The puppet was the star of a Super Bowl ad and appeared in the 1999 Macy’s Thanksgiving Day Parade. It was synonymous with the collective insanity that precipitated the bursting of the dotcom bubble in 2000, leaving many agencies to rue the day they convinced themselves that the dotcom fool’s gold was real and lasting.
What happened to Pets.com was a lesson in how even the most powerful and clever advertising cannot sustain a big idea never properly thought through.
Having raised $82.5 million in an initial public offering in February 2000, the pet food and supplies company was never able to give pet owners a compelling reason to buy online. Orders took too long to arrive and Pets.com had to undercharge shipping costs to attract customers.
Having lost $147 million in the first nine months of 2000, the company folded.
Pets.com was just one of the many companies seduced by the prevailing mantra of the time: get large or get lost.
The theory was that an internet company should rapidly expand its customer base, even if short-term losses were huge. This meant running public-awareness ad campaigns that embraced TV and print, as well as targeting major sporting events.
The insanity reached its zenith in January 2000 when 17 dotcom companies, awash with venture capitalists’ money, paid more than $2 million each for 30-second spots during the Super Bowl.
The Nasdaq index of leading tech shares spiked three months later and declined sharply after. The dotcom bubble had burst.
Things you need to know
- The impact of the bursting bubble on dotcom companies was evident during the 2001 Super Bowl, when just three of them bought spots.
- Big ad campaigns encouraged many institutional investors to put money into dotcoms. But, having entered near the top of the market, they suffered severe losses.
- The dotcom boom had an upside, having spawned such technological developments as unmetered internet access and social networking.