In The Adpocalypse: What it Means, VlogbrotherHank Green issues a humorous lament on the impending demise of online advertising. Please devote the next 3:54 of your life to watching that video, so you catch all his points and I don’t need to repeat them here.
Got them? Good.
All of Hank’s points are well-argued and make complete sense. They are also valid mostly inside the bowels of the Google beast where his video work has thrived for the duration, as well as inside the broadcast model that Google sort-of emulates. (That’s the one where “content creators” and “brands” live in some kind of partly-real and partly-imagined symbiosis.)
While I like and respect what the brothers are trying to do commercially inside Google’s belly, I also expect them, and countless other “content creators” will get partly or completely expelled after Google finishes digesting that market, and obeys its appetite for lucrative new markets that obsolesce its current one.
We can see that appetite at work now that Google Contributor screams agreement with ad blockers (which Google is also joining) and their half-billion human operators that advertising has negative value. This is at odds with the business model that has long sustained both YouTube and “content creators” who make money there.
So it now appears that being a B2B creature that sells eyeballs to advertisers is Google’s larval stage, and that Google intends to emerge from its chrysalis as a B2C creature that sells content directly to human customers. (And stays hedged with search advertising, which is really more about query-based notifications than advertising, and doesn’t require unwelcome surveillance that will get whacked by the GDPR anyway a year from now.)
Google will do this two ways: 1) through Contributor (an “ad removal pass” you buy) and 2) through subscriptions to YouTube TV (a $35/month cable TV replacement) and/or YouTube Red ($9.99/month for “uninterrupted music, ad-free videos, and more”).
Contributor is a way for Google to raise its share of the adtech duopoly it comprises with Facebook. The two paid video offerings are ways for Google to maximize its wedge of a subscription pie also sliced up by Apple, Amazon, Netflix, HBO, ShowTime, all the ISPs and every publication you can name—and to do that before we all hit Peak Subscription. (Which I’m sure most of us can see coming. I haven’t written about it yet, but I have touched hard on it here and here.)
I hope the Vlogbrothers make money from YouTube Red once they’re behind that paywall. Or that they can sell their inventory outside all the silos, like some other creators do. Maybe they’ll luck out if EmanciPay or some other new and open customer-based way of paying for creative goods works out. Whether or not that happens, one or more of the new blockchain/distributed ledger/token systems will provide countless new ways that stuff will get offered and paid for in the world’s markets. Brave Payments is already pioneering in that space. (Get the Brave browser and give it a try.)
It helps to recognize that the larger context (in fact the largest one) is the Internet, not the Web (which sits on top of the Net), and not apps (which are all basically on loan from their makers and the distribution systems of Apple and Google). The Internet cannot be contained in, or reduced to, the feudal castles of Facebook and Google, which mostly live on the Web. Those are all provisional and temporary. Money made by and within them is an evanescent grace.
All the Net does is connect end points and pass data between them through any available path. This locates us on a second world alongside the physical one, where the distance between everything it connects rounds to zero. This is new to human experience and at least as transformative as language, writing, printing and electricity—and no less essential than any of those, meaning it isn’t going to go away, no matter how well the ISPs, governments and corporate giants succeed in gobbling up and spinctering business and populations inside their digestive tracts.
The Net is any-to-any, by any means, by design of its base protocols. This opens countless possibilities we have barely begun to explore, much less build out. It is also an experience for humanity that is not going to get un-experienced if some other base protocols replace the ones we have now.
I am convinced that we will find new ways in our connected environment to pay for goods and services, and to signal each other much more securely, efficiently and effectively than we do now. I am also convinced we will do all that in a two-party way rather than in the three-party ways that require platforms and bureaucracies. If this sounds like anarchy, well, maybe: yeah. I dunno. We already have something like that in many disrupted industries. (Some wise stuff got written about this by David Graeber in The Utopia of Rules.)
Not a day goes by that my mind isn’t blown by the new things happening that have not yet cohered into an ecosystem but still look like they can create and sustain many forms of economic and social life, new and old. I haven’t seen anything like this in tech since the late ’90s. And if that sounds like another bubble starting to form, yes it is. You see it clearly in the ICO market right now. (Look at what’s lined up so far. Wholly shit.)
