Back in the olden days, I covered health care services at an investment bank that was quickly developing a specialty in the Internet. The talk then was that the Internet would revolutionize advertising because of the tight targeting and tracking capabilities. Advertisers would read their ideal customers, who would click on an ad to buy exactly what they wanted. Viola! Advertisers would save money, increase sales, and improve customer satisfaction.
That’s not how it worked, though. Advertisers have tons of data about every one of us, and yet, half the coupons that spit out at the grocery store checkout counter are of no interest. One of the people I worked with way back when, Derek Brown, recently wrote about how off so many of Facebook’s ads are. Human beings are tough to target, and even then, it is hard to make us part with our hard-earned money.
In fact, the single hardest thing for any business is to come up with a product or service that people will spend money on. Consumers are sophisticated, and just about everyone over the age of three has been burned by a product that was not at all as great as it was presented to be.
It is easy to show whether an online ad generates a sale, and you know what? Hardly any of them do. Instead of showing how valuable online advertising was, it only proved that most advertising is ignored. As advertising is more and more ineffective, companies buy less, so publications have smaller budgets, so they put out skimpier magazines, which are even less attractive to advertisers, and the death spiral goes on.
As a writer for both traditional and new media, I know firsthand how rates have come down and assignments have slowed. As the proprietor of Chicago on the Cheap, I know how hard it is to get readers and then get them to pay for what they read (it is hoped by clicking on the ads, but will that work? You tell me.)
We bought a new car a few years ago, and it came with six months of free satellite radio, My husband and I love music, but we are also cheap, and we could not imagine that satellite radio would be worth our money. After three days, we were hooked, and we happily pay $13 bucks or whatever. The provider reached us through sampling. We have not listened to a radio commercial since then. Are we typical? I don’t know. Did ClearChannel’s strategy of buying up all the radio stations in order to run tons of ads work? Not in the long run.
I’ve been experimenting with ways to promote Chicago on the Cheap. I sent out a press release that might result in some coverage. I have Facebook and Twitter, but who doesn’t? It’s just more noise. I have paid for Google AdSense; so far, I have had one click-through which cost me $1.87. I’ve also gone the old-fashioned way and bought a whole bunch of pens with the URL stamped on the side. Every day that I hand out pens, the readership goes up.
It is an interesting time, and we have a lot to work through right now. I suspect that advertiser-supported business models are not long for this world, and that goes for online as well as print. As consumers, we will end up paying for media – and less for consumer products.
