Why Advertising is Failing on the Internet: Nu Uh!

By Matthew Marshall, Paid Search Coordinator, Advertising Solutions

This Sunday, TechCrunch introduced a guest post by Eric Clemons, professor of Operations and Information Management at The Wharton School of the University of Pennsylvania. Dr. Clemons argues in this article that internet advertising is “not trusted, not wanted, and not needed” and will ultimately fail. This article has lit a fire under online advertisers, bloggers and sensationalists on both sides of the argument. While my immediate reaction to the article was “nu uh!,” I thought I would take some time to articulate my case against Eric Clemons and present a thought out, opinion based, counter argument. I may not have a PHD from Cornell, however, I have spent a year building and optimizing PPC campaigns… which may be just as good.

After presenting us the case that online advertising is on the decline and will ultimately fail, Eric Clemons makes his point that he believes the internet is not replacing traditional advertising. He states that it is, in fact shattering it. His argument is:

It is frequently argued that the advertising industry will provide sufficient innovation to replace the loss of traditional ads on traditional mass media. Again, my basic premise rejects this, suggesting that simple commercial messages pushed through whatever medium, in order to reach a potential customer who is in the middle of doing something else, will fail. It’s not that we no longer need information to initiate or to complete a transaction; rather, we will no longer need advertising to obtain that information …The conventional wisdom is that this is exactly what paid search helps us to do, but all too often they are nothing more than a form of misdirection… Instead, we will use information that we trust, obtained at the time that we want to see it.

It is a provocative statement that seems logical enough. With more information easily available, users will bypass ads and go straight to sources that they know and trust. Dr. Clemons did some research of his own to make this point (with a nice ad showing up right before the article.) The problem is that people do not always know what information they are looking for. The thing is they need to find it. It is abundantly clear with searches garnering a YOY growth of 27.5%, people are using search engines to find what they are looking for.

Dr. Clemons would likely retort that paid ads are “misdirecting.” This is where I think his argument fails. As a search engine marketer I know the lengths we take to optimize and tweak our campaigns to maximize our relevance to each query we bid on. We consider the intent of each query as well as attempt to understand the person behind the query.

I would argue the opposite of Dr. Clemons. I believe that paid search provides some of the best and most reliable information per query on the internet. After all, consumers ultimately are voting for these ads based on their reaction to the website and message. If an ad misdirects a searcher, they will likely not convert resulting in a negative ROI and ultimately the removal of that particular query and text ad. It is a self-evolving, regulatory system.

Dr. Clemons’ argument that Consumers do not trust advertising, do not want to view advertising and do not need advertising has been argued since the beginning of traditional advertising. The idea that the internet has fragmented media and destroyed the need for ads is a false assumption. Quite the contrary with further segmentation and understanding of user intent we are able to finally provide people with ads that are relevant to what the need and want.

The reason online advertising will not fail and will continue to grow is because we can now directly address the three issues with traditional advertising (trust, relevancy and need).

We gain consumers trust by providing them with relevant content, by building reputable brand names and integrating into online communities to encourage discussion and open dialogue.
We show ads to the most relevant consumer in order to avoid being in front of consumers that are not looking for what we have to offer them.
And finally if it were true that consumers did not need advertising then they would stop clicking on text ads, and we simply are not seeing this happen.

It is true that online advertising will continue to evolve. The great thing is with the magnitude of information we have, evolution will be quick and efficient. Relevancy will increase and user experience will be richer.

I may be a little biased in my conclusion seeing as my career depends on Dr. Clemons being wrong… but I chose this industry precisely because I believe in its potential and value. So what do you think? Is advertising no longer needed for consumers to make a purchasing decision? Is online advertising destined to fail? It appears that even Dr. Clemons himself is finding some value in Paid Search.

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