Advertising is dead; long live advertising

I've been reading alot about the future of advertising lately, mainly because I'm thinking about the future of my startup.

On one end of the spectrum, some are saying that advertising will cease to exist. Of course, now we need to define advertising, because no one is predicting an end to commerce or marketing. "Advertising" in this context refers to unsolicited awareness-based marketing. The argument is that the same advances in communication technology that make it easy for anybody to blog to everybody imply that vendors can easily reach target consumers. In addition, since unsolicited interstitial advertising no longer works, tools and process will arise that make it easy for customers to find vendors that meet their needs (the beginnings of the trend visible in Google, Yelp, Amazon, etc.). In this glorious future (present?), media companies whose business model is based upon audience aggregation and collocation of content and advertising cannot survive. Heads up: when ads fail, you're going to have to start paying for professionally produced stuff. In some domains, perhaps, amateur stuff will be so good we won't notice or care (aside: Kutiman is a professional producer), but it does seem some genuine problems will be created.

On the other hand are those who say any talk of the end of advertising is at best too premature to be useful. The real change underway as audiences move online is towards measurability. Direct response advertising is emininently measurable so much of the early advertising activity on the internet has (obsessively?) focused on direct response, but this view ignores other value that advertising can generate. If you are an artistic type, you want to break out of the direct response straightjacket and have another creative revolution. If you are a math type, you either work with a direct response vehicle that facilitates brand awareness, or you want to find a way to make branding measurable. The latter can literally mean mindreading, data mining techniques, or fancy focus group techniques.

I certainly believe that the industry in trending towards measurability; it's why I'm in this business. However I suspect that historically advertisers have overpayed for marketing, and are now entering a period where they will underpay: a multi-decade hype cycle, if you will. In Seth Godin's terms, we are switching from a period of "glamorous" ad buying to "rational" ad buying. Ultimately, advertisers will converge to the proper level of spending, but from below, and to entice them towards optimal spend the industry will have to find a way to relate all marketing activity to ROI. It is only when measurability has been conquered that the next creative revolution can truly start, because only then can the value of a great advertisement be understood.