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The Standard Return on Investment

by Glen Emerson Morris
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Now that the advertising industry has begun to understand how to calculate a return on investment for Internet marketing, it can begin the even more difficult task of learning how to maximize that investment. This is likely to be a lot trickier, since many of the answers aren't obvious, and it involves careful consideration of long term costs largely beyond the control of the company.

Minimizing the development costs of a Website is the natural first choice strategy, and one with lots of options. A company can cut corners in the development of a Website several ways, particularly if it's a very complex site. Over the past few years, a number of software products have been developed to automate much of the scripting, or programming, of additional Websites features like databases, online ordering, and interactive advertising. Some of these products are very beneficial, with an immediate short term payoff, no compromise in quality, and no long term consequences. Other products also offer much up front, but can turn into a major cash drain on a long term basis. It pays to know the difference.

In its drive to dominate the Internet, Microsoft has begun offering products, like Active-X, which greatly simplify the development of complex Websites. The products are very seductive, especially for companies on tight budgets, but as business deals they're very similar to maneuvers used by credit card companies like First USA, who offer customers large credit lines at rates under 10%, give them a couple of years to max out the card, and then raise the rate to 30% per year or better. After a seemingly good beginning, the deal turns into a long term nightmare.

The catch with the Microsoft gambit is that you have to use Microsoft Web servers to use Active-X products. The server products are nowhere near as price friendly as Active-X products, and the long term support costs of a Windows NT network can easily exceed the combined cost of the hardware and software. Unfortunately, support costs go on year after year, and unlike software and hardware, always goes up in price.

There's also another long term issue with supporting Mcrosoft's Active-X technology, in that it basically undermines the universal Internet standard, HTML. By modifying the standard HTML language, under the guise of adding extra features, Microsoft is in effect trying to make a universal standard a Microsoft propriatary product, and this isn't the first time Microsoft has tried to do this.

Microsoft recently lost a court case brought by Sun over Microsoft's version of JAVA, which it licensed from Sun. JAVA was developed by Sun as a universal platform programming language so that developers wouldn't have to rewrite code for their programs to run on different types of computers. When Microsoft licensed the right to develop JAVA related products from SUN, Microsoft agreed that its JAVA products would be 100% compatible with Sun's univeral JAVA standard. Sun charged that Microsoft's JAVA products were deliberately made to be incompatible with Sun's JAVA standard, and that essentially Microsoft was trying to hijack JAVA as a propritary product. The Federal court ruled in Sun's favor.

There is an even greater reason why the advertising industries may find investing in Microsoft technology counter-productive; there is a fundamental conflict of interest between Microsoft and the media and advertising industries. Gates increases the value of his products by making them incompatible with his competition's. This may be a valid approach from Microsoft's point of view, given their overall strategy, but ultimately it limits the market share Microsoft products can offer advertisers. This is a lesson Paramount recently learned; it pulled the Star Trek site from Microsoft's Website service in all probability because too many Star Trek fans refused to use Microsoft's Internet Explorer, and Microsoft wouldn't let them into the site if they didn't use it.

Advertisers need a mass market, and using a propriatary system is no way to get one. Microsoft will only be able to offer advertisers a mass market when it has completely monopolizied the Internet, and the prices Microsoft would charge then would be easy to imagine, but very difficult to afford. By supporting a Microsoft exclusive standard now, advertisers would sacrificing short term market share for the dubious privilige of funding Microsoft's long term attempt to monopolize the Internet. There are better deals available.

Interestingly enough, Internet marketers now have a viable alternative to the overpriced UNIX and Windows NT operating systems for their Web servers in the unlikely development of Linux. It's basically a reverse engineered version of the UNIX operating system done by an undergraduate student in Europe, Linus Torvalds, who evidently had a lot of spare time on his his hands, and even more talent. Linux replaces a $1000+ UNIX or Windows NT operating system, fits on a single floppy disk, and unlike UNIX or Windows NT, is absolutely free. Though popular for its price, Linux is becoming widely used for Web servers because of its crash free stability, and because its open standard means users and developers can find out everything they need to know about it, to run it, or program for it.

Given the choice between investing in Internet technology based on open and universal standards, like HTML or Linux, or closed propriatary standards like Active-X and Windows NT servers, advertisers would be far better off investing in open and universal standards, even if they may not be be the cheapest way to go initially. Long term, there's no cheaper way to go. It will pay the advertising industry to resist the temptations coming from Microsoft. Their products, like Eve's apple, come with substantial strings attached.

Copyright 1994 - 2010 by Glen Emerson Morris All Rights Reserved

' keywords: Internet advertising, Internet marketing, business, advertising, Internet, marketing. For more advertising and marketing help, news, resources and information visit our Home Page.

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