3. Advertising will fail for three reasons:

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

This is from a longish post, that may be worth your time reading in full if these things concern you.

1) Note the reference to Dan Ariely’s excellent “Predictably Irrational”, which I almost consider required reading at this point.

2) The only way to avoid these three rather valid points is to stay within the context the user/reader currently finds themselves in. Don’t try to sell them something totally different than what they are already looking at right then.

E.g. earlier I viewed a video about Twitter going mainstream on MSNBC, and they served up an ad for KRAFT dressing or something like that. Major FAIL, but really this kind of thing is still totally common, on Hulu.com, etc. etc.

What if they had served a super short pre-roll ad that said: “Stay tuned after the end of the video, we’ve got a major surprise relating to Twitter for you”, and then in a post-roll add try to sell me something related to Twitter, social media, smart phones (to post to soc media), etc. etc.

That would make at least some marginal sense. Getting me to optin to a list by offering a free in-depth report on how Social Media is changing the world, and then try to sell me off of there would be even smarter. It’s difficult to go from Zero to Sale in one step, especially if the price point is outside of “impulse purchase” range.