COMMENTARY

We Have To Dig Deeper For True Disruption Threatening Advertising

• by Gord Hotchkiss , Featured Contributor, November 13, 2018

Ken Auletta had me at “disruption.” I’ve just finished reading his new book, “Frenemies, The Epic Disruption of the Ad Business (and Everything Else).”

Regular readers will know that this title would be like catnip to me. Despite the hyperbole he employs, Auletta was speaking my language. As a bonus, he does appear to be at least an occasional reader, as he did quote me twice in the book.

The majority of the disruption, according to Auletta, is happening within the ad biz itself. The “frenemies” described in the book are the digital disruptors Facebook, Google and -- increasingly -- Amazon.

 

Their position of strength is the reams of data they collect. The disrupted are primarily the holding companies like WPP and Publicis.

Auletta’s narrative frame for his book is focused on the fortunes of Michael Kassan, who through his company MediaLink has managed to position himself as the über-connector between the traditional holding companies and the new digital disruptors.

Auletta says Kassan is “advertising’s Dolly Levi.” For those of you on the south side of 70, he’s referring to the lead character from the 1964 musical "Hello, Dolly!" -- a New York City matchmaker.  Auletta skips back and forth between the disrupted -- represented by Sir Martin Sorrell and Irwin Gotlieb of WPP, Maurice Levy and Rishad Tobaccowala of Publicis and many of the other usual suspects -- and the disruptors, in this case represented mainly by Carolyn Everson, a Facebook vice president.

The other narrative device Auletta employs is the battle of Mad Men vs Math Men, which is a little too cutesy for my taste, not to mention hackneyed (the agency I used to work for trundled this same meme out at least six years ago).

While the battle between the Big Idea and Big Data is an easily found target, I think what we’re missing here is the Big Picture.

Auletta’s take is too short-sighted. The digital disruption he documents is indeed happening, but the bigger disruption is not between the holding companies and the new digital, data-rich platforms but between the market and the marketer.

The entire advertising industry is based on an exchange that is no longer valid. Other than one chapter that deals with ad-blocking and another about privacy concerns, Auletta spends little time exploring the consumer’s outright rejection of advertising.

If we’re talking about disruption in the ad biz, we have to borrow the infamously head-scratching quote from Donald Rumsfield: "There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones."

Auletta’s book, understandably, deals with the first two categories. After all, it’s pretty hard to write a 358-page book on what you don’t know you don’t know. But as Rumsfeld said, it’s that category where you find your “gotchas.”

If we're really going to look at “epic disruptions” we have to look at the foundations, not the increasingly shaky edifices built on those foundations.

And the foundation of advertising is the exchange of a consumer’s attention in return for something of value to them. In the past, that has either been entertainment or information. 

We, the consumers, placed value on those things because there was no other place to get them. Scarcity confers value. But that's no longer true. Our expectations have changed when it comes to sourcing both information and entertainment.

I’ve stated this before, and it’s this quote that Auletta used -- twice. While I’m grateful for that, I believe that this disruption in value exchange is not just an interesting aside. It’s the key to the whole thing.

I don’t care if your advertising is driven by the smartest AI super-algorithm powered by munching on my personal data. If I didn’t ask to see your ad, I don’t want to see it. Period. I have many choices, and watching intrusive ads are way down my list.

If I’m right, I’m not sure what that means for the future. But this rejection of advertising by the market is the place where those things we don’t know we don’t know live.

Yes, advertising holding companies are doomed. But I also think Facebook’s future as an ad-financed platform is similarly doomed. And that idea certainly didn't make it into Ken Auletta’s book.