
The Theory of Peak Advertising and The Future of the Web (2013) [pdf] - sinak
http://peakads.org/images/Peak_Ads.pdf
======
gipp
I've always been a little bemused by the single-minded focus on clickthrough
and direct engagement in online advertising.

In television and radio advertising, you don't have direct engagement metrics
like clickthrough -- just reach. X number of eyeballs saw your ad, and that's
that. Television ad campaigns tend to have a far more abstract strategy than
anything that could be captured by something like clickthrough. They're about
building brand _image_ and planting a well-designed perception in the mind of
the viewer. It's a _long-term_ strategy. And despite a lack of any measurement
or expectation of direct engagement, companies don't even blink at paying
hugely more for television advertising than an equivalent reach of internet
advertising.

Why are they willing to believe in longer-term, more nebulous ideas like brand
image and mindshare with television ads, yet Internet ads are expected to
result in direct, immediate conversion for pennies on the dollar? It's as
though you measured a TV ad's success by the number of people who dropped
whatever they were doing, went out to the store, and bought whatever was on
the ad immediately.

It just seems like an absurd double standard, and I don't understand where it
comes from (other than the general arbitrariness of marketing in general).

------
x0x0
Alternatively, advertisers (and publishers) could insist on more and more
intrusive or unavoidable advertising. Even now, you could pretty reliably
detect ad blocking; many sites don't but some do (eg fark). You could simply
block users that don't view ads. Or use interstitials exclusively. And if some
users complain, well, who cares? It's not like people who skip ads earn you
any money, so in a very real sense, they don't matter at all.

I think this will lead to a web experience that I like less and less. I'm
willing to pay money to not have to endure advertising but I'm very much in
the minority. As blue_beetle said: "If you are not paying for it, you’re not
the customer; you’re the product being sold."

~~~
Loughla
Nope. It will go the other direction. I think we'll see an insurgence of
astroturfers and their ilk.

Advertisers will realize that no one clicks in-your-face banner ads, but that
people can be manipulated to purchase their items through the subtle use of
forums and social media. Then we see more research into the field of planting
trained individuals into sites like Reddit and HN, and the effectiveness
there, then come the sales.

~~~
jiggy2011
I'm pretty sure advertisers are doing it already, definitely on reddit. It
would surprise me if HN didn't have a few stealth shills.

~~~
mrfusion
Do you have any examples?

~~~
saukrates
[http://www.reddit.com/r/HailCorporate/top/](http://www.reddit.com/r/HailCorporate/top/)
is the subreddit focused on highlighting posts they consider to be onbehalf of
corporations.

------
eevilspock
How much of the content on the web is garbage?

That is what I have asked over 100 people in the past two years. Only two have
ever answered less than 80%.

> _Advertising is the critical financial engine of the Internet._

Well this explains why we have so much garbage. The web is the result of the
perverse incentives advertising creates.

> _The fate of the Internet is therefore inextricably tied up in the fate of
> advertising._

We are not doomed to this fate. TV has gotten better because we have decided
its worth paying HBO and the others.

