A very intriguing working paper that everyone in the advertising industrial complex — not to mention every tech startup or venture investor with dreams of voluminous advertising-dependent business models — should take some time to read before their next client pitch or board meeting.
It’s called “The Theory of Peak Advertising and the Future of the Web,” — and its authors ROFLcon founder Tim Hwang and Electronic Frontier Foundation activist Adi Kamdar paint a somewhat wonky, but otherwise sobering picture of the economic “future” of digital advertising. Which is to say, in essence: there may not be much of one.
The paper's thesis: online advertising has entered a state of continuous decline in effectiveness, and the existing ad-dependent business models of supporting digital content and information are, in turn, unsustainable.
A smack to the head, for sure — but eminently credible based on four key observations that are increasingly hard to refute:
1) Younger audiences (especially those considered to be digital or mobile natives) are essentially hard-wired to skip, avoid, or otherwise tune out advertising. (Anyone with children knows this implicitly).
3) Click-fraud and automated bots are skewing — even gaming — the system. (If your “fat finger" has ever erroneously tapped on a mobile ad, you’re part of the problem.)
4) There’s simply too much advertising spread across an ever-increasing landscape of media, which, collectively, drives down overall consumer attentiveness. (Quick: name the last three ads you saw before you clicked over to this blog post.)
The future of content and its economic underpinnings hangs in the balance, the authors argue, and a very different set of digital experiences awaits for consumers. marketers and publishers alike.
An eerie echo of a similar line of discussion about a decade ago when the first cracks in the mighty armor of print media were first discovered, debated and mostly minimized.
And we all know how that’s been turning out.
(photos © http://peakads.org and Associated Press/Noah Berger)