The End Of Advertising?

If you stand back and look, it all looks pretty simple.

Media companies have thrived by giving away content and then selling the purveyors of goods and services the opportunity to hawk their wares on the pages of magazines, newspapers, and on television screens.

And for a while, that worked out fine. Today, not so much.

As the internet gave new publishers low-cost ways to create content without expensive printing presses and radio and TV broadcast equipment, new voices flourished.

This was the so-called “democratization” of publishing. The only problem is that internet ad tech didn’t keep up with the promise that advertising would evolve from a mass to a targeted niche business. Advertisers today want a targeted audience, and they pay in what seems in large part to be based on old-world mass media metrics.



Meanwhile, content creators struggle between a tug of war between what consumers want, and what advertisers will pay for. It’s uncomfortable, and it’s getting worse every day.

The headline of the moment is the rather unglamorous demise of Mic. But I would argue that’s just a symptom. Advertisers pay for mass audiences, and readers and viewers are increasingly moving to narrowcast relevant voices.

But there are some signs of hope. As annoying as they are, the increasing use of paywalls are shifting users from consumers of free content to subscribers.

Patreon is growing as a platform that allows users to tip content creators. Civil is a journalism platform built on blockchain technology to give journalists ownership and control of their content.

A new attention economy is on the horizon — one where content creators are paid based on how people watch, read, share, and comment. The more active content participants (note, I didn’t say “consumers”) are rewarded for their curation and amplification. More passive members pay into the system with micropayments.

Imagine a future that works like this: a site that pays members for posting and curating content. It uses micropayments backed by a tradeable currency, operating on a Bitcoin cryptocurrency generation model to finance content optimized for stories that encourage and appreciate active rather than passive consumption.

There is a clear value in publishing on a site where user participation is valued. It remains to be seen whether the model of small typical rewards and the possibility that a post might generate substantially more are enough to incentivize long-term participation or a greater focus on informational posts in the long term.

Now, this isn’t to say that advertising is gone. Rather it’s back to its appropriate place: selling mass-market goods using mass-media metrics.

But for content communities that have grown up on the web, those economics just don’t hold up. Creators want to reach people, to activate conversations, and to reward engagement and content sharing. The payback isn’t in goods sold, but in ideas amplified. And for those editorial startups, a new blockchain economic model is now on the horizon.

5 comments about "The End Of Advertising?".
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  1. Richard Reisman from Teleshuttle Corporation, December 10, 2018 at 1:32 p.m.

    Steven, I completely agree with your points on the shift to user payments and to compensation for user value contributions -- and suggest some ways to go farther, based on more creative pricing strategies.

    On user payments vs. ads, my most recent post explores how and why to do that, in a way that can still enable win-win forms of advertising: "Reverse the Biz Model! -- Undo the Faustian Bargain for Ads and Data" (

    On micropayments, which have problems of unpredictability and risk that even cryptocurrency do not solve, I suggest how to soften that in a hybrid of subscription and micropayments that offeres volume discounts and usage caps: "'The Case Against Micropayments' -- From Fear and Surprise to The Comfy Chair" (

  2. Douglas Ferguson from College of Charleston, December 10, 2018 at 2:35 p.m.

    Advertising wen from being ancillary in the age of newspapers (where there was also a per-copy revenue) to being absolutely essential in the age of unknown audiences (with broadcast users who could never pass a turnstile or see a box office or newsstand) had to be monetized to make the system work. Advertising flourished in an age of necessity and now sees its demise in an age of options, where audiences can easily be tracked and billed because the content provider knows exactly what programs they consume (and where they live). Broadcasters never actually needed advertising but it seemed the easiest choice in the 1930s, given the alternative was taxing receivers or having the government produce tall the shows. Now broadcasters (and ad agencies) must imagine a world where advertising is a choice competing with micropayments and subscription fees.

  3. Ed Papazian from Media Dynamics Inc, December 10, 2018 at 5:17 p.m.

    Without advertising we would never have had shows like "Gusmoke", "I Love Lucy", All In The Family", "Law And Order", "Seinfeld" and countless others, including the nightly news, NFL football games, etc. It's very easy to claim that all that advertisers care about is selective targeting and come to the conclusion that this spells the doom of "mass TV". It doesn't. Why? Because many advertisers need and want mass exposure not only because their products and services are for the masses but also to help them launch new products or sell ideas---like how wonderful their corporations are or their presidential candidates. Also, it is not true that "mass" audience TV is being  supplanted by super selective streaming media---paid for by consumers in exchange for no ads. Certainly there is some of this---but it's hardly the norm nor is it likely to be for the forseeable future. Instead, we will witness a steady and often not successful encroachment of traditional TV programmers into the subscription TV content market---to the point where consumers who crave the ability to watch what they supposedly want, when they want to will simply not be able to afford many of the offered options due to inflated pricing. Finally, we should remember that advertisers who want the kinds of targeting selectivity that is being promised---even if it can be attained at something approaching scale----will be charged double or triple the cpms of mass media. It remains to be seen whether this really pays out for all concerned on an ROI basis.

  4. Paula Lynn from Who Else Unlimited, December 11, 2018 at 12:14 a.m.

    Steve, that's all golbelty gook and totally awful. It would all backfire and have tulip bulbs pushing up daisies.

  5. John Grono from GAP Research, December 11, 2018 at 5:45 p.m.

    Steve, I understand and agree that "Advertisers today want a targeted audience".

    They may want that, but is that what is best for their brand?

    It seems like a huge majority of marketers are after the 'sugar-hit' of a quick sale (hey, let's halve the price online ... wow that worked!), rather than building their brand for long-term success and profit.   And there is no bigger 'sugar-hit' than online sales especially if you measure success by last-click attribution (wow, just as it started pouring rain I saw a red truck ... gees red trucks must bring rain!)

    I suggest that if you haven't already read Prof. Byron Sharp's "How Brands Grow", then you should.

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