Commentary
The Bermuda Triangle Of Advertising
- by Gord Hotchkiss , Featured Contributor, September 13, 2016
I’ve been fortunate enough to have some of the brightest minds and sharpest commentators in the industry contributing their thoughts on the topic. In the middle of all these comments lies a massive gap. This gap can be triangulated by looking at three comments in particular:
Esther Dyson: “Ultimately, what the advertisers want is sales... attention, engagement...all these are merely indicators for attribution and waypoints on the path to sales.”
Doc Searls: “Please do what you do best (and wins the most awards): make ads that clearly sponsor the content they accompany (we can actually appreciate that), and are sufficiently creative to induce positive regard in our hearts and minds. “
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Ken Fadner: “I don't want to live in a world like this one” (speaking of the hyper-targeted advertising scenario I described in my last column).
These three comments are all absolutely right (with the possible exception of Searls, which I’ll come back to in a minute) and they draw a path around the gaping hole that is the future of advertising.
So let’s strip this back to the basics to try to find solid ground from which to move forward again.
Advertising depends on a triangular value exchange: We want entertainment and information, which is delivered via various media. These media need funding -- which comes from advertising. Advertising wants exposure to the media audience. So, if we boil that down: We put up with advertising in return for access to entertainment and information. This is the balance that is deemed “OK” by Doc Searls and other commenters.
The problem is that this is no longer the world we live in -- if we ever did. The value exchange requires all three sides to agree that the value is sufficient for us to keep participating. The relatively benign and balanced model of advertising laid out by Searls just doesn’t exist anymore.
The problem is the value exchange triangle is breaking down on two sides -- for advertisers and the audience.
As I explained in an earlier Online Spin, value exchanges depend on scarcity -- and for the audience, there is no longer a scarcity of information and entertainment. Also, there are now new models for information and entertainment delivery that disrupt our assessment of this value exchange.
The cognitive context that made us accepting of commercials has been broken. Where once we sat passively and consumed advertising, we now have subscription contexts that are entirely commercial-free. That makes the appearance of advertising all the more frustrating. Our brain has been trained to no longer be accepting of ads.
The other issue is that ads only appeared in contexts where we were passively engaged. Now, ads appear when we’re actively engaged. That’s an entirely different mental model, with different expectations of acceptability.
This traditional value exchange is also breaking down for advertisers. The inefficiencies of the previous model have been exposed, and more accountable and effective models have emerged.
Dyson’s point was probably the most constant bearing point we can navigate to: Companies want sales. They also want more effective advertising. And much as we may hate the clutter and crap that litters the current digital landscape, when it works well, it does promise to deliver a higher degree of efficiency.
So, we have the previous three-sided value exchange collapsing on two of the sides, bringing the third side -- media -- down with it.
Look, we can bitch about digital all we want. I share Searls' frustration with digital in general and Fadner’s misgivings about creepy and ineffective execution of digital targeting in particular.
But this horse has already left the barn. Digital is more than just the flavor of the month. It’s the thin edge of a massive wedge of change in content distribution and consumption. For reasons far too numerous to name, we’ll never return to the benign world of clearly sponsored content and creative ads.
First of all, that benign world never worked that well. Secondly, two sides of the value-exchange triangle have gotten a taste of something better: virtually unlimited content delivered without advertising strings attached, and a much more effective way to deliver advertising.
Is digital working very well now? Absolutely not. Fadner and Searls are right about that, It’s creepy, poorly targeted, intrusive and annoying. And it’s all these things for the very same reason that Esther Dyson identified: Companies want sales, and they’ll try anything that promises to deliver it.
But we’re at the very beginning of a huge disruptive wave. Stuff isn’t supposed to work very well at this point. That comes with maturity and an inevitable rebalancing. Searls may rail against digital, just like people railed against television, the telephone and horseless carriages. But it’s just too early to tell what a more mature model will look like. Corporate greed will dictate the trying of everything. We will fight back by blocking the hijacking of our attention. A sustainable balance will emerge somewhere in between. But we can’t see it yet from our vantage point.
Triangles. Everywhere I look, I see triangles! :-)
Terrfic post, Gord.
