12:02 UK
Anatomy of a backlash 3
Hype's love affair with the internet, and the backlash which followed it, has been a remarkable period of recent history.
Yet all the time, internet usage figures have climbed regardless. Each day this week BBC News Online's Giles Wilson picks a key moment in the shifting sands of opinion.
No. 3: Branding is all
There are doubts about how dot.coms will ever make any money, but they all seem convinced that the most important thing is to get their brand known. Hence the world is full of dot.com adverts.
A gaunt young couple, in a gloomy grey world, move things around just by the power of their breathing.
Peas on a plate roll back and forth. Bowling balls in their lanes do the same. Even the sea obeys them - waves move in time to their breathing.
It looks like a very strange trip, something like Bladerunner meets Bewitched with a touch of heroin chic. At the end it says Breathe.com. But there are no clues for the viewer about what Breathe.com is or does.
If anybody didn't notice them, it was probably because every other dot.com was spending as much as it could, also trying to get noticed.
Figures compiled by ACNeilson MMS put the amount of money spent by dot.coms advertising themselves in 2000 at £292m.
Advertising industry magazine Campaign said Breathe's was the ninth most expensive ad ever made.
And it succeeded in attracting a reported 250,000 customers, a fifth of whom were drawn by its offer of unlimited internet access for a one-off £50 fee. Some estimates valued the company at £200m.
That was in April 2000. In July the company pulled the plug on 500 of its most loyal customers.
They were the people who had taken the offer at its word and had used the service non-stop. In December, the administrators were called in and the company was sold off for just £1.4m.
So had the advert simply been a prime example of dot.com hubris and arrogance?
"I think they realised that to be a big player, you've got to get big quickly. Research had shown that people had shopping lists of about six websites which were the only ones they visited. Breathe wanted to get on that list."
So what was needed, he says, was a big branding exercise - hence the advert which cost £600,000 to film.
"In some ways it was money well spent," he says. "In a business sense it wasn't a success, but as a launch it was hugely successful."
The plan would have worked, he says, if it hadn't been for the "city catching a cold". There would have been three more phases in the campaign which would have explained exactly what Breathe did.
It was not the only company to be humiliated. Internet giant AltaVista made a spectacular about-turn when it had promised its customers a similar deal on unlimited access. One day it claimed 100,000 customers, the next it admitted that, in fact, it had none.
And despite the best efforts of the hype industry, the great British public refused to be enthused about the launch of Wap services.
There seemed to be a growing sense that people realised the sums had to add up and that the net wasn't going to be everything that had been claimed for it.
Even, he adds, by serious companies who should have known what they were doing. "It was quite astonishing, and I can't get over it still."
It was hardly suprising that "half-arsed outfits run by kids who knew nothing about anything couldn't cope, when even really serious operators couldn't".
He still wonders why people were so affected by the hype. "Everybody needs to explain why so many people were hoodwinked by it. And the biggest failures were us journalists. Of all people who should have understood about this, we should have done. But we fuelled the lunacy. "
One journalist who managed to remain sceptical, he says, was Tom Mangold of Panorama, who made a programme broadcast on 3 April 2000. It contained this exchange between Mangold and two people setting up a dot.com which would print and deliver personalised greetings cards.
MANGOLD: With great respect, this sounds like the most unoriginal idea I've ever heard.
MALE: Not the way we're going to do it though.
MANGOLD: Do you think you're going to become internet millionaires?
FEMALE: We actually print out the message on a plain piece of paper that we insert into the card and we deliver it out for them.
MANGOLD: When do you think you're going to make you're first million?
FEMALE: In probably three years.
MALE: If we make a million dollars we will have failed. We're looking probably about a hundred or a hundred and fifty.
As the market was turning against dot.coms, the number of UK homes which had internet access showed no sign of slowdown.
In July 2000 it was 7.8 million - more than three times the figure of two years earlier.
Hilarious and depressing at the same time. The sheer arrogance of the people involved is the most striking aspect of this series of reports. John Naughton has hit the nail on the head when he says that journalists should have criticised and been more objective. I'd love to know what happened to that greetings card company - does anyone know?
And the branding is still going on. Even now, companies which should focus on their product are spending stupud amounts of money on marketing and cutting people out of the production process which actually improves the product. When will they learn?
Tomorrow: When it came down to it, companies' websites often were a bit of a luxury, and the first thing to go when belts were tightened.
12 Mar 00 | Business
Breathe freely with new deal
30 Aug 00 | Business
Altavista UK boss resigns
06 Mar 00 | Business
Altavista heralds net revolution
18 May 00 | Business
From Boo.com to Boo.gone
03 Apr 00 | Archive
Dot Com Fever April 3 2000
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