Advertising is for the Losers? A Rebuttal

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By: Dwayne W. Waite Jr.

The advertising industry and the social media technologists are about to butt heads yet again. It is certainly not a bad thing; in fact, we should look at these conversations as extremely beneficial. We get a chance to defend advertising and show them why it will never go away. In fact, for social media to succeed, advertising is needed. But it seems that the social media "elites" are so eager to call it a victory, when the ad industry has its white flag tucked safely under lock and key.

In a recent Forbes article, Allen Grant, the CEO of Curebit, a referral program platform company, says that advertising will soon be for those companies with losing products and the "social layer" will reign supreme. Not his exact words, but just as grandiose.

It is interesting to explore why these tech entrepreneurs have such a negative attitude towards advertising. Why, when advertising welcomes them with open arms, do tech entrepreneurs give the cold shoulder? True, advertising can see where it can benefit in the social media world. Perhaps it is a matter of demonstrating why social media needs advertising? Or, is the distrust based on inherent values of techies, that they can build a fully operational environment and outside contributors (unless you're investing) need not apply? It's possible.

Or more simply: they just don't understand advertising.

To move on from the inspection, we can say it is probably a mix of all of the above. In my own dealings with startup, Internet, and technology companies, several of the elements discussed arise.

In order for an idea to succeed, it needs to solve a problem or fulfill a need that the consumer has. If the consumer is not aware that this need or want is going unfilled, they must be made aware; advertising helps solve that problem. Grant's claim that advertising will soon be for losing companies implies that only companies that are not filling the needs of consumers will have to spend money to get in front of their faces. Grant's claim then concludes that the future of business will reside in the "social layer," where referrals will be the main driver for companies.

If that's the future, then how does business grow now? Through advertising?

As communications professionals, we know that word of mouth is the most effective form of promotion. It seems Grant knows this fact as well. What is missing then, is how the opinion-maker, influencer, or gatekeeper receives the primary information in order to spread and refer the message to their listeners. How do they become aware? And then, once those listeners pick up the message, how are their choices reinforced? How can they grow informed enough to influence others?

Advertising solves those problems.

Social media and tech entrepreneurs live with the assumption that consumers are constantly looking for the most convenient option. They believe that consumers will readily spread information (positive or negative) and even more consumers will readily accept a message. Through research in consumer behavior, we know that those assumptions are mediocre at best. Consumers are much more likely to share negative information, more likely to hold positive reviews and referrals (unless they are incentivized...which is marketing), and will always trust a person before an organization, Internet-based or otherwise.

And let's make sure we're clear: the best advertising in the world cannot save a bad or losing product.

As the social layer becomes crowded with referral network platforms, daily deals, social networks, and the like, these entrepreneurs who cried for the death of advertising will be coming for ways to raise awareness.

And we'll be waiting.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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