More than a half-century ago, the social critic Vance Packard labeled the advertisers of his day "hidden persuaders." What would he think of their descendants today?
Our social spaces are being encroached upon more than ever by advertising, even as doubts persist about whether it's having any impact. A recent survey by the market research service AYTM found that more than 50% of Facebook users said they never noticed ads on the service, or considered those they did see not relevant to them.
Facebook's reaction to such findings is to step up the proportion of commercial content in the messages received by its users, while concealing its true nature. The company is rolling out a product it calls "sponsored stories," in which a user's decision to "like" a company's product will show up in his or her friends' news feeds as an item placed by that company.
The idea, plainly, is to dress up an ad so it masquerades as a voluntary endorsement of a product between friends. If that sounds like an extreme encroachment of commercial interests into our personal lives, so be it: Facebook thinks it's the key to attention-grabbing ads.
"Ads that are connected to the people around you are proving effective," says Debra Aho Williamson, principal analyst at the research firm EMarketer. "But it's not new to say that the things our friends like we are more likely to be interested in. Knowing that your friend is interested in something does have an effect on you."
There's little doubt that the ad industry is going through a shakeout as severe as anything facing newspapers, broadcasters and record labels, among other industries grappling with dramatic technological change.
Some indicators of the harsh realities facing marketers, especially online, have gotten wide publicity in recent weeks and days. The announcement of General Motors' decision to pull all its paid advertising from Facebook because of doubts about its effectiveness, for example, coincided almost exactly with Facebook's initial stock offering. Microsoft last week acknowledged defeat in the online ad market by writing down almost all of its acquisition of the Internet ad company AQuantive, for which it spent $6.3 billion in 2007.
Yet online ad revenue in the U.S. is expected to surpass print this year for the first time. That suggests that sponsors know they have to be online; they just don't know yet what to do once they get there.
Advertising has always been intrusive to a degree, but it used to know its place. Television commercials were sequestered in discrete blocks of minutes within prime-time programs; newspaper and magazine ads were given their own pages or set off to the side or corner of a shared page; websites had banner or block ads that could be ignored at will. For marketers, that was the problem: People ignored them, paged past them, fast-forwarded through them.
The upshot has been the proliferation of ads that can't be ignored. It's a rare prime-time show that isn't marred by a promotional animation constantly cavorting at the bottom of the screen. American newspapers have moved ads from their demure inside-page ghettos to the front page or even wrap-around enclosures. Marketing experts determined years ago that "customers actively avoid looking at online banner ads," as Catherine Tucker of MIT and Avi Goldfarb of the University of Toronto observed in a scholarly study last year. So now ads take over your computer screen until you click to drive them off; ads play music or video at you, unbidden; floaters seem to follow your line of sight so you can't peek around them.
To some extent, these efforts deserve our sympathy, even forbearance. The bargain we've made with content providers is that the cost of our newspapers, television programming and favorite websites will be subsidized by advertising. The more intent we are at ignoring it, the louder it will clamor for attention, as it should.
Yet a greater concern should be how much of this advertising depends on invading our privacy. Not very long ago, "targeted" advertising meant placing ads for ski equipment in Skiing Magazine, or commercials for toys on Saturday morning cartoon shows. (No one ever said targeters had to have scruples.) Today it means delving into individuals' personal histories in an effort to home in on their hearts' desires.
Tucker and Goldfarb found evidence that while consumers traditionally have been antsy about personally targeted ads on private topics such as finance and medical care, privacy concerns are spreading to other fields. No one should be surprised that the advertising industry would exploit every piece of information it can get its hands on to reach the individual. But Tucker says that even though marketers have more ability than ever to "force their way into a consumer's attention, it does not mean that they should or that it will improve sales if they do. Instead, micro-targeting demands a more understated and informational approach than marketers have been used to."