The End Of Advertising

February 29th, 2012

Dave Winer writes about the intermingling of of tech and advertising (via Brent Simmons):

The tech industry has been absorbed by the ad industry, and vice versa.

However, there is, imho, still room for a tech industry that is not merged with the ad industry.

I’ll take this a step further: advertising is on the way out. Technology loathes a middle-man, and advertising as an industry is the king of all middle-men. The purpose of advertising is to connect customers with companies, so as to facilitate a transfer of money in exchange for goods or services. As time goes by, customers and companies will be more and more capable of achieving this on their own.

In the history of the world so far, there has been considerable opportunity for advertisers to misguide customers, and to lure their money toward products or services that can be framed as perfect for them, even when they are not. That’s the art and the holy grail of advertising. But going forward, technology will offer customers and companies the tools to connect effortlessly, optimizing for compatibility without the help of the bogus, outdated advertising system.

Most of us base purchasing decisions on vague hunches derived from a mix of advertising influences, word-of-mouth, and the relative trendiness of a product. But more and more as customers we are cutting out the advertising middle-man, in favor of systems based on education and trust. Amazon is a good example of this. With the notable exception of their Kindle line of products, they have little concern about which products their customers buy. It only matters that they buy things, and that they buy things often. They provide detailed product information, and allow honest, often scathing reviews. The goal is for customers to make self-serving decisions. In this case, defying the advertisers’ best interests is in Amazon’s best interest as well.

Extrapolate the technology-assisted consumption process out over the next 10, 50, 100 years, and I have a hard time imagining a meaningful role for conventional advertising. If I search Google for “lawnmower,” it’s not interesting that some tractor company has paid Google for the privilege of putting their brand’s information at the top of the list. At some point in the future, customers will assume that companies who choose to advertise conventionally are afraid of the outcome when consulting various self-empowering resources. Where am I more likely to search for “lawnmower?” If I want to know what a lawnmower is, Google. If I want to know which lawnmower to buy? Amazon, or another site that strives to empower customers, not advertisers.

I do worry about what happens to some of our beloved, advertising-driven services. We’ve all grown accustomed to the subsidization of news reporting and analysis. In recent decades, advertising has crept further into our lives, even subsidizing municipal infrastructures such as public transit. What impact will the end of advertising have on these important services?

In the old world, technology for connecting customers directly to companies did not exist, so companies were satisfied in buying advertising. It is tool that serves to expose customers to the concept of a product, and to crudely attempt to educate them about the suitability of the product for their purposes.

In the new world, mass-exposure will be replaced by social networking, and education will be not only replaced by, but massively bolstered by trusted systems such as Amazon’s review database, Consumer Reports, and other much better stuff that is presumably coming in the future. Presumably? It has to be coming, and it has to be better, because everything’s riding on it.

Everything’s riding on it because this is the salvation for current advertising-subsidized industries. They will shift from being exposure-focused, to education-focused. Amazon, Apple, and many others already offer affiliate systems that reward anybody who can produce a sale. The old way to produce a sale is by blasting customers with unwanted information until you happen upon something that sticks. The new way is to provide customers with a trustworthy, opt-in system for determining what’s best for the customer. To stay alive in the changing world, these subsidized industries will change their business plans, or go out of business.

Earlier today, before I even followed Brent’s link to Dave’s piece, I read this short, thought-provoking essay, allegedly by the graffiti artist Banksy. Here is an excerpt that I think is pertinent to my predictions here:

They have access to the most sophisticated technology the world has ever seen and they bully you with it. They are The Advertisers and they are laughing at you.

You owe the companies nothing. Less than nothing, you especially don’t owe them any courtesy. They owe you. They have re-arranged the world to put themselves in front of you. They never asked for your permission, don’t even start asking for theirs.

As a businessman who is dedicated to my own commercial success, I embrace the challenge of getting the word out to potential customers. I will shout my message from the rooftops to anybody who will listen. But only to those who will listen. I don’t want to annoy, interrupt, cajole, or appeal to a customer’s feelings of inferiority. I don’t want a customer to choose my product over a competitor’s unless it’s better for them. In short: I want a future without advertising, where my products sell themselves through word-of-mouth and through trusted systems that educate customers about making the right choice for them. Not what’s right for companies, and certainly, so long as they’re still around, not what’s right for advertisers.

11 Responses to “The End Of Advertising”

  1. Andy Lee Says:

    Well argued. “What a lawnmower is” vs. “which lawnmower to buy” — until you pointed out the distinction, I wasn’t consciously aware I was using Google and Amazon for these two purposes. I just naturally did it.

  2. JulesLt Says:

    Wither Google, though? Not that I particularly care – I think Google has been horribly compromised by the idea that everything should be free-subsidised-by-advertising.

    It would be interesting to show a history of web searches for a specific term, too – to show the way that Google has shifted from presuming you want information, to presuming you want to buy.

