Re: [projectvrm] Theory of peak advertising

[Don Marti < >]

begin Marc Guldimann | Enliken quotation of Tue, Oct 15, 2013 at 09:26:33AM 
-0400:

> 2 - Ad blocking will be ubiquitous. 
> False. Ad blocking is a technological blip, publishers will soon require 
> that you don't block ads to see content. See DVRs and "the death of TV ads" 
> or try using an ad blocker on Hulu to see why this is false. Even the #1 ad 
> blocker is fast realizing this and has started blackmailing publishers to 
> let ads through. 

The problem with a "blocker" vs. "blocker blocker"
arms race is that ad blocker developers have to push
a new release of a browser extension to keep up,
and publishers would have to change something at the
Content Management System level.  Browser extensions
can move fast, and CMSs are some of the most slothful,
lowest quality software in the world. (This is why ads,
social, analytics, and other site features are often
third-party--it's a major project to get the CMS to do
anything.)

Are publishers going to pull their content off the web
proper, and into the kind of DRM-restricted sandbox
that online video services such as Netflix use?

Are HTML pages going the way of full-text RSS
feeds--no longer used by sites that run advertising
because it's too hard to deliver ads there?

Do we end up losing the web and getting something like
tablet magazines instead?
  http://gigaom.com/2013/10/06/tablet-magazines-failure/

> 3 - Click fraud is an endemic problem that will destroy online advertising. 
>  
> False. $53m in the first two quarters of 2013 is a rounding error. Online 
> advertising did $20 BILLION dollars in revenue during the same period, and 
> grew 20% year over year. That means click fraud amounts to not even 2% of 
> the GROWTH of online advertising. 

There are definitely more alarming numbers out there than the
ones this paper used.  17.4%? 18.6%? 28.9%?
  http://searchengineland.com/report-click-fraud-rate-up-to-18-6-percent-46922

Anyway, some advertisers are probably experiencing a
"rounding error" while others are being completely
hosed.  Interesting that it's so hard for the actual
advertiser to tell which group they fall into.

> 4 - Too many ads will ruin the experience and people will "abandon the 
> site". 
> False. The same thing has happened in TV without the expected collapse - 
> http://www.waynesthisandthat.com/commerciallength.htm . Additionally, the 
> framing of this problem betrays the author's lack of understanding of 
> digital advertising vs. traditional - attention to digital media is growing 
> FASTER than online ad spend.

Isn't TV having its expected collapse right now?
  
http://adage.com/article/digital/americans-spend-time-digital-devices-tv/243414/

Attention to digital media is growing faster than
online ad spend because ads in digital media are
user-targetable, and therefore worth less than print
and TV ads (they're closer to spam than to _Vogue_
or _Computer Shopper_ ads.)  Revenue for web ads has
stubbornly refused to keep up with minutes spent on
the medium.

> If I have more time later this week I'll do a more in-depth tear down on 
> the whole paper.

Can you do mine too?
  http://zgp.org/targeted-advertising-considered-harmful/

> On Oct 12, 2013, at 11:16 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.  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.
> > 
> > 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.
> > 
> > 
> > 
> > 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.
> >> 
> >> 
> >> 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
> > 
 
> 

-- 
Don Marti                      +1-510-332-1587 (mobile)
http://zgp.org/~dmarti/        Alameda, California, USA