Too Much Advertising is a bad business model!

When I was young, I was asked by a friend if I could give him advice on how to become a millionaire. I told him that the fastest way is probably to sell drugs, prostitution, or the weapons industry. He looked at me with a strange face until he realized that my point was that morale plays a significant role in making money. When I meet entrepreneurs in all industries, many or actually most, started their business for a reason and passion. Becoming rich is‚ of course, nice, but often more a result of hard work, a good idea, good execution, and usually a bit of luck. So why this article, you may ask?

The media industry has a problem. I have for years subscribed to a newspaper. Until a few years ago, I got it on paper, and though I've never been a big fan of adverts, I understood their purpose - and in the paper edition, these ads didn't intrude on me too much. With a shift to an e-edition that has dramatically changed, I now feel that the newspaper cares less about content and more about targeting me. I then installed an ad-blocker which has worked fine for some time. Now the newspaper has taken counters to eliminate the blocker, and I feel even more annoyed. I am so irritated over the ads that I today cancelled my subscription.

I, of course, understand that advertising subsidizes content creation, but when newspapers, magazines, trade media, and others make money on selling advertising and where I become the product rather than focusing on the content, I opt-out. The strange thing is that I have never met any who like advertising, and when I did a pole on LinkedIn, fewer even reacts/click on the ads.

One 'marketing lady,' who probably feared for her position, desperately wrote something like, 'but people see the ad, so it must have some value.'

Well, I have got so sick and tired of ads that I close my eyes - sometimes even literally, when I am exposed to ads. I am so sick and tired of companies overexposing their products that I ban them. In Denmark, we have a chain of grocery shops called Coop - I have stopped buying my grocery products there.

So think about it for a second. You run a media where you use advertising to subsidize content creation. Now you place ads on your website. Users hate it, and worst-case scenario, your users flee from your media, or second-worst-case your advertisers get no clicks, no conversions, no engagement, and they stop advertising with you.

This is a bad business model, and advertising has grown to an unacceptable level. It only supports - in the short term - the media outlet, Google, Facebook, and the companies who have built a business around serving something nobody wants. I question the value for the advertiser, to be honest!

I am confident that online advertising and profiling users for the sole purpose of targeting ads will see an end. Privacy is one reason, but what will drive it further and faster is the lack of ROI (and no, dear marketers, conversions, clicks, and views are not real money!). Why spend money on advertising on the web if everybody does whatever they can to avoid seeing these or even engaging? Numerous websites today describe conversion rates in the level of 2-3% or even lower.

It's time to re-think the business models, and unfortunately, a new beast is now on the radar. By 'professionals,' referred to as 'inbound marketing.'

Inbound marketing or content marketing creates content, stories, films, or other ways to drive engagement from the targeted audience.

The problem is that these professional communication people don't write blogs or make videos to benefit the reader or the viewer but to benefit the advertiser. The concept is wrong.

Nobody has, of course, cracked the formula yet, because it's a fact that creating good content cost money. The unfortunate result can turn into numerous outcomes - of some we already see. One is lower quality (using un-edited press releases, ready-made articles from newsagents, etc.) Another is more adverts (we already see that YouTube forces its viewers to see two ads, which used to be one unless you subscribe). A third is payment walls (newspapers, trade media, online media), and a fourth is altering the channels - for example, moving from print to online-only, and so forth.

With a growing number of channels from video, online, print, podcast, SoMe, etc., all are, of course, trying to use the best media to get the communication through - however, if the content isn't any good, why should a PSP even care?

We believe that content with integrity and understanding the PSPs need is the most critical element - and then, of course, ensure accessibility.

Jun 26, 2021

Author: Morten Bech Reitoft