Why Internet advertising will not fail

So seems as the near 600 comments in response to Eric Clemons, Why Advertising Is Failing On The Internet on TechCrunch this week is striking a few chords with some and ruffling a few feathers with others. I find both hardly suprising, yet it just amazes me how anyone is giving this article any credit at all?

Mr. Clemons is Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania. Yet I don’t think throwing weight around is possibly the best way of justifying a nonsensical piece that is the equivalent of the old children’s fable ‘Chicken-Liken the sky is falling down’.

If you haven’t read it, go get a cup of coffee and do so now. Then come back.

Internet advertising

Ok, ok this is 2009. Adverts in an online ‘brochure’ accessible via a web browser is, admittedly the majority, but by no means the definition on “Internet advertising” the way it was perceived 10-15 years ago. Take a look down your street or next time you go to the toilet in a public bar – you see those screens everywhere – they are digital, updated via the internet. Once they were confined to Times Square, Piccadilly Circus and Shibuya, now those bright lit screens are everywhere.

Then there are those applications you are downloading to your iPhone or Android – they are accessing the Internet. To say nothing of Xbox 360 games or Desktop Instant Messengers or IPTV or Cable TV services – heck even BluRay 2.0 – that all pull content off the internet and not confined to a mere web browser. So before we dismiss “online” advertising, think of each of those internet-enabled screens from outdoor billboards around town and your bus shelters to shopping mall to screens in the cab or amusing you in your restroom, let alone your TV screens at home or your Mobile – then tell me they are ALL about to fail.

I think we will find that the placement of advertising messages where a user is about to become a lot more animated, interesting, interactive and targeted once more screens take an internet connection. Think of combining the power of TV to stimulate emotions with the reach of outdoor – interactive mass-media; where animated out-of-home content can be zapped to your mobile… or made more relevant because you are in the vicinity of a larger screen with your personal GPS mobile… we haven’t even started yet with online advertising!

Print advertising

Having worked in editorial design some years back it was obvious to me of the 60:40 rule – 60% advertising to 40% editorial – something the internet community is far from achieving currently. Do people have issues with such a disproportionate level of advertising, especially when they are paying for magazines? Not at all, they actually enhance the experience. We read the glossy magazines and covet the handbags and watches that are so beautifully portrayed. We scratch-and-sniff the perfume ads. Indeed, they are a source of information and experience in their own right.

Ads in newspapers are targeted against the actual article, something the internet has been slow to catch up with, and may indeed circumvent with behavioural advertising. Online is a mass roll-out of clickable ads at best targeted to channels like sport or movie sections on website, not specific page content. They are currently bereft of such content relevance, let alone developed specifically for the environment where they sit, and still few allow a user to experience a brand right where they are.

Now let’s consider Amazon’s Kindle or Sony eReader; high-definition text that is mono at present for books. Linked to an internet connection, given colour, even becoming flexible with advent of wafer thin OLED screens and we have the makings of downloadable magazines and newspapers to a single device – not just with beautiful photos of those Gucci handbags, but animated stories and videos designed to create desire – all pushed down to the device in real-time.

The argument that newspaper sales are declining because people dislike push advertising is ridiculous. We have moved from half a dozen newspapers and TV channels to a plethora of places to retrieve information and news, that is why. Yet on a subway it’s not so easy to read news on a Blackberry screen – and this where devices like the Kindle are poised to capitalize on, and find a new eNewspaper reader for each newspaper reader who passes away.

Papyrus gave way to paper, the pen to the printing press and the keyboard. Print will not die, it will just evolve.

Push messaging

The online industry has been developed around pull, not push. It expects a user to “click” away from what they are doing to go somewhere else. It is trackable. You only pay per click. These may have been great arguments in midst of dot.com crash but have little bearing on how advertising actually works. Display adverts deliver content to the user wherever they are; sitting on your sofa watching TV, driving past a billboard. They deliver audio-visual stimuli that strike emotional responses, combined with repetition, to create desire and intrigue to explore further and ultimately purchase. This is not always immediate – and 0.X% CTR proves this – but is something that must be measured cross-channel later on, for example display ad effects driving search clicks. I see a TV ad and then search on the screen closest to me, or store it in my mind until I next go shopping.

The concept of users clicking to microsites to then have a brand experience are crazy for most brands; would you click on an advert for a shampoo unless you wanted to check the ingredients against your skin allergy? And certainly not to buy online! It should be about product demonstrations, ‘and now for the science bit’ are stories that ensure we now ‘look’ for a particular item on our next shopping trip. Combining senses; sight, sound AND touch allows consumers to have a deeper connection with the brand (70-90% recall) then merely sight and sound (50% recall) afforded by TV or print.

