It’s the end of advertising as we know it
This year, the Reuter’s Digital News Report 2016, the Pew’s State of the News Media 2016 and, of course,Mary Meeker’s Internet Trends 2016 all point to three separate trends that may well envisage the end of advertising as we know it: the increasing popularity of communication platforms, the rise of adblockers and the propensity of brands to communicate directly with their users. The combined effect of those trends may be that, in the near future, advertising as we know could have no place in the information and communication streams individuals use unless they specifically want it there. It´s a radical change that often goes unnoticed.
From distribution platforms to communication platforms
As usual, this year’s Mary Meeker presentation was full of valuable insights and supporting data. But one trend stands out as it relates to the future of advertising in the digital age: people increasingly spend their digital time on communication platforms, exchanging all sorts of content directly with their friends. It´s not just that they abandoned news websites or portals in favor of personally managed social networks (like Facebook), something that has been repeatedly diagnosed in the last couple of years and is also manifest in the other studies mentioned above. Now data indicates that people also seem to be shifting from such purely distribution platforms toward direct communication platforms (like Messenger or Snapchat).
People tend to choose to be in the digital “spaces” where they feel they have greater control of their information and communication streams. On communication platforms such as Messenger or Snapchat, individuals exchange information with one another or with selected groups and brand or product communication only enters “the conversation” if and when users specifically choose it. This is an important shift that often goes unnoticed. That’s why this kind of communication platforms increasingly integrate all sorts of additional services for the users. They can post photos or videos, but they can also call a taxi or buy a pair of sneakers within the platform. It’s no longer a content distribution network with a communication platform attached (like Facebook with Messenger). It´s a communication platform with a content distribution network attached (Like KakaoTalk, WeChat or Line, with all the integrated services). In platforms such as Messenger, Kakao or WeChat, users don’t want to see ads from brands. They just want to establish “conversations” with their friends. If they happen to talk about a pair of sneakers one wants to buy, they might exchange photos, recommendations or even links about it. That’s when the brand may be invited to join the “conversation”. But that’s a marketing opportunity subject to previous invitation!
This separation between a communication platform and a distribution platform is subtle, but very important. And it sheds a light as to why Facebook choose to separate Messenger from the social network itself and so aggressively marketed the first: Facebook understood that this was an important trend and tried to position as winning contender in that “space”.
Will Facebook make as much money on Messenger as it does on the social network? It’s difficult to know. But if it does it will not be through advertising! It will be through the direct connection between a brand and its users upon invitation. Messenger will benefit from being the platform where they both meet.
What is interesting to notice is that the best examples of advertising made on these communication platforms cited by Mary Meeker — the ads by Taco Bell and KFC on Snapchat, for instance — are literally things that you put “on” your personal communication stream with your friends. It’s creative, funny and probably the least intrusive advertising you would allow. But still, it is an intrusion. Once it ceases to be funny, it will not be invited to the “conversation”.
Consequently, it seems very doubtful that traditional digital advertising formats will ever be as effective on communication platforms as they are in distribution platforms. The key issue here is the greater degree of control that users exert on communication platforms in relation to the one they have on distribution platforms like Facebook.
Curating the streams
The second major trend that Reuter’s Digital News Report, Pew’s State of the News Media and Mary Meeker’s Internet Trends all agree on is the overall rise of ad blockers. The fact that three major digital media studies clearly identify the same trend should come as a real “eye-opener” for the industry. The fact is this: people use ad blockers whenever they can and always that they learn how to so. That is why the numbers reflect a greater penetration of the use of ad blocking among the younger users, who are more technically savvy. The significance of this is that most probably ad blockers will be more widely used in the future and not less, thus degrading even more the media business models that depend on advertising.
So why do people use ad blockers? The simple answer is: because they can. Again, ad blockers are a tool that individuals can use to exercise a greater degree of control over their information streams. They will block ads in the platforms and contexts in which they do not want ads do appear. They will allow them when they specifically want ads to enter the stream. A variation of this is provided by the content curation platforms (Reddit, Scoop.it, Flipboard, etc.) that individuals increasingly use and that allow them to regulate what kind of content they want to preferably include or exclude from their streams. Of course, Facebook is also a content curation tool, in fact the most widely used one. As with ad blockers, the more people become more familiar with this kind of tools they will learn to use them to curate their information streams, and in many cases that will mean circumvent advertising.
Disintermediating relationships
The third major trend that Mary Meeker’s study identifies and that has an impact on advertising is the tendency for brands to entail direct relationships with their users inside the communication platforms they increasingly populate. This is observable both in Messenger and in Snapchat, for instance. From a user’s point of view this is of course a form of absolute control over that marketing relationship: the connection with a brand and its products only subsists if and when the user wants it. From the brand’s point of view this is a limitation -the contact opportunities are fewer than what could be obtained thought advertising — but also a richer marketing opportunity — when a user invites a brand to join “the conversation” that’s usually because it is closer to the conversion goal. That connection is much more valuable and efficient than an ad impression.
Overall, what stands out from this kind of connection between a brand and its users is disintermediation. The connection between the brand and its users, that previously was intermediated between news media channels, can now be directly established using this new communication tools and platforms. This of course disintermediates the news media channels but also the all advertising professionalism that exists precisely to put commercial messages in that intermediation.
Another key takeaway marketing professionals can take from this is that in a world where increasingly individuals are capable of domesticating their information and communication streams with digital tools, they establish relationships through them rather than simply exchanging information. Which means of course that marketing must also become “relational”. And that will be something quite different than what we today call “advertising”.
It’s the end of advertising as we know it… and I feel fine!
News and advertising are Siamese twins. Throughout history they have established a symbiotic relationship: news media depend on advertising for funding; advertising depends on news media to reach the audiences it wants to impact. This symbiosis between them is a rational arrangement for the mass media age. But it is no longer a rational arrangement for the digital age, with users controlling the process and accessing multiple tools to do so. That’s what the increasing popularity of communication platforms, the rise of ad blockers and content curation and the direct connection between brands and users really mean.
In media theory, advertising is — and always was — something that you put between A and B. Which implies that neither A or B would want advertising in the first place and both A and B will get rid of it if they can. Advertising is, in a way, the result of an imperfection. It’s the collateral effect of a system that is not entirely rational. If the system that connects A to B was perfect, advertising would make no sense.
What modern information and communication technologies do is precisely provide individuals with the tools and platforms that permit them to regulate and control more efficiently — with a greater degree of rationality, if you will — their information and communication streams. This is the fundamental change that explains why it may well be the end of advertising as we know it. Of course brands, products and services will continue to connect with users. But it will be in novel and different ways that we should not call “advertising”.