    Of course there would still be click-through commission, but I’m presuming most of Google’s revenue actually comes from giving companies a means to buy their way into those vital few lines at the top of the screen? (And the whole secondary industry of SEO based around gaming the search engines).

    I also wonder whether people are economically ready for it – i.e. people have proved very resistent to paying for TV or magazines without ads. Think of the huge intellectual effort spent on suggesting that all ‘content’ should be free-to-the-consumer.

    Personally, I’m at the opposite end. I far prefer the market model, than one where everything is a loss-leader for something else down the line.

  3. Ed Says:

    You’re conflating dishonesty with marketing and, while there’s considerable overlap between the two, they are not identical. We should all be fair and honest in our dealing with others and _try_ to direct their messages to people who are interested, but we’d have to be able to read minds and have a remarkable ability to direct our voices to be able to “shout [our] message from the rooftops to anybody who will listen. But only to those who will listen.”

    I’m not a fan of most advertising, but if we all choose to ignore ads completely then we’ll have to either find another way to support services that are funded by them or do without. Are you ready to stop searching on Google or to pay them for results when their advertising supported business model collapses?

  4. John C. Welch Says:

    If you actually think that Amazon isn’t advertising and marketing on a monstrous scale, I have some fine ocean view property to sell you.

    In Nebraska.

    All those affiliate links you see on people’s sites? What, pray tell, are those? (Hint: multi-level advertising)

    Also, you make the mistake every. single. geek. makes.

    “Because *I* do it *this way*, so does everyone else”

    I have some sad, shocking news for you: Advertising still works, and well for the vast majority of humanity, (read: “People who view a computer as an overcomplicated hammer”.) Seriously.

    The advertising/marketing/PR industry has changed, but word of mouth? ON the INTERNET? Honky please, you’re going to be drowned out.

  5. Andy Lee Says:

    It occurs to me this is a prediction in the opposite direction of Minority Report and similar dystopian imaginings, which I don’t think I’ve ever seen.

  6. Steve Tibbett Says:

    As long as there are people selling things who wish more people were buying their things and have money to spend on trying to influence which thing people buy, there will be advertising.

    It’s the nature of capitalism. If there’s a demand, someone will fill it.

    Unfortunately some of what you’re predicting is playing out, in a bad way. Advertisers want to promote their products, and social media, and reviews on places like the App Store are influential, so we see them being subverted.

    Advertisers want higher rankings and are willing to pay money to get it. And someone is willing to take that money to game the system for them.

    Advertising isn’t going to go away, and it’s better to design a system that’s tolerant to advertising (and the sort of advertising that you think is appropriate for your users) than to design a system that’s resistent to it and see it subverted and engage in an arms race with the advertisers.

  7. charles Says:

    It is definitely a trend, though of course you have an optimistic view of the final destination. I tend to agree with you and be optimistic too. But there is also an arms’ race here, with advertisers getting better and better at targeting (analytics, SEO, cookies and other shenanigans), and getting better at gaming the system. If enough of us ‘geeks’ keep an eye on this, and reward truly crowd-sourced unbiased web sites, then there will always be a business model for such high-quality crowd-sourced recommendation engine somewhere.

  8. charles Says:

    Actually, I just noticed Amazon now has a section “Product Ads from External Websites(What’s this?)” below the “Customers Who Bought This Item Also Bought” line. Sigh.

  9. Whatever Says:

    Unfortunately, your prediction of advertising on the way out is so damn wrong it ain’t even funny…

  10. DDA Says:

    You don’t want an end to advertising since you state that you want to do that very thing (“should my message from the rooftops…”); what you want is an end to misleading and/or intrusive advertising. But as others have pointed out, it is (currently) impractical to live in a world without ad-supported content; few, if any, people are willing to make micro-payments every time they do a Google search or a YouTube video or send a tweet (witness the huge indignation about the cost of text messages).

    I agree with Mr. Welch that “word-of-mouth” on the Internet is basically impossible without a *huge* amount of filtering; you’ll just be drowned out.

    Tasteful non-intrusive advertising is fine (with me, anyway); ad networks like The Deck don’t bother me. But it’s also not clear to me that they will scale well enough to keep all the sites I like to read alive.

    In the end, *nothing* is free; someone has to pay the freight and until a better model is found, advertising will stick around. My goal is to not reward intrusive or misleading advertising as much as I can.

  11. Jeff Soto Says:

    I don’t think advertising is on its way out. Perhaps traditional advertising may undergo a significant change in the next few years but it will definitely not go anywhere. Advertisers will think of new and unique ways to reach the people they need to even if it means abandoning traditional means of advertising. If anything you’ll be seeing more content curation (ie Pinterest and the sort) where well known personas or people you actually known will tell (sell) you what you need to know or buy.

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