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‘Chaos Scenario’ Author Bob Garfield Watches as His Worst Predictions Wreak Havoc on Media and Marketing Worlds.

The New York Times. TV Guide. Clear Channel. NBC, Boxee, Yahoo. They tell the story. There is no longer a need to warn of a gathering Chaos Scenario, in which the yin of media and yang of marketing fly apart, symbiotic no more. There is no need to seed doubt about the internet’s prospects as an advertising medium, nor otherwise be a prophet of doom.

Chicken Little, don your hardhat. Nudged by recession, doom has arrived.

The toll will be so vast — and the institutions of media and marketing are so central to our economy, our culture, our democracy and our very selves — that it’s easy to fantasize about some miraculous preserver of „reach“ dangling just out of reach. We need „mass,“ so mass, therefore, must survive. Alas, economies are unsentimental and denial unproductive. The post-advertising age is under way.

This isn’t about the end of commerce or the end of marketing or news or entertainment. All of the above are finding new expressions online, and in time will flourish thanks to the very digital revolution that is now ravaging them. The future is bright. But the present is apocalyptic. Any hope for a seamless transition — or any transition at all — from mass media and marketing to micro media and marketing are absurd.

The sky is falling, the frog in the pot has come to a boil and, oh yeah, we are, most of us, exquisitely, irretrievably fucked.

Newspapers

Amid 23% population growth in the past two decades, U.S. newspaper circulation has dropped 20% — one reason your morning paper, downsized every which way, is no match for a stiff breeze. Craigslist, siphoning off $7 billion worth of classifieds, is another.
There are so many horror stories to choose from. The Rocky Mountain News just folded, the Seattle Post-Intelligencer went web-only last week and the San Francisco Chronicle is on death’s door. A decade ago, the Minneapolis Star Tribune sold for $1.2 billion. In January, it declared bankruptcy. Chicago’s vast Tribune Co. was valued at $12 billion in 2000, when it took on debt to acquire the Times-Mirror Co. for more than $8.3 billion. In April 2007, real-estate developer Sam Zell snapped up the whole empire for $8.2 billion, and commenced wholesale retrenchment, including layoffs, bureau closings and the sale to Cablevision of the venerable Newsday. Within 20 months, bankruptcy.

As for The Wall Street Journal, nobody knew when Rupert Murdoch plunked down $5.5 billion for a $3.5 billion paper last year whether he was a genius of synergy and valuation or a sucker. The recession obscures the answer, but last month News Corp. declared a write-down of $8.4 billion in assets — about 40% of it attributed by Wall Street analysts to the Journal deal. Oops.

Bob Garfield’s „The Chaos Scenario“ will soon be a book. For a preview: TheChaosScenario.net.

For sheer poignancy, though, it’s hard to beat The New York Times. With a $400 million May debt payment approaching like a runaway cement truck, the Times is selling 75% of its shiny new headquarters. More alarmingly, it has suspended its stock dividend and borrowed $250 million at usurious rates from Mexican oligarch Carlos Slim, whom a Times editorial not long ago condemned as a „robber baron.“ And if not Slim, who, Gazprom?
On the plus side, thanks to the internet, all of these papers — especially the Times — have seen their readership soar. Surely, with the attendant savings in production and distribution, the future online-only paper represents a promising business model, right? No. That ship has sailed. Long ago newspapers based their online strategy on advertising, at which point traffic became the holy grail. Times Select — the walled garden of premium columnists available by subscription only — generated income but depressed traffic. So out it went. The Times and 99% of its brethren opted to give away all content in exchange for audience, neglecting to understand two structural facts of online life: 1) Nobody clicks on ads, because why would they? 2) The virtually infinite supply of online ad inventory will always depress the price even the best publisher can fetch. Always. Immutably. Forever. Mass media thrived on the economics of scarcity. The internet represents an economy of unending abundance.

As Philadelphia Inquirer and Daily News boss Brian Tierney told me at the end of January, „Clearly a free internet model online — if you build it, they will come — I don’t think is working for media like ours. … I think we’re going to have to start to find a way to charge for it and not just rely on advertising.“

By the time anyone figured that out, it was too late. The audience doesn’t imagine that all cars want to be free, or that all toasters want to be free, or that all paper towels want to be free, but it somehow believes that all content wants to be free. That’s an indefensible ethic, but moral high ground doesn’t repay the creditors. And three weeks after our conversation, Tierney’s Philadelphia Media Holdings declared bankruptcy.

