The Death of Advertising
And what will rise from its ashes.
“The biggest advertisers on television are cars; retailers; CPG companies, all of which have business models that are fundamentally threatened by the internet. These are all companies that are mass market, but the offline mass market relative to the internet is a middle market, and the internet destroys mid-size businesses. It rewards niche businesses that have high differentiation and can charge a premium, and it rewards massive scale businesses that can operate internationally, at a scale unimaginable by even these giant companies. And one wonders, when and if this advertising shifts away from television, how much of it is going to be left?” — Ben Thompson, Exponent Episode #104: Snap’s Gingerbread Strategy
The presence of advertising in our daily lives is akin to that of water in the life of a fish. It’s everywhere, and yet often, we remain oblivious to it, at least consciously; blind to the brightly colored billboard on the highway, or the flashing neon lights outside of a roadside motel. Our conscious minds, however, were never the targets of traditional advertising. The most effective advertising campaigns of the last fifty years were the ones we eventually forgot were there — the McDonald’s television ads delivered to us as children; the Coca-Cola slide in left field at AT&T park in San Francisco; the slogans that somehow made insurance more than a hedge against disaster. (“You’re in good hands”, “Nationwide is on your side!”, “15 minutes could save you 15% or more on car insurance”, “Esurance — insurance, for the modern world”, “Like a good neighbor, State Farm is there!”, to name a few. Also, I recalled those without external aid — such is the effectiveness of long-term, large-scale advertising campaigns.)
In the old world, there was no effective way to target individuals searching for niche products, so the companies that succeeded — the household names, so to speak — offered products that appealed to broad swaths of people, and advertised by reaching thousands, and in many cases, millions of people at once (see: Super Bowl and radio ads). The companies who ran successful advertising campaigns…
