
Something doesn’t ad up about America’s advertising market - hardtke
https://www.economist.com/news/business/21735029-stockmarket-investors-are-wrong-expect-enormous-surge-advertising-revenues-something
======
taneq
> In the analogue era the rule of thumb was that ads could comprise no more
> than 33-50% of TV or radio programming, or of a magazine’s pages, says
> Rishad Tobaccowala, of Publicis, an advertising firm.

My tolerance is _way_ lower than that now. Commercial TV is basically
unwatchable, as is commercial radio. The internet is pretty horrible without
an ad blocker. Anything more than 10-20% advertising just gets turned off
immediately.

~~~
CapacitorSet
Indeed, 50% advertising seems outright ridiculous. Want to watch a 2-hours
film? You'll watch two hours (!) of advertising. That's silly.

~~~
flukus
Or they'll just cut out part of the movie and give you 90 minutes of ads with
90 minutes of movie. Australian free to air networks have done this.

~~~
dvtv75
I saw that a few times in New Zealand, too. I think I've seen TV shows lose
scenes and lines for more ads, as well.

What really got me was back when the Battlestar Galactica pilot screened on
TV. I was very keen to see it, and heard the pilot was three hours three
minutes long.

It was split up, on TV3 I think, into two 180 minute slots, which means there
were almost as many minutes of ads as there were of the show. I had to turn it
off after one scene was interrupted in the middle for an ad-break that was
longer than the scene, then we came back for a single line (now out-of-
context) and one camera change, then cut to another break. (For reference, it
was a scene with the nuke hitting the Galactica, then six minutes of ads
interrupted by about 25 seconds of show.)

I turned off my TV, found an email address, and explained to them just why I
was going to buy the DVD and not watch another second of their broadcast.

TV advertising is so intrusive these days that I haven't watched broadcast TV
in years.

------
ChuckMcM
This isn't a particularly new insight :-). And the phenomenal rise in the use
of ad blockers, dvrs that skip commercials, and direct to streaming services
suggest that not only has "big advertising" poisoned the commons they are at
risk to training an entire generation in the art of avoiding their product.
It's my hope that they entire house of cards will collapse.

There clearly are "good" advertising options. People will often read topic
specific periodicals (magazines, newsletters, Etc.) both for the editorial
content and the advertising of service providers surrounding the topic. And of
course there are people who will be more excited about the advertisements on
the Superbowl next weekend than the game. But advertising as envisioned by
Google and Facebook feel like they are under siege and there is a race to the
bottom in terms of what advertisers will pay, and so how much they 'care'
about the end product.

The growing battle will be advertisements "embedded" in content. People can
already replace billboards in movies or on Youtube with ads for actual
products. At some point these 'insertion points' will be programmed in as
meta-data in the distribution of content so that they can be added in on site.
Things from store fronts to the vehicles in the scene are up for dynamic
replacement.

~~~
lorenzhs
That last one is already happening, and has been for 5-10 years, albeit not
dynamically. Reruns of old shows sometimes have the advertisements switched
out or even inserted. Here's an article describing this phenomenon in 2011:
[http://www.ew.com/article/2011/07/07/how-i-met-your-
mother-r...](http://www.ew.com/article/2011/07/07/how-i-met-your-mother-
reruns-bad-teacher-zookeeper/)

------
ramblenode
I'm a Millenial and I have a hard time believing advertisers have gotten a
positive return from what they've spent advertising to adult me. Clicking on
an ad is always unintentional. Pop-ups are closed immediately and
automatically, as are auto-playing videos. Other ads are scrolled past as
quickly as possible to remove them from my field of view. And all this is when
I don't have an ad blocker running.

TV is almost unwatchable now because of ads. I can tolerate them for an hour
or so, but past this I get anxiety and then frustration from seeing them if
they aren't muted. At some point I begin to feel irrational hostility to the
brands on TV.

I struggle to remember the last time I saw an ad that triggered real curiosity
or a desire to purchase something. Usually I'll hear about things I want from
personal channels, by seeking them out myself, or from mailing lists I've
explicitly signed up for.

Of course, maybe I'm being influenced in ways I don't realize or understand.
But I kind of doubt the effect is very large. I compare products on
ingredients, price, utility, etc. and make a decision from there. There are a
handful of brands which have intrinsic value to me, but it's because of good
experiences and recommendations from people I trust, not ads.

I don't think I'm atypical for my demographic, and there seem to be others who
concur [0] [1]. Whether it's the majority, I'm not sure, but a sizable chunk
seem to have become averse/resistant to traditional in-your-face, attention
monopolizing ads. Influencers, sponsored content, and product placement may
have better reach in the near future among these people. There's also IoT
purchasing interfaces like Amazon Echo and Google Home which stand to be a
powerful gatekeeper to products.

