Internet and Traditional Media

Knowledge@Wharton writes:

According to Wharton marketing professor Peter Fader, online companies’ invasion of traditional media buying is only the latest example of the Internet’s ability to transform industry after industry. “A lot of people viewed advertising as a sacred area where only advertising people have expertise. I say ‘Phooey.’ There’s no reason any smart, resourceful firm should not be able to get in on the game — particularly those with a proven track record in a related area,” he says, adding that Google and the other Internet firms are looking at traditional media sales as an inefficient market where they can quickly harvest “big, tasty, low-hanging fruit.”

The Internet firms’ simultaneous rush into traditional media is another boon for advertisers because the companies will be competing against one another, preventing any one from gaining monopoly pricing power. In the end, says Fader, the broader economy, not just advertisers, will benefit, although the companies that currently broker advertising may be squeezed. “The biggest problem Google is going to face is both inertia from the entrenched players and natural fear and skepticism on the part of [advertisers]. But from the standpoint of technology and pleasing the customer, there is no reason Google can’t revolutionize this industry.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.