Magazines

In 2008, newsstand sales — the profit engine of the industry — fell 12%. According to Media Industry Newsletter, gross ad pages so far in 2009 have dropped a staggering 22% — that coming off a dismal 2008. In recent months, Condé Nast has folded Domino, Meredith has folded Country Home, Ziff-Davis has folded PC Magazine, Hearst has folded CosmoGirl and O at Home, The New York Times has folded Play, and Hachette has folded Home.
Playgirl is gone. Radar is gone. The formerly weekly, formerly biweekly U.S. News is now a monthly. Time Inc. magazines have reduced head count — mostly through layoffs — by 1,400 employees since 2004. And TV Guide magazine, the erstwhile 17 million-circulation goldmine, was sold in October to OpenGate Capital for $1, or $2 less than a copy at the supermarket checkout.

Two years ago, Jack Kliger, chairman of Hachette Filipacchi Media U.S. and then chairman of the Magazine Publishers of America, told an MPA audience: „I’m not ready to end up my career watching our industry get marginalized and fade away.“ That’s been taken care of. Kliger was pushed out of daily responsibilities by his French owners who, as one of many cost-cutting measures, withdrew from the MPA in mid-February.

Be not tempted to dismiss this as the toll of a down cycle; this is structural, as articulated a few weeks ago by Wenda Harris Millard, co-CEO of Martha Stewart Living Omnimedia. „Advertising simply cannot support all the media that’s out there.“ Or as the publisher of another famous-name, high-circulation title recently told me, begging for anonymity on the grounds of not wishing to be stoned to death: „We are living the Chaos Scenario.“ Nicely phrased.

Broadcast stations

Remember how Clear Channel, the radio-TV-billboard colossus, was going to destroy our very democracy by voraciously swallowing every broadcast station in America? For a decade, the mantra from media-concentration hawks: Stop Clear Channel now or we will all be slaves!
Yeah, well, we’re probably safe. After being purchased by two private-equity firms (for $38 per share, down from $100 in 2000), Clear Channel dumped its 56 TV stations and tried to unload more than 500 of its small-market radio stations, but has been stymied by the credit freeze and declining value of those assets. Without those sale proceeds, the company’s prospects for default on its $20 billion debt are worrisome enough that Standard & Poor’s rates its commercial paper five steps below investment grade. Junk, in other words. In early February, S&P said it was considering downgrading the company yet again. The fearsome juggernaut has just laid off 9% of its work force.

At least it got out of TV when the getting was merely not so good. Bernstein Research predicts a 20% to 30% drop in 2009 TV station ad revenue. Stations’ share of TV ad dollars, according to TNS Media Intelligence, dropped to 26% in 2007 from 34% in 2000. Affiliate fees from networks have essentially disappeared, and the values of local licenses have plummeted, resulting in massive write-downs by ownership groups. And two of the four major networks — CBS and NBC — have publicly hinted that the days of distributing programming over the air via affiliates are numbered.

TV networks

„Do we want to be what we’ve been?“ asked NBC Universal CEO Jeff Zucker at a December investor conference, as if the matter were in his hands. If everybody had their druthers, the status quo would be just dandy: networks distributing programming to local broadcasters and selling the aggregated audience to advertisers at ever higher costs per thousand.
But nobody has their druthers. According to Nielsen Media Research, in the last reporting period, CBS’s prime-time audience was down 2.9%. ABC was down 9.7%, Fox was down 17.5% and NBC was down 14.3%. The numbers were particularly devastating for Zucker, whose weak schedule has exacerbated viewer exodus, resulting in lost revenue, yielding huge spending cutbacks, producing cheap, even-less-popular programming (no dramas or sitcoms in the first hour of prime time, more and more „The Big Loser“ and next „The Jay Leno Show“ only in the last hour), leading to still more viewer defection and so on toward oblivion. Zucker keeps the lights on only because mass marketers, desperate for access to even the Incredible Shrinking Mass Audience, have continued to pay more and more for less and less.

The average price of reaching 1,000 households with a 30-second spot in prime time, according to Media Dynamics, has jumped from $8.28 in 1986 to $22.65 in 2008 — but effectively more like $32, because between 150 and 200 of those 1000 households use DVRs to skip past the ads.

But the ratchet effect is over. What the law of diminishing returns could not influence, the deep recession has. Now the advertiser exodus, too, is under way. As of mid-February, 71% reported having slashed their 2009 budgets, and 6% more said the cuts were on their way.

That’s why Zucker finally admits to considering a once-unthinkable proposition: once affiliate contracts and pro-sports deals expire, ceasing to be a network at all. NBC: the cable channel.

