Why We Love Advertising
By T. Alex Blum, Founding Partner at Blum Consulting Partners, Inc.
An article appeared in the New York Times on October 28, 2019 entitled, “The Advertising Industry Has A Problem: People Hate Ads”. This followed another story earlier in the year entitled “Why You Hate Online Ads” and just recently the Ad Contrarian, Bob Hoffman, quoted The Times and went on to lament (accurately) the sorry state of the advertising industry as regards transparency, data, privacy, and a host of other ills.
Unfortunately, the ways advertising can be annoying have increased dramatically, thanks to technology and “innovations” like banner ads and “native advertising”, but let’s be clear, it’s not that people hate ads – they still like good ads, creative ads, funny ads – just look at all the attention paid every year to ads on the Super Bowl. People like to be entertained. They just hate being subjected to mediocre advertising on TV or online, or manipulative advertising pretending to be content, or online advertising in general in an environment (the internet) that once promised to be ad free.
Historically, advertising has been a de facto bargain which served both consumers and advertisers pretty well, in which consumers agreed to accept a certain level of irritation – ads - in exchange for cheap, or free entertainment – TV, magazines, newspapers, etc. In fact, in the 18th century, advertising introduced a huge benefit to the general public, replacing patronage as the financial foundation for journalism, allowing newspapers and broadsheets to exist without explicitly advocating a political agenda.
Until recently, advertising functioned pretty effectively under a set of terms that were generally understood and accepted, even if a certain amount of complaining was part of the landscape.
The advent of cable TV, and especially HBO and Showtime, enhanced the bargain by giving people the choice of paying relatively low subscription fees for better content, free of advertising. The key was choice – no one imagined that NFL football was going to be free of advertising but being able to watch a movie without commercial interruptions brought widespread joy to TV Land and mitigated the irritation factor of commercial TV significantly.
Now, there is a problem. The problem is that advertisers, and particularly tech and “new paradigm” companies, are violating the terms of the contract, with predictable results. Advertising is everywhere, and most of it is not very entertaining. As Tim Wu points out in his two brilliant books about the growth of information empires, The Attention Merchants and The Master Switch, humans have a tendency to overestimate the positive results that technological innovation, revolution, or disruption will produce, and disregard the likely negative side effects. Whether it’s Quibi, or ad-supported Hulu, or a host of other streaming services and online resources, it’s clear that the promised land of universal ad-free content is a chimera. How is $12B of private equity debt that Neflix has taken on going to get paid back? Not with subscriptions, unless we’re all planning on paying a whole lot more for our “cord-cutting”. And what about all the additional content that ATT wants to wring out of HBO? How many of us have noticed that now when you press pause on your remote, you’re seeing promos instead of a paused image? How long before you’re seeing ads instead? Wait for it, it’s coming soon, for sure.
The thorn tree in the garden is monetization. The content creation industry is over-invested, and if you ask where the return is, everybody’s solution is advertising. No wonder people “hate ads”; there’s too many of them, and they’re showing up in too many places in our day to day lives. But let’s put the onus on monetization, where it belongs, and stop making ads carry the weight. There’s too much content being produced under a financial model that probably can’t support it, and too much private equity money sloshing around in our economy looking for disproportionate returns.
At its best, advertising is the canary in the coal mine of our culture. When multi-ethnic or multi-racial families become the norm in Cheerios ads on TV, it tells you where we are as a society, in this case in a positive way; art leads culture, ads reflect it. The beauty of advertising is actually that it doesn’t last, it’s ephemeral. It’s a symptom, not a cause. If you think you hate ads, think again. Look around, advertising might be trying to tell you something, and it’s not about ring around the collar.