We in the blogosphere can be snarky, self-referential, and–above all–lazy. Case in point: Amidst the transformation of print advertising dollars to digital pennies, we are reminded all the time that “somebody” once said that he knew half of his advertising budget was a waste, if he could only figure out which half.
Listen to Bush 41 and Use The Google, people! The quotee in question was none other than John Wanamaker, the Philadelphia retailer who brought to Western Civilization both Mother’s Day and, as long as we’re trying to maintain a thimbleful of relevance here, the modern department store. In 1875, Wanamaker bought a defunct railroad depot and turned it into the first category-killer retailer, approximately a century before there were “categories” to be killed. This guy was frigging out there, kicking ass on the sales floor while bemoaning his inability to measure the effectiveness of his advertising spend. All this, about the time that Reconstruction was coming to a close. (God, I love real entrepreneurs almost as much as I love Wikipedia. Send Jimmy Wales some money, people!).
Fast forward from the sweat-of-the-brow retail thingy-mongering that was Wanamaker’s Grand Depot to the svelte and smart new media property that is Seeking Alpha. Over there, semi-resident smart guy Alex Rampell says what a many of us have been thinking but not saying much about, finding ourselves unable to improve much upon Mr. Wanamaker’s 135-year-old formulation that much if not most advertising is a waste of money. Furthermore and perhaps most importantly, with the nascent CPA measurement enabled online, the jig may now well be up on all manner of advertising spend.
This whole idea is especially interesting and to me for two reasons. First, because I am a venture capitalist. And as a venture capitalist, I have since 2003 listened to all manner of humans with 135+ IQs patiently explain to me that most off-line spend would move inexorably on-line, and would actually *grow* now that advertisers realized how great the online channel is.
The second is because I am a student of the media business, newspapers especially. And I began to wonder, a couple of years ago, what would happen to newspapers when four generations later, John Wanamaker got his revenge. Assume half of advertising just goes away: poof. And now, off-line properties with what rounds to no efficacy measurement capabilites, get to compete, complete with their laminated rate cards and back-slapping sales forces. For newspapers, assume that jobs, real estate, and auto classified revenues go TO ZERO in the next five years. Futhermore, assume national retail advertisers get a grip, and listen to the data instead of their agencies’ interpretation of the data. Suddenly, ad-supported content businesses are terrible businesses.
Oy. And that’s the only syllable of Yiddish I know.