And that’s not just the last resort of the Big Four laggard. It’s also the last resort of the Big Four leader. At CBS, where fourth-quarter profit was down 54%, Les Moonves has publicly speculated about a similar move „five or 10 years away.“

Cable

Just fair warning, guys: Cable has problems of its own. It’s no more DVR-proof than broadcast. It is also suffering a sort of distribution autoimmune disease, wherein the body attacks itself. The very coax the industry has been stringing for 50 years is now the pipe for broadband, which households increasingly are using to bypass pay cable entirely.
Charter Communications will soon be in bankruptcy after losing more than 75,000 basic-cable customers in the fourth quarter of 2008. Churn, the expensive process of replacing lost subscribers with new ones, is taking its toll. Comcast’s sign-ups in the fourth quarter were down by half from 2007. Here’s what Glenn Britt, CEO of Time Warner Cable, told analysts in his last earnings conference call: „People are saying, ‘All I need is broadband. I don’t need video.’“

Britt was referring to „over-the-top,“ which, if you don’t like the autoimmune analogy, can equally be thought of as being shot with your own gun. The game changer in this respect is Boxee, a software app that aggregates all your videos onto one screen and allows you to feed them into your TV machine. This is what they mean by „convergence.“

But Boxee is such a threat to the business model of both cable and broadcast that Hulu — which distributes NBC, Fox and Viacom programs online for free with minimal advertising — demanded to be removed from Boxee’s offerings.

Because if you can watch TV programs on your actual TV, with very few ads and no subscription fees to a cable middleman, why wouldn’t you?

Online publishers

Yahoo, at about 3.5 billion daily page views, is the most visited website in the world. In 2008, it had a profit of $424 million on $7.2 billion in revenue. Not too shabby, unless you compare it with 2005, when the company had a profit of $1.9 billion on revenue of $5.3 billion. Last spring, after a prolonged dance, it finally rejected Microsoft’s takeover bid at $33 per share, or about $50 billion. Yahoo now trades in the range of $12, for a market cap of $17 billion.
What does it mean when online usage soars, yet the most popular publisher’s value is cut by two-thirds? It means Wall Street sees Yahoo’s margins headed steadily down — not just because it gets trounced by Google in search but because its CPMs are going in the wrong direction.

The fundamental obstacle for online publishing, according to the president of the Interactive Advertising Bureau: „It couldn’t be more straightforward,“ Randall Rothenberg says. „It is a disequilibrium between supply and demand.“

Yeah, that about sums it up. As (my former Ad Age colleague) Rothenberg details, „Today the average 14-year-old can create a global television network with applications that are built into her laptop. So from a very strict Econ 101 basis, you have the ability to create virtually unlimited supply against what has been historically relatively stable demand.“

So the biggest online publishers, with all their vast overhead, have no more access to audience than Courtney the eighth-grader. And there are hundreds of millions of Courtneys, millions of them on Google AdSense, driving the price of ad space down, down, down.

Rothenberg also acknowledges to problem of ad avoidance, as evidenced by average click-through rates approaching zero. Yet, for all his economic realism, he stubbornly insists there’s a solution: „Better advertising. More informational. More entertaining. More beautiful.“

A latter-day Creative Revolution, that is.

„The interactive industry is finally and belatedly beginning to see that the way we built our sites, based on the direct-response foundation, infused the environment with ugliness and clutter.“

Granted, fewer dancing silhouettes and pop-ups might be nice, but if you need to trump Econ 101 and basic human behavior, the job calls for something a bit more efficacious. Like a magic beanstalk. It’s worth noting that Wenda Harris Millard’s analysis about the structural glut of ad inventory took place at a conference of the IAB, where she is chairwoman. Her previous gig: head of sales at Yahoo.

But why pick on poor Yahoo? Consider Twitter, Facebook and YouTube, which among them have altered human behavior of a grand scale. Two and a half years ago, Google paid $1.65 billion for YouTube. The 2008 payoff: about $90 million in ad revenue — which might (but probably won’t) cover the costs of copyright-infringement litigation and certainly won’t cover bandwidth charges. Facebook, whose 2007 valuation of $15 billion has shrunk to about $3.7 billion, had 2008 revenue estimated at $300 million. And Twitter had $0.

Thus, the mantra: „We have the audience. All we need is a business model.“ As if adequate revenue were somehow guaranteed by physics or heavenly deity. It isn’t. I’ve pored over Isaac Newton and the Ten Commandments. There is no „Thou shalt monetize.“

By Bob Garfield
Published: March 23, 2009

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43 Comments
By Now | New York, NY March 22, 2009 04:31:04 pm:
Randy Rothenberg is right,the „targeting is everything“ mantra is a lie. Brilliant creative is now,and always has been, the only answer.How hard can it be?Even I can do it.Larry Brown,Adsimple,East Hampton.NY
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By Stevewax | NEW YORK, NY March 22, 2009 05:27:35 pm:
Hey, Bob, nice little piece with some mild warnings. If it’s apocalypse that you want, try this:

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

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By voyager360 | SANTA FE, NM March 22, 2009 09:04:30 pm:
Hi Bob,

Very insightful.

