Entries from October 2008 ↓

As if by magic, Russell Davies writes:

We need to stop describing ad-supported things as ‘free’. Their might be no exchange of cash but there’s an exchange of attention and cognition. The marketing business justifies a lot of crap on the basis that it’s giving things away for free. If we paused and recognised that they’re not actually free then we might think harder about whether it’s the right thing to do. We might do smarter, better things if we recognise the cost we’re imposing on people without their permission.

I agree that advertising is not free – it’s a cost in terms of our attention, our time. But there’s a further aspect in which advertising costs us. The more relevant advertising becomes, the more likely it is to tell us things that we already know – relevancy here is more likely repetition. The more it tells us about things we were going to take advantage of anyway, the more it’s just a cost transferred directly from its medium to the good or service we purchase. Advertising, done best, directly makes things more expensive.

Quick example: when I buy a newspaper, I’m likely to see adverts for things I’m not going to buy anyway. I don’t drive, but there are plenty of car adverts in the papers. The car companies will never see the money they’ve spent on advertising from my wallet.

That portion of the newspaper revenue that the car adverts support is funded by someone else and effectively donated to me through the paper’s lower cover price. But as the adverts become more relevant, this dynamic changes and subsequently the newspaper, or more likely website, becomes less free to me.

And in between lick and split, in between the car makers and the journalists are the advertising folk’s overheads that I’m funding too.

If the internet works its disintermediating magic then advertising will eat itself. That’s good. Ok?

But go read Russell’s post anyway, it’s dead good.

I’ve just come back from one of the first meetings for what I hope will become a very important project. I’ll talk more about the project itself in a future blog post. It was a good meeting, trying to gather a bunch of people around an embryonic open-source VRM application.

But, I couldn’t help noticing that for a second time in as many weeks – the first time was at the Social Innovation Meetup – how much the language of the venture capitalist and MBA spivs has become common coin.

So, people were talking about ‘routes to market’, ‘how to drive adoption’, about ‘market share’ and ‘intellectual property’. Worried about cashflow and ‘lifestyle businesses’. It’s so different from the last projects like this I was involved in, where, wide-eyed and unflappable, we only talked about the code, and how to make stuff that we ourselves would use. Classic, open-source, scratch-an-itch concerns.

Those last projects were ten years ago, when the cost of, for example, web hosting was tens of times higher than now; when there was nowhere like the amount of free software out there to learn from and use; when all a respectable developer spent their pocket money on was technical books. What’s driving the spiv talk now?

I’m not sure what to think about it, but it just feels wrong. On the one hand, it’s boldly visionary to be thinking about every tool as something that could change the world. On the other, it’s casually dismissive of any moderate or non-monetary motives, forcing every web-app to be viewed through the ‘next google’ glasses.

At the meeting I was at tonight, the spiv-tallk was at least countered. But I sensed that for some people the make-believe narrative of the venture-funded start-up still held. I’ll admit I’m oversensitive about these things, but just because I’m paranoid it doesn’t mean that people aren’t out to get me, right?

Oh well, these days will pass. I keep telling myself. They will pass.

Everything is wrong with advertising, and that will become clear over the next few years. Almost all business plans based on advertising will fail. The amount of money being spent on advertising will decrease. The number of spivs that the advertising industry can find meaningless work for will plummet. And this is a damn good thing.

Bold words, and sure to met with chuckles from the spivs currently dreaming up the next big advertising platform – maybe it’s mobile, maybe it’s online. They’ll be laughing all the way to the piggy-bank, little piggy tails bobbing, while anti-business, idealist anarchists are force-fed our own words. Or so they dream. This is the first in a series of posts explaining why we’ll be having a big piggy barbecue soon, and why we should be already smelling the bacon.

One of the reason the pig-spivs are deluded is that they don’t have a clue what advertising is. To them, advertising is either defined existentially as ‘what advertising people get paid for’ or recursively as ‘what advertising budgets are for.’ Deconstructing google’s marketing the ‘ad’ in Adwords refers to the budget-line that they get paid from rather than what they’re doing.

Alongside this Orwellian pig-spiv wordplay comes another odd assumption. That advertising in some way makes things cheaper. Having advertising on my mobile phone makes my mobile phone free; having advertising in a newspaper makes the journalism available for free. When you put it like that, it’s clear that advertising merely moves end-user cost from one activity, say journalism, and adds it on to another, say making cars. Now this may be a bargain we’re willing to strike, but, overall, it means that things cost more – largely to no-one’s benefit.

Reflect a while on this: the current economic difficulties are, to some degree, caused by folks in the States defaulting on their home-loans, often to pay medical and drug bills to companies that spend more in advertising than in either production or research. This is not a smart state of affairs.

One sliver of advertising that I think is safe is what I’m going to call ‘yellow pages advertising’. I have a need for something, and I want to see who can satisfy that need. And, crucially, I search to satisfy that need. Whether that’s by going to the yellow pages, searching on google, visiting a price comparison site, I search. The internet has made this process more information-rich, perhaps more price sensitive. The cost we bear for this advertising – being advertised to is always something that costs us in the end – pays for better information. I think that’s ok.

Most advertising, though, is of a different sort – I’m going to call it ’shove advertising’. It’s aim is either to push a product on to us, to influence our view of a product, or to create a demand where none existed. Because its aim is to distract rather than to inform – it’s aim is to make us do something that we hadn’t planned to, spend money we weren’t going to. It’s in essence distracting, intrusive. In essence I say to avoid this very odd assumption that there’s a holy grail in relevancy which can somehow make intrusions welcome, distractions non-distracting. Relevancy is the pig-spiv’s silk purse. Trying to turn shove advertising into yellow pages advertising. A shove is a shove – unless I’m being pushed out of the way of a speeding bendy-bus, shoves just aren’t welcome.

That’s enough for now, in the next post, I’m going to expand on why shove advertising has grown so prevalent, and why it won’t last. And why I believe the internet has changed this. Hopefully forever.