Dec 222005

New Media Deal – a comment

New Media Deal – a comment

A user calling him or herself “graciouswings” (who left a bogus email address with his/her comment, so I couldn’t email him/her) made a lengthy comment to my New Media Deal posting (posting here, comment at the bottom or here).

The meat of the comment was:

“advertising doesn’t bug us if it’s not too intrusive and if there’s something in it for us as consumers.” This is simply not true. This notion is based on unfair playing grounds. People don’t like seeing commercials before movies. People _are_ bugged by having to create an account at every website they visit, whether it’s to post a comment, purchase a song, ask a question of tech support, read the news, or get their local weather info — agreeing to the privacy statement by the by. People don’t read the privacy statements. People aren’t given a choice, other than to simply not use the service. People have no choice but to watch those ads in the theater — in spite of having paid a day’s salary for their family to watch the movie — because, if they didn’t, they’d have to be late and get bad seats in the theater. And if you think that not using services or receiving diminished services is a choice, you’re lying to yourself. It’s discrimination.

I’m struggling to come up with a definition of discrimination that fits graciouswings’ argument, since discrimination means “treatment based on class or category rather than individual merit; or partiality or prejudice.”  All consumers are treated equally with respect to advertising, as far as I can tell.

And although it’s only one data point, I do have an interesting anedcote that gets of the core of this argument.  When I was running marketing for MovieFone (777-FILM) back in the 1990s, we ran a survey of our own customers and asked them which they would prefer:  continuing to use the MovieFone service with its 20-second uninterruptible movie advertisement at the beginning of every call; or have MovieFone become an ad-free service on a 900-number at a cost of $0.25 per call to the caller.  The results were *overwhelming* that consumers would rather listen to the ad than pay a quarter for the convenience of the service.  And this isn’t an ad that consumers could skip or flip past like a print ad.  I suspect if we ran a poll asking people if they’d rather pay $3.00 for a copy of the New York Times or pay $1.00 and have a bunch of ads in it, they’d respond the same way.

But maybe consumers are different when it comes to the New Media Deal.  Maybe they would rather pay for services than get them for free in exchange for some of their personal data.  I suspect if that was the case, some entrepreneur (perhaps graciouswings) would make a fortune developing paid, ad-free versions of most major web services that would attract some meaningful portion of consumers under a different model.  But seems to me that the body of empirical evidence is proving otherwise.

  • http://www.askderekscruggs.com Derek Scruggs

    This whole argument smells like an “angels on the head of a pin” kind of thing. Of course people would prefer not to get advertising. They’d also like to be able get everything they want at Wal Mart without having to pay for it. They’d also like to ride first class on all their flights. News flash: they ain’t gonna get it.

    So the real question is what are they willing to *tolerate* along the path of getting what they want?

    Advertising doesn’t need to justify itself any more than Wal Mart has to justify charging money for its products. Complain all you want, but don’t be shocked if companies ignore you. Marketing companies provide valuable services that result in higher revenues, lower costs and all those other things companies use to measure success.

    I don’t like seeing advertising at movies either. For that matter, I don’t like paying $8 for tickets. I avoid both by waiting for the DVD and renting it for $2, or even $1 at McDonald’s. Maybe some smart entrepreneur will invent a solution that brings me back to the theater.

    Is my alternative choice perfect? No. Tolerable? Yes.

  • Neville

    Google ripped through the search advertising business by making the necessary advertising less intrusive but just as or even more effective, so there may be a ‘middle way’ between your approach and that of ‘graciouswings’.

  • liam Connolly

    To point I agree with graciouswings. The internet has changed business forever, unlike times gone the internet has levelled the wealth creation/accumulation playing field. When hotmail gave free email accounts to the world, who gained. If hotmail didn’t permit it’s customers to be so pestered by ads and so-forth gmail would never have got a look in. Competition on the web is what it is all about. graciouswings is asking for no-more than any of us wish for, who among us like the pop-ups, the registration tasks, the surveys. Sure we do put-up with them but we would be much happier if they didn’t exist. Don’t get me wrong I’m all for people making money from their efforts. My point is that I believe those that will succeed in making the bucks are those that produce useful applications that are simple to use and have zero barrier to entry. Take the software product called skylook, I stumbeled across it this week, it combines outlook & skype, mega useful but not free. Understandable they want to make money for their work but I would suggest they give it away for free. They get a small window to get the product out there, the competitors are out there and the playground changes every day. Make hay while the sun shines!

  • http://maddogfog.blogspot.com Mike D.

    It really strikes me how people today have a real sense of entitlement when it comes to free web services. Example: del.icio.us ran into some stability issues a few weeks ago and I was floored by the amount of ranting that I saw in the comment section of the del.icio.us blog from people complaining that they couldn’t get through their day without del.icio.us, that they were going to drop del.icio.us for a diffrent bookmarking service, etc. At first I thought: how could people think they have a right to complain about downtime when the service is free? After further thought it makes sense, because the users actually are “paying” for the service with their time by contributing tags, bookmarks, etc. and giving up some personal information about themselves (telling del.icio.us which topics you are interested in). So even though they are not putting up with ads, they are holding up their end of the bargain on the New Media Deal by contributing tags (i.e. increasing the value of the del.icio.us network). In return they expect a stable service. Throw the recent Yahoo acquisition into the mix and people were understandably irate about all of that personal information that they have volunteered over the years possibly being used for marketing purposes in the near future. I am a big fan of both del.icio.us and Yahoo and I hope that they keep del.icio.us as an ad-free service or, at a minumum, make the ads very contextual and unobtrusive.

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