I work 100% in real estate advertising.

Stupidity or herd mentality are two things that plague thousands of brokers in the real estate market. Too many of them blindly plow 75% of their annual advertising budgets at print and either too little or zero dollars at Internet advertising.

Newspaper ads and Real Estate Guide advertising magazines were one of the norms of real estate marketing — which are largely printed by the same newspaper.

Ironically, the National Association of REALTORS (NAR) publishes an annual report every year which clearly shows that more than 82% of customers searching for homes are using the Internet. It’s a real shame to see how few brokers read the trends and reports from the same trade association they belong to.

So it begs the question, why spend 75% of your annual marketing budget on print ads when 82% or more of your traffic is coming from the Internet?

What’s even more sad is many real estate brokers are still expecting the good old days of print to come back. Delivering them the leads they used to get from print media four years ago.

Bart | Santa Fe
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By BERT | NEW YORK, NY March 22, 2009 10:15:20 pm:
Nice a priori arguments. the only problem is that the facts always lead me to a different conclusion. I just did a meta-analysis of 388 ROI studies. The full presentation of results is available at http://www.slideshare.net/joelrubinson/tv-effectiveness-webcast-rubinson
TV works as well as ever and TV, print (certainly magazines), and internet all had their strengths. shopper marketing is probably the sleeper in the bunch. I see the sidebar in AA saying that the DRTV ads for $19.95 are doing better than ever. Are the ads better (that couldn’t be it) or are we simply able to more clearly see the impact of TV? All that is known about advertising will be presented by Prof Jerry Wind at the ARF conference on Mar 31st (www.thearf.org) and it will show that advertising still has impact. The point about newspapers is clear–but those who transcend platform, like the NY times are more likely to come out of this recession in a viable position.
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By YuriyBoykiv | Cliffside Park, NJ March 22, 2009 10:33:18 pm:
Bob, I usually love your articles, but this one is way too pessimistic… I believe you are right in most of your observations, but we should not forget that we are going through the intense evolution in the media business and as a result we feel that all the changes are too rapid and too dramatic.
This is no different than what horse carriages went through in the beginning of the 20th centuries when Ford came up with its first car; or what the telefax went through when Bell started what is now AT&T.
Newspapers, magazines and traditional TV networks are dying, no doubt about it. But the best ones will adapt to the online model and become leaner and much more efficient. I am convinced that the future of TV is in the On-Demand model and that DVRs and TiVos are just transitional models (similarly to Hybrid cars before the new, more efficient technology takes ove the automotive industry). Why would anyone skip the TV spot, if they can avoid it all together with the VOD model?
Evolution is ruthless, and those that adapt quickly will survive. Peace.
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By jackgordon2009 | NEW YORK, NY March 23, 2009 12:24:53 am:
THE BEST ARTICLE WRITTEN ON ADAGE SINCE THE 75th Anniversary Issue!
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By AHRL | CHICAGO, IL March 23, 2009 01:25:47 am:
Agreed–best observations in years.
Leadership is too rooted in how things have been–because that is how holding companies know how to make money. Breaks my heart every day-
when an industry of ideas becomes too dependent on the old ways.
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By annecaborn | Brighton March 23, 2009 05:16:16 am:
Social media was bound to become more powerful when our collective future looked at its bleakest. We think less about furthering ourselves and more about survival of the species. Biology has a social context. Social connectivity has been annxed as a biological imperative.
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By letterrep | Leesburg, VA March 23, 2009 08:13:09 am:
I’ve got a business model…but no one will listen.

http://www.LetterRep.com

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By neilantyree | EL SEGUNDO, CA March 23, 2009 08:23:45 am:
Certainly an eyeball-popping article for a Monday morn. But, frankly, there’s not much in here that I find terribly shocking. But I DO salute the author’s very careful rundown of all the bad news. Nicely catalogued for future reference for any of us who need a little back-up when making a case for some client recommendation.

But frankly? I particularly enjoyed Larry Brown’s optimistic tone to his brief note. And you can add me to the list of those who REMAIN optimistic.

Time to get innovative again, people!

Neilan Tyree
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By jimmymac | new york, NY March 23, 2009 08:32:51 am:
Ouch. That’s brutal. That’s frightening. And worse still, I can’t find much wrong with your assessment to argue against.

But now that the death knell is here, what do agencies and their clients do about it?
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By Jonathan_Trenn | FALLS CHURCH, VA March 23, 2009 08:47:16 am:
Well, Good Morning Bob.

