The last few weeks of the stock market have not been pretty for many of the newest web based 'high flyers'. For sure there will be some bounce back to some realistic level. The carnage in the tech marketplace, especially with B2C Internet stocks has been blamed on various reasons. Mostly greed would be my own best bet.

If you blow the smoke away and analyze the entire 'boom and bust' rhythm of the market place something emerges that gives me and probably all sensible direct marketers hope. If these organizations, along with their VC's (venture capitalists) and investment bankers understood direct marketing many of the pitfalls that they fell into would have been avoided. Make no mistake; the central concepts of many of these firms are well founded. They've gotten caught up in rhetoric and spending that no one in the direct field would have gone for.

Quarterly when expectations have not been met or losses were created at a dizzying pace one central theme was heard,"we were acquiring customers". This magic phrase allowed for spending in the most outrageous fashions. Marketing alliances were created that could only be compensated for if the most lofty expectations happened. DrKoop and AOL is one that has been reported and DrKoop's accounting firm acknowledges the seriousness of its problems.

Obviously, no one told the folks at these dotcoms that "acquiring customers" needs a formula and back end system to create lifetime value or some value that results in a positive ROI.  Basics such as Recency, Frequency and Monetary value of the acquired customers has been thrown out the window. It wasn't only the business plan that was missing; it was the basic knowledge.

It hasn't only been happening with the wild spending on TV commercials. Remember the Superbowl? Bet you can't remember more than two of the dotcom names that advertised.

The spending on web based advertising has been just as frivolous. Many tracking organizations have already confirmed that banner advertising, unless directly targeted to an exact group may be an ineffective method of advertising.

The banner may be the cousin of the compiled list in direct mail. You would use a compiled direct list to reach a specific group of companies for instance. Someone selling a plumbing part would want to reach plumbing companies. That's a targeted use of a compiled list. A banner might be used and placed on a site of a plumbing trade magazine to attract the same audience. That would be a good use of a banner and most likely (assuming the offer made sense) a successful one.

In contrast, the scatter approach across multiple sites of a banner may indeed be a waste of money and is consistently proving to be the case. Even with all of the technology, including cookies (I described them several articles ago) there is one ingredient that all of the gurus have forgotten. Buyers, there is no demographic or psychographic in the world as good as a person or company that has bought, through the same medium, previously. Let me correct the previous sentence, a company doesn't buy, people who work their purchase.

Unfortunately, the same technology driven dotcoms are repeating the mistake of ignoring the basics in the email arena as well. The entire focus has been on whether or not a person has opted-in or out of a request. The request is just the permission to use their name in a promotion. Millions of dollars are flowing through the marketplace based on a phrase that results in little more than a respondent list. I'm not knocking the concept of opt-in, I support it. The problem is that it is simply not enough.

The so-called targeting by site is not enough. As evidence go to any copy of SRDS or online to MIN or any other database of postal lists. Any seminar or conference, book or guru will tell you - Direct Mail Sold is what pulls best in direct mail. In email it is the same. On the web it is the same. Asking a former buyer in the same medium to buy will be easier than getting a non-buyer to buy, opt-in or not.

Many of the advertising pages in this publication and its sister publication (as well as the competition) are displaying huge databases of email names, closely examine how many are buyers. There are none that are shown. Ask the question, "How many of the multi-million names are buyers of any product or service?"

Some of the most well known and successful opt-in groups are only selling what in the postal world would be considered respondent rather than response/buyer type lists. There is a role for respondent data but not the central portion of any campaign. The web is new by many standards but before money is spent, the same rules of direct marketing should be applied. Otherwise, we'll blow the budgets just as they were blown during the first phase of the web, pre-correction.

The Internet has always been a direct marketing channel. For too long we've let the techies and newbies control what takes place in the marketing sector of the net. Before some of the 'gurus' declare direct marketing as infeasible on the net we should apply principles that will assure the success it deserves.