Eric Clemons, Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania, recently wrote a highly controversial guest post at TechCrunch. It is a wealth of ideas worth considering, but its basic message is this: advertising on the internet will fail. Today I'm going to try and evaluate this conclusion. On Wednesday, I'll touch briefly on an interesting point he makes later in the article.
According to Clemons, advertising on the Internet will fail because of three states of affairs (hereafter, SOA):
- People don't trust ads. (cf. BlogLESS, Remembering Promises)
- People don't want ads. ("When do you leave the TV to get a snack?" he asks, "Is it during the content or the commercials?")
- People don't need ads when they have friends and independent professional rating sites from which to obtain information. (cf. BlogLESS, Social Networking and Brands)
Now consider the following. SOA3 states that people don't need ads because other, more preferable resources are available to provide them with information. Clemens notes that "It’s not that we no longer need information to initiate or to complete a transaction; rather, we will no longer need advertising to obtain that information." This means that SOA3 is the case if and only if SOA2 is the case. In other words, if people found ads sufficiently preferable, this would undermine the efficacy of SOA3. There are many thriving phenomena that consumers want but clearly do not need. For example, reality television.
Now, ask yourself why SOA2 is the case. Or better, ask Clemons, who takes up the question as he dismisses a certain practical alternative: "better targeting of ads using individual interests and individual behaviors will ensure that we do not bore or annoy as many people with each ad, but cannot address the trust issue." In other words, people do not want ads because they are noise. The messages contained in them are not worthy of consideration, and thus are perceived as useless cognitive clutter in the already messy space of the Internet.
This means that SOA2 would collapse if SOA1 was not the case. In other words, if people perceived that they could trust ads, they would become virtually indistinguishable from other contentful, potentially useful information on the Internet.This means that, advertising on the Internet will indeed fail, but only if it can't develop trust by making meaningful, keepable promises.
Of course, some of you will recognize this as what we've been talking about for the last year. We hope that Clemons' popular essay and findings provide further motivation for advertisers to work hard on developing strategies that Clemons himself may not have yet considered a feasible subset of advertising.