It'll be interesting to see how this turns out and whether the marginal
influence of an ad increases or decreases over time as AI, surveillance, and
micro-targeting improve and as society and culture respond.

[0]
[https://www.forbes.com/sites/danielnewman/2015/04/28/researc...](https://www.forbes.com/sites/danielnewman/2015/04/28/research-
shows-millennials-dont-respond-to-ads/)

[1] [http://www.sfgate.com/business/article/Millennials-really-
ha...](http://www.sfgate.com/business/article/Millennials-really-hate-
advertising-study-finds-7393642.php)

~~~
jacobush
It may be that ads fail in the moment, the click-me-now-sense. But they may
still work in the old-fashioned "strong signal way", i.e. you notice that a
brand is strong (can pay for a lot advertising) and you remain aware of the
brand.

The "strong signal" message is diluted by ultra-targeted-ads, but you will
still be aware of the product.

Whether it still is a net gain in your (and similar targets) case, maybe no
one knows.

~~~
ramblenode
> But they may still work in the old-fashioned "strong signal way"

This is a good point and does affect me to varying extent. I would say strong
signaling is the least effective for certain food items, mouthwash,
toothpaste, vitamins, etc. where the makeup and price of the item is simple
and comparable between brand names and off-brands. Where there are sufficient
trustworthy reviews of items, it is also less effective. When it's something I
need quickly or when the tolerance for failure is low, I'm much more likely to
default to a peacock type of product that's established itself.

~~~
jacobush
is that what you are aware of? I suspect a lot of us also choose the strongly
signalled product also for mundane products.

------
evrydayhustling
These valuations aren't necessarily just a bet on advertising as we know or
imagine it. At least for FB and Google, the assets that give them power to
direct attention to ads can potentially be monetized in other ways if ads stop
being the most lucrative.

And conversely, if you don't own an asset that redirects a massive amount of
attention, you can't launch any kind of product without getting help from
someone who does (whether you call that help advertising or not).

~~~
lsseckman
If Google's asset was so powerful you'd think their other products would be
doing better. (google+, glass, Allo, etc)

~~~
gcb0
even they being failure, almost everyone heard of them.

~~~
lsseckman
right, but the point is that those products won't maintain the company
valuation.

lots of people have heard about AIM, but it didn't save AOL

------
apexalpha
Many people scorn others for blocking ads. I'd be taking in content without
paying back. But honestly I see it like this:

If I walk down the street and someone hands me a flyer that says: new shop
open at X! Come now for discount.

I'd consider that fair advertising. But what happens on the internet nowadays
is more like this:

"Hello. Our cameras saw you stared into the windows at shop X, Y and Z. Our
system also noticed you are walking slower than usual and your phone
regularely turned on during the last 3 nights. Are you not sleeping well? Get
a better bed! Come to this shop."

That is basically how intrusive online ads are. And I have absolutely 0,00
regret about taking meassures to block this 24/7 subconscious priming from my
life.

If content creators don't like this they should find a different business
model.

~~~
bewo001
Good analogy. TV and many web sites feel like a road at very touristy place
where you get constantly harassed by people trying to get you to visit their
bar or sign time share condo contracts.

------
dba7dba
When cable TV was starting out in US, one of the advertised pros was no
commercials on cable TV.

~~~
isostatic
In the UK, skytv stated free to air, with adverts, with movies being
subscription but no adverts.

Then they introduced subscriptions around 1994 to all channels, but kept
adverts.

I don't subscribe to sky, but I used to, until I saw that the revenue from
advertising was tiny - by increasing subscription prices by 10% they could get
rid of adverts and remain revenue neutral.

If you don't offer an advert free product I won't buy it. When Netflix and
amazon inevitably start adverts, I'll go back to DVDs. If they aren't
available then torrents it is.

Advertising is a scourge on civilisation, it costs trillions of dollars in
lost time each year in the US alone.

~~~
dba7dba
_When Netflix and amazon inevitably start adverts_

I am positive that day will come. Soon enough. Unfortunately.

~~~
isostatic
They know how much they get per customer from an advertiser. They could then
simply offer a "no advert" plan at this premium (or more), like cbs all access
do.

If they don't they're idiots. Remember there's plenty of competiton for
entertainment nowadays.

------
scarface74
I find the best, most interesting ads to be podcast ads. I've bought or
recommended a number of products based on them - Backblaze, Casper,
Betterment, Hover, Squarespace, etc.

Others I'm very interested in trying - Warby Parker, Away Travel, Linode and
Fracture come to mind.

I can't think of a single podcast ad that I think is total rubbish.

On the same note, Marco Arment created his own podcast ad platform for his
Overcast podcast player that is unobtrusive, informative and I actually
consider it feature.