But this one is bigger. It’s also going to bring down everybody whose business is guesswork filled with fraud and malware.
If you’re betting on which giants survive, hold Amazon and Apple. Short those other two.
Required viewing: A Good American, a documentary on Bill Binney and the NSA by @FriedrichMoser. IMHO, this is the real Snowden movie. And I say that with full respect for Snowden. Please watch it. (Disclosure: I have spent quality time with both Bill and Fritz, and believe in both.) Bonus dude: @KirkWiebe, also ex-NSA and a colleague of Bill’s. (In case you think this is all lefty propaganda, read Kirk’s tweets.)
Deep background on the dude. From exactly 20 years and a few days ago. Revealing what you already knew, only vividly now. Pull-quote: “And, most important, every square inch belonged to Trump, who had aspired to and achieved the ultimate luxury, an existence unmolested by the rumbling of a soul. ‘Trump’—a fellow with universal recognition but with a suspicion that an interior life was an intolerable inconvenience, a creature everywhere and nowhere, uniquely capable of inhabiting it all at once, all alone.” Now “it all” is the USA.
Dave Winer’s Binge-Worthy TV Shows. Definitive. And I say that entirely because I trust Dave. He’s my designated watcher. (I also like that Twin Peaks isn’t in there. I binge-watched the original, both seasons, end to end, and hated where it went, meaning where it didn’t go, such as to an ending. A quarter century later I watched most of the first episode and part of the second, punching out of both when it got too gratuitously bloody and strange in what I thought were non-David-Lynchian ways, meaning I can guess the ending now: Cooper kills his doppelganger (a better character than Cooper, btw) and rescues Laura Palmer from hell. Tell me if I’m wrong in a year or few.
Theresa May wants to regulate the Internet. (Time) Which would be like regulating gravity. (Clue: you can think you’re regulating the Internet by mistaking containers on it for the real thing, and then regulating the containers in and the people in them. It does help that the containers aren’t the Net. So there’s still hope.)
Errata Security: Your printers and files are designed to narc on you. Here’s the fuck: “most new printers print nearly invisible yellow dots that track down exactly when and where documents, any document, is printed.” Also, if you want to see the personal metadata embedded invisibly in your own images (yes, all of them), or in those you find on the Web or elsewhere, go to MetaPicz. Among the gems in my own metadata is this item: “Owner: Tangent Mind llc.” Search: Tangent Mind llc. Can’t figure it. Yet. Help welcome.
Until I read this about Carol Connors, I only knew her as the sweet girly sounding lead singer of The Teddy Bears, whose only hit was To Know Him Is To Love Him, which was the slow-dance song of the late ’50s. She was in high school at the time. The song was written and produced by bandmate Phil Spector, and based on an inscription on his old man’s grave. Carol not only went on to a fine career as a singer, but she scored big as a songwriter too. Among other achievements, she co-wrote Gonna Fly Now, which you know better as the theme music for the movie Rocky. Somewhere in there she also wrote the Rip Cords’ Hey Little Cobra.
Brands are bailing from adtech, and news about it is coming fast and hard.
The New York Times said AT&T and Johnson & Johnson were pulling their ads from YouTube, concerned that “Google is not doing enough to prevent brands from appearing next to offensive material, like hate speech.” Business Insider said “more than 250” advertisers were bailing as well. Both reports came on the heels of one Guardian story that said Audi, HSBC, Lloyds, McDonald’s, L’Oréal, Sainsbury’s, Argos, the BBC and Sky were doing the same in the UK. Another Guardian story that said O2, Royal Mail and Vodaphone were joining the boycott as well. Wired and AdAge have weighed in too.
Agencies placing those ads on YouTube were shocked, shocked! that ads for these fine brands were showing up next to “extremist material,” and therefore sponsoring it. They blame Google, and so does most of the press coverage as well.
On Monday, at a breakfast briefing with journalists before he took to the stage at Advertising Week Europe — Brittin said the annual ad industry event gave Google a “good opportunity to say first and foremost, sorry, this should not happen, and we need to do better.”
Brittin added: “There are brands who have reached out to us and are talking to our teams about whether they are affected or concerned by this. I have spoken personally to a number of advertisers over the last few days as well. Those that I have spoken to, by the way, we have been talking about a handful of impressions and pennies not pounds of spend — that’s in the case of the ones I’ve spoken to at least. However small or big the issue, it’s an important issue that we address.”
