Advertising isn’t understood
Posted on Friday, March 2nd, 2007 at 7:32pm. #
Sometimes, I really do worry about peoples’ grasp of what advertising is, and how the advertising works.
In the Joe Duck blog he says:
* The most important question is about $money$ and it is simply this – can video be monetized well? Nobody knows yet. I predict the answer is going to be somewhat complex, but basically no, you can’t monetize it nearly as well as pay per click advertising, where the information experience can be integrated well with the buying experience. With Video this match is going to be more difficult and usually impossible. Somebody watching a “Daily Show” clip is primarily interested in a quick laugh, and seems unlikely to wind up clicking off on an advertisement and almost totally unlikely to buy something as part of the Comedy Central clip watching experience.
So, what Joe’s saying is that TV advertising is a waste of money; radio advertising is a waste of money; poster advertising is a waste of money; and newspaper advertising is a waste of money – because you’re “almost totally unlikely to buy something” as part of the experience. And he’s an “internet entrepreneur”. Blimey, if he doesn’t understand that advertising is necessary to build a brand as well as sell things, then there’s not much hope for the rest of us.
Meanwhile, on the BBC Backstage mailing list, a discussion has erupted around ad blockers. The ignorance and selfishness shown by many of the participants has been amazing to behold. One person claims he has “never bought anything as a result of TV or radio advertising”: which, unless he’s claiming never to watch or listen to commercial radio, is simply false. Others appear to think that the -only- way that advertising can earn money is if people click on the ads; and therefore by blocking the ads they’re not damaging an ad-funded site. This list has some incredibly interesting people on it; so why are they so ignorant to advertising-funded models? Why do they see no ethical problems in enjoying a website’s content while stripping all the advertising off it? Why do they not see what they’re doing is damaging the very website they enjoy?
The ignorance extends to business. The commercial radio industry has, over 30 years, established a rough “revenue per listener per hour” figure of 2.5p. The music and record industry appears to think it’s perfectly fair to charge over 2.5p per listener per hour to run an internet radio station, however (and that’s before you put the cost of staffing, talent, and bandwidth into the equation). The insistence by the record industry to charge these unrealistic figures shows a total misunderstanding of the amount of revenue that you can earn from advertising, and how this revenue is earnt: an internet radio station reaching only a few thousand people simply won’t get onto a buying list, let alone earn the 2.5p that regular terrestrial radio enjoys.
Is it time for advertising to have their own PR offensive, to explain advertising-funded business models to consumers and businesses? Do we need to explain the benefits that advertising brings consumers, and make the image of advertising better so that people trust it more? How many people understand that a television ad must be independently fact-checked before it makes it to-air, and every claim double-checked? How many people know that many websites get money to display ads, as well as if you click on it?
Or, is advertising inherently evil and untrustworthy? Does the advertising industry just need to get more ruthless and less respectful of the consumer, by making their ads more irritating and harder to get away from? Is beating the ad-blockers the order of the day? Does all video have to have a ‘buy this product? Yes? No?’ interstitial at regular intervals?
