In essence, three fundamental shifts are piling on top of each other.
- Advertising is migrating to digital media because it is far more effective in targeting and reaching relevant audiences than most traditional media.
- Aggregate advertising spend in the US is likely to experience a cyclical downturn as the economy softens
- People are confronting a proliferation of sources competing for their attention and becoming less receptive to advertising messages, even when they are very well targeted
[…] The likely evolution of Internet advertising
The basic paradox of the Internet can be framed very simply: The very platform that makes advertising both more relevant and more measurable is the same platform that longer-term will challenge and ultimately undermine the basic role of advertising in communicating with customers.
[…] On the other hand, if entrepreneurs want to build enduring businesses that will change the world, resist the temptation to become too dependent on advertising. It’s OK to offer many products and services for free (in fact, that will be essential for success) but just be sure you understand your role in a broader ecosystem where someone (even if it is not directly you) is making a ton of money with platforms and services that people will pay for. In particular, look for ecosystems with platforms and services that generate increasing value as the number of participants expands.
David Cushman on the broken web ad model
More loosely related:
Remix Culture and Context Management (conversation with JSB)