Google also isn’t alone at this. They’re just the biggest player in an icky business. That business is adtech: tracking-based advertising.
Real advertising doesn’t do any of those things, because it’s not personal. It is aimed at populations selected by the media they choose to watch, listen to or read. To reach those people with real ads, you buy space or time on those media. You sponsor those media because those media also have brand value.
With real advertising, you have brands supporting brands.
Brands can’t sponsor media through adtech because adtech isn’t built for that. On the contrary, adtech is built to undermine the brand value of all the media it uses, because it cares about eyeballs more than media.
Adtech is magic in this literal sense: it’s all about misdirection. You think you’re getting one thing while you’re really getting another. It’s why brands think they’re placing ads in media, while the systems they hire chase eyeballs. Since adtech systems are automated and biased toward finding the cheapest ways to hit sought-after eyeballs with ads, some ads show up on unsavory sites. And, let’s face it, even good eyeballs go to bad places.
This is why the media, the UK government, the brands, and even Google are all shocked. They all think adtech is advertising. Which makes sense: it lookslike advertising and gets called advertising. But it is profoundly different in almost every other respect. I explain those differences in Separating Advertising’s Wheat and Chaff:
…advertising today is also digital. That fact makes advertising much more data-driven, tracking-based and personal. Nearly all the buzz and science in advertising today flies around the data-driven, tracking-based stuff generally called adtech. This form of digital advertising has turned into a massive industry, driven by an assumption that the best advertising is also the most targeted, the most real-time, the most data-driven, the most personal — and that old-fashioned brand advertising is hopelessly retro.
In terms of actual value to the marketplace, however, the old-fashioned stuff is wheat and the new-fashioned stuff is chaff. In fact, the chaff was only grafted on recently.
See, adtech did not spring from the loins of Madison Avenue. Instead its direct ancestor is what’s called direct response marketing. Before that, it was called direct mail, or junk mail. In metrics, methods and manners, it is little different from its closest relative, spam.
Direct response marketing has always wanted to get personal, has always been data-driven, has never attracted the creative talent for which Madison Avenue has been rightly famous. Look up best ads of all time and you’ll find nothing but wheat. No direct response or adtech postings, mailings or ad placements on phones or websites.
Yes, brand advertising has always been data-driven too, but the data that mattered was how many people were exposed to an ad, not how many clicked on one — or whether you, personally, did anything.
And yes, a lot of brand advertising is annoying. But at least we know it pays for the TV programs we watch and the publications we read. Wheat-producing advertisers are called “sponsors” for a reason.
So how did direct response marketing get to be called advertising ? By looking the same. Online it’s hardto tell the difference between a wheat ad and a chaff one.
This whole problem wouldn’t exist if the alien replica wasn’t chasing spied-on eyeballs, and if advertisers still sponsored desirable media the old-fashioned way.
Fixing it won’t be easy, because the alien replica has been drunk on digital for so long that very little humanity remains. This is true not just for Madison Avenue, but for both the client and the media stages of the advertising supply chain. On the client side, old-school sales & marketing VPs have been replaced by data-obsessed CMOs who would rather hire an IBM to paint a portrait of a fiction called “the chief executive customer” than actually talk to a real one. On the media side, publishers and broadcasters have long since fired their human sales people and outsourced income production to dozens of third party adtech systems.
But at least we’re seeing brands start to wake up, even if they’re still fooled by adtech’s magic tricks. And consciousness is surely happening a level or two above the CMO. Those senior executives, whose brains have not been snatched by adtech, will still recognize the obvious: that brands are best made and served by sponsoring media they know, like and trust.
After all, sponsoring trusted media is what produced brands in the first place. It’s also what still what makes brands familiar to whole populations, and what still sponsors worthy publications and the journalism they contain.
If brands still want to do “interest-based” or “interactive” advertising (adtech’s euphemisms for what it actually does) they should realize five things:
Adtech sucks at branding. Hundreds of $billions have been spent on adtech so far, and not one brand known to the world has come out of it.
Yes, it works, about .0x% of the time, on average. The other 99.9x% of the time it produces nothing but negative externalities, including lots of tendentious math by agencies and platforms to justify the expense.Among those externalities are subtracted value from brands themselves.
