You have to wonder why advertisers spend millions of dollars on Facebook only to get a click-through rate of less than 3%. With all the data and market sentiment about use of advertising tactics within social you have to wonder why advertising executives continue to follow old models.
When I was heavily involved in management consulting we used to use a BS flag in group meetings with executives. The objective was that when people were tossing around opinions on issues without any data to support the opinion or any sound logic anyone could throw out the BS flag. The process helped break the ice and make a point.
Opinions are dangerous without data to ground them in logic. Logic based on data and use of data to make sound assumptions is fundamental to good business decisions. Given the state of social media maybe users ought to have a virtual BS flag to throw out when we see social tactics and conversations laced with tricks to capture users data or attention for a irrelevant transaction.
An Alternative to Advertising?
Doc Searls writes: Think of advertising as oil and Google as one big emirate. What happens when the oil runs out?
Maybe it already is. Citing a “Natural Born Clickers” study by ComScore and Starcoma, Ad Age last year reported that “the number of people online who click display ads has dropped 50% in less than two years, and only 8% of Internet users account for 85% of all clicks…What’s more, the 8% of Internet users that compose a majority of clicks is also down by half from the last study, which found 16% are responsible for 80% of clicks. The 2008 study found half of all clicks come from lower-income young adults.”
The free rides won’t go on forever. There are better ways than advertising for demand and supply to find each other (including search, which is free), and more will be found. Google will be in the middle of that discovery process, no doubt. But it’s an open question whether Google will make the same kind of money in a post-advertising marketplace. I’m betting they won’t.
Alternatives Out of the Box of Advertising
Advertising and marketing models came out of the era of mass production. Society has changed and buyer behavior has shifted away from the old advertising and marketing methods. To ignore the data and the relevant shifts is to walk in the darkness with landmines all around you. Kaboom!
The marketplace of suppliers and buyers is wide open for innovation. Pepsi Refresh is a progressive approach to marketing and advertising by enabling buyers to submit ideas to help their communities. While Pepsi Refresh doesn’t represent a new advertising model it does represent a change. The big change, as proposed by Doc, is to leverage all the technological intelligence and innovation aimed at simply matching buyers intentions with supplier proposals. Simple, clean and efficient. The inefficiency lies within how technology suppliers have and continue to build the internet with silos rather than open collaboration tools for the marketplace to operate seamlessly for the benefit of buyers.
Maybe Doc’s vision is too simple yet difficult for a marketplace built by silo mentality. The same mentality was revolutionized when suppliers couldn’t compete against competitors with better models in the 80’s. Enter lean manufacturing models aimed at reducing waste and rework.
Just maybe the new model for technology providers currently supported by advertisers will be forced to change with less and less buyers opting in for BS ads that don’t match their intentions. As Doc eludes to…..if the advertising money continues to dry up just maybe the technology will change and everyone will gain new efficiencies at less cost to both suppliers and buyers. A reality than may be fueled by the decline in advertising effectiveness. What would happen to Google, Facebook, Twitter and all this social stuff? Kaboom again.