Just Tweeted this via that free adless online network that brings in $0 worth of revenue. Now, 1,133 more people have access to it.
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By kwkern | OLD GREENWICH, CT March 23, 2009 09:16:29 am:
The good news is consumer willingness to pay is growing – in 2008 according to Veronis, Suhler, Stevenson, almost 70% of industry revenues. It is harder to win a share of millions of consumer transactions than a couple of big advertisers’ budgets. But understanding how to drive consumer transactions will both generate new revenue and a premium from marketers who value this new expertise. katherine at comradity.com
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By markz | New York, NY March 23, 2009 09:23:14 am:
Having worked with Newspapers and TV stations for nearly who were trying to migrate their businesses online, it is clear that the institutional barriers to doing anything truly innovative will surely be their ultimate downfall. A comparison to the U.S. auto industry is not that much of a stretch. Garfield’s assessment of the online space is much less grounded and seems to be built as „filler“ because he had to mention the segment with some negative data (when 90% of the market data is positive). The key to the online inventory glut & lack of performance is not just about better creative — but a shift from buying placement (old media style) to buying audience (the holy grail of new media). The way to do that is through DATA — which is just beginning to play a major role in online advertising. Google’s recent BT efforts and the growth of DATA exchanges like eXelate, attest to this fact and are poised to totally change the landscape of online advertising. Ms. Mallard win’t know what hit her . . .

Mark Zagorski, eXelate
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By DavidGriffith | BETHEL, CT March 23, 2009 09:46:19 am:
Traditional disruptive media will continue to decline as technology continues to put consumers in control. This article does a good job of redefining the role of advertising in the digital age. http://promotions2.com/2009/new-rules-of-advertising-in-the-digital-age/
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By Rodney33 | FRISCO, TX March 23, 2009 11:12:31 am:
It’s going to be tough, but we have hope in our future, that is because – we don’t focus our efforts on media.

We are focused on solutions – most of which, the majority of, are not driven by media.

They’re driven by customer interaction and results.

You don’t see any mention in the article about web site development and digital tools, mobile Aps, social network strategies, shopper marketing and events, or good old fashioned DM-CRM, other than the mention that banner ads don’t work on Facebook and Twitter. How profound.

Ad Age has never given any of these categories much coverage, because in their minds, they weren’t Advertising. They weren’t what „Mad-Men“ were all about.

It’s been over 5 years now, these practices we do the most of – that Ad Age and the giant Advertising holding companies call – „below the line marketing,“ actually became „above the line,“ because they began generating the majority of all revenues for agencies.

Here is the bottom line – it’s huge, obvious and has never been more true;

1) Consumers are in control and they associate and buy things from „people they trust.“

2) Advertising media at best, does not directly sell. It simply creates awareness, to stir curiosity and give people a reason to ask their trust network about a message they saw.

3)Friends, family and minimally general opinions found in trusted communities are trusted more than all media buys combined.

Our job is to help clients build trust with an audience. Seeing is believing.

That’s why we’re focusing on website development and tools, mobile aps, social networking strategies, events and shopper marketing, to provide tools to help people manage their lives and to make educated decisions that they trust.
Can we produce TV, radio and outdoor? Yes. Is it important to our future? No.

Clients are emphasizing the word „Trust“ and „Building Trust with customers“ in their briefs because they’re hearing it focus groups.

I write all of this to let you know, when Ad Age says, „we are irretrievably fucked,“ you’re right.

You are, as long as you continue to see the „Ad World“ as it once was.

We’re not, because we have never seen it that way.

Rodney Mason, CMO
Moosylvania
The Great State of Design

rodney@moosylvania.com
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By jimcourtri | chicago, IL March 23, 2009 11:42:08 am:
As an ad agency creative for 25 years, I was at the center of the now-disintegrating ‘aggregate and aggravate’ model. Mass media made the content people loved. I made the ads we all hated to watch. And loved to zap. Not anymore. In Bob’s new World of Chaos, I’m now applying my strategic skills to making entertaining video content for websites. Now I create content people WANT to see. It’s the perfect rechanneling of the creative mind. Bob’s right. The answer lies in new creative uses for the medium. Where most people use websites as online brochures, I’m helping to turn them into broadcast stations that offer unlimited free media. All you have to do is make the content interesting, and the audience will find it.

Jim Courtright
BYOB, (Become Your Own Broadcaster), Chicago
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By Kelly | Calgary, AB March 23, 2009 12:09:32 pm:
I read this right after I downloaded a stunning promo video for the puma lift. The link came via email from a peer. http://lift.puma.com/
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By dickl | New York, NY March 23, 2009 12:16:05 pm:
Bob, Thanks for the reality check.

How do you feel about the future of live event marketing and impact and human touch will relate to the digital age
and the marketing mix?