We have to stop the lie that the ad supported web is free:
[https://news.ycombinator.com/item?id=7485773](https://news.ycombinator.com/item?id=7485773)

~~~
ddebernardy
> We are not doomed to this fate. TV has gotten better because we have decided
> its worth paying HBO and the others.

Do keep in mind, though, that it used to be that way in the past. It's a cycle
that led to steady price increases since the advent of TV.

Once upon a time, people paid for cable TV to spare themselves of ads.

Fast forward a few years, and cable TV operators noted that they could get
away with having people pay for their content _and_ show ads, all while
publicly funded TV channels were steadily starved of cash.

Fast forward yet another few years, and the same cable TVs are charging for
these cable channels _and_ for premium channels such as HBO.

Meinks in a few years, cash starved cable TV channels will be so crappy that
viewers will begin to tolerate ads on premium channels. This will open the
gate down the road for yet another round of price increases -- possibly
something like paid shows with two prices, one with ads and one without.

At the same time, the coming generation will quit TV altogether (if they have
ever used it to begin with) and tolerate ads while watching movies on their
smart phones and tablets.

The only real question is what type of ads these will be. The paper hints at
what probably lies ahead: sponsored content and product placement.

------
egypturnash
Patreon is starting to replace ads for some people. Including me. I won't be
sad to see them go.

------
riemannzeta
Interesting, but pretty thinly supported by facts. The demographics, in
particular, could be explained as a function of relative disposable income as
much as immunity.

Would be far more persuasive if backed up with a cohort analysis over time of
a young and and old demographic.

------
Loughla
For too long, and on too many websites, you couldn't be sure that the ad
wasn't just going to trigger a thousand pop-ups and/or download malware. Or,
the ad was for something you just purchased on-line, leading to confusion.
People no longer click ads because they've learned to avoid them (and almost
every ad I've seen looks super spammy anyway).

It's called training. People can be trained to do/not to do anything. In this
case they've been trained to avoid advertising nonsense; look at the annual
increase in ad-blocker usage and how younger generations avoid ads the most as
cited in this paper.

------
maroonblazer
Interesting theory. I can think of two additional counterarguments:

1) the decline in price of advertising belies the growth in users and the
steady increase in advertising spend Y/Y (+14% in 2014 according to Mary
Meeker's latest report).

2) the paper focuses only on advertising targeted toward the bottom of the
purchase funnel. A considerable amount of display ad revenue comes from upper-
funnel ads, where the objectives are not behavioral but rather perceptual.
That said, I don't know what proportion of total display ad revenue falls into
this category.

------
thibauts
> The fate of the Internet is therefore inextricably tied up in the fate of
> advertising.

Are we going to revert to a web of sharing and free contributions by
passionate people ? How sad ! Is the web close to an end ? No we're fine,
thank you advertising and ecommerce people.

How are we going to do without all those big servers and clouds and things ?
Peer to peer.

------
dredmorbius
A few observations:

• There are other revenue models online. Notably, Amazon, Apple, Google, eBay,
and Etsy are all employing direct sales. This cuts out the role of advertising
and focuses instead on _intent_. It's also directly monetizeable. I'm watching
to see who can apply this to main street, offering a hybrid online/offline
shopping system (I'd like to be able to research and order online, but pay
and/or arrange for delivery offline). I'm struck by how _small_ online sales
are having consistently _undershot_ growth forecasts in recent years.
Federated retail is one such approach.
[http://redd.it/22om3p](http://redd.it/22om3p)
[http://redd.it/243in1](http://redd.it/243in1)

• Advertising is a hugely negative experience in many, many ways:
[http://redd.it/24107v](http://redd.it/24107v)

• The medium is the message. Both technolgies for information and
entertainment, and the business models supporting them, have had tremendous
levels of influence on _what forms_ of media are available and provided. A
quick off-the-top-of-my-head listing:
[http://redd.it/278e2o](http://redd.it/278e2o)

• Advertising has severe perverse incentives on media. Much of the present
weaponized clickbait, viral media, and other misfeatures are a direct result
of ad-optimized content. The faster it dies the better:
[http://redd.it/23twec](http://redd.it/23twec)

• Mass-marketing advertising itself is largely a creature of a number of
accidents of history. Consumer culture (dating to Wedgewood China and mid-19th
century England, see James Burke, The Day The Universe Changed: 6 "Credit
Where It's Due"), broadcast media in which content was widely distributed (now
rapidly fragmenting into microchannels, though costs remain low), a
proliferation of consumer goods for which demand had to be engineered
(possibly ending, and while the 3D printing / micromanufacture model may be
overhyped, it's one possible avenue out), and a growth-oriented economy (as
well as a financial system which absolutely relies on it).

• For content, at least, there are several ways out. I'd be particularly
interested in seeing a broadband tax or content syndication scheme (the first
is a proposal of Phil Hunt's, of the UK Pirate Party, the latter my own)
tried. To a first approximation the dollars work out.
[http://redd.it/1vknhc](http://redd.it/1vknhc)
[http://redd.it/1uotb3](http://redd.it/1uotb3)

There's also Don Marti's observation that a key function of indiscriminate
advertising is a brand-strength signalling message which is lost in
microtargeted advertising. The waste _is_ the useful part:
[http://zgp.org/~dmarti/business/targeting-better-is-
worse/](http://zgp.org/~dmarti/business/targeting-better-is-worse/)

In a sense, advertising becomes a Veblen good, signalling status:
[http://en.wikipedia.org/wiki/Veblen_good](http://en.wikipedia.org/wiki/Veblen_good)