Yes, direct response marketing does work, and it works best when target customers have already opted in, consciously and deliberately. (Note that there is a great deal of ambiguity about how much being a Google or Facebook member amounts to deliberate and conscious agreement to being followed and targeted, privacy controls withstanding. The choices in those controls should be much more binary and clear than they are.) So if L’Oreal wants to get a conversation going with customers of Lancôme, Giorgio Armani or The Body Shop, they should do it by those customers’ grace, not because the robots they’ve hired guess those customers might be interested, based on surveillance-gathered personal data.
Adtech starts with spying on people. This isn’t the elephant in the middle of adtech’s room. It’s the volcano about to erupt from under adtech’s floor. In that volcano are pissed off people who will soon get their own ways to kill off adtech. The rumbling under the floor right now is ad blocking. The lava that will pave over adtech is full tracking protection.
Adtech’s rationalizations are all around putting the “right message in front of the right people at the right time,” and aiming those messages with spyware-harvested Big Data. Both of those are direct marketing purposes, not those of brand advertising. The difference is stark, absolute, and essential for everyone to understand.
The only reason publishers go along with adtech is that they don’t know any other way to make money from advertising online — and no developers have provided them one. (But that will happen soon. Trust me on this. I know things I can’t yet talk about.)
What Shoshana Zuboff calls “surveillance capitalism” is going to be illegal a year from now in the EU anyway, thanks to the General Data Protection Regulation, aka GDPR. Mark your calendars: on 25 May 2018 will come an extinction event for adtech, because here are the fines the GDPR will impose for unpermitted harvesting of personal data: 1) “a fine up to 10,000,000 EUR or up to 2% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 4)”‘; and 2) “a fine up to 20,000,000 EUR or up to 4% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 5 & 6).”
Ad choices won’t do the job. That’s adtech’s way to “give you control” over “how information about your interests is used for relevant advertising.” The link into that system is this little symbol you see in the corner of many ads:
While clicking on it does provide a way for you to opt out of surveillance, you have to do it over and over again for every ad you see with the damn thing, like playing a slo-mo game of whack-a-mole, and it still relies on the adtech industry keeping cookies in your browsers.
If there is a market on the receiving end for “interest based advertising,” let’s have a standard system that puts full control in the hands of individuals, and speaks through open code and protocols to any and all publishers and broadcasters. Anything less will just be another top-down adtech industry paint-job on the same old shit.
An open question is if agencies can be programmatic online without spying on people. I think they can, if they start by admitting that spying is where the problem lies.
It should be clear that spying is why Do Not Track became a thing, and whyad blocking hockey-sticked when the adtech industry and publishers together gave the middle finger to people’s polite request not to be tracked. (Which is all Do Not Track provides.) It should also be clear that ad blocking and tracking protection are not “threats” and “costs” to publishers and agencies. They are clear and legitimate market responses by human beings to having adtech’s digital hands up their skirts.
It also won’t be easy for the big platforms to fix their adtech systems. Consider, for example, the egg that was splattered on Mark Zuckerberg’s face by Facebook’s own adtech when he posted his insistence that “99% of what people see is authentic” and “only a very small amount is fake news and hoaxes,” and fraudulent ads ran right next to his post:
These ads are fraudulent in at least three ways: 1) the headlines are lies; 2) espn.com is not the advertiser; 3) if you click on them, you find they’re bait for switches to something else. (One I clicked on was for a diet supplement.)
Facebook is going to have a hard time fixing this, because it is entirely in the chaff business. With Google, even though it’s hard to tell whether any given ad placed in a Google property is wheat or chaff, at least some of it really is wheat. (I would guess most search ads are, for example.) It should be just as easy for Google to disclose those ads’ nature as wheat as it is for the company to use Ad Choices to disclose adn ad’s nature as chaff. (I suggest one possible approach to this in A way to peace in the adblock war.)
But fixing the mess needs to start with advertisers. They can do it by firing adtech and its agents and going back to sponsoring reputable broadcasters and publishers. Simple as that.