Dick Lambert
dick.lambert@gmail.com
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By bburdsal | TUCSON, AZ March 23, 2009 12:44:53 pm:
Interesting article, it seems media as we know it TV, newspapers and magazines are done. For far to long media feed us what they wanted not what we wanted and relied on advertisers to pay the bills. With advertising dead they are finding the public not wanting to pay. In my option it is not a public wanting something for free; it is a media not offering a reason to pay.

Brett Burdsal
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By Greg | Franklin, TN March 23, 2009 01:17:32 pm:
This article is a preview of Bob Garfield’s new book, The Chaos Scenario: Amid the Ruins of Mass Media, the Choice for Business is Stark; Listen, or Perish.

And, while this article forecasts the old media mode’s demise, the book also points the way to a digitally-powered social marketing future.

I am working with Bob to publish and promote the book according to the principles he espouses on its pages.

Read more about it, register for updates, and even join the team of new media experts working to promote the book and transform an industry at http://www.thechaosscenario.net/

Full disclosure: My name is Greg Stielstra and I am Bob Garfield’s publishing partner on this project. GS
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By jkantor1 | St. Petersburg, FL March 23, 2009 01:18:09 pm:
No one clicks on ads because they aren’t targetted to them. When I go to a vertical market site – one on a single subject that I am interested in – I click on ads quite frequently. The first rule of marketing is that you can’t sell something to someone who doesn’t want it.
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By michael | Thornhill, ON March 23, 2009 02:47:24 pm:
excellent insights…truly thought provoking.

what’s a magazine publisher to do?????

You are a really BIG publisher or a really small publisher.

A beach ball vs. a ball bearing…

Me? I am happy to be a ball bearing.

Read more here…if you dare!

http://publishingcentral.com/

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By barry | NY, NY March 23, 2009 03:22:09 pm:
Fantastic essay. I always enjoy these pieces.
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By gstein | San Francisco, CA March 23, 2009 04:03:24 pm:
Why is advertising so frequently and deeply relied upon to make innovation work out?

Twitter is remarkable, naturally. But the innovation of Twiter (and a thousand other communications innovations) seem to stop once the idea is cooked and available. Then there always seems to be a half-hearted sense that „advertising“ will make this thing pay.

OK. Fair enough. But „advertising“ is neither a monolithic solution, nor is it a silver bullet. Some kids in a garage may come up with a cool idea, then drop some HTML code into the margins that pull ads from Google (or wherever). But if those ads don’t produce clicks, it doesn’t prompt a damnation of advertising. It may just be that you have to think a bit farther in the innovation. Or get the ad guys working with the innovators earlier.

„cut-and-paste-this-code“ is not a monetization strategy.
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By adexchanger | New york, NY March 23, 2009 04:08:37 pm:
Nice link bait.

This is a perfectly written, „pessimistic,“ traditional media point of view.

I congratulate you. You prove how easy it is to criticize and be negative by stating the obvious.

I didn’t get any insight out of this. Nevertheless, I’m impressed you got me to read it.

www.AdExchanger.com
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By stephenpbyrne | Australia March 23, 2009 04:53:02 pm:
There’s nothing new in any of this. It merely affirms what many of us already know.

The fact is that people in management right across the media simply don’t read. Ironic isn’t it? And if they did, then they would have seen this coming a long time ago and moved to a safe haven. And yet it has nothing to do with the recession. The recession is merely going to hurry it along.
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By JORGE | MONTERREY March 23, 2009 08:45:49 pm:
Great piece.
Would be great to give us your opinion on what the new landscape will be after this chaos.
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By Bob | Anytown March 23, 2009 10:00:54 pm:
@stephen byrne

You’re right. It isn’t new. I’ve been writing and speaking about this since 2005. some have paid attention. some haven’t needed me to connect the dots. some continue to live in denial. but when the titanic is going down, someone needs to inform the passengers on the sun deck, no?
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By EDWARD | BALTIMORE, MD March 24, 2009 02:27:30 am:
There’s one realm that advertisers and publishers have yet to consider: I call it COSAS – Community Outreach Social Advertising System. It seems like the business model needs to concentrate on the „social networking“ structure. Your comments on this concept.
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By Rob_Kadar | NY, NY March 24, 2009 12:44:20 pm:
Garfiled paints a chilling picture and perhaps has been reading too many headlines focused on glonbal financial collapse and Bernie Maddoff. He ignores the massive and massively successful and lucrative search, ppc text marketplace. And he also ignores the transition of local advertising to the Web including local Healthcare advertising.
Robert Kadar
Good Health Advertising
www.GoodHealthAdvertising.com
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By rgoodden | Atlanta, GA March 24, 2009 12:56:48 pm:
My Atlanta press release clients no longer much care if the print media picks up their news stories. Coverage on the Internet seems their only focus. Having grown up in an era in which newspaper circulation has withered and in which newspapers have ceded much of their former role in the nation’s intellectual life, younger business managers feel none of the emotional link to newsprint that their predecessors did.
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By GEORGE | BOISE, ID March 24, 2009 05:04:33 pm:
Bob…
BL may be a princess, but after reading this, you are also truly a prince. Just posted about it on AdScam, telling AdScammer’s this is required reading for everyone, but particularly for media douchnozzles still living in Mad Men days. Great piece… Fuck the few naysayers who commented negatively. They probably work for the „Wizened of Oz!“
Cheers/George
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By Lemee_D | Bronx, NY March 24, 2009 06:34:39 pm:
Bob Garfield publishing a book? On paper? How quaint!

