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The curious case of advertising

Updated: Apr 3, 2019

So advertising, what happened?

Advertising is one of the fuels of the modern digital economy. Advertising dollars pay for countless thousands of tech professionals, support online platforms from the small to the biggest of all, and provide the hope for a glittering future for many more starting off with big business dreams.

And yet the story of advertising in our digital world is a really rather strange one. Advertising has become simultaneously so big and also so small. Early promises remain unfulfilled while it has been dragged unwittingly into the agendas, and more scarily, the bruising fights, of others.

What are you looking at?

The internet began in the non-profit environments of government and academia but ever since it arrived in the commercial world around 1990 the question has been how to fund online activities.

Advertising was always a key answer to this question but not then and never since the only one. Subscriptions have always been part of the conversation, regularly alternating in and out of fashion (we’ll return to them in a future part of this series of articles), as have various reimaginings of old concepts such as micro-payments and donations. However things have always reliably turned back to advertising to do the heavy lifting of generating revenue from ordinary users.

It’s very fitting that advertising has come to mean so much for the online economy as digital advertising was tailor made to fix the biggest issue advertising has faced for its entire existence - that is how to measure whether and where it actually works or not. As the famous phrase generally attributed to 19th century Philadelphia business man John Wanamaker puts it so memorably: ‘Half the money I spend on advertising is wasted, the trouble is I don’t know which half!’

Despite its central role in digital commerce however, questions about advertising’s effectiveness have only increased, not decreased, over the last couple of decades. And while this has been going on, as advertising spending has galloped relentlessly ahead, getting only bigger and bigger, the advertisements themselves, both literally and culturally, have become smaller and smaller.

And all this really matters, because advertising really matters. Not only as mentioned above for its raw monetary value, which is essential for countless online players, but also for we consumers. There’s far too much stuff in the world and nothing like enough time to sample everything before making informed consumption choices. We need advertising to help us navigate the impossible mass of products and services competing for our personal attention and spending.

For so long a driver of cultural conversations and shared experiences and one of the primary enablers of our digital world, paradoxically advertising has been caught up in the inefficiencies of that same digital world and also seen its cultural impact plummet. Cut down by the very thing it helped create. Most curious indeed.

Advertising has always been a curious beast, essential for everyone from the purest of charities to the most unscrupulous of snake oil sellers. Throughout recorded history people have always needed to tell others about their services and their stuff for sale, but it wasn’t until the 18th century with the exciting new mass medium of newspapers that advertising really kicked into gear as a major economic force in its own right, and by the 19th and early 20th centuries many of the key tools for successful advertising such as how to create compelling imagery, design and snappy slogans had been established.

Fast forward to the advent of TV and by 1960s advertising had begun its imperial phase. A golden age for all those who were there (well the men anyway), who argue, quite plausibly, that the Mad Men TV series actually toned down some of the realities of that time. Advertising got bigger and bigger. In everything. Revenues, budgets, ideas, ambitions, cultural impacts, artistic visions, creative genius, all round excesses. The full set.

But that vexing ‘wasted half’ thing wouldn’t go away. Sure you devise a brilliant campaign, it would run and you’d (hopefully) see a positive sales effect which you could measure and analyse. But could it have been done better? More cost effectively? With more bang for fewer bucks?

Enter digital

Meanwhile, in 1989 Tim Berners-Lee was unveiling his worldwide web to make the internet an actual workable and accessible thing for anyone who wasn’t a computer scientist. Our world of browsers and websites and all the rest had begun.

Advertising has always been an early-ish adopter with new media platforms and the web was no exception with the first banner ad going live in 1994 and from then on there was no going back. Advertising rapidly became central to the whole online universe.

Every business now needed to think about how digital fitted into their marketing mix. More significantly, huge numbers of both the new digital businesses and amateur ventures looked to advertising to pay their bills. Advertising became a kind of cat nip (or crack cocaine depending on your perspective) for the burgeoning tech industry, the irresistible answer to their revenue concerns.

However while advertising was neither prepared nor able to fulfil such a role (in truth nothing could given how lofty the dreams were at this time) the advertising business itself was more than happy to dive into this new medium. Digital offered something they had always craved - data and with it the ability to finally target and measure advertising so only relevant ads were served to people who were interested in seeing them.

However by happily accepting this Faustian bargain, hoping to finally solve its ‘wasted 50%’ legacy, advertising ended up sowing the seeds of its identity loss and cultural decline.

