Is the Internet Antisocial Toward Advertisers?

All in all, 2002 was a rough enough year I just can’t bring myself to revisit it all in a “Year That Was” column. For the most part, I am glad to see it go, and there’s little purpose in dredging up the crud that largely constituted news in our biz this year.

Instead, I want to highlight something that wasn’t covered. Specifically, a fascinating book by Michael Suk-Young Chwe, called “Rational Ritual: Culture, Coordination, and Common Knowledge” came out, and it didn’t get the attention in ad circles I think it deserves.

Although not an advertising book explicitly, Chwe’s analysis of advertising’s role in our culture highlights what I believe to be one of the fundamental differences between Internet advertising and advertising in the other media the Internet synthesizes. The premise is something like this: Reach, as we know it, is a necessity for “social brands,” but not for all brands. Chwe defines social brands as those that “a person is more likely to buy… the more other people buy [them],” and those that are consumed communally.

For marketers of social brands, their task is one of common knowledge coordination — not making the individual aware, but making the individual aware that everyone else is also aware of what the individual is aware. If you use TV, for example, to sell cars, computers, beer, movies, Web sites, clothing, and other social brands, then you will be dependent on popular shows because “when a product is advertised on a popular show, not only do many people see the ad, each viewer knows that many other people see the ad.”

This is not necessarily a new idea. The value to an advertiser of borrowing interest from a content provider is fairly well known; and, even intuitively, most consumers could tell you how showing an ad on a popular show builds legitimacy for the brand. And sure enough, among the most compelling data points Chwe uses is the list of products advertised on the Super Bowl (which he calls “the best common knowledge generator in the United States”) from 1997 to 2000. Of the 500-plus Super Bowl ads from the 34 product categories advertised during that period, around half of the ads were from the top four categories: beer, soft drinks, cars, or communications — all social brands. It isn’t enough to keep a beer you like in the fridge; you have to have a beer in the fridge a visitor to your home might also like.

If we accept social brand marketers have to pay the premium to get reach from popular programming, Internet marketers may have a problem. What if the Internet’s popular programming does nothing to generate common knowledge? What if the highest reach areas of the Internet are delivering an audience of individuals who are completely unaware of the rest of the individuals in the audience? If Internet publishers cannot create common knowledge for big-spending, social-brand advertisers, what will be the Internet’s place in their media mix?

Since most Internet content isn’t consumed simultaneously by every member of its audience, defining what is “popular” presents problems of its own. But even if we bypass the question of what time frame is used to calculate cumulative audience for Internet content, we are faced with the possibility that popular Internet content will have to work harder than content in other media to command a premium CPM.

If we look at the most popular content offerings online — Hotmail, Yahoo, and AOL Chat, for example — we have content that accounts for a huge share of the online audience at any given time but doesn’t aggregate an audience with any particularly marketable commonality. Even if we extend beyond individual content areas and focus on the audience of an entire site, there seems little reason to believe the visitors to the mass-reach site feel any particular affinity for, or even have awareness of, the other members of that site’s audience.

This may all seem a bit ponderous for an industry that has bigger fish to fry, but this is an issue we will have to deal with eventually. Certainly, if 2003 brings continued adoption of reach/frequency-based media planning models online, it won’t take long to see if our “audience in common” dynamic is up to snuff.

To my mind, the strongest hedge against potential problems would be for marketers to work with strong online publishing brands now. A strong publishing brand is not the same as a popular publishing brand by definition; but, if we can learn how publishing brands generate audience commonality, then perhaps the reach can follow. Certainly, there hasn’t historically been a shortage of online publishing inventory; so theoretically, once we can find those publishers that have borrowed interest to sell, the media-planning function may simply be one of building out a mix of enough such inventory to deliver significant scale.

Though Chwe’s book raises a number of questions for me, I tend to agree marketers need mass-market advertising to solve their fundamental problems. I believe it can be accomplished on the Internet, but we need to figure out how best to achieve that goal. As we close out a year in which many were bearish on the future of advertising, such thought-provoking ideas make “Rational Ritual” a good first book to kick off a better 2003.