Digital Media Could Hit A Bubble, With Advertisers Rethinking Traditional TV

Are we sure business outcomes connected to TV commercials are all they appear to be? Should traditional TV advertisers continue to pursue them?

When it comes to digital media, there may be a chink in that wall-garden.

Former Google executive Tim Hwang’s new book, Subprime Attention Crisis, claims the digital ad business is built on a fiction. Attention of viewers and targeting of audiences isn’t all it's cracked up to be. In fact, micro-targeting of users is far less accurate, and less persuasive.

The value of attention — the art of keeping digital users stuck to their screens for long periods of time to grab their data, which can be used or resold — is weaker than it appears.

All this is built around the outlook that digital media giants — Facebook and Google in particular — could be working themselves into a “bubble” or sorts.

No, not like a NBA location bubble for protection against COVID-19. Rather, a bubble that is fragile and ready to pop — like the real estate, mortgage-backed securities and the housing market in late 2008, which resulted in the Great Recession.



Considering all the recent gains in the stock market — after the initial massive drop due to the COVID-19 disruption in March/April — was built on the back of rising technology companies, Facebook and Google, as well, including Amazon, Netflix, chip-maker Invidia and others, Hwang says this is the bubble that could pop.

The idea of the book is that while user “attention” is pursued — one needs to examine the content users are consuming — the “quality” versus just “quantity.” Consumer personal information about family and friends might be “quality” stuff. But other news-related content might be suspect, and maybe some personal data, as well.

This might come to a head if advertisers realize they are getting far less return on their media investment — from less quality attention — and then leave digital platforms in droves. Hwang points the blame at machine-learning and advertising buying “programmatic” systems. This machine trading is what got mortgage-backed securities into problems back in 2008.

Also Hwang says companies’ ROI in digital marketing are often weak. Not helping this are the high costs around advertising technology -- which can climb to a massive 50% in some cases.

What would advertisers do then?

We can imagine they might move back, en masse, to traditional TV once they realize the digital media economy -- while working somewhat -- isn’t all that efficient in its ultimate goal: providing lasting value to users or advertisers.

Would better TV-based media/advertising systems then rise? Stay tuned — literally — to the TV screen.

2 comments about "Digital Media Could Hit A Bubble, With Advertisers Rethinking Traditional TV".
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  1. Ed Papazian from Media Dynamics Inc, October 8, 2020 at 12:29 p.m.

    Wayne, based on Hwang's comments, as posted in your article, why would advertisers "rethink" their use of "traditional TV"? If anything, they would rethink their use of digital media. Sure, improvements are needed in TV audience metrics and there other issues---growing ad clutter, for instance---but once the "addressable TV" and "advanced TV" folks start to focus on viewer metrics as opposed to set usage as a way to target consumers, they will be offering a targeting approach that, if we believe Hwang, is far superior to what is available in digital media for those advertisers where the higher CPMs are justified by improved ROI results.

  2. brian ring from ring digital llc, October 13, 2020 at 7:03 p.m.

    Wayne, another fascinating and well-written post here. This is a big picture story playing out in real-time before our eyes.

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