Re his ad age comments about the following wanting to be free:

cars: by-the-hour rental strategies (return by parking anywhere); pay per mile

toasters: when the banks realize that paying 0.001% doesn’t bring in bread

paper towels: used to be free in public restrooms; now we use electric dryers

content: if you pay the taxi driver, you’ll get lots of opinion content

books: borrow from library, find pages you like to keep, photocopy or google and print

Bill Gates was correct when he said, in effect-
want me to watch your ad, pay me

want me to take your „research“ (Do-Not-Call) call? pay me

Next: want to stop spam? half a penny per email delivery charge,
to be used for . . printing textbooks for schoolroom use
(first 50 emails per month free/credited back at end of month, of course)
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By priscaro | MENLO PARK, CA March 25, 2009 12:09:13 pm:
What I’m surprised at is that everyone is so shocked that people don’t think advertising is worth paying for anymore. Here’s a news flash: it never was. In the olden days of network television and print, consumers tolerated advertising because it paid for content–in a way that was largely hidden from them. And because there was no alternative. Once that stricture was removed, presto! nobody looks at advertising, because we don’t have to! What a surprise. We still want content. Hell, we’ll look at anything. In fact, we’re so crazy about content, someone will pay billions to deliver it, even if most of it is nonsense (i.e., YouTube and 500 or so cable channels). But that’s not the answer, either. The inescapable fact is that we don’t want to see 10,000 advertising messages a day in exchange for getting a few minutes of news or entertainment anymore. And who could blame us? Remember that line about, „I know half my advertising is wasted, I just don’t know which half“? Well the answer is in, and it’s both. Need more proof that the world needs to be turned upside down? Turn off your DVR and sit through a 4 hour-long golf tournament with its hour and a half’s worth of ads for erectile dysfunction. Please. The sky is indeed falling and it’s about time. So let’s stop wringing our hands about it. Instead, let’s create great content, relentlessly, and ask people to pay for it. And while we’re at it, let’s invent some new ways to talk people into buying our stuff that is interesting enough, and honest enough to get people to look at it, on its own merits.
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By josephtpittman | Reston, VA March 26, 2009 12:06:17 pm:
Bob – I enjoyed the piece you wrote, but the discussion that ensued… well that made it all the better! Made me think of the brilliant „Cluetrain Manifesto“ (Locke, Searls, Weinberger, 1999), and the first of the 95 Theses: „Markets are Conversations.“ We used to think that markets were created by advertising, but that really only worked if the product was worth talking about; advertising just helped get the conversation started. Enter the Net, and a spontaneous global conversation is enabled. Markets form and grow exponentially when there is something worth talking about. Advertising in a world where people couldn’t talk back was never a great model – it was just the only economically viable model at the time. „Target Marketing“ increased the likelihood of advertising reaching more prospects, but only incrementally. My bet is that the media and advertising survivors at the other end of the Chaos Scenario will be economically viable because: (1) they realized that it’s all about enabling conversations, and a medium that doesn’t enable conversations in context (i.e. newspapers) can’t make it. And, (2) „Target Marketing“ is not really about marketers being clever enough to find the right consumers, but vice-versa… In the post-Chaos Scenario age, consumers „Target“ the companies and products that they are passionate about and enable their growth by spreading the message. — Terry Pittman
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By zennie62 | Oakland, CA March 26, 2009 02:47:13 pm:
Excellent column and it affirms my vlog of last week:

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By Fausty | Chilliwack, BC March 28, 2009 03:43:41 am:
„News is what somebody somewhere is trying to suppress. The rest is advertising.“
- Lord Northcliffe

The reason newspapers are dying is because they lost their balls, stopped reporting on real issues, and instead turned into hollowed-out husks of irrelevant nonsense. Faced with either eating that pap – and paying for it – or having access to unfiltered (and often accordingly fuzzy) online „news,“ most smart folks dumped the advertisingpaper, err newspaper industry on the side of the road.

