Advertising has been prevalent since the Ancient times. I’m sure back then, people were painting the latest trend in premium wooden sandals on papyrus and plastering it all over the local town centers. Quite a clamor that must have caused. The modern day equivalents of Uggs or Birkenstocks (and from an aesthetics perspective, not much difference despite the thousand-odd years time lapse).
But the purpose is clear. Advertising is basically the promotion of a product to an audience potentially leading to sales. They try to tie a story into it to evoke something out of the audience; by creating a narrative. To build a positive association between the product and your poor unsuspecting, pea-sized, gullible amygdala.
Think about Nike and their “Just do it” slogan. It’s almost ubiquitous with their brand and it is simple and elegant. While still helping the audience understand what their products are about while evoking a positive emotion out of us. It’s subliminal and subconscious programming at its finest. Same with BMW — “ultimate driving machine”.
I’ve bought several products based on their advertising campaigns: Apple being the standout product. They have always preached design excellence and have a holier-than-thou exclusivity vibe around their brand — even when everyone has an Apple these days! The brand has been so etched into our minds since the Steve Jobs days that the consumers just put up with their premium prices. Thank God people are not going crazy over the Vision Pro — I guess Apple has realized even their prices has a limit.
It’s a great exercise in subconscious manipulation.
On top of that, it’s a great business model. Companies bid for keywords that they think will help secure sales and promote visibility of their services and pay Google per click. And it’s gotten so big now that Google’s ad revenue was close to a quarter of a trillion dollars in 2023! That was almost 80% of their total revenue. And most of it came from search advertising.
And Instagram, which has its own complex algorithm of ad promotion to your feeds based on demographic and your likes, page history etc, just surpassed YouTube in ad revenue in 2021. So this is not just through search but also a huge source of revenue on image and video platforms too.
I may be dating myself but a decade or two ago, it would be that you would go to a source and find ads, like a newspaper or bulletin board. And the serendipity of coming across a product that catches your eye fills you with curiosity and interest.
Nowadays, It’s everywhere. Whether we like it or not.
So all this to say, why does it feel like online advertising is kind of pointless in today’s times? Consumerism is at an all-time high and ads are just plastered in every square inch of every website thanks to Google, so you would think companies are shelling out billions for a good reason.
However, I think the issue is a feeling of indifference and even annoyance.
Picture this. You are watching a Youtube video at night — and you get an unskippable 30 second ad on Hello Fresh. Or USAA Insurance. Or Shopify. Or whatever new crap is out in this world that has no need to be taking up space in your brain. I know for a fact I will never buy these products. Ever. Partly because I don’t care for these products and I have done just fine without them. But partly also because they’ve annoyed me enough during what I consider my me-time when I just want to relax. And I’m the kind of guy who would be petty enough to remember what product annoyed me when and just avoid them altogether! Genuinely though, I wonder what their click-through rates are and how many people actually spend on the product compared to what these brands pay Google or Meta for advertising. Keep in mind, I think by blocking cookies and tracking services, I am not getting ads that are as targeted as others might who have opened the flood gates for Google to track. But the principle is the same.
Ultimately, advertising is all about making an emotional connection with the audience. And when the connection being made is one of annoyance or indifference because you can’t get back to what you wanted to watch, or if a webpage is just horribly disfigured with banners smothered across it making your reading experience cumbersome, is that a positive one? Even if the product is one that cures cancer, what is the audience’s psychological connection with that product at that moment?
I feel it’s similar to cases when ads were placed on X where there was a lot of controversy going around in the platform. Regardless of what the ads were about, the large companies felt they did not want to be associated with the negativity and feared that is what the audience will perceive so they ordered to get all ads pulled from the entire platform.
That’s what makes me wonder if internet advertising even works as effectively as some companies think it does and continue to put in money. Sure, you get a ton of eyes on it — but could that have a downside too?
Yes, tomorrow if I want a meal-kit service, maybe Hello Fresh might come to my mind. From an advertising perspective, the company has won. Because that is literally the objective of any advertising. But it’s not a positive association. I might do more research on it and compare it with other brands before making a final decision, but I feel it will take more for it to come on top compared to others as it is starting from a negative association in my mind rather than a neutral one.
I imagine the conversion rates (ratio of number of interactions on the ad to the number of eyes on it) to be extremely low and the cost per click bid that a company can do to a Google would be low to justify their budget. But while it’s seems to be an optimization or mathematical problem, I feel it’s more psychological.
Timing your ads and when to play them is definitely important. Even if you have a large budget, placing ads consistently for a long duration might be more detrimental than playing it intermittently. I am not sure if that is in the control of the companies or the platforms where they publish on.
Maybe we can’t escape much in this age of AI and optimization to the nth degree. But at least I’d like to retain some amount of control and not give into every ad that appears on my feed or search history and make my own decisions.
It’s going to be an uphill battle.
vsan