Isn’t that what John Dewey gave us when discussing Experiential Learning Cycles back in the 30’s; that ‘there is an intimate and necessary relation between the processes of actual experience and education’? People need to play, in order to learn; welcome to interactive advertising.

Pushing content to a user and allowing them to be attracted and explore where they are will have greater impact then traditional media has achieved, but only when we neither repurpose TV or Print ads online, nor expect a user to “click” somewhere else.

Quality content is not free

The internet was free, but music was and TV was not. Neither are games. Even Magazines are not. People pay for quality content and now the Internet has moved from mere information to entertainment, all ‘consumers in control’ means is that they can have ‘this much for free, and a better experience for a price’; whether that is increasing your broadband speed or buying a Hi-Def movie on a disc. If this better experience can be achieved by receiving advertising and continue to play/watch/consume for free – then the trade-off is no longer forced upon but appreciated – and more so if the targeting is that much more relevant and somehow enhances the experience overall.

If you want evidence of advertising enhancing my entertainment, take a look on YouTube at all the TV ads there being searched upon or at people positively discussing them across social networks. Heck, even Obama worked that one to his favour! See the lists now on Facebook people put about their favourite films/books/music and think of reaction to Amazon when they first ‘suggested’ books to you not so long back. Things change and people soften. Check the research on advertising related to gaming – you ever wanted a hardcore bunch of modern geeks to crack, than gamers leave no prisoners. The fact is, they appreciate the advertising trade off for free game play and feel that brand placement enhances game reality.

Up until 2005 connection speeds prevented quality advertising to be pushed down in real-time. It hindered people. But the same broadband that brought online entertainment that is challenging the TV and Music industries, has provided quality that people are willing to trade for advertising – especially fun, entertaining advertising. We used to forward funny videos around by email, we used to call that “viral” – now we are posting them to our Facebook walls. I think you will find most of those are centred around a ‘brand’.

Filtering out advertising

Anyone who thinks advertising does not affect them, well show me your wardrobe and your food cupboards and I will prove you otherwise. You choose a brand because to choose another would say something about you; you either stand out negatively or would not stand out at all. Why do we live in a world where consumerism is rife, where fake rip-offs in Chinatown exist – because peer pressure suggests you need that “brand” to be a better person. We are all victims to advertising, just that most of it is clever enough to go under our radar – and that is what an immature internet industry has still got to learn, how to go undetected and add to, not detract from, the consumer’s entertainment.

People look for brands and products they have seen elsewhere in search engines; sure they want qualification by an impartial source before purchase – whether that’s a friend up the pub, or on Amazon/iTunes/TripAdvisor feedback. But a specific targeted display ad offering a discount and extra warranty at that point on a comparison site I arrived at via search – you telling me that will be ineffective?! Yes, an intelligent web 3.0 is coming. This argument about people being ‘misdirected by search engines’ is actually ‘being shown alternatives’; you see I am considering a range of options before I finally decide on the right one, at the right price. The key is in the word “searching”. And let’s be honest, nothing in this world is impartial; every travel agent and mortgage advisor on the high street is taking both commission and pushing a specific range of products they have access to and can make more money from. I go to these places in high street and possibly pay more than I could elsewhere as I value the service, and surprisingly happy to pay for it in some instances – because it just makes my life easier, somehow. Why would online be any different?

Targeted advertising reinforces your cognitive process of evaluation.

Infinity and beyond

TV advertising won’t die. It may be quicker bursts, shorter linear stories or actually become the entertainment in their own right; become interactive product placements which show you where you can buy Beckham’s shoes from locally by pointing your Wii-like remote at; have the ability to send virally to your social networks by clicking the “red” button. Even your BluRay’s are about to get real-time content push down. Maybe we aren’t all watching the 30 second TV spot, but I can tell you what phone Jack Bower has and what watch and car James Bond has.

I don’t like ads in Facebook per se. I am in a different mindset chatting with friends to when I reading about cars or holidays. So give me some fun video to stick on my wall from Nike, or a photo-cropper from Canon… Notice the names there? That’s advertising that is…

Yes people like ads, they value them, and they trust them – maybe different to how they did ten years ago, and different to how they will 20 years from now – but as long as you need clothes, cars, food, toiletries and gadgets – your ego will seek out something to either make you blend in or stand out accordingly – and that is the power of advertising, its information about what is cool, healthy and necessary, and that is not going to change.

Alternative was of generating revenue will always be with us. The internet has challenged business practices the world over, not just advertising – hey, I can even study online now, negating the need to go sit in a classroom listening to a lecture!

