In the previous post, I reference the first three reasons why Wharton Professor Eric Clemons thinks online advertising is doomed to fail. Ironically, his fourth reason for failure is the key to avoiding his grim vision of the future.
4) There is no shortage of places to put ads
It’s true. It’s fragmentation. And when a middle man gets fragmented, they are in trouble.
The more fragmented you are, the less power you have. Here’s what I mean. Consumers fifty years ago were massively fragmented. A sea of individuals. Changing a status quo on behalf of consumers would have been extremely difficult. The Internet changed all that as it has become simple for consumers to unite around a cause, using the web to spread the word and communicate with like-minded people. Enabling consumers to aggregate themselves 50 years ago was impossible. Today it’s more than possible. It’s happening every day.
Now think about media. Fifty years ago, a few companies owned it all. A small united front of like-minded competitors controlled an entire industry consisting of a huge number of fragmented advertisers and an even larger universe of fragmented consumers. On the Internet today, thousands of publishers look to generate advertising dollars. Trying to get them to agree is, to borrow a phrase from “Curious” , like herding cats. It has become far simpler for consumers to unite, coincidentally at the same time that media is hyper fragmenting.
Professor Clemons ends with a final prediction. “The Internet is about freedom, and I suspect that a truly free population will not be held captive and forced to watch ads. We always knew that freedom comes at a price; perhaps the price of Internet freedom and the failure of ads will be paying a fair price for the content and the experience and the recommendations that we value.”
He’s so close but I don’t think he sees the forest through the trees. It’s true that we are becoming a free population and won’t be held captive. (i.e. united, not fragmented). But why is the suggested solution that ads go away and consumers start paying for content and Internet experiences? We’re already paying for DVRs and satellite radio to avoid ads as I talked about in this post. If we’re that valuable, make us an offer…we might be interested in seeing ads after all. I’d rather be paid to be a consumer than charged not to be and I bet I’m not alone.
