Advertising: our newest sunset industry?

Some of my best friends work in advertising. Or used to. It was a great business once. It won’t be so great ten years from now, because it was an industry based on a media ecosystem that is rapidly eroding. Two interesting pieces on the Web today provide insights on this.

The first is a long blog post by Eric Clemons, who is Professor of Operations and Information Management at the Wharton School of the University of Pennsylvania. In it, he argues that the Internet shatters all forms of advertising. “The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed,” he writes. The nub of his argument is contained in four propositions:

* People don’t trust ads. There is a vast literature to support this. Is it all wrong?

* People don’t want ads. Again, there is a vast literature to support this. Think about your own behavior, you own channel surfing and fast forwarding and the timing of when you leave the TV to get a snack. Is it during the content or the commercials?

* People don’t need ads. There is a vast amount of trusted content on the net. Again, there is literature on this. But think about how you form your opinion of a product, from online ads or online reviews?

* There is no shortage of places to put ads. Competition among them will be brutal. Prices will be driven lower and lower, for everyone but Google.

The second piece is by Frédéric Filloux, who with Jean-Louis Gassée, writes Monday Note, one of the most thoughtful essay-blogs on the Web. In this week’s edition, he writes about a fascinating, detailed study of the 18-24 generation conducted by the French polling institute BVA. According to Frédéric’s summary, these people do not rely for information on a single group but on several, each with a different degree of trust.

The three concentric circles are : close friends and family as the core, a group of 20 to 30 pals whom they trust, and the “Facebook friends” of 200 or so, which acts as an echo chamber. Beyond these groups, behaviors such as elusiveness, temptation to trick and circumvent the social system will prevail.

How do they get the news? No wonder why the group is crucial to the Digital Native getting his information. First of all, the fastest is the best. Forget about long form journalism. Quick TV newscasts, free commuter newspapers, bursts of news bulletins on the radio are more than enough. The group will do the rest: it will organize the importance, the hierarchy of news elements, it will set the news cycle’s pace.

More chilling: the group’s belief in its power to decide what’s credible and what’s not. Truth – at least perceived truth – seems to emerge from an implicit group vote, in total disregard for actual facts. If the group believes it, chances are it is “true”. When something flares up, if it turns out to be a groundless rumor, it’s fine since it won’t last (which is little consolation for the victim of a baseless rumor); and the news cycle waves are so compressed that old-fashioned notions such as reliability or trustfulness become secondary. Anyway, because they are systematically manipulated, the Digital Natives don’t trust the media (when they themselves are not the manipulators).

Consequently, resources can only be group-related or collectively-driven. The perfect example is Wikipedia: because it is crowd-powered and carries an image of neutrality, it is embraced as trustworthy. In addition, Wikipedia is accessible, straightforward and well structured. As a result, many Digital Natives acknowledge turning to Wikipedia to check facts, or to get a good digest of the class there where given.

Note that advertising figures nowhere in this.