In a recent - and rather controversial - post on TechCrunch Eric Clemons postulates that advertising on the Internet is dead. He received a huge number of responses to his article and posted a response at the bottom of his original article that basically summed up what he already said, while also claiming an article in The Economist agreed with him.
So what is the basis of his claims that advertising is dead?
He makes three basic claims: First, the people don’t want to view advertising. Second, that they don’t trust advertising. Third, that they don’t need advertising.
The first two claims are somewhat true. However, this is nothing new. Those have been true since advertising first started in any medium. Obviously TV and radio would be much better if there were no ads right? I mean, we could just watch the shows straight through with no “annoying” ads getting in the way. Ads that make claims like “Tide makes your whites whiter” I mean, do we really even believe it when they say it about themselves?
Yet, somehow, ads continue. Why? Repetition and research. In order for an ad to “stick” with a consumer they have to see it multiple times. At which point they start thinking about the product. If it is in an area where they need said product (like laundry detergent) the consumer might ask around, research on the Web and even try the product themselves to see if it works. This could be further enhanced if they see a sale or coupon for the product, making the decision that much easier.
This leads to point three: That consumers don’t need advertising. Sure they do. They even want it, even if the claim in polls says no. Even if consumers claim to not like it, ask yourself or others you know if they respond to ads about sales at their favorite store or a sale on a product they have been eying. You know it happens. Everyone does this. I get e-mails from Tiger Direct, for example, that tell me about great sales they are having on products. I appreciate knowing about them so I continue to get the e-mails. How many of these type of e-mails do you willingly get (not talking about spam, talking about e-mails you opted to receive)?
What the Internet has done is made it easier for people to research products, but they still learn about the products via advertising.
As to the Economist agreeing? Hardly. The Economist points out how well advertising works on some sites - just not on others. They aren’t even talking about the effectiveness of the ads, they are talking about revenues for the sites that run them. This is a totally different thing.
Advertising can work for companies that are using it, yet not generate enough for the site that shows the ads. Sites have a limited number of visitors and advertisers generally spend only to the point where it makes them money, while still paying for ads. A site can only support so many ads with so many customers. Once they reach saturation, there isn’t more money to be had (unless they get more traffic). So a site might not be able to gather enough revenue to support themselves with advertising alone. But that is a business model issue, not an advertising issue.
Lastly, advertising does work, but thanks to the recession companies are doing less of it right now. This is hardly the time to claim the death of advertising when companies are spending less on everything across the board. Advertising more is something many companies would like to do, but can’t because they must take care of the basics first (like paying employees, paying suppliers, etc) and with lower sales they just can’t spend the money on ads.
Advertising is hardly dead. Yes, there will be changes over time, but that is nothing new. Advertising has always adjusted, from newspapers, to radio, to TV to the Internet. It will continue to do so for a long, long time to come as well.
