Response to a TechCrunch Article About Advertising
posted by Rick Webb 
on March 31, 2009 at 04:08 AM
filed under: Advertising, Banners and Rich Media, and Entrepreneurship
Rick Webb
Co-founder, COO : New York
topics: Agency Collaboration, Rock and Roll, Viral Marketing, Search, and The Internet
filed under: Advertising, Banners and Rich Media, and Entrepreneurship
Got a little riled up this evening reading a TechCrunch article from guest author Eric Clemons from Wharton on Why Advertising is Failing on The Internet. I got a little riled up. Mainly these posts irk me in how we’ve just been hearing the same old, same old, for years, even as people do interesting, compelling, effective stuff on the internet every day.
Anyway, here is my long-winded reply:
Okay. I see you significantly revised your article in the update, and, really, this is more a problem of an inflammatory headline, but I think a comment from an advertiser is warranted nonetheless. Take a second, look me up. I know what I’m talking about. Honest. I do advertising. On the internet. And it works. And I make money off it. And my clients are happy. And I don’t care two whits about banners, search, or any algorithms.
Advertising is not failing advertisers, and it’s not failing consumers. It’s failing everyone who expected it to fund the whole of the internet. But advertisers are just like everyone else. Why would we pay someone (websites) for something (messages) we could get for free?
You’ve got a few fundamental logical problems with your assessment. Let’s dissect a bit.
First, you say “advertising is failing.” But your argument here is not that it’s not working, but simply that it’s not the web’s economic salvation. You’re conflating the failure of advertising as a means of funding all the fun the internet has with the efficacy of advertising as a means of impacting users’ behavior. They’re different things. It’s doing each of them well to different extents. Just because it’s failing to fund the whole internet doesn’t mean it’s failing to influence consumer’s purchase patterns.
Secondly, you list the age-old problems with advertising. People don’t like it. They don’t trust it. Whatever. it’s a red herring. It’s always been the case. The internet didn’t change anything about that. Advertising worked before in the face of these obstacles, and it works now in the face of these obstacles. We all like to bitch about advertising. It has challenges. Nonetheless, it still works.
Next, you’re conflating the need of websites and media properties to make money with the need of advertisers to make ads. Just because there are different ways for sites to make money now means nothing. So what? Fewer sites will run display ads? What does that have to do with the existence of advertising? Will it stop someone needing to market their product just because Facebook found another way to make money?
And lastly, like everyone in the tech world (though you seem to not be from there), you seem to be under the impression that all advertising online is display ads, text ads, and maybe a rich media unit here or there. But the definition you give is more broad than that. You said it yourself. It’s getting a message in front of people where they’ll see it, in order to influence them. It’s not clicks. It’s not this page or that.
Here’s the stone-cold fact. Your analysis is outdated. Effective advertisers have already adapted to the years-old “new” reality you outline. It’s more expensive than anyone hoped, it’s less profitable for agencies, and it’s a hell of a lot harder than everyone hoped, but the fact is it works.
11 comments
A few additions.
1. The most interesting stuff on the web for a brand to do will continue to be not "advertising" (using the definition of buying space to spread your message) but rather everything else a company can do on the web (example: most of our work).
2. The vast majority of people don't need to/want to make money on the web. This is a problem for 1% of the web world (if that). BG.com makes plenty of money as a promotion tool for the company, we don't need to put ads up (though I guess we could if we really wanted to). I feel like he totally glosses over this point.
3. He says advertising is dying because print publications are going out of business. This is plainly untrue. Many of those print publications relied on classified ads in addition to the big full page stuff. Those classified ads have moved online in both a free and paid way. They are doing exceedingly well (how many people do you know who have found an apartment from the newspaper lately?). This is a place where advertising excels (job classifieds is another one). No one ever talks about this, but this is advertising and it's working even better than it did offline on the web!
Yeah. Think that's it. Thanks Rick.
Looking forward to the return of @mediaisthriving on Twitter BTW. Its apparent disappearance cast a pall over the media industry.
@Aaron - oh, i usually don't. It was the extra veneer of respectability the academic had, plus the more-inflammatory-than-usual headline that got to me.
@Josh - today, if all goes well!
I agree there is a cornucopia of bad ads online. However, (let me stress that more) however, we should be concentrating more on educating clients. Perhaps there should be less conversation about ads and more conversations on educating clients about the beauty of the digital space and all of its glorious potential. It is often the uneducated client or the client who refuses to be educated on the variety of communications we can offer.
Another failing is Clemons’ failure to note some of the great successes in cross-media advertising. Ads that drive the audience to the online experience, or experiential events that incorporate an online component, or any of the other advertising effectiveness multipliers.
I find it fascinating how so many pundits/experts confuse the business model of a medium (owning a website, newspaper, TV station) with an advertising model of a brand. Both of which are evolving, and changing, as they have since the very day they first existed.
Even if all the newspapers and TV stations disappeared overnight, the expectation in Silicon Valley that the 10's of billions of ad dollars in the US consequently freed up would simply go to funding tech companies is fascinatingly absurd. It is increasingly viable for brands/agencies to make their own media/content models that don't rely on paid ad space. It ain't easy, but it's fun and to your point proving effective.
@Brett - succinctly put, and you know what, I think they actually DO think that the money would go into funding tech companies. When in actuality it would probably almost entirely go to outdoor, retail, events, and whatever other medium hadn't died completely. One of my most eye-opening learnings since moving to the bay area last month is that despite all their businesses making all their money from advertising, many people here have no idea how the advertising industry actually works.
PS--Hi Noah!
I would have liked for you to talk about endemic though...
Oh, and I'll concur with the recs above to stay away from TechCrunch... its media by idiots and for idiots.