Re: [projectvrm] Theory of peak advertising

[Doc Searls < >]

On Oct 12, 2013, at 8:16 AM, Don Marti 
<
 >
 wrote:

> I don't know about those venture dollars, but ever
> since I read _Antifragile_ by Nassim Nicholas Taleb,
> I feel like a chump for not having figured out a
> way to bet against the ad bubble. (Especially since
> VCs don't understand advertising--they still think
> that it's something that data can make more efficient:
> http://venturebeat.com/2013/09/28/why-we-need-a-don-draper-mentality-to-redistribute-the-200b-tv-ad-industry-from-broadcast-to-the-web/
> ) Ideas?
> 
> Anyway, Peak Ads.  All good, as long as you're only
> considering what Doc calls direct marketing.

That's here <http://hvrd.me/16DOfDX>, and the distinction is to draw a line 
between advertising that gets personal and advertising that doesn't. The 
former, as Don, Tim, Adi and I all say, has peaked.

> Peak Ads describes email spam perfectly.  Email spammers
> can send more spam than you can possibly read.
> You have an incentive to block it.  Email spam is
> an inexpensive, common, and almost totally ignored
> medium -- it's already peaked.
> 
> As web ads get to be more and more like email spam,
> they're peaking, too.  Right so far.
> 
> Magazine ads, though, don't peak.  Why?  Because they
> rely for effectiveness on the amount the advertiser
> spends, as perceived by the reader.  Signaling.

The spend is the biggest signal, and not the only one.

There is also old-fashioned branding. Which, when it is done well, expresses 
the integrity, personality and value of the brand.

This is best exemplified not by Superbowl TV commercials, but with truly 
appropriate and welcomed display ads in vertical magazines. The best 
exemplars are the fashion mags (e.g. Vogue), and their satellites in narrower 
side-verticals such as wedding (e.g. Brides), shopping (e.g. Lucky) and teens 
(e.g. Seventeen). Readers in well-served niches such as these welcome and 
peruse the ads, often with closer attention than they devote to editorial 
matter. The symbiosis between the two is high: advertising and editorial 
cohabiting with and supporting each other, even respecting the "Chinese wall" 
between them.  There is, to my knowledge, *nothing* close to this online, 
other than what one finds in the online versions of print magazines. What one 
finds, even with relatively upscale pubs such as Wired and Salon, is far 
driven by adtech imperatives, starting with surveillance of readers.

Note that the brand advertising I'm talking about here doesn't get personal — 
and that itself is valuable.

> More ads make a magazine more valuable.  Instead of
> a death spiral like spam or web adtech, there's a
> value-building cycle.  A new magazine can rise if an
> ad there sends a strong signal.  (IMHO, good content
> has a multiplier effect on that reader-perceived
> ad spend.) More ads mean more money for content,
> more content means more readers, ad rates go up, and
> everyone's a winner.  Readers get better articles and
> photos for the same cover price, advertisers get a
> signaling "bonus" from the quality of the magazine,
> and the writers, photographers, and editors get paid.
> 
> Yes, the total attention that readers can pay is
> limited, but the tendency is to try to attract it with
> ever-stronger signaling, which means an incentive to
> give readers better and better ad-supported content.
> I'll take it.
> 
> The question is how to make web advertising work
> more like magazine ads, which have never peaked, and
> less like junk faxes, telemarketing, and email spam,
> which spiraled into near-worthlessness.

I think it will help for the personalized stuff to fail (or get blocked) out 
of the way.

Note that the new arbiter of what's okay is Adblock Plus, which makes the 
most popular browser add-on, which now passes through ads it whitelists as 
impersonal. This is a developing story, and we're involved: 
<http://realbusiness.co.uk/article/24260-online-advertising-adblockers-and-your-online-experience>

> begin Katherine Warman Kern quotation of Sat, Oct 12, 2013 at 07:21:50AM 
> -0400:
>> 
>> Here's a idea for an additional chapter - "advertising isn't really 
>> financing the Internet"
>> 
>> I wonder if anyone has looked at some basis for an annual depreciation of 
>> cumulative venture dollars invested in Internet ad startups compared to 
>> the annual ad revenues.

That's a very good idea.

Doc

>> Katherine Warman Kern
>> www.comradity.com
>> @comradity
>> 203-918-2617
>> 
>> On Oct 12, 2013, at 1:32 AM, Doc Searls 
>> <
 >
>>  wrote:
>> 
>>> <http://peakads.org/images/Peak_Ads.pdf>
>>> 
>>> ... is a "Working Paper by Tim Hwang and Adi Kamdar of the Nesson Center 
>>> for Internet Geophysics VERSION ONE - October 9, 2013." 
>>> 
>>> My only regret, reading the piece, is that Tim & Adi apparently had not 
>>> read The Intention Economy, in which one of the chapters is called The 
>>> Advertising Bubble, and makes essentially the same case.
>>> 
>>> For those not getting the tongue in cheek in the title, Tim is the father 
>>> of the Awesome Foundation, ROFLCON and much more — and a very smart, 
>>> funny and creative dude. Charlie Nesson is the alpha founder of the 
>>> Berkman Center and a Harvard Law Professor of high repute, both in spite 
>>> and because of his oddities (e.g. fondness for Internet gambling and 
>>> Jamaica permissiveness around drugs). Nobody is more out-there and 
>>> grounded than these two guys, who are also at least two generations 
>>> apart. Love 'em both.
>>> 
>>> Enjoy.
>>> 
>>> Doc
> 
> -- 
> Don Marti                      +1-510-332-1587 (mobile)
> http://zgp.org/~dmarti/        Alameda, California, USA
>