I typically visit a number of technology sites to learn about new technology, Internet companies and products – not to learn about marketing. So I was a bit amused the other day when I saw that TechCrunch (a technology site) was trying to talk about marketing and advertising. To do this, they enlisted a guest writer who is a professor of operations management at Wharton. I guess anybody can be a marketing expert. The problem, of course, is that not everybody is a marketing expert and thus you get a retread of old ideas.
Here is the basic idea that sparked hundreds of comments – advertising is failing on the internet. The reasons for this, according to the article is that consumers don’t trust advertising, don’t want to view advertising and don’t need advertising. This was followed up by some comments about other business models, which, as expected, includes more targeted advertising (like people haven’t been trying to do this for decades, which they have).
As point of fact, these are not even vaguely new ideas. Firstly, it has long been known (at least since I started teaching marketing 20 years ago) that advertising messages from commercial sources are less trustworthy than other sources (e.g., friends, independent rating agencies, etc.). Second, there has never been any doubt that consumers don’t want to view advertising. Except for the Super Bowl and certain magazine advertising, people have long found advertising to be intrusive …. unless of course it is there to provide information at a time when people need it.
Finally, do people need advertising? That depends. Some do and some don’t. Sure, they can get information about product offerings from rating sites (like the TechCrunch article says), but they have always gotten it from lots of others sources as well. Beyond this, however, is that advertising has many roles, only one of which is to inform. Advertising can be useful for brand loyalty, brand awareness, etc.
There are two points I’m trying to make. First, technology sites should stay focused on technology and not venture into marketing since, well, they tend to recreate the wheel and confuse people. Second, and more interesting, is that history shows us that predictions and dire warnings are likely to be either wrong or overly pessimistic. Remember how paper was going to disappear computers came along, or that every company would be disintermediated, or that radio would disappear (along with bookstores and pet food stores). I know people like to scare people with dire, end of world warnings (it makes for great book sales – remember “The End of Marketing as We Know It” or lots of internet comments), but it doesn’t help marketers or companies market their products and services better.
As an example of dire predictions, at least 7 years ago people said that banner ads were finished. I wrote my skeptical reaction to this, which you can read here. Of course, banner ads continued despite the dire warnings.
Note, that since YouTube, Facebook and Twitter, for example, rely on ad revenues (which aren’t that big, according to this article), if internet advertising fails, social media sites will lose their ability to survive.
So, what’s your take on this (at least I know I’m talking to marketing – rather than a technology – audience)? Is advertising on the internet failing? Is it going to die? If so, what will replace it?
Marketing is one of those things, like writing, for example, that everyone in business has to do as part of being in business. Of course, just because you had to write a letter to a customer or potential client doesn’t mean you’re a professional writer. Likewise, just because you came up with a product or a service and brought it to market doesn’t mean that you’re a professional marketer.
That being said, I’m not sure even a professional, credentialed, and experienced marketer should ever say anything like “advertising” on the “internet” is dead. Neither advertising nor the internet are static entities or even things in any simple sense. As long as people are communicating with one another and are using channels or instances of communication to let others know about a product or service for sale, there will be advertising.
And as long as the “internet” (or the set of evolving technologies that fits under that rubric) is used for communication, advertising, in some form, will be there.
Alan, I agree with you. We should take the Ben Franklin approach here and look at current trends with moderation. I think better targeting is only one part of the answer. Paying for performance is another. Opt-in is a third key element.
I think this all has to be viewed as a system, not a straight line. If advertising fails, then sales fail, and companies have no reason to operate. Epic fail. If advertising works, then sales happen, then companies grow and reinvest in ads. The economics of industries based solely on ads (i.e. media) may change dramatically on the way, but ads are a necessity and we all know that
something this evil never dies.
Re: Wharton. Scary to think what future MBAs are being taught by “experts” who spend most of their time at/on conferences, blogs, and email newsletters. Then they get a job in the trenches and see everything they were taught is utter bullsh*t.
technical people tend to belive they’re mastering the universe and knowledge. in 90’s they said classical stores are dead (internet stores will replace them). they’re overrating ’social’ networks, youtube and other phenomenons of current moment.
advertising will exist as long as free, competitive market exists.
Thanks all,
Yes, @dusan, everybody thinks they know marketing, but most have no sense of the history of marketing, so they tend to recreate the wheel over and over and over again, thinking that they were the first to discover it.
“something this evil never dies.”
That’s hilarious. I love it.
I will have to say, though, that I don’t think that advertising is inherently evil. It’s just the way certain practitioners tend to use it.
As long as humans are flawed, which will be always, someone will find a way to screw up some benign object. Heck, we’d have evil rainbows if humans could find some way to make a profit from them.
