Aug
25
That Ghost in the Machine
Filed Under B2B, Big Data, Blog, data analytics, Industry Analysis, internet, mobile content, online advertising, privacy, Publishing, Search, social media, Uncategorized, Workflow | Leave a Comment
There has to be a better way. Seven times have I raced to the telephone today, and seven times have I been greeted with “(pause ..click.) Here is an important message about your insurance/ mis-sold PPI/ tax filing etc etc”. I have put my name on every register but still the intrusive rubbish pours in. My mail box is full of it, and the kindly folk who send us magazines pack a few between every page as well as on them. This dandruff of sales offers is perfectly understandable and indeed some of my best friends, the nicest people you can imagine, make a living out of creating space – filling promotional gunk. And, even worse, many of my clients depend for a revenue stream on selling that space. But I cannot be the only person on the planet who feels exhausted by fending off the intrusive presence of advertising, and feels like saying “When I’m ready to buy, I will give a signal!”
Yesterday I read a fine and stimulating article in the Observor by John Naughton (http://gu.com/p/4by3j), a commentator I much admire and who I have often quoted here. He entitled it: “Is this really the beginning of the end for web ads?” And he cited his use of the Ghostery app to measure the numbers of services watching him using the web in order to find out what he was doing in order to serve him an ad. He counted 31 trackers, and he also quotes a Mozilla engineer as looking at a page served by a well known tech site and finding that the “content” comprised 8k of storage and the ads 6 mb. And we wonder why, in bandwidth starved, fibre-scarce, pseudo-broadband Britain, pages take so long to load! And by now you will be ahead of me, I suspect. Put together the trackers and their bandwidth use, and the ads and theirs, and any school child with a smartphone who wants to get a decent upload time ( – to quote Naughton, we are talking about loading a page to an iPhone in 2 seconds as against eleven at present – ) will load ad-blocking software. Apple, who have no skin in this game, have revised IoS9 and the iPhone release due in the autumn with heavyweight content blocking facilities. They will not be universally effective but think of this: online has the greatest potential for advertising of any medium we have yet acquired for communication purposes. You can track an ad, fit it precisely to your customer’s behaviour, adjust it so readers react to it – and yet advertising in the network has never commanded the rates that it did in the pre-digital world.
So let’s follow the Naughton thesis a little further. Imagine the revolts gain strength. Resentment at the intrusiveness and cost of receiving all those online ads turns into a global movement that blocks them out. Network speeds improve and user costs go down, but that part of publishing that still depends on advertising for a revenue stream takes a further big hit. This will be offset to an extent by Buy Buttons in apps and by brand sponsorship to promote them.
But in a world where users demand free information – and can get it – subscription is not the complete answer in filling the consequent revenue deficit. And providing services, in which information is a part of the deal, is certainly a part of the solution, but how many service vendors do we need? Recent evidence seems to show that users value a dominant incumbent, a challenger and an innovative newcomer – but not much else.
We shall certainly have sponsorship, and that may be a growth point. And it is not hard to imagine the rapid growth of brokerage businesses designed to introduce buyer and seller. I know many in the software sales area, and they infest travel markets. As a general rule the B2B brokers tend to build brand by word of mouth while their consumer equivalents are big brand advertisers – and may be the big brand sponsors of the future. In a world where you buy your Olympic Games coverage from Amazon, watching the Expedia 100m final may make a lot of sense. And Expedia advertising online may not.
This year has seen another new flood of Internet service start-ups. I think we now have to look very carefully at the funding of advertising dependent services in the years to come, and ask where the revenue streams come from in a world where the advertising balloon is deflating. The next DotCom Bust, and we can be sure there will be one, will have The Decline of Advertising running through it like Brighton Rock.