Future of digital advertising: consumers and advertisers need a new deal
The sale of the Financial Times marked an important milestone in traditional media continuing it transformation into the digital world. Many commentators have cited the price as evidence that paywalls can work. But it should also be seen as an indication that data is becoming a fundamental part of the content and publishing world. This is because as publishers erect paywalls, they gather two assets; revenue and data. Both of these help to pay for the content that we consume when we land on that publishers website.
Data is the reason most of the content on the web is free – because we effectively trade the data that we exude on those platforms, for a service that we don’t have to pay for. The audience is the product, not the content. It’s important to note though, that this isn’t a new concept – our behaviour has always been sold to advertisers, which drives revenues to produce more content. Advertising has, for a long time, funded the content that we consume for free and in the case of most magazines and newspapers, we actually pay to consume.
So it was with slight surprise that I read Felix Salmon’s article recently, in which he explains how advertising technology is destroying the online experience. He cites slow load times, naff mobile experiences, and privacy infringements – all at a cost to whoever is consuming the content. In principle, I agree, it can be frustrating when you’re on the tube Wi-Fi, and you can see a page very nearly load, only to lose signal and lose the content. However, if that is the cost, then I believe that the products and services that we receive in return for that cost far outweigh those frustrations.
A very different internet
Without advertising, the internet would look very different today – there would be few online newspapers, virtually no video (other than that produced by amateurs), no Google Maps, no Apple Pay, and almost certainly no free email services. The two alternatives to advertising would be paid services such as paywalls (although even those generally require some advertising funding too), or government funding – and given the current conversations around the BBC, that’s probably an avenue best left alone.
So, I think we probably agree that advertising is important to the future of the internet, given it’s been important to any content (be that radio, television, or newspapers) that we’ve consumed for more than a century.
Advertising technology, however is a slightly different beast. What has traditionally annoyed people about advertising hasn’t been that it’s been invasive (although I agree with Salmon, there is a special place reserved in hell for people who run those incessant, high-frequency retargeting programmes). What’s annoying has been the fact that a lot of advertising speaks to the wrong people – broad media titles carry broad audiences, and so the advertising, by proxy, ends up being broad. Out of an entire newspaper, an individual might only actually find a handful of adverts interesting. The same goes for television, radio and, in the past, the internet.
Most people don’t necessarily understand (or probably want to understand) what actually happens when they type out an address in their browser. Advertising used to be as simple as (and I’m not joking now) calling up the media owner (a newspaper, a magazine, a television channel etc), agreeing a price and a placement and then sending over the advertising creative. The advert would be printed or placed and then the media owner would report back on how many people had seen the advert. It was a simpler time.
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