I’ve long thought that the most consequential thing I’ve ever done was write a newspaper editorial that helped stop development atop the highest wooded hilltop overlooking the New York metro. The hill is called High Mountain, and it is now home to the High Mountain Park Preserve in Wayne, New Jersey. That’s it above, highlighted by a rectangle on a shot I took from a passenger plane on approach to LaGuardia in 2008.
The year was 1970, and I was a 23-year-old reporter for a suburban daily called Wayne Today (which may still exist). One day, while at the police station picking up copies of the previous day’s reports, I found a detailed plan to develop the top of High Mountain, and decided to pay the place a visit. So I took a fun hike through thick woods and a din of screaming cicadas (Brood X, I gather—the same one that inspired Bob Dylan’s “Day of the Locust”) to a rocky clearing at the crest, and immediately decided the mountain was a much better place for a park than for the office building specified in the plan.
As it happened there was also a need for an editorial soon after that, and Jerry Fuchs, who usually wrote our editorials, wasn’t available. So I came off the bench and wrote this:
That was a draft proof of the piece.* I ran across it today while cleaning old papers from a file cabinet in my garage. I doubt anybody has the final printed piece, and I’m amazed that the proof exists.
I left for another paper after that, and didn’t keep up with Wayne news, beyond hearing that my editorial derailed the development plan. No doubt activists of various kinds were behind the eventual preservation of the mountain. But it’s nice to know that there is some small proof that I had something to do with that.
*Additional history: Wayne Today published in those days using old-fashioned letterpress techniques. Type was set in lead by skilled operators on Linotype machines. Each line was a “slug,” and every written piece was a pile of slugs arranged in a frame, inked with a roller and then proofed by another roller that printed on blank paper. That’s what we marked up (as you see above) for the Linotype operators, who would create replacement slugs, give them to the page composers in layout, who could read upside down and backwards as they arranged everything in what was called a forme. The layout guys (they were all guys) then embossed each page into a damp papier-mâché sheet, which would serve as a mold for the half-cylinder of hot lead that would eventually do the printing. So the whole process went like this: reporter->Linotype operator->editor->Linotype operator->page composer->stereotype operator->printer. Ancestors of robotics eventually replaced all of it. And now in the U.S., exemplars of big-J journalism (New York Times, Washington Post) are tarred by the President as “fake news,” and millions believe it. My, how times change.
We didn’t have that in the old print and broadcast worlds, and still don’t, where they persist. (For example, on news stands, or when you hit SCAN on a car radio.)
But we have it in digital media.
Here’s another difference: a lot of the stuff that gets shared is outright fake. There’s a lot of concern about that right now:
Why? Well, there’s a business in it. More eyeballs, more advertising, more money, for more eyeballs for more advertising. And so on.
Those ads are aimed by tracking beacons planted in your phones and browsers, feeding data about your interests, likes and dislikes to robot brains that work as hard as they can to know you and keep feeding you more stuff that stokes your prejudices. Fake or not, what you’ll see is stuff you are likely to share with others who do the same. This business that pays for this is called “adtech,” also known as “interest based” or “interactive” advertising. But those are euphemisms. Its science is all about stalking. They can plausibly deny it’s personal. But it is.
The “social” idea is “markets as conversations” (a personal nightmare for me, gotta say). The business idea is to drag as many eyeballs as possible across ads that are aimed by the same kinds of creepy systems. The latter funds the former.
Rather than unpack that, I’ll leave that up to the rest of ya’ll, with a few links:
I didn’t watch Monday’s debate between Donald Trump and Hillary Clinton. I listened to it, while I live blogged what I heard in a window on top of it. This was after getting up in the middle of the night at an AirBnB with terrible wi-fi in the middle of London.
While Hillary scored some strong hits toward the end of the debate, I thought Trump sounded stronger, with many more quotable one-liners. So I gave the debate to him, much as I hated to. (Put me in the #NeverTrump column.)
But in the morning everybody was giving the debate to Hillary. What did I miss?
In a word: the video. When I watched some clips, it was clear that Hillary was winning, big time. Trump looked rude and buffoonish, while Hillary did something wonderful: every so often she looked into the camera as if into a friend’s eyes, and smiled while Trump mansplained away, looking like the jerk he is.
In other words, she used video better than Trump did. And I missed it.
The correct answer is neither. Nobody’s experience is “owned” by somebody else.