There’s a key distinction between marketing and advertising.
Advertising is a failing form of marketing but there are plenty other ways to win consumer trust & attention.
Once marketers stop compartmentalizing and realize that marketing needs to be integrated (e.g. print/online/events/twitter etc) they’ll start to win over attention.
Interesting question. I’ve got a marketing title, but I’m not a marketing expert. And what works for me in my business might not work for everyone. Some people may find that internet advertising is dead. But three months into a campaign on the website of a major newspaper, my traffic has increased, my sales have increased and I’m already plotting channeling more of my budget into it next year.
Our social media efforts on the other hand have unearthed lots of opportunities, good connections, much-needed advice, professional assistance and great ideas, but no business that I can see (and before someone clamors about metrics, we’re small–I’d know). I’m not complaining–we’re still in social media exploration mode (I’m @furnituregirl on Twitter & we have both a Facebook page and a blog) and I highly value the lessons I’ve learned.
When it comes to ROI, that means a lot, but when it comes to cash on hand, it means nothing at all.
It seems there’s always someone shouting the “sky is falling”. I have to wonder how they define internet advertising. Did they as an example take into account print ads that feature websites?
Do they consider integrated mixed media campaigns using radio ads with internet tie ins to be internet.
Advertising? How about press releases via internet distribution are those advertising.
Advertising has always found ways to innovate and adapt since the days when Burma Shave put clever ads on a rows of roadside signs or, tobacco companies used farmers barns as billboards.
I predict that internet advertising isn’t going away on the internet or anywhere else.
Advertising not trusted, don’t want or need it?
Yes it’s true, not all promises made are kept but who cares?
It goes way back and I think everybody knows that it is often not only the service and product that’s sold, it is the feeling and the feeling comes with the advertising.
It’s true that people don’t want to watch a full 10 minute break with non-stop advertising, but what would we do if there was non at all, we need it?
We want to see those cute pictures, with hot girls and lovely shoes–
It looks great and who invented that, which brand knows that we want that?!
It’s not even the brand name, it is what the brand represents and the brand represents that picture, that picture with the hot girl, so if we represent the brand, we represent ourselves as that HOT GIRL!
It’s actually easy and advertising will never stop because people think that way and even marketers that know all the tricks, still buy it. Advertising whether it is online or offline influences and helps us making decisions.
Every day people find new ways to put their product or service out there.
And everybody knows that if you find a new way, we do not get rid of the old one, we combine and create stronger power.
As long as people will live, they will be influenced by everything they see, no explanation for it– that’s just the way it works.
All good points Allen. But as much as I agree that it can help to have a sense of history, I would also argue that this very historical perspective can be the blinders that prevent you from seeing the iceberg that’s about to hit you.
And, frankly, Allen, there’s something in the tone of your piece that suggests to me that you are more likely to be pulling iceberg fragments out of your hair than others.
Yes, paradigms don’t end every day. Worlds don’t disappear every day. But sometimes they do. And whenever I read a piece like this one of yours, I think of the guy who was stoutly talking up the wonderful future for the stagecoach business. Just seconds before the stagecoach business evaporated.
@Adam: I think Allen is using quite a large database of knowledge and experience for his statements. Like thousands of books and cases of marketing.
On the other hand, you have technical people, that are assuming death of advertising based on thousands of books about programming and few articles about advertising.
Now my question is what is the iceberg here that we’re trying to look over? Seems like it’s not the same iceberg.
Dusan:
A large database of knowledge is very helpful in times of stasis. In times of fundamental change it is unhelpful and maybe harmful.
We are still very much at the beginning of the internet revolution. Society, behavior and attitude is likely to change is some very significant ways.
So when I hear an eminent expert talk about how it’s been for 100 years, I start to thinking he’s about to hit an iceberg.
I don’t know if internet advertising is going to end. But I think that dismissing suhc a thought because of how it’s been in the past is not much smarter than believing it simply because you read a technical article.
Oh this is a favorite topic of mine! What I’m not seeing in the midst of all the speculation here is where lies the supporting data?
There’s no simple answer to this question. How would it ever be possible for internet advertising to end? All data that I’ve seen points to the opposite. Dynamic Logic studies show time and again that online adverting outperforms traditional media (print, tv) within most consumer categories on awareness, purchase intent, and brand favorability.
“Internet advertising” is a very broad term. Are banner ads becoming less effective? There are too many placement and frequency variables to know with certainty. And have we arrived at an agreed upon benchmark for success?
I do believe that integrated messaging is where the opportunity lies. Brand integration at contextually relevant, teachable moments — especially within interactive (i.e. video, slideshows, assessment tools, etc) and consumer-generated content.
Brand need to become part of the conversation.
