Kevin O’Connor, DoubleClick’s co-founder and chief executive officer, is betting his future on the Internet although he believes most predictions on the medium’s are wrong.
Speaking Tuesday at Summer Internet World ’99, O’Connor said despite all the talk of convergence, companies betting on it will lose.
“The Internet will become like the electrical system we have today. There has never been an example where two devices converge. The Internet is an active medium where TVs are a passive medium,” he said.
O’Connor believes the Internet will become a necessity over the next five years. Advertising dollars will begin to flow to the Internet from conventional media which makes it important for businesses to understand how to market on the Internet. The best news, he said, is the pot of gold is growing since the Web is growing faster than all other media combined.
He also predicted e-commerce will continue to grow rapidly. In the future, the question will become what won’t be bought online.
The most popular items will be purchases that require a lot of thought, such as travel or autos; items where there’s a large variety of choices, such jobs, homes and CDs; and goods ideally suited for electronic delivery, such as stocks, insurance and credit cards.
The challenge for e-commerce companies, O’Connor said, is learning to follow the consumer. Companies that do that will find the money.
“The challenge is getting the right message to the right consumer at the right time. That’s what we’re focused on. Ad dollars are still concentrated although the money is beginning to spread out,” he said.
Companies wanting to succeed online need not guess about what the consumer wants, O’Connor said, because consumers have continually proven they are willing to give demographic data and buying preferences if they receive something of value in return.
“In advertising, the challenge is to get rid of random ads and make them relevant to consumers. Recommendation engines will increasingly be a major part,” he said.
He also believes that the number of Internet sites that depend on advertising for revenue will increase.
O’Connor cautioned current Internet leaders to be ever mindful of sleeping giants that have dominated their industry for some time but have not yet embraced the Internet. Rather than being afraid of the Internet, he said companies would be better served by learning how the Internet allows them to pass on lower operating costs to the consumer.
“People get fooled because all trends start small. Big companies hate small markets and they don’t connect the dots to see where things are going. Companies are also afraid of cannibalizing their audience or distribution system,” he said.