emotions secure advertising's future

What’s the difference between a search service and a service perfectly targeting informative advertising to its users?  Susan Wojcicki, Google VP, Product Management, recently stated:

Google’s advertising business was founded on the core principle that advertising should deliver the right information to the right person at the right time. This is very similar to our mission in search, and, like our colleagues in search, those of us on the ads team are constantly striving to achieve better results.

Daniel Tunkelang insightfully responded:

Google insists that it maintains a wall between its search and advertising businesses. But Wojcicki’s post–which is on Google’s official blog–suggests otherwise, at least in spirit. If Google believes that both search and advertising aim to “offer relevant content” and “deliver the right information to the right person at the right time”, then why put up a wall at all?

If an advertising platform truly provides only the most relevant, useful, timely information to its users, it gives advertisers no incentive to bid against each other to place ads.  The most relevant, useful, timely ad, not the highest bidding advertiser, would be presented to users.  Ad results wouldn’t differ from search results.  The perfect advertising service would provide no incentive for advertising expenses.

For both search and advertising, emphasizing relevant, useful, timely information obscures the importance of emotions in human decision-making.  A vast amount of information is subconsciously processed within the human body.  Only some of this information is brought into the brain’s working memory and higher-order cortical regions.  Competing for attention is not just the business of advertising.  Emotions have a major role in the ongoing competition for attention within the human brain.

Actually making a decision requires a motivational push, not just information processing.  In an influential book describing new understanding of emotions, a neuroscientist described the behavior of a patient with damage to brain regions associated with emotional processing.  The patient was offered the choice between two dates for a laboratory appointment:

For the better part of a half-hour, the patient enumerated reasons for and against each of the two dates: previous engagements, proximity to other engagements, possible meteorological conditions, virtually anything that one could reasonably think about concerning a simple date.  Just as calmly as he had driven over the ice, and recounted that episode, he was now walking us through a tiresome cost-benefit analysis,  an endless outlining and fruitless comparison of options and possible consequences.[1]

When the doctors finally halted this process and asked the patient to come on the second of the two dates, the patient was happy to accept that choice. Human-Computer Information Retrieval services should not be implicitly modeled on the behavior of emotionally damaged humans and emotionless computers.  An impulse to choose, apart from organizing and accessing information, is a key aspect of human search behavior that concludes with choice.

Search and advertising involve much different emotional patterns in users’ information processing.  Web search produces a list of choices designed to be informative, not emotive.  Given the importance of search result rankings to users’ choices, users seem to view these results with a feeling “tell me right now” and “whatever, good enough.”  The emotional drive is not primarily to make a good choice, but to go somewhere, to finish the search.[2]

Advertising has much more specific emotional targeting than search.  Advertisers design brand names and tag lines to be emotive.  Where possible, they use images and audio-visual materials that evoke favorable feelings.  Compared to clicking on search results, users are much more likely to click on an advertisement based on emotions that the specific advertisement generates.

Because emotions are an integral aspect of human information-processing and decision-making, advertising’s future is secure.  Even if they perfectly target ads to be relevant, useful, and timely for users, advertising platforms cannot effectively rank the emotional value of ads.  Persons and companies have deep-seated feelings about how good they and their products are.  These feelings are fully sufficient to drive vigorous bidding for advertising opportunities.

Search will not replace advertising.  Information technology can greatly improve human’s ability to organize, rank, and make accessible information.  No such technology exists for human emotions.  That fact will keep advertising platforms in business.

Notes:

[1] Damasio, Antonio R. (1994) Descartes’ error: emotion, reason, and the human brain (New York: Putnam) pp. 193-4.  Skin conductance responses, which typically are correlated with emotional responses, have been documented to precede a risky choice in normal individuals. Such a response does not occur for individuals with bilateral damage to the ventromedial prefrontal cortices. The later persons’ choices systematically differ from normal persons’ choices within the same laboratory experiment. See Bechara, Antoine, Hanna Damasio, Daniel Tranel, and Antonio R. Damasio, “Deciding Advantageously Before Knowing the Advantageous Strategy,” Science, V. 275, 28 February 1997, pp. 1293-5. Damasio’s somatic-marker hypothesis provides a more general framework for understanding such effects.

