Digital Minefield

Why The Machines Are Winning

Is Advertising Strangling the Internet?


Advertising used to be a black art. A famous quote was, “I know half of our ad budget is wasted; I just don’t know which half.” No more. Now, thanks to the Internet’s filter bubbles and Big Data, advertisers know exactly who is likely to like what.

Internet advertising knows exactly where best to put its money—and how much of it to be effective. In a few short decades, advertising on the Internet has moved from rooms filled with people to computers filled with math.

Once advertising’s focus was on focus groups; now it’s on math, like fractal equations. At least this is true for the Internet. And that experience is fast changing the game from art to science.

The economy is driven by marketing, of which advertising is the most visible part. The most effective advertising is Word Of Mouth (WOM). Yet it hasn’t really happened openly on the Internet. WOM is a natural fit for personalized Internets.

On today’s Internet, WOM is behind the scenes. At some point, like-minded users could be offered money (micro-payments?) to be the face and/or voice of WOM ads targeting individuals. Would you block all such ads? Even from friends?

For all I know it’s already happening. What I do know is that once advertisers understood what could be achieved by greater personalization of targets, there’s no end to how far they’ll go.

Well, not exactly. If history has taught us anything, we know they can go too far. Diminishing returns will only make them want to shrink the targets more. They’ll work harder, not smarter.

Since the gurus of capitalism are unconcerned about diminishing consumers, we can assume those numbers will continue to decrease. By the time advertisers realize there’s no one out there who can afford their products, it will be too late—for all of us.

But long before that happens be prepared for big changes. “The day when Americans can buy a cable-like television service via the Internet is inching closer.” —CNNMoney, January 7, 2014.

I’ve told you why this is inevitable, but nobody I read online sees the real motivators behind this move: the advertisers. Are they unaware what advertisers have learned from the Internet?

Why would advertisers want to keep throwing their considerable dollars at cable? Having advertised on the Internet, they know precisely how, where, and when to put their ads on Internet TV.

As a medium, television serves its advertisers not its viewers. When television moves to the medium of the Internet, it will still serve its advertisers, just as the makers of filters bubble do now.

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