And lastly, within each product category, I think it’s important to understand where the Internet fits within the purchase funnel — awareness, consideration, purchase/action. For most high-consideration products, the internet rules. In those cases, brand.coms then need to determine what websites are most impactful in reaching their target audience (at that meaningful moment).
Again — metrics are the only way each brand will arrive at their own integrated marketing plan.
Marketers core job isn’t to only put up advertising but to work at the trust that is needed for it to be well received.
I agree to some extent with the points mentioned in the article “Why Advertising is failing on the Internet.” For example, I agree that pushing messages, that have not been requested, at customers will most likely have a high rate of failure. Most pop-up/banner ads are annoying.
However I disagree that customers do not need advertising. True if you are in the market for a car, a computer, maybe a particular oil-free moisturizer you’ll do intense research but sometimes you have no idea a particular product is out there. Advertising helps create that awareness. Sometimes creatively packaged advertising helps create a need in your mind that you didn’t even know existed.
Furthermore, what about building brand equity? Advertising, in whatever medium, is used to create an image that is associated with a certain brand. Take iPods for example, there are tons of cheaper MP3 players out there but people still want the iPod. Why? Because they think iPods are cool and cool people buy iPods. They associate themselves with the image that Apple is trying to create for that product. They want to be a part of it; they will pay the extra bucks for it.
And targeted ads do work, at least on me. Banner ads placed in my browser telling me about New York and Co.’s sale on halter tops or Victoria Secret’s sale on underwear catch my attention and I don’t find them intrusive at all. I like to know these things. I click on these ads.
The Internet is just another medium; yeah it can be abused but I think the right advertising campaign targeted at the right consumers can help ensure your online advertising is not a failure especially since it has been proven that current advertising not only affects current sales but future sales as well.
As a business, you need to communicate your message to your customers. The only question is which medium is most effective for *you.* Figuring out which medium works best for you is up to the science of marketing. (Note that the term “medium” has been rebranded and is now called a “channel”.)
Figuring out which message works best for *you* in which medium is still up to the art of marketing.
So, we can debate all we want, but when it gets down to brass tacks it is still the same old same old. The art and the science gel, magic happens.
Advertising of any kind never dies. It just evolves.
As a business, you need to communicate your message to your customers. The only question is which medium is most effective for *you.* Figuring out which medium works best for you is up to the science of marketing. (Note that the term “medium” has been rebranded and is now called a “channel”.)
Figuring out which message works best for *you* in which medium is still up to the art of marketing.
So, we can debate all we want, but when it gets down to brass tacks it is still the same old same old. The art and the science gel, magic happens.
Advertising of any kind never dies. It just evolves.
What will replace it ?
Subscription.
After the friction with introducing such a model passes, it seems obvious to most that I speak with. Of course you need to believe that the ultimate goal will be to meet consumer’s needs and not the needs of corporations, and its hard to believe thats not the case.
To paraphrase Mark Twain, “The reports of the death of Internet advertising are greatly exaggerated”
I think it is provably true that advertising on the Internet is not failing.
For example, pay-per-click is really Google’s only real cash cow and few would dispute they are a successful company with a bright future. Yes, with the economic downturn they are experiencing some problems like many companies.
As an anecdote, I can say that our firm has gotten positive ROI on Google AdWords since we started using it about 5 years ago.
I think that Internet advertising of various sorts helps with brand building, too.
I have been influenced by one of the most maligned forms of Web advertising: The banner. If it is a company I am familiar with, such as L.L. Bean, an advertisement can remind me that my clothes are getting a bit thread bear and I need new running shoes. I may or may not click on the ad and buy right that minute but it goes on my todo list to visit their site soon.
Sure, if the service or product is of no interest to me then the advertisement is invisible. That is true in any medium.
By the way, I find it a bit ironic that there are actually a *lot* of ads right on the page with this editorial announcing the failure of Internet advertising.
Gorilla marketing in today’s economy is everything, ?marketing to get through the recession!
If your interested in web optimization for your site, th?ere is a free site for uploading video ads for your business, they also have image uploads if you are not yet up to videos. The more sites you can link to the greater you?r market will be. They have a free link exchange as well.
http://adwido.com
?
“I will have to say, though, that I don’t think that advertising is inherently evil. It’s just the way certain practitioners tend to use it.”
It’s not inherently evil, but it does have characteristics that disadvantage the consumer.
An ad’s primary, overriding goal is to persuade me — not to provide helpful information.
Online, I can freely access tons of helpful, user-generated reviews. Why look at ads?
I wrote a reaction essay to the TechCrunch article here:
http://www.whyweworry.com/blog/2009/06/29/why-advertising-will-fail-on-the-internet/