Obviously, economists today are more interested than ever in isolating factors that make economic crises predictable. We can see many of these factors in play in the current Internet advertising climate.
- Toxicity: Wall Street's subprime crisis was built on toxic financial instruments. The mediascape's subprime crisis is being built on toxic communications.
- Value Chain Expansion: The financial crisis happened in large part because of massive reintermediation. Banks sold debt it to the next guy, who sold it to the next guy, and so on. What was once a simple, short value chain lengthened to the point of absurdity. Exactly the same value chain pattern is surfacing in media.
- Unnovation: The deeper issue is this: The digital economy is supported wholesale by ads, but no one's improved ads. In the final analysis, every industry that does not improve must reach the crisis point.
- Ethics: Every financial collapse is really just an ethical collapse that happened a few years earlier. Is the state of advertising in ethical crisis? Obviously, we think so. And if that sounds familiar, recall Wall Street 2001-2008.
A very nice article, and some serious food for Monday thought.