Marketing set to plague us for a while yet - but the protagonists are changing
Defending yourself against those telling you what you need, rather than what you want, is now down to the winners of cyber battle between ‘botnets’ and ‘blockers’
I reserve a small but particularly venomous part of my spleen for marketing people. They have always seemed to represent and encourage the worst things in the world around us.
Before I get too “tired and emotional” I should emphasise that it is not just marketing people who make me feel this way. Lawyers come a close second. And if I see – as I have over the past week – evidence of pain among them, it is hard to hide a quiet pleasure.
Part of my distaste for marketing folks is well founded, I believe. But I confess too that part is sheer envy. This began when I was a young journalist in the Financial Times, when I was literally sweating 13-hour days to hit 8pm or 9pm news deadlines.
At that time, everyone on the marketing and advertising side of the paper (all males of course) took Friday off on the golf course, arguing that contracts could not be secured without entertaining clients on the fairways.
The brazen audacity took my breath away. The fact they succeeded outraged me, and made me deeply jealous. The fact that my venerable employer gave them a four-day week, paid their golf club memberships, covered their green fees and then paid for them to entertain their golf-playing clients, struck me as a scandalous con.
But putting this unalloyed envy on one side, I have good reasons for my spite. It is marketing people that take all of our “wants” and on behalf of mainly big-brand companies spin those wants into indispensable “needs”.
It is this spinning process, transforming wants into needs that sit at the heart of the consumer obsession that makes “malling” one of the world’s leading pastimes.
By creatively and often brilliantly fuelling this consumer obsession (I may hate these people, but I cannot deny the brilliance they sometimes display), they are at the heart of the mindless accumulation of “stuff” that litters our homes and our lives, and puts such pressure on landfills around the world.
If I could blame the global environmental crisis and climate change wholly on them, I would, but I suspect that would be a tad too extreme – there are others to blame alongside them.
...it puzzles me so many executives are willing to spend awesome billions of dollars on advertisements on TV or in newspapers and magazines in the profound conviction that the future of their businesses depends on it
Because I am an avid and life-long advertisement avoider, it also puzzles me that so many executives are willing to spend awesome billions of dollars on advertisements on TV or in newspapers and magazines in the profound conviction that the future of their businesses depends on it.
For example, Procter & Gamble, the world’s biggest advertiser, spends 11 per cent of its total annual revenues – approximately US$7.24bn – on advertising its washing powder, dypers and so on.
If everyone else were like me, studiously avoiding adverts wherever and whenever they appear, then this would be money that is wholly wasted and could almost certainly be put to much better use.
But of course I have to bite my tongue.
It seems not everyone else is like me despite the massive popularity of “ad-blocking” apps that over 400 million internet users download to keep advertisers at bay.
There are some people out there who really do read the adverts, seek them out even, happy to be persuaded that the latest fad (Pokemon Go?) is actually a need rather than a self-indulgent want, and are happy to buy the latest Gucci handbag so it can sit unused alongside the many other unused handbags that eventually end up being resold at extraordinary prices through “Milan Station”.
So I was pleased this week to discover that the advertising industry is an industry in distress, as the digital giants hoover up an increasing share of global “ad spend” and cast aside those thousands of ad salesmen (most were men) who for so many decades indispensably plied the world’s golf courses securing ad deals from their golf-addicted clients.
Company results over the past week from Facebook and Google signalled massive growth in advertising revenues, and prompted predictions that digital advertising will in the next two years pass US$200 billion, for the first time overtaking overall ad spending on TV.
Facebook alone reported advertising revenues of US$6.24bn in the second quarter this year, up 63 per cent from the second quarter last year.
Growth at Google was lower at around 20 per cent, but its massive scale meant advertising revenue was 50 per cent higher than Facebook.
Of course, my pleasure was short-lived, because it was quickly clear that worldwide, the enthusiasm of the likes of Procter & Gamble to spend dizzying billions on advertising is as rampant as ever.
Industry stress comes from the astonishing pace of shift to digital advertising, from the rising oligopoly of Facebook and Google, who today account for 72 per cent of the world’s online advertising outside China, and from alarming stories of digital “fraud” in the online advertising industry.
This last alarum is fascinating.
Out of an estimated US$159 billion spent on digital advertising in 2015, experts say around a third is lost to “botnet”-wielding fraudsters – a cool US$50 billion.
A study last year of 10 billion online ads found that for worst-hit companies, almost 40 per cent of visits to ad sites are from computer hackers rather than potential buyers
In short, computer hacking networks called botnets infect and capture literally millions of computers and then drive further millions of visits to adverts on key websites.
Since most advertisers like Procter & Gamble pay websites on the basis of how many hits their adverts get, the potential to bloat hits by using hacker-generated bots posing as human eyes is immense.
A study last year of 10 billion online ads found that for worst-hit companies, almost 40 per cent of visits to ad sites are from computer hackers rather than potential buyers.
All the more worrying then that Facebook is introducing technology to make it harder for people to use “ad-blockers” that shield them from the relentless onslaught of advertisers.
Industry experts say around 420 million smartphone users currently use one or more ad-blocking app, with a further 200 million on laptop or desktop computers.
These are comforting numbers to me, showing I am not alone in my efforts to keep advertising out of my life, but I think all of us know that we are ultimately fighting a losing battle as digital technology allows advertisers to probe deeper and deeper into our lives, redefining what should be regarded as private, and what’s public.
Hate them as I may, I think I am doomed to continue envying those marketing and advertising guys in perpetuity.
David Dodwell is executive director of the Hong Kong-APEC Trade Policy Group
