Advertising Is Dead. Long Live Advertising!

As an early stage investor focused on media, marketing tech and analytics, I inevitably wind up in conversations about the future of advertising. These span a range from the predictable (ad campaigns will get better; agencies will get smarter), to the apocalyptic (brands are toast; agencies are dead). But what has surprised me most is what hasn’t been brought up in these discussions. A fundamental question has been left unasked by these ad tech leading lights, and I find myself wondering why don’t they see what is right in front of them?

The question: Who says advertising will have, or even deserves, a future?

Now, this may sound like your basic Molotov cocktail concept – more provocative and flashy than constructive. But that’s not the case. This is a true, deep question which everyone in mobile and Social should be pondering because a logical analysis reveals a forceful case that advertising, as we have known it historically, ought to go away.

To understand why this is so, let’s review some fundamentals. First, advertising isn’t some eternal truth. It is a relatively recent invention, barely more than 100 years old. Prior to that, commerce was utterly local. The shoe maker knew how many shoes he could make and how many of his neighbors would buy shoes in a year. He made all that he could sell and sold all that he could make. When businesses know that they can sell everything they make, there is no need to advertise. This was the case through almost all of human commerce.

Only with the Industrial Revolution and the accompanying revolution in transportation during the late 19th Century did production begin to outstrip the known local buying capacity. This ushered in the potential to ship excess goods far from where they were made to sell to new buyers. And that shift brought about the need to inform those new buyers and to compete with entrenched local sources. And that generated the original need for advertising and all that goes with it.

Back then, and until the past few years, one fundamental reality dominated advertising: The audience only existed at afar, removed from the manufacturer and his message. You may want to sell skis, but the world of skiers is diffuse, ski buyers are hard to find. And, if you can’t find them, you can’t influence them. Same for boats or stereos or children’s cereal or cosmetics. Marketers knew that there were customers out there somewhere; knew that folks already used their products and that more could be induced to begin using them. But how could one actually find the right targets in a milling, amorphous, distant consumer population?

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