A bigger part of my world is becoming ad-free. My TV viewing is probably 80% ad-free now. Same with my music-listening. Together, that costs me about $20 per month. It’s a price I don’t mind paying.
But what if we push that to its logical extreme? What if we made the entire world ad-free?
Various publications and ad-tech providers have posited that scenario. It’s actually interesting to see the two very different worlds that are conjectured, depending on what side of the church you happen to be sitting in.
When that view comes from those in the ad biz, a WWA (World Without Advertising) is a post-apocalyptic hell with ex-copywriters (of which I’m one) walking around as jobless zombies, and the citizens of the world being squeezed penniless by exploding subscription rates. Our very society would crumble around our ears. And, for some reason, a WWA is always colored in various shades of desaturated grey, like Moscow circa 1982 or Apple’s Big Brother ad.
But those from outside our industry take a less alarming view of a WWA. This, they say, might actually work. It could be sustainable. It would probably be a more pleasant place.
Let’s do a smell test of the economics. According to eMarketer, the total ad spend in the U.S. for this year is $189 billion. That works out to just shy of $600 per year for each American, or $1,550 for the average household. If we look at annual expenditures for the typical American family, that would put it somewhere between clothing and vehicle insurance. It would represent 2.8% of their total expenditures. A little steep, perhaps, but not out of the question.
Okay, you say. That’s fine for a rich country like the US. But what about the rest of the world? Glad you asked. The projected advertising spend worldwide – again according to eMarketer – is $592 billion, or about $84 for every single person on the planet. The average global income is about $10,000 per year. So, globally, eliminating advertising would take about 0.84% of your income. In other words, if you worked until Jan. 3, you’d get to enjoy the rest of the year ad-free.
So let’s say we agree that this is a price we’re willing to spend. What would an America without advertising look like? How would we support content providers, for example? Paying a few one-off subscriptions, like Netflix and Spotify, is not that big a deal, but if you multiply that by every potential content outlet, it quickly becomes unmanageable.
Still, this could work by using the converging technologies of personalization engines, digital content delivery, micro-payments and online payment solutions like ApplePay.
Let’s imagine we have a digital wallet where we keep our content consumption budget. The wallet is a smart wallet, in that it knows our personal tastes and preferences. Each time we access content, it automatically pays the producer for it and tracks our budget to ensure we’re staying within preset guidelines. The ecosystem of this content marketplace would be complex, true, but the technology exists. And it can’t be any more complex than the current advertising marketplace.
A WWA would be a less-cluttered and interruptive place. But would it also be a better place? Defendants of the ad biz generally say that advertising nets out as a plus for our society. It creates awareness of new products, builds appreciation for creativity and generally adds to our collective wellbeing.
I’m not so sure. I’ve mentioned before that I suspect advertising may be inherently evil. I know it persuades us to buy stuff we may desire, but certainly don’t need. I have no idea what our society would be like without advertising, but I have a hard time imagining we’d be worse off than we are now.
The biggest problem, I think, is the naiveté of this hypothetically ad-free world. Content will still have to be produced. And if the legitimized ad channel is removed, I suspect things will simply go underground. Content producers will be offered kickbacks to work commercial content into supposedly objective channels. Perhaps I’m just being cynical, but I’d be willing to place a fairly large bet on the bendability of the morals of the marketing community.
Ultimately, it comes down to sustainability. Let’s not forget that about a third of all Americans are using ad blockers, and that percentage is rising rapidly. When I test the ideological waters of the people whose opinions I trust, there is no good news for the current advertising ecosystem.
We all agree that advertising is in bad shape. It’s just the severity of the prognosis that differs: ranging from a chronic but gradual debilitating condition to the land of walking dead. A world without advertising may be tough to imagine, but a world that continues to prop up the existing model is even more unlikely.
A world without advertising would, indeed, be a different world. Typically advertising spending accounts for only 2-3% of an average marketer's total sales so, at first glance, it may seem like something that is easily dispensed with. Yet how much of those total sales dollars are driven by advertising? This is not an easy one to answer, however, it is evident that the figure is considerably higher than 2-3%. And this is especially so for new products and/or new formulations of established ones. So how would an advertiser with a really great new product launch it? By word-of-mouth?
Also worth considering is the quality of the ad-free media content we would be consuming in this wonderful new world. Does anyone believe that producers of quality content would be able to supply our needs without ad revenues? Some might pull this off, but many wouldn't be able to with the result that most of the content we would be getting on TV or video would be low budget fare. Of course there would be virtually a huge---perhaps this is welcome---decline in TV news and sports content. Would that be good? As for magazines and radio-----forget about it.
And what about movies. Your typical Hollywood producer relies on TV/video-generated incomes, largely ad funded, for most or all of his profits. Take the advertising dollars out of the equation and how many big spending, "quality" films could be made on a profitable basis?
Of course, one could argue that the media and content producers would adjust to the new situation---and that is a possibility. But are we sure that these adjustments would represent an improvement? Color me skeptical.
I might be old school, but I was bought up to believe that advertising is about selling knowledge, information and motivation. Is that still true or have have advertising become so complex that this is it has become a forrest and tree question?
After reading about this today on more than one post, it seems, again, that the dog keeps chasing its tail with no more answers than there were pre-digital. The more answers to more complicating questions lead back to the same answers and same questions with more variables on both parts. The following actually had 20 times to the end, but I cannot seem to find it.
From STANDARD (Clarksville, TX) February 4, 1860, P 1, c. 7
A French editor gives the following amusing description of the effect of an advertisement: :The first time a man sees an advertisement, he takes no notice of it; the second time he looks at the name; the third time he looks at the price; the fourth time he reads it; the fifth time he speaks of it to his wife; the sixth time he buys."
Naiveté indeed. So many of these anti-advertising arguments come from an elitist point of view. We have all of always-on gadgets pouring an untinterupted flow of information and suddenly we're wringing our hands because there's a banner on the page. It's like Louis CK said, "Everything's amazing right now and nobody's happy."
There's no such thing as an "ad-free world" short of a totalitarian society. When some reference the small percentage of corporate budget being spent on ads and what impact it might have to the bottom line aren't considering the multitude of shop owners, small business people, and anyone else who needs to drive sales traffic who would quickly, by utter necessity, fill the void. Your uncluttered ad-free utopia would look like MySpace on crack in no time. At least in our current ad world issues of quality, esthetic and brand still matter to some.
People have complained about advertising since advertising became a thing. The real crux is in the presentation and relevance. Disruptive, cluttered, loud, poorly executed and sloppily presented advertising should be avoided at all cost... cost meaning vote with your wallet and don't go to those sites or watch those channels or read those mags. Buy a DVR. Pay for Hulu ad-free. The more lousy the advertising, the more we drive folks away. But on the flip side... well, you get the idea. Quality matters.
Not sure we're thinking broadly enough here. Ed, yes, many content producers rely on advertising. I'm not denying that. But my point is, the economics may work without advertising. We just have to wrap our mind around it. Another potential benefit is that it would democratize content production even more than it is now. You may have a net gain - and more independents could participate. I, like you, have a certain amount of skepticism about how this would play out, but we have to contemplate the possibility. I think technology is taking us down this path and we can chose to deny until it's too late to react or actually be open minded enough to think about how a new paradigm could emerge.
And Tom, you're absolutely right - "People have complained about advertising since advertising became a thing." The difference is, people can now do something about it. And yes, quality matters. But in all the advertising I'm exposed to in a day - a week - a year - I can probably count the truly good ads on one hand.