The small wide world

Advertising at its best, at its most brilliant, is when it is telling entrancing stories that bring us happily and willingly into its world. Whether or not you drink Coca Cola has absolutely no bearing whatsoever on your ability to sing or enjoy singing, but we all know the famous Coke ad song ‘I’d like to teach the world to sing’. It's such a famous ad that it’s no surprise that Mad Men chose to build their finale around it.

I don’t actually think I’ve ever seen the ad to be honest. I wasn’t even alive when it aired, yet I have a pretty clear image of my head of people singing on top of a hill somewhere somehow. Frankly I don’t care whether that’s right or not, it’s a happy song, a beautiful sentiment and idea and Coke and their agency did a good thing by adding that to our cultural heritage.

As I say the message of the song has absolutely nothing to do with actually drinking fizzy carbonated water, but who cares? It’s a great ad and without question helped Coke carry on selling lots of carbonated drinks long after it aired. Makes me think about Coke, this nearly 50 year old ad, and as I say, I haven’t even seen it. That’s pretty powerful advertising by any measure.

Today those kind of moments are so much harder because of digital advertising. Not impossible for sure, and the many creative geniuses hard at work in the advertising world continue to come up with lots of brilliant work. This isn’t a lament that everything used to be better. But it is definitely harder than it was to tell stories because digital advertising is just so much smaller.

Digital advertising of today is hardly the stuff of the dreams of David Ogilvy or the Saatchi brothers or any of the other creative giants of the advertising world. They all knew that get advertising right and people enjoy it, even seek it out. They love it.

Let us dismay you

Digital advertising however has repeatedly had to find ways to intrude rather than entertain. And people respond in kind - they just don’t value digital ads, in fact they frequently actively hate them. The huge rise in ad blockers being a case in point. Lots of other ads were always annoying for sure, but plenty weren’t and continue to not be in the physical world - big glossy magazines with more advertising than editorial are highly valued by their readers, while there are many engaging and funny billboard ads or TV commercials that consumers enjoy coming across.

There are of course honourable exceptions. Ad supported results in searches either across the web overall or within specific retail environments can be valuable to consumers, but huge numbers of consumers go out of their way now to avoid or ignore digital ads. There’s a great deal of sophistication around identifying and segmenting audiences online, finding just the right people to target, but when so many consumers are doing their best to avoid what’s being sent to them that doesn’t imply everything is healthy. Especially when the revenue earned from this advertising is funding a huge proportion of our digital world.

And as well as consumers actively resenting the advertising that follows them around the web, there are in addition all the many negative aspects of advertising being pushed to the forefront of the digital economy, such as data collection, ownership and usage, privacy concerns, invasion of private space, and many more in this ever expanding rogues gallery of digital world nasties.

Meanwhile while digital store fronts have never had the issue of how to pay their way, existing only to facilitate purchases, for everyone else this is the question that will never go away as the internet is now through and through a commercial environment. And so the question of what in this commercial environment is being sold is consumers and their attention and their data. Many of whom are completely unaware of this commercial reality. But for how much longer?

None of this mattered for advertisers in the pre-digital world, but it sure does now. These aren’t problems of the ad industry’s making, but that’s no comfort as they find themselves right and the very heart of them. Add into the mix things like digital ads being vehicles for malicious code and viruses and the constant arms race going on between online advertising networks, ad tech and ad blockers and the result is really not pretty.

Better luck next time

And all this for the one promise they were interested in - making ads more powerful. More individual, more useful, and therefore less wasteful for all concerned. That hasn’t worked out either as there’s growing evidence of the huge fraud and wastage of digital ads, where so many reported clicks, views, etc, aren’t actually coming from a real person, a real consumer, at all.

How extensive is this fraud around ads? Well that’s the thing. At least John Wanamaker could comfort himself that only half his advertising was being wasted. A few years ago Google, who’s very existence relies on digital advertising, calculated that the proportion of digital ads never even seen by an actual person was…56%.

Advertising fulfils too important a role for all concerned to ever go away, and in the past it has paid for information and entertainment of immense cultural value. It still does in our digital world but with all this unfortunate mess and baggage surrounding it that nobody really expected in the early innocent days of the commercial web. Maybe the next stages of tech evolution, much of it, don't forget, that will actually be paid for by advertising, will finally start to deliver on the promises of better advertising of 30 years ago.

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