Very well put Gord, what would be interesting is adding generational context to this value exchange triangle. Some of this reads like an older generation's vew on a shifting consumer/business phenomena vs. a dimensional view from quite distinct growing masses of people (generations) that look at so different digitally. the next step in maturity is obviously influenced by "the economics of a ad ecosystem that is fed and drained on many levels" with Agencies obviously taking the hit on the first wave, but its also the shifting expectations of new generations that are rising in value for brands to subsidize "entertainment" to build brand loyalty. What that economic model looks like 5 years from now will be fascinating...so will the creative barrier consumers will expect in advertising experiences from quality brands.
Gord, once again, I must take partial issue with your thesis. To begin with, magazines and newspapers always relied on subscription as well as ad incomes and the cable channels exist today only because half of their incomes come from viewers via their subscriptions to cable systems or satellite delivery systems. Even the broadcast TV networks have turned things around so only half of their revenues are ad dollar based---the rest comes from retransmission fees, product placement deals ,syndication profit sharing pacts with program producers, SVOD, etc.
A second point concerns the audience's unspoken "deal" with the media. TV viewers, radio listeners and print hard copy readers know and have accepted the idea that ad dollars support these media and, in the case of TV and radio, that there will be breaks---not interruptions-----in the flow of content to allow for commercials. It is only when the breaks come too often or have much too many commercials that there is a problem and the audience becomes annoyed, ad impact suffers , etc. Moreover the interruptions in TV and radio always occur at the end of a scene or content sequence, unlike digital where they come at the audience all the time in a highly disruptive manner.
You say that the old system never really worked that well. Perhaps, but it worked. You also say that the typical consumer, thanks to digital, is now getting virtually unlimited content without the strings of advertising. Really? Then why does the average adult devote so much of his/her daily media time to ad-supported media? A conservative estimate is that ad-supported content accounts for about 9 hours a day of viewing, reading or listening while ad-free TV ( Netflix, etc. ) comes in at perhaps 50 minutes. Toss in PBS and public radio and this rises to about an hour or so. Is this the great sea change or "crisis point" you are referring to? Sorry but I don't buy it----not yet anyway.
No doubt our resident digital evangelist will soon chime in about "legacy media" being doomed to extinction, how advertisers will refuse to pay more for less in dealing with the TV networks, how everyone who counts---not worthless oldsters, of course---- is abandoning TV for Netflix to avoid ads, how all advertisers are demanding transparency, etc. etc. So we are probably in for another marathon thread. Which is fine with me.
Gord,
Really appreciate your insights and the effort you invest to communicate them so well.
I read your column as "advertising as we know it today -a pebble in our media consumption shoe - will be different in the future.
Esther Dyson raised a vital point - advertising is a means to an end - more profit, revenue, sales. 30-second spots are no more fundamental to that objective than horses are to urban transit in this century. Early automobiles were applauded for reducing and then eliminating the mess and stink of horse manure in the city. Maybe future means of promoting product awareness and differentiation will also be less noisome.
You elide a key question - must sellers hijack our attention to achieve their goals? Why not integrate into or become an element of our media consumption?
I now visit several tech vendor sites primarily to catch their in-house interviews. They are structured to resemble a coffee break conversation. I can quickly understand some new technology, how it works and the problems it solves. Some of my employer's training is presented as a mini soap opera, where "employees" wrestle with a tough issue in a realistic setting.
Ed Papazian, above, points out another alternative - product placement. In the late '60s Citroen made a short documentary showing a Scandinavian couple driving their DS from snowy late Winter at home to sunny Spring in Italy.
I agree with you that vendors are also learning to use social media to address consumers directly.
Never a dull moment as these things shake out.
Interesting stuff! I agree with Ed. However I would like to point out that there is a shared level of responsibility between the advertiser, the medium and the advertising community. I don't like to label it all as "corporate greed".
Shareholders of the companies that spend the billions of dollars on Advertising every year will ultimately demand that the Board of Directors provide a cash return on their investment. Then these debates over digital vs branding, old school vs new school etc. will all disappear along with those that fail to meet the demands of the "real" marketplace.
All that is required is for more balance to come back into the triumvirate. Media owners got too greedy and pushed too many ads into each break. Advertisers don't listen to their creatives and approve woeful copy and production. Audiences rebel and seek out ways to remove themselves from the mess.
If media owners limited ads, advertisers let their creatives come up with genuine stories about their brands, audiences will engage and legacy media will always have a place.
The biggest problem across the whole industry is how to make it more efficient, so it can run leaner, with less ads, that potentially cost more, and so advertisers can have the time to come up with great stories.