What's Killing Traditional Media? Not the Internet - Advertising

Steven Dutch, Natural and Applied Sciences, Universityof Wisconsin - Green Bay
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I will respond to questions and comments as time permits, but if you want to take issuewith any position expressed here, you first have to answer this question:

What evidence would it take to prove your beliefs wrong?

I simply will not reply to challenges that do not address this question. Refutabilityis one of the classic determinants of whether a theory can be called scientific. Moreover,I have found it to be a great general-purpose cut-through-the-crap question to determinewhether somebody is interested in serious intellectual inquiry or just playing mind games.Note, by the way, that I am assuming the burden of proof here - all youhave to do is commit to a criterion for testing.It's easy to criticize science for being "closed-minded". Are you open-mindedenough to consider whether your ideas might be wrong?


“By the way, if anyone here is in advertising or marketing, kill yourself. Seriously, there’s no joke coming, you are Satan’s spawn, filling the world with bile and garbage. Kill yourself now; it’s the only way to save your souls. Now, on with the show… ” --Bill Hicks

Okay, I confess. I have actually bought things out of airline in-flight catalogs. This is essentially a harmless form of advertising, apart from the trees used in printing the catalogs and the aviation fuel used to carry them around (on a large plane they probably weigh as much as a passenger). But they sit there in the pouch along with the earphones and barf bag, They don't intrude on you, and once in a while I learn of something useful in them. The scary thing is that the goods in the catalogs are aimed at upscale business fliers, and the idea that the people in charge of our economy would actually buy some of the stuff in these catalogs, like personalized brass golf ball markers (a quarter is so plebeian) is appalling. It makes sense after Bernie Madoff and Bear Stearns, but it's still appalling.

There is good advertising. Some TV commercials are so witty and well made they're worth watching even if you never buy the product. The Evian roller skating babies. BBC's April Fool's ads, ranging from the spaghetti harvest to flying penguins. Guinness' evolution in reverse ad (even if the biology is nonsense). I have subscribed to a magazine called Sky and Telescope for over forty years. It is full of ads. But these are ads for products appealing to amateur astronomers. The people who make these products supply a niche market, have to meet extremely high quality standards to satisfy their extremely demanding customer base, and take pride in doing so. One of the more unusual ads recently was a real estate development that features sites with dark-sky covenants governing outdoor lighting. So here we have a developer, probably an astronomy buff himself, who offers a product specifically aimed to a need among amateur astronomers. Good for him. I hope he makes a bazillion dollars. I can't recall anyone ever writing in to complain about the ads, and I enjoy looking at them and making wish lists for after I win the lottery.

Even the very first e-mail spam message was well intentioned and appropriate to the target group. It was a 1978 mailing advertising the unveiling of new computers, and was targeted to an audience of computer scientists. It's hardly different from mailings I get all the time from various organizations. The difference was that this message was unsolicited, whereas I have signed up for e-mail lists to some organizations. Still, by today's standards, it was very benign, but it did portend things to come.

When Edward Lloyd opened his coffeehouse in London in 1688, he soon found that the information he supplied was as appealing to his customers as his coffee. Naturally, people with information soon found it paid off to supply it to Lloyd. Before the mid-19th Century, advertisements were for specific businesses or public events like ship departures, plays, political debates, and so on. Regrettably, there were also ads for slave auctions and appeals for the recapture of runaway slaves. But on the whole the advertisements were for services that there was a real likelihood some readers might have an interest in knowing. And - a vital point - you could ignore the ads entirely if you chose.

Periodicals and advertisers soon formed a mutually beneficial alliance. The advertisers had useful information and the newspapers supplied an audience. The information might actually be useful enough that some people would buy the paper specifically to get it, while other readers might chance upon it and find it useful.

But over time the alliance turned toxic. As markets became saturated and crowded with competitors, advertisers needed ever more shrill and numerous ads to attract attention and shave off that ever thinner slice of the market. The media, on the other hand, found they could get more revenue from advertising than they could from selling content. So the volume of ads increased, while the content decreased. Reporters were let go, comics shrank in size, local reporting dwindled.

Apart from the stereotypical newsboy shouting "Extra," (did that ever happen?) advertisements were almost wholly passive, apart from the annoying practice of breaking articles up to shunt readers to the back where the ads were. You could simply ignore them. That changed with radio and television. Ads in those media are inherently intrusive, since they interrupt the flow of the program.

It's been said that the mass media provide content for free so they can sell ads. That's true for in-flight magazines and free weekend shoppers that provide a handful of fluff articles to entice people to read them. It might have been true of radio and television, where the price of free broadcasts was commercials. But any publication seriously worth buying, the consumer is still paying for the content. Ads might help subsidize the content delivery, but the customer buys the medium for the content. I wouldn't buy Sky and Telescope or Scientific American if they only had five pages of articles and fifty pages of ads. I have no use for the New York Times because it is 90 per cent ads.

Even before the Internet, newspapers and many other media were struggling. Costs were rising. Colliers and Look, once magazine mainstays, went out of business long before the Internet. Life has sputtered along fitfully, mostly surviving by reprinting pictures from its glory days. And it seems to be an unfortunate pattern that businesses facing contraction cut the very things that attract customers. Your local bus line is losing riders? Cut routes and raise fares. Your department store is challenged by Wal-Mart? Well, we could never consider offering more variety ourselves (I shop at Wal-Mart not because they're cheap, but because I can count on them having what I'm looking for.) Your newspaper is losing readers? Okay, we'll cut the comics pages, fire reporters, slash local coverage. But not the ad inserts. They're sacrosanct.

The Internet has opened new possibilities for advertising. Not only is it possible to reach audiences even more cheaply than before, but the international nature of the Internet has made it possible for people in poorly policed countries to bombard the Internet with junk mail. It doesn't matter that hardly anybody responds; the spammers are counting on that one person in a million who really is stupid enough to believe that someone in Lower Frambesia will cut him in on a few million dollars.

  1. We should go back to the practice of billing Internet subscribers for time spent on line. In return:
  2. Internet providers pay Web site owners according to usage. After all, these are the people who are generating the traffic that keeps the providers in business. Charge a basic fee for hosting, offset by volume of visits.
  3. Internet providers charge Web sites for separately transmitted ads. Banner ads, marginal ads and other in-page ads are just fine. Pop-ups, additional pages and redirects cost. But what if I'm hacked? Maintain your site properly.

Under this system, Internet users subsidize the Internet, not by some complex and insecure micropayment system, but through accessing the content. Web providers, in turn, pass some of the revenue on to Web site owners. If a Web site owner elects to host pop-ups or other intrusive ads, he'd better be very sure it will generate enough revenue to cover costs.

The solution: tax the bejeebers out of advertising. First of all, eliminate it as a deductible business expense. Next, pass laws that companies that can afford to advertise can also afford to provide health care and fully funded pensions to their employees. Finally make it so costly that only people with something serious to say will take the risk.

"But my business can't survive without advertising." I have a very Adam Smith solution for you. Go out of business. That will open up a niche for somebody whocan make a go of it without advertising.


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Created 6 September 2009;  Last Update 24 May, 2020

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