I read with interest fellow Insider Dave Morgan’s column about how software is destroying advertising agencies, but not the need for them. I do want to chime in on what’s happening in advertising, but I need a little more time to think about it.
What did catch my eye was a comment at the end by Harvard Business School professor Alvin Silk: “You can eliminate the middleman, but not his/her function.”
I think Dave and Alvin have put their collective thumbs on something that extends beyond our industry: the growing gap between people and platforms. I’ll use my current industry as an example: travel. It’s something we all do, so we can all relate to it.
Platforms and software have definitely eaten this industry. In terms of travel destination planning, the 800-pound Gorilla is TripAdvisor. It’s impossible to overstate its importance to operators and business owners.
TripAdvisor almost singlehandedly ushered in an era of do-it-yourself travel planning. For any destination in the world, we can now find the restaurants, accommodations, tours and attractions that are the favorites of other travelers. It allows us to both discover and filter while planning our next trip, something that was impossible 20 years ago, before TripAdvisor came along.
But for all its benefits, TripAdvisor also leaves some gaps.
The biggest gap in travel is what I’ve heard called the “Other Five.” I live in Canada’s wine country (yes, there is such a thing). Visitors to our valley -- the Okanagan -- generally come with five wineries they have planned to visit. The chances are very good that those wineries were selected with the help of TripAdvisor.
But while they’re visiting, they also visit the “other five”: five wineries they discovered once they got to the destination. These discoveries depend on more traditional means -- either word of mouth or sheer serendipity. And it’s often one of these “other five” that provide the truly memorable and authentic experiences.
That’s the problem with platforms like TripAdvisor, which are based on general popularity and algorithms. Technically, platforms should help you discover the long tail, but they don’t. Everything automatically defaults to the head of the curve. It’s the Matthew Effect applied to travel: the advantage accumulates to those already blessed.
We all want to see the same things -- up to a point.But then we want to explore the “other five,” and that’s where we find the gap between platforms and people.
We have been trained by Google not to look beyond the first page of online results. It’s actually worse than that. We don’t typically scan beyond the top five. Yet, by the very nature of ratings-based algorithms. that's always where you’ll find the “other five.” They languish in the middle of the results, sometimes taking years to bump up even a few spots.
It’s why there’s still a market -- and a rapidly expanding one, at that -- for a tour guided by an actual human. Humans can think beyond an algorithm, asking questions about what you like and pulling from their own experience to make very targeted and empathetic suggestions.
The problem with platforms is their preoccupation with scale. They feel they have to be all things to all people. I’ll call it Unicornitis: the obsession with gaining a massive valuation.
Platforms approach every potential market focused on how many users they can capture. By doing so, they have to target the lowest common denominator. The web thrives on scale and popularity -- the rich get richer and the poor get poorer. Yes, there are niche players out there, but they’re very hard to find. They are the “other five” of the Internet, sitting on the third page of Google results.
This has almost nothing to do with advertising, but I think it’s the same phenomenon at work. As we rely more on software, we gain a false confidence that it replaces human-powered expertise. It doesn’t. And a lot of things can slip through the gap that’s created.
Having published over 74,000 online sweepstakes promotions, nearly all from Fortune companies or well known brands, I have learned much about the true workings of the internet and advertising. I believed in Google and programmatic for years. Now I changed my position. The ad industry has grown to believe that the client/agency/creation and then ad distribution is a one stop process. Where I differ now in my opinion is there must be a change in the distribution side of the ads that we see now. Programmatic shouldn't be the only option for ads and neither should Search for text link ads. What is forgotten is nearly 10 percent of all ads created have some kind of promotional element within the ad. This includes sweepstakes, contests, giveaways and coupons. The programmatics have effectively blocked all sweepstakes and contest ads either in search or in programming or last, to be programmed out as a tool of eliminate competition for ad space. As a result, promotional ads receive views than should be or simply wasted. Humans are far superior that AI programmatics in this regard. Humans can target ads far better than any computer program and in nearly all cases, can be done at a far lower cost. The reason? sweepstakes ads can be sold by far larger volume sales at a low unit cost, are hand placed mean zero security issues and no fraud. The underlining issue is can humans out perform computer programs if given the right tools and opportunity? Yes.