True, somebody else may cause a person’s experience to happen. But causing isn’t the same as owning.
We own our selves. That includes our experiences.
This is an essential distinction. For lack of it, both mobile operators and advertisers are delusional about their customers and consumers. (That’s an important distinction too. Operators have customers. Advertisers have consumers. Customers pay, consumers may or may not. That the former also qualifies as the latter does not mean the distinction should not be made. Sellers are far more accountable to customers than advertisers are to consumers.)
It’s interesting that Unlockd’s survey shows almost identically high levels of delusion by advertisers and operators…
85% of advertisers and 82% of operators “think the mobile ad experience is positive for end users”
3% of advertisers and 1% of operators admit “it could be negative”
Of the 85% of advertisers who think the experience is positive, 50% “believe it’s because products advertised are relevant to the end user”
“the reasons for this opinion is driven from the belief that users are served detail around products that are relevant to them.”
47% of consumers think “the mobile phone ad experience (for them) is positive”
39% of consumers “think ads are irrelevant
36% blame “poor or irritating format”
40% “believe the volume of ads served to them are a main reason for the negative experience”
Years ago, when I consulted BT, JP Rangaswami (@jobsworth), then BT’s Chief Scientist, told me phone companies’ core competency was billing, not communications. Since those operators clearly wish to be in the “content” business now, and to make money the same way print and broadcast did for more than a century, it makes sense that they imagine themselves now to be one-way conduits for ad-fortified content, and not just a way people and things (including the ones called products and companies) can connect to each other.
The FCC and other regulators need to bear this in mind as they look at what operators are doing to the Internet. I mean, it’s good and necessary for regulators to care about neutrality and privacy of Internet services, but a category error is being made if regulators fail to recognize that the operators want to be “content distributors” on the models of commercial broadcasting (funded by advertising) and the post office (funded by junk mail, which is the legacy model of today’s personalized direct response advertising online).
I also have to question how consumers were asked by this survey about their mobile ad experiences. Let me see a show of hands: how many here consider their mobile phone ad experience “positive?” Keep your hands down if you are associated in any way with advertising, phone companies or publishing. When I ask this question, or one like it (e.g. “Who here wants to see ads on their phone?”) in talks I give, the number of raised hands is usually zero. If it’s not, the few parties with raised hands offer qualified responses, such as, “I’d like to see coupons when I’m in a store using a shopping app.”
Another delusion of advertisers and operators is that all ads should be relevant. They don’t need to be. In fact, the most valuable ads are not targeted personally, but across populations, so large populations can become familiar with advertised products and services.
It’s a simple fact that branding wouldn’t exist without massive quantities of ads being shown to people for whom the ads are irrelevant. Few of us would know the brands of Procter & Gamble, Unilever, L’Oreal, Coca-Cola, Nestlé, General Motors, Volkswagen, Mars or McDonald’s (the current top ten brand advertisers worldwide) if not for the massive amounts of money those companies spend advertising to people who will never buy their products but will damn sure known those products’ names. (Don Marti explains this well.)
A hard fact that the advertising industry needs to face is that there is very little appetite for ads on the receiving end. People put up with it on TV and radio, and in print, but for the most part they don’t like it. (The notable exceptions are print ads in fashion magazines and other high-quality publications. And classifieds.)
Appetites for ads, and all forms of content, should be consumers’ own. This means consumers need to be able to specify the kind of advertising they’re looking for, if any.
Even then, the far more valuable signal coming from consumers is (or will be) an actual desire for certain products and services. In marketing lingo, these signals are qualified leads. In VRM lingo, these signals are intentcasts. With intentcasting, the customers do the advertising, and are in full control of the process. And they are no longer mere consumers (which Jerry Michalskicalls “gullets with wallets and eyeballs”).
So it would be far more leveraged for operators to work with those companies than with advertising systems so disconnected from reality that they’ve caused hundreds of millions of people to block ads on their mobile devices — and are in such deep denial of the market’s clear messages that they deny the legitimacy of a clear personal choice, misdirecting attention toward the makers of ad blocking tools, and away from what’s actually happening: people asserting power over their own lives and private spaces (e.g. their browsers) online.
If companies actually believe in free markets, they need to believe in free customers. Those are people who, at the very least, are in charge of their own experiences in the networked world.