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I saw the following piece in AdWeek, entitled “Art & Commerce: Death By YouTube?” by Andrew Keen, in which Keen argues that the Web 2.0 movement is the worst thing possible for advertising.

A few points:

1. Advertising will die because of user generated content: 

Is the Web 2.0 cultural revolution of user-generated content good news for the ad industry? Will the explosion of fashionable blogs and social networks increase the size of the advertising economy? Can the YouTubification of professional creative content and the wikifying of mainstream authoritative media benefit advertisers and advertising companies?

The answer to these three questions, I’m afraid, is unambiguously negative. No, no, no. Web 2.0 is, in truth, the very worst piece of news for the advertising industry since the birth of mass media. In the short term, the Web 2.0 hysteria marks the end of the golden age of advertising; in the long term, it might even mark the end of advertising itself.

What I don’t understand here might be something extraordinarily simple: I thought that the sites that support, spread, and store user generated content can only do so by having web servers. Those servers are not free. They also have to pay for their bandwidth and connection to the internet. Also, not free. Ontop of the costs involved with actually broadcasting content, there is the idea of the profit motive: Most companies exist to turn a profit; they would not spend time and energy creating sites that broadcast were there no way to make money.

Enter advertising.

For a site to offer free storage and functionality to users, they must find a way to pay the bills. Currently, many of these sites do so by having ads.

Without a fundamental change in business models, does it not follow that advertising and user generated content sites are inextricably linked?

2.  Consumer Generated Media Devalues Advertising:

What Web 2.0 is doing, compounded by the online consumer’s shrinking attention span and his or her hostility towards the “inauthenticity” of commercial messages, is radically deflating the value of advertising.

I completely disagree here. Instead, Web 2.0 inherently increases the value of advertising in that it creates communities of interest that actually care about things. So rather than being bombarded by ads that mean nothing to me (seeing an ad for Pampers, for instance), instead, I see ads that promote things I’m actually interested in. For instance, if I’m at a tech site and see ads for the latest and greatest gadgets, I don’t see that as a burden (to a point, obviously).

Ontop of that, ads within communities of interest are immensely valuable to advertisers, as they are much more targeted and less burdensome than a broadly-based shotgun approach. If you were selling, say, the Blackberry, which group would you prefer to pitch to: a) everyone in the country b) a community of insanely busy, connected, business executives that travel often?

Which strategy would be more useful? And given the same budget, would you rather spend the money reaching more unqualified targets, or a highly targeted, engaged audience that is likely already discussing your product category?

3. Because it is online, it must be garbage:

……the supposed “freedom” of Web 2.0 is creating inferior and often corrupt content, which in turn results in fewer credible advertising opportunities for discriminating buyers. After all, what sane brand manager would consciously invest his or her dollars in a narcissistic blog, a semi-pornographic teen social network or an anonymously authored, self-serving wiki? Rather than choices, these are punishments. Caught between the Scylla of online garbage and the Charybdis of vanishing traditional media content, it’s no wonder, then, that the chief marketing officer’s average tenure has now dropped to little more than 14 months. 

What sane brand manager would invest time in social media? My answer: the one that wants to join the conversation that is already happening. The one that realizes online communities and social networking are here to stay and that when all the hype is distilled, the internet is a communications medium. It allows people to talk, to connect, to share.

If you want to find new ways to market what you sell, it makes sense to find out what your audience wants. It makes sense to talk to them about what you’re doing wrong. And to simply even more, it makes sense to show up when they all get together.

But don’t listen to me, I’m just a blogger.

Filed under: online advertising