Watching EVERY major newspaper support the drumbeat for war war war back 04, I cannot even try to suppress genuine scadenfreude that they’re all going tits-up. Goodbye, and good riddance. You blew our trust in your „objective“ reporting – at least with rambling ‘blog posts I know the writer isn’t trying to pretend to be Above Having An Opinion. The NYT still pays Tom Friedman and Judith Myers to write for them, correct? They deserve to get wiped out, and soon.

There’s plenty of businesses making plenty of money in the „new world“ of online content distribution. You just don’t read about them in the magazines or see them on TeeVee because, well, they’ve ignored the real, organic evolution of online culture since day one. I remember back when the tech bubble burst in 01, how utterly GLEEFUL those „experts“ were that their cushy jobs commenting on how smart they are to each other wouldn’t have any competition from those unwashed upstarts online. Only there never really was a „tech bubble,“ all that burst is the dumb money got wiped out. Tech carried on because tech is real innovation – unlike the „real estate market“ that was a shell game all along.

I digress, as usual. Anyone who has time to whinge about how it’s all doom and gloom is clearly not in the car. Those of us who live and breathe the sharp edge of technological innovation can’t even keep up with the opportunities – let alone sit around and feel sorry for ourselves. There’s going to be alot of self-satisfied, self-entitled „executives“ working at Taco Bell before this is done – they fiddled furiously while Rome was burned by Dick Cheney and his friends. . . and now they’re wondering why the wind blows through their scorched ruins of a mansion. Welcome to reality, kids. It’s not going away.

„Societies or companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail and fall.“
- Rupert Murdoch

Fausty | www.baneki.com | www.cultureghost.org
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By DanBecker | EVANSTON, IL March 31, 2009 12:39:00 pm:
Excellent article. I believe there has been way to much investment and overvaluation given to digital distribution. Certainly we are experiencing an evolution, it is the digitalization of media’s supply and distribution chain. However much of the investment in new media product is investment in temporary novelties and disruption, all at the expense of traditional media.

Fundamentally I believe their is a confusion and misunderstanding of the media value proposition.

(A)Underlying all media is a story. Stories connect and share among people. This feature is what we primarily value when we consume media. Traditional media 1:many, communicated the same story among many, it therefore created great value. New Media 1:1, isolates the individual and audiences, it destroys value.

(B)We use media to escape, whether entertainment of news, media takes us away from immediate moments and concern. Its nice that we can now do this on our mobile sets, or our work computers, but when we want to escape we want to be at home with a large screen experience on a comfortable couch. Point: Digital viewing platforms still retain their core function: TV – entertainment, Computer – productivity, Mobile – communications. Just because these platfroms can support digitally distributed media, doesnt mean they should.

(C) Digital Distribution – from an audience perspective the value is primarily the ability to easily time shift content. It makes sense given the increasing time and multitasking of our lives.

Interactivity, and the anywhere and anyplace features of digital distribution are nice, yet only 2% of online audiences actually interact with their media, and few people prefer to consume long form media via their computer or mobile. Point: most incremental viewer benefits of digital distribution are at best remotely marginal and not worth the investment.

Thanks for the professional editorial Mr. Garfield.

Regards,
Dan Becker
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By dehodges | Brooklyn, NY April 1, 2009 12:30:06 am:
bob, really enjoyed your post. used some of your ideas in my own lament on the death of print/journalism:

http://www.nostempore.net/?p=83

best,
david
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By joelf | NORTH HOLLYWOOD, CA April 1, 2009 01:04:09 am:
Advertising still works in some cases; you’re all congratulating the author on a great piece which is essentially an ad for his new book. Target marketing in action. Great advertisent Bob
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By editorial | Westport, CT April 5, 2009 08:13:27 pm:
Great article. You might appreciate this one, which has some similarities. It’s a „fable“ about the end of advertising:

http://knol.google.com/k/bruce-kasanoff/the-end-of-advertising/2vq9kgfh5xlar/10#

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By JT | BONDI JUNCTION April 23, 2009 08:47:20 pm:
Wonderful article and quite provoking. This trend is the reason we changed www.storyz.com from being a social network to be a viral marketing and entertainment service.

One of the keys going forward is engaging the consumer in a dialog with your brand. And with engaging, I mean something beyond clicking on a banner ad. At Storyz, our purpose is to allow brands to create engagement in a social network setting – by allowing brands to be creative, run campaigns across social networks and web and mobile platforms, and change the creative without having to retool or rebuild the technical platform.

While we are alone in this space in providing this, I suspect many will follow suit to create something similar. What we, and the industry needs, are more case studies and success stories showing the effectiveness of engaging campaigns and engaging users in digital media.

JT Klepp
COO
Storyz.com