Question: what percentage of global ad spend goes to internet ads?
Answer: about 10%.
That obviously means that 90% of global ad spend is still going elsewhere despite the incredible amount of money that has been shifted (and will continue to be shifted) to the internet. Now hold that thought for a moment.
Yesterday, I read an interesting interview with Jim Rogers, a well-known investor. When asked what fund managers who were battered by the recent collapse of the major financial markets should do, he provided an interesting response:
Become a farmer. The world has tens of thousands of hotshot fund managers right now. If I am correct, the financial community is not going to be a great place to be in for the next 30 years. We have many periods in history when financial people were in charge, we had many periods when people who produced real goods were in charge — miners, farmers, etc.
The world, in my view, is changing and is shifting away from the financial types to producers of real goods, and this is going to last for several decades as it always has. This may sound strange but it always happens this way. Ten years from now, it may be farmers who will drive the Lamborghinis and the stock brokers will drive tractors or taxis at best.
These words provide a memorable reminder that there’s a whole world out there that, for most of us, typically goes unseen. Most of us don’t really think about where our food comes from and we also don’t really think about how our iPhones and netbooks get manufactured. Yet each process encompasses massive industries that not only involve large amounts of money, but that are extremely innovative and full of opportunity. From the raw materials to the assembly lines to the supply chains, there’s a lot that goes into producing almost everything we enjoy.
So what’s the point of this?
It’s easy to get locked into a particular mindset that focuses our attention too narrowly. Let’s apply this to the fact that the internet only accounts for 10% of global ad spend. Lately, I’ve been asking myself a simple question: with all the talk about how offline and brick-and-mortar businesses (eg. newspapers) need to adapt to the internet, is there any reason that internet-based businesses shouldn’t look to adapt to the offline world as well? Why does it have to be a one-way street? Is the world we live in not more accurately described as a multi-channel world?
If you run an online business that’s growing like a weed, has great margins and a great reputation with clients/customers, should you sit back and relax because everything is gravy? Or should you consider that you may be ignoring an opportunity to leverage your position online to do even more offline. To make sure you’re not leaving 90% of your potential on the table.
I’m not suggesting you go out and purchase a farm. That’s probably a really bad idea (at least wait until I buy mine) but I think it’s worth considering that while the internet can often be the
foundation of a business, it doesn’t have to be the end all and be all
of a business.
You can look at the woes of the newspapers and say ‘Gosh. Those dummies just didn’t see it coming.‘ But there are plenty of online businesses guilty of the same myopia. Don’t be one of them.
Photo credit: Jim Epler via Flickr.