Advertising and the Rise of the False Economy…

Back in the “day” when there were only three major broadcast television networks (ABC, CBS and NBC) there existed a logical premium as well as advantage to the concept of advertising.  As between the three [networks], they held captive the entire American viewing audience; basically if you will they owned the “eyes” of the world’s largest economy.  In a way this is an amazing thing which may never exist again, as in this tightly captive model the “few” in control of the “medium” created their own “message” which is one of the reasons for my interest in Marshall McLuhan’s work as it’s contemporary of the time.

However one of the interesting things about “advertising” is it’s “time” based, and time by it’s nature is limited.  Therefore a 30 second spot on TV would require 30 seconds of channel time where the medium had to dedicate that period to the “message” (commercial in this example).  In kind the viewer had to also dedicate their time too in order to watch the “message”. Thus each of the three networks, where faced with selling a limited amount of their commodity (medium “time”) as they could not make more “time”.  This logically precipitated the horizontal expansion of networks via other channels (still speaking of television), however the other issue that was soon faced which limited expansion was the lack of frequencies or “channel space” if you will.

In the end as you well know, the market to solve this issue switched from analog to digital to again press forward the boundaries of horizontal expansion. However what about the market itself?  In short for the sake of conversation the “viewing” market is still the same.  In other words, if there were still only three networks, there would still only be one audience.  While one might also say the increase in programming diversity has drawn in additional viewing time, the fact is the audience does not scale in respect to the media.  In fact the audience is fixed and the media is the variable component.  Where as in the past it was 3:1 as in three networks and one audience, whereas today just based upon television as a medium one would be looking at numbers in excess of 328:1! This ratio is also artificially low as its only based my access to Comcast digital cable box, not the combination of all potential options as if one were to subscribe to Direct TV, Comcast, U-verss, etc.  However, even with this minimalist view, one can see that the large number clearly represents a phenomenal dilution within the market place.

For a moment think about this, in the past an advertiser would have a roughly 1 in 3 chance of me seeing their ad spot run.  Since I am the audience, this fact applies across the audience as a whole.  Fast forward to today and there is a 1 in 328 chance I will see that same ad spot run.

Here is where the “false economy” of advertising starts building a case for itself when it comes to “advertising” as the back bone of all media (television, radio, internet, etc) as all build upon this as a main stay for revenue creation.  So let’s now add all of those media channels together we are likely to be well above 10,000,000:1!  This is mind numbing to me along with the fact that venture capitalists will invest billions into companies just on the concept profiting from display ad’s or banners!

Ok, when was the last time you bought something that popped up on the small screen of your cell phone while you were using an adware based application?  Me, never and yes I am fully aware in many cases the concept is to generated repeat awareness, via customer impressions to promote impulse buying decisions when confronted by the product along with other potential selections at the same time such as at a grocery store.

However I submit to you that with ratios as mentioned above, the messaging has in itself become noise as at a certain point the number of “impressions” will turn the message negatively viral if you will.  So what once was meant to be a “message” is now simply background noise.  In saying this, the extended logic also applies to the money paid by companies to the “medium” is wasted as the “message” is lost due to the high noise factor created by the vast number of media channels.  Also it’s not just one, or a thousand messages which end up as “noise”, it becomes the majority of them thus eroding underlying economies the mediums have been built on and thus the investments which created them.

In essence one could say “the emperor is quickly losing his clothes”, and the false economy of impression based advertising is eroding our economy as it is not fueling sustainable societal value….

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About Joseph Campbell

As a strong believer in the fact that "people work for people", it has been a life driver to better to understand the complexities of the various aspects which drive efficiency within this axiom, especially the concepts of leadership. Supporting this, I have been fortunate enough to having experienced this as leader on a global basis over the last decade and half. During this time it has been clear there are three core drivers being Life, Leadership and Economics.
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One Response to Advertising and the Rise of the False Economy…

  1. ulag says:

    What makes entrepreneurship an intrinsic part of US and Israeli societies. Its their history.
    http://haphazardcontemplations.wordpress.com/2010/12/29/what-makes-an-entrepreneurial-society/

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