Contextual mobile ads indeed… they are still “ads” and if SMS is the best mobiles can do, I suggest you research “QR codes” and “RFID” or take a trip to Japan and check out “Tonchidot” for starters. Bless you, granddad.

Two-thirds of the planet now carry mobile devices and are about to all be upgraded to personal internet devices that you will pay your car parking whilst in a cafe or control your washing machine with from a taxi, let alone carrying your TV in your pocket. Time-shifted, place-shifted content from the cloud, linked to synchronous trans-media branded stories, as broadcast gives way to multicast. I could go on.

So in ten years from now when internet advertising has morphed into every media device and has far from failed but encapsulated global media spend, I will gladly buy you dinner Mr. Clemons and will equally consider becoming your replacement at Wharton University.

And who knows, by then Google may just be another Compuserve…

About the Author:

I am a Digital Transformation Strategist and focussed on global evangelism; helping position clients at the forefront of emerging media and the next generation of consumer engagement. I'm passionate about how storytelling and creative technology can be used to deliver focussed messages – irrespective of the consumer viewing device – and then drive favourable outcomes for brands, whilst addressing concerns over user profiling.

7 Comments

  1. Olivier Blanchard March 27, 2009 at 00:53

    That’s a damn fine post, Dean.

    Though I don’t agree that internet advertising is predominantly pull, but I see what you mean. In a way, the clickability of internet ads redefines push and pull to a great extent. (It kind of blends the two.)

    I really like the points you make about magazines (and their ads) potentially moving to next gen kindles… or smart paper.

    All in all, anyone claiming that advertising will fail (on the internet or anywhere else) clearly doesn’t understand where technology is going. Smart advertisers will adapt and pioneer new ways to reach their audiences and help their profession evolve.

    I am reminded of some of the advertising technologies imagined by Spielberg in Minority Report for example, or my tours of Microsoft’s “house of the future” in Redmond, or some of the discussions I’ve had with mobile app developers working on stuff our phones will be able to do in 2-3 years.

    Advertising is in trouble today NOT because it doesn’t know how to adapt to new channels and technologies but because as an industry, it doesn’t know how to sell its own ROI. In an economic downturn, not being able to prove your worth to cash-strapped clients isn’t a recipe for success.

    Fact: Traditional advertising will still be alive and well in 20 years.

    Fact: Digital and mobile advertising will continue to grow alongside those markets. 111 million mobile users in 2008 vs. a projected 800 million mobile users worldwide) in 2013. Does that sound like the well is running dry? ;D

    Again, great response to Eric’s piece. Cheers.

  2. Dean Donaldson March 27, 2009 at 10:49

    Thanks Oliver – by the way there is currently 4 BILLION mobile users world-wide (2/3 planet) , not 111 million… against a 1 billion Internet users (1/6 planet) 😉
    http://thenextwavefutures.wordpress.com/2009/03/09/global-mobile/

    With rate of change of handset, coupled with reach in remote areas of the world, the time taken for PC adoption of internet will pale to insignificance with the speed mobile becomes internet enabled… in fact Japan/Korea majority of people now access web via mobiles anyway…

    If you want to have a gander’s at Minority Report- esque ideas – my first blog post a few years ago did just that.
    http://deandonaldson.wordpress.com/2006/08/07/the-web-at-30/

    And yep, your point on people not knowing how to justify ROI for online is a key focus in my presentations these days, and spawned the following research:
    http://tinyurl.com/GetEyeblasterBulletin3

    e.g. you are 5x more convert WITHIN a banner then on a site… urrrmmm. why are you relying solely on CTR?!

    PPC works for search, not display.

  3. […] The follow-up debate between Eric Clemons and Danny Sullivan. Dean Donaldson weighs in. Possibly related posts: (automatically generated)Marketing 101Learning the Ways of the Internet: […]

  4. […] Now that CTR is failing, to those who suggest display advertising will die to widgets is suggesting all TV, Print, Outdoor is ineffective and will die also. Hogwash. Display advertising hasn’t even evolved into what it could or should yet… I wrote about this before following a high profile argument on whether advertising online would fail? […]

  5. […] what it could or should yet… I wrote about this before following a high profile argument on whether advertising online would fail?I am convinced, it’s not the format or channel that’s failing, it’s the metric that is […]

  6. Clint June 29, 2009 at 20:41

    Excellent analysis, Dean.

  7. worlds best brands July 24, 2009 at 20:16

    Interesting post, a lot of the worlds best brand are now using social sites like worldstopbrands.com and twitter.com to interact with users offer special, and to get news out about the brands and what the brands have to offer. So advertising via the Internet is now the best option.

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