The Internet Bet on Advertising. But It Got the Bet Wrong.

A fundamental mistake explains why the internet hasn’t beaten TV

Part two in a series. For part one, head here. Produced in partnership with Newco Shift.

So here we are. Twenty years into the internet, and we’re still telling ourselves the same lie: Ad dollars will inevitably follow eyeballs, and soon enough, the internet will get its fair share of those dollars, mostly from that old, dying medium called Television. But up till now, we’ve not managed to make anything on the internet that compares with the phenomenally effective medium of Television for reaching the mass public.

The reason? Advertising on the internet is mainly about performance — what’s called direct marketing. And advertising on TV is mainly about brand. And brand matters, a lot.

This concept is not new. It was put to paper nearly a hundred years ago: first touched upon by the English economist Joan Robinson, then nailed down the same year by Harvard economist Edward Hastings Chamberlin: companies sell in two ways: through direct sales (in that era, that meant salesmen) and through marketing (newspaper ads, poster boys). Today, in advertising, we still use the same divide: there is brand advertising (“Just do it,”) and direct advertising (“Get $10 off your…