[2] Image search seems to involve a different emotional pattern than web search.  See the recent talk of Peter Linsley, Google Image Search Product Manager.

content marketing is bigger than media sponsorship


According to the Interactive Advertising Bureau’s Internet Advertising Revenue Report, U.S. internet advertising revenue from sponsorship fell from 8% of Internet advertising revenue in 2004 to 2% of Internet advertising revenue in 2008. Sponsorship revenue here means revenue from “custom content and/or experiences created for an advertiser.” Compared to search ads (45% of Internet advertising revenue in 2008) and banner ads (21% of Internet advertising revenue in 2008), such sponsorship has high transaction costs for organizing an advertising buy and a high minimum value for a buy.[1]

Sponsorship was the predominate funding source for U.S. radio and television programming prior to the early 1950s. Programs typically had a sole sponsor. Often the sponsor’s name was included in the program name. Early radio’s most popular programs included Maxwell House Show Boat (1933-34, Maxwell House coffee), Ed Wynn, The Fire Chief (1932-33, Texaco Fire Chief gasoline), Pepsodent Show (1942-43, Pepsodent tooth paste), Raleigh Cigarette Program (1942-43, Raleigh cigarettes), and the Fleischmann’s Yeast Hour (1933-34, Fleischmann’s yeast). In 1940, the Bell System began sponsoring a radio program called the Bell Telephone Hour. It featured light classical music performed by the “Bell Telephone Orchestra.”  It was a popular program, but not one of the most popular radio shows of its time.[2]

Material created for advertisers includes much more than sponsored programming. In the 1940s, radio programming was probably about 15% of the Bell System’s media advertising budget.[3] Bell System advertising expenses also included spending on booklets, pamphlets, bill inserts, window displays, exhibits, posters, placards, lectures, demonstrations, central office visits, general press service, special news stories, and other miscellaneous advertising. These are all categories of custom-created content and experiences delivered outside of major media channels. From 1941 to 1950, these types of advertising expenses probably averaged about 20% of Bell System advertising expenses. Even in the golden era of sponsored radio advertising, various forms of custom-content delivered in various ways were a larger share of the Bell System’s advertising budget than was radio.

The decline in sponsorship revenue in Internet advertising revenue from 2004 to 2008 is probably best interpreted as a disintermediation effect. Companies have always used a wide variety of means to communicate with potential customers.  For 2007, the Coen Advertising Expenditure Dataset classifies $37 billion in advertising expenditure (13% of total ad spending) as miscellaneous. Much of this advertising expenditure is probably custom-created content delivered outside of major media channels. With the Internet, non-media firms gain powerful new capabilities for communicating custom-created content. Custom-created content delivered outside of major media channels is likely to be increasing in importance in the communications industry.

Notes:

[1] For advertising shares over time, see p. 10 of the IAB Internet Advertising Revenue Report. The definition section, p. 16, defines sponsorship revenue. Sponsorship revenue includes theme-oriented, custom-built pages featuring an advertiser’s brand; advergaming, including both sole-sponsored games and custom-branded games; sole-sponsorship, with custom branding, of particular content sections; and brand-focused sweepstakes and contests.

[2] The AT&T Annual Report for 1940 (pp. 10-11) explained:

    After a series of local and regional experiments with radio broadcasting programs extending through several years, the Bell System started a nation-wide program in April, 1940. The program is heard regularly every Monday evening over one of the major radio networks [NBC Radio]. It is know as “The Telephone Hour” and is made up largely of light classical music. The entertainment is furnished by a symphonic orchestra, a chorus of mixed voices and two well known vocal soloists.
    Two brief messages are a feature of each week’s broadcast. These informative remarks cover a wide range of subjects — company policies, organization, service aims and practices, rates and other information about the Bell System which seems timely and appropriate.
    This radio program supplements the newspaper and magazine advertising which the companies of the System have carried on for years. It provides a medium for speaking directly and quickly to a large number of the public. At the turn of the year, the weekly audience was calculated by an outside commercial survey organization as totalling more than eleven million listeners.

The Bell System provided about 85% of telephone lines in the U.S. in the 1940s. Competition between the Bell System and independent telephone companies was relatively weak in this period. The Bell System’s advertising probably was primarily directed at expanding interest in telephone service. From 1940 to 1950, the share of U.S. households with telephone service rose from 37% to 62%.

[3] For the U.S. as a whole, radio advertising as a share of total advertising expenditure was 11% in 1940, rose to 15% in 1945, and then fell back to 11% in 1950.  The Bell System’s radio advertising share probably followed a similar pattern.  Thus a rising share of custom-created content probably accounts for most of the rise in custom-created content (inc. radio) from 30% to 40% of Bell System advertising expenditure from 1940 to 1950.  Here’s all the available Bell System advertising data by media from 1941 to 1950. The beginning of the Bell Telephone Hour in 1940, and the beginning of FCC collection of data on telephone companies’ advertising expenses by media in 1941, probably is not a coincidence.

dead beat poetry

Dad, dollar can
test for the Dad

Look, kid, I’m not your father.
All I did
I got some once
from your mother
at a party back there
and then the man comes a-pounding at my door.

Dad, dollar can
test for the Dad

I’m not your father, kid.
But if I wanted a kid,
I don’t think you’re half bad
Yup, when you grow up
I think you’re gonna be a man.

Dad, dollar can
test for the Dad

A man.
Stand up straight
let’s see some spirit in those eyes
some fire…
burns tears
when you’re gonna cry.