It’s not just Internet Advertising that is Failing – the World has Fundamentally Changed

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Why Advertising Is Failing On The Internet – by Eric Clemons on March 22, 2009

Couldn’t agree more Eric. This is my theory.

Advertising is the creation of the 20th century Mass economy – Mass Production – Mass Media – Mass Marketing.

In this economy:

  1. Content was scarce
  2. Distribution was controlled
  3. Consumer attention was abundant

Advertising works great in this economy because consumers lacked choice.

Flash forward to the 21st century where the Mass economy doesn’t exist any more. It’s more like the fragmentation or social economy.

In this economy:

  1. Content is abundant and free
  2. Distribution is totally open
  3. Consumer attention is scarce (severely overloaded)
  4. Social engagement is the new Content

Advertising doesn’t work in this economy because consumers have limitless choice. Who’s going to choose advertising? Give a user a TiVo and what do they do? Consumers are also spending proportionally more time (attention) in social engagement rather than content consumption.

Eric is right we need to start exploring some new models. I think those models will be based on consumer intent, social influence and community engagement.

We’ve written extensively about this is years past.

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Social Feed Overloaded

Stream Overload

Dude, I’m plugged into all my lifestreams. ;-)


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The World Has Changed

The Break Up
by geertdesager

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The Facebook Opportunity!

The Facebook Problem

However, as far as I can tell, none of these Facebook apps developers are deriving any real benefits (if you are a Facebook apps developer and ARE deriving a tangible benefit, other than customer acquisition within the Facebook infrastructure, please weigh in.) In addition, Facebook has shifted all of the infrastructure costs to these apps developers, creating the “I have 250,000 users, now what?” problem.

The Facebook Problem? What?

I’m thinking it’s the Facebook Opportunity?

Since when is customer acquisition not the ultimate tangible benefit?

zero customers = zero revenue everytime

What came first for Google? users or revenue? Google built an app that ran on the web platform. They figured out the revenue model much much later…yes? Facebook is now offering developers the opportunity to build apps on a Social platform.

So what’s the bigger problem?

Millions of users and we’ll figure out the revenue model later?


We’ve built an app/ platform that WE think is cool and we’ll figure out how to acquire users later?

I think it’s pretty fundamental.

users = attention = revenue

All successful internet apps/products bare their own infrastructure costs.

The magic is getting the users! Why are we all of the sudden discounting that reality? The “I have millions of users and now what problem” is good problem to have. That’s when it’s time for VCs to step in and provide their value.

Where are you guys? Time to step up!

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A VC Age Discriminator

Ok I let Fred’s first post on this slide. The Mid Life Entrepreneur Crisis

But he’s back on the age issue again.

The Age Question (continued)

“It is incredibly hard to think of new paradigms when you’ve grown up reading the newspaper every morning. When you turn to TV for your entertainment. When you read magazines on the train home from work.”

Yes it is! That’s why the very very few who can are so special! You should be seeking them out rather than insulting them with these discriminative posts.

Continuing to write posts like these is also a self fulfilling prophecy for you because you just completely push older entrepreneurs away. Clearly you have a bias. That’s unfortunate for you.

Ok Facebook opened up their social platform. The new paradigm to me is where the Social Graph intersects with Social Media and the Attention Economy. It changes everything. It changes media. It changes marketing. It changes advertising. Truth be told I don’t know a lot people of any age that really fully get this…. yet.

Who cares how the hell old you are! You either live in this new world or you don’t. That’s the only determinant. There are many young people that don’t live online at all. Just like there are older people like myself that live in and on the web, the 2.0 social web, 24/7.

Let’s stop the valueless gross age generalizations and built the new paradigm! Shall we?

Please stop insulting the outliers. You’re smarter than that Fred.

Ironically, I was riding the BART to SFO on Friday. As I entered the BART they were handing out free Newspapers. I hadn’t read a paper newspaper in the past, I don’t know, 5 years or so. It was a very nostalgic experience. I’m sticking with RSS and my Facebook Socialstream. ;-)

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Attention = Experience?

You must watch this!

Have You Ever Been Experienced?


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