• by Jeff Einstein , July 6, 2012

In Part 2 of my interview with Mr. Digital, he recalled the dot-com era as a bona fide youth movement, the surrender of analog experience to digital youth. He sits across from me and sums up his employment career over the previous 44 years (since the age of 16) in baseball terms:  “Jobs 13,” he said cryptically.  “Won 8, lost 5, percentage .615.”

“Wasn’t really much the corporate type,” he concluded.  “I’ve had layovers in airports that lasted longer than most of my corporate jobs.”
 
“Tell me what happened after the dot-com crash.” I said.

“Well,” he began, “the first decade of the 21st century witnessed the ascent of the online networks and an explosion of high-tech intermediaries, each designed to compensate for specific failures in the traditional online advertising model .”

“Define specific failures,” I said.
 
“The whole system has failed advertisers on a massive level,” he said. “Click-through rates plunged through the floor, from around 5% when the dot-com market collapsed, to about .1% by 2011.  Hundreds of opportunistic start-ups sprang up like weeds.  Some of them were designed to optimize performance, others were designed to protect brands from the risk of adverse exposure, and still others were designed to collect, analyze and/or sell data.”

“What happened?”
 
He sighed.  “Nothing really works.  The entire system is choked with complexity and has started to operate in reverse.  Performance has collapsed and costs have skyrocketed, thanks, in large part, to all the high-tech optimization.”

“What else?”

“The consolidation of digital planning and buying through the backrooms and exchanges of mega-media agencies has all but obliterated the local advertising market, the same local advertising market that once accounted for more than 80% of all media spends just a short generation ago. Big-box media has done to the local media franchises what big-box retailers did to local retailers: Steal market share and drive down price points.”
 
“The data market seems to be where all the action is in digital advertising and marketing these days,” I said.  “Data seems to be the future of online marketing and advertising.”
 
He corrected me.  “No, the data market is what emerged in advertising when everyone woke up one day and realized that no one could earn a living anymore by selling ads that no one wants and everyone is equipped to avoid.”
 
“You’re not exactly a numbers guy, are you?” I asked.

“I can appreciate numbers,” he said.  “But numbers in the advertising business are what you rely on when everything else fails. Numbers are like patriotism: the last refuge of scoundrels.”

“What have you learned over your three decades in digital advertising and marketing,” I asked.
 
“Three things I know for certain,” he answered.  “First, no one wants more ads.  Second, everyone wants more content.  And third, no one and everyone are the same guys.”
 
“What’s your biggest fear for the ad business?”
 
“That our obsession with our own digital toys of scale will convert the industry into a soulless white-collar sweatshop.”