Is online advertising dead?

Professor Dave Winer has posted one of the most convincing articles about the sunset of online advertisement in his blog

The idea behind his theory is that online review sites and blogs will make online advertisement completely ineffective by offering something that advertisements could never offer, something that, as Kevin Kelly stated in his brilliant essay Better than Free cannot be easily duplicated digitally: TRUST and HONESTY.

How many people actually trust the information they see in an advertisement? I know i don’t.
In this web 2.0 world, most online-savvy people check online reviews by other buyers and users in sites they trust, to see if a product is worth buying or not. I have made buying decisions for items ranging from cars to CDs based entirely on online reviews, and i am happy to say that in 99% of all purchases, i am satisfied with the decisions i’ve made. There are hundreds if not thousands of specialized websites and blogs that thrive on reviewing products by blogger and users alike.
Advertisements will never offer the sense of tapping into the collective sense of trust, the way blogs and web forums can.

As a record label owner, where will would my advertisement money be better spent? buying online banners or sending out copies to targeted bloggers, online zines, podcasters and online radio stations?
The answer is obvious.
The truthfullness of Professor Winer’s predictions can be corroborated by the way lowly scammers are now advertising their shady products.

By my own calculations, acai berry weight-loss product peddlers have spent millions of dollars creating fake online blog sites and buying google ads for sites like helensdiet.com, lindas-diet.com, juliasweightlossblog.com, kristinsdiet.com, JuliasWeightLossBlog.com, bbysdietjournal.com, abbysdietjournal.com, ashleysdietblog.com, etc etc.
Anyone who surfs the web has seen at least one of those “Flat stomach Rule: Obey” ads. They are everywhere!

I am sure people have been scammed to the tune of millions of dollars to the point to where the FTC is now (supposedly) investigating those websites.

The truth is that people trust bloggers and fellow consumers more than they do emarketers and advertisers, whether we like it or not. There is a reason why shady businesses are not spending millions of dollars in traditional online advertisements: because they don’t work!
How else would you explain the fact that these dubious businesses are spending a lot of time and effort into creating domains and building fake blogs instead of paying online ads?

3 Responses to “Is online advertising dead?”

1. admin says:

   June 12, 2009 at 1:33 pm

   For more related information on why advertising will ultimately fail check out this adbusters.org article:

   http://www.adbusters.org/magazine/84/pop_nihilism_adverting_eats_itself.html

2. admin says:

   June 12, 2009 at 3:28 pm

   Here is another great exposition as to why online advertising is dead:

   http://www.techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/

   There are three problems with advertising in any form, whether broadcast or online:

   Consumers do not trust advertising. Dan Ariely has demonstrated that messages attributed to a commercial source have much lower credibility and much lower impact on the perception of product quality than the same message attributed to a rating service. Forrester Research has completed studies that show that advertising and company sponsored blogs are the least-trusted source of information on products and services, while recommendations from friends and online reviews from customers are the highest.

   Consumers do not want to view advertising. Think of watching network TV news and remember that the commercials on all the major networks are as closely synchronized as possible. Why? If network executives believed we all wanted to see the ads they would be staggered, so that users could channel surf to view the ads; ads are synchronized so that users cannot channel surf to avoid the ads.

   And mostly consumers do not need advertising. My own research suggests that consumers behave as if they get much of their information about product offerings from the internet, through independent professional rating sites like dpreview.com or community content rating services like Ratebeer.com or TripAdvisor

3. neoanchorite says:

   October 11, 2009 at 6:52 am

   A word about advertising and product information: By the time people come to search for information about a product the work of advertisers is already over. Berger said back in the 1970s (I seem to remember) that advertising works by creating dissatisfaction (How can I be content with my wallowing stomach after seeing all those sculptured abs?). Advertising might change its form but for the cogs of the unsustainable growth machine to keep turning the industry has to find a way to continue to spread dissatisfaction. It might turn out that product placement is a better method than older ads in the intermissions; hence all the pop idols who curiously feel the need to made calls on their cell phones while filming videos for their latest songs.