Podcast ads and the direct response model must be working because the same
companies are represented in most of the popular tech podcasts year after
year. They have metrics to know exactly which podcasts generate traffic.

------
debt
Call me paranoid but y’all seem petty unfazed by the seriousness of what’s
being presented here.

Google and Facebook are going to stop growing in the next ten years which
means unless cars start driving themselves soon, the gravy train is coming to
a screeching halt.

That’ll be a site to see.

~~~
chatmasta
Google is (finally) diversifying with Cloud Platform. As recently as a few
years ago, advertising was 98% of google revenue. I haven’t kept up with the
numbers, but I bet that’s lower now due to cloud and gsuite.

------
chatmasta
Advertisers, save for big brands, would not spend money on ads if they did not
convert eyeballs to customers. The entire marketing industry is built around
measuring traffic and conversions, and setting bid prices accordingly. So
clearly advertising is “working” in some capacity. It generates value by
providing a growth engine. A new company today can use advertising to reach an
audience greater than ever in the past. My intuition is that this has to be
adding real value, somehow.

------
harrywhelchel
A lot of people have commented on native advertising being on the rise. Does
the saturation of traditional ads mean we'll see more native advertising or
will we adapt and better recognize native advertising too? Will we get more
skeptical and untrustworthy of content in general?

~~~
Feniks
Native advertising still has to be marked as advertising. In theory you could
easily block them if you want with a cosmetic filter.

Personally I don't mind advertorials if they have a subject I am interested
in. Native advertising is better than a full page ad taking over the screen.

------
everdev
Public link anyone?

~~~
lern_too_spel
Pay for it. It's the price of not having the article plastered with ads and
clickbait.

~~~
BareNakedCoder
Yes, pay for it. It's well worth it. I've been a subscriber for many years and
consider it on my Top 10 list of things I would miss most if I were ever
stranded on a deserted island.

------
mindFilet

      IMAGINE a world in which you are manipulated
      by intelligent advertisements from dusk until 
      dawn.
    
      It may sound outlandish, but this dystopia is
      increasingly what stockmarket investors are 
      banking on.
    

Except ads don't actually manipulate me. I know they don't because I don't
even have the money to spend on the things advertisers show me. When I do have
disposable money (a rare event) there are specific projects that I plan during
the lean times. Those projects get well researched, and aren't impulsive,
emotional events.

Day-to-day spending also is not swayed by advertisements. There are real
reasons behind the choices I make, and those ideas, opinions and motivations
don't source their information from advertisers. I'm not charmed by entreaties
that pander to my niche demographic.

Advertising has one rare utility, in shedding light on things that are new.
The cliche being that everything is "new and improved" if you believe what ads
are trying to sell you.

The people that try new things are the targets, and learning who will try
something new, and who will spread positive word-of-mouth endorsements, is the
holy grail of advertising, but realistically most people do research and find
real evidence, before parting with their money.

Ads can notify a person of presence, but in practice, people really do operate
carefully before accepting invitations to buy, or R.S.V.P. with their wallets.

~~~
Zarath
No way dude. Ever shopped for a car, car insurance, mobile phone plans? I
almost guarantee you that the first company you thought of was a result of
advertising.

~~~
prewett
When I think of buying a car, I think of Honda. I bought Oldsmobiles because
my dad did, until they stopped making them. Then I test drove a Toyota,
because a family friend loved hers, but it was pretty ho-hum. Then I test
drove a Honda, because it's the other Japanese car (which to me signaled high-
quality, not because of advertising but because of the family friend's
experience with her Toyota), and loved the transmission. Loved my first Honda
and have had no mechanical failures, hence car = Honda for me.

My most recent car insurance was purchased because the banker at the bank
where I met the guy selling me his used (Honda) car asked me, and I went with
that one. You could argue it was marketing, but it definitely wasn't
advertising--I had no idea the name of the company until I got the letter in
the mail. I do think of Geico, but that's because I am a fan of Warren
Buffett, and his annual reports constantly laud Geico. But the website
requires you to request a quote, which is too much hassle ("if you have to
ask, you can't afford it," I figure). After I have thought of Geico I think of
the commercials, but that's not the order that advertising is supposed to
work.

The first mobile phone plan I think of is AT&T because they were the only
carrier with the first iPhone. (However, I did subsequently switch to Verizon
because I had evidence from talking to people, especially my brother, that
"more bars in more places" was actually true, so you could argue that
advertising factored in there, but it was really more that T-Mobile had such
terrible reception at my apartment and AT&T was too expensive, and my brother
said Verizon was the only option in the middle of nowhere where he was
living.)

Now I don't watch TV, don't even own one, so I will have less influence than
most. But, still.

