It Pays to Advertise

Why is Social Media “Free” to Use?

It is often said that the American free enterprise system is the eighth wonder of the world and the average American's lack of understanding of what it is and why it works is the ninth wonder of the world.

In today's confluence of mass communication, many of us are somewhat bewildered by the tremendous number of advertising messages that are directed to our attention on a day-by-day basis – whether through traditional venues such as newspapers, magazines direct marketing, etc. – or from rich media platforms, such as sponsored ads on Google and Facebook to individual websites and apps.

But have you ever stopped to consider where our economy and commerce would be if business people did not aggressively pursue their freedom to advertise the products and services they produce?

Better yet, how could all the “free” social media sites we enjoy operate without advertising revenue – including those ubiquitous banner ads that run along the sidelines and interfere on the middle of the page? Bottom line: “free” content on collaborative sites are possible only by advertising dollars.

But, in the social age, where do ads fit?

According to a Forbes article, Facebook founder Mark Zuckerberg stated, “We should relax, make relationships, build rapport, sell later.” That philosophy has helped shape its current pitch. Rather than simply providing traditional ads, the social network encourages companies to engage with user by telling them stories. Facebook believe that such interaction is less intrusive than other online ads that take over a user’s screen or push done content.  

Advertising:  With –or -Without Content:

Dish Network Announces its New Ad-Skipping DRV – Ironically, with Commercials.



Ad-skipping DVR raises a ruckus

 The Wall Street Journal, New York Times, LA Times, and others screamed headlines during “upfront” week on the Dish Network Corp. plans to promote its new ad-skipping feature with, ironically enough, a television ad.

Ironically, Dish is rolling out television, radio, newspaper and social media ads to spread the word about their new DVR, dubbed the “Hopper.” Dish last week added “Auto Hop” which lets views skip commercial completely on most nation prime-time shows aired on the major broadcast networks.

However, major networks may not run the ads.

From the B-School

A little card with a caption that said, "NEGATIVE THINKING" and the message it contained is a standard in Business Administration Schools.

It begins, "A man lived by the side of the road and sold hamburgers. He was hard of hearing so he had no radio. He had trouble with his eyes so he watched no television and read no newspaper, but he sold good hamburgers. He did however, advertise in the local newspaper telling people how good they were.

He stood by the side of the road and cried, "Buy a hamburger mister?" and people bought. He increased his meat and roll orders and bought a bigger stove to take care of his trade. His son came home from college to help him and then something happened.

His son said, "Father, haven't you been listening to what people are saying? If money stays tight, we are bound to have bad business. There may be a big recession coming on, you had better prepare for poor trade. Whereupon this man thought, "Well, my son has been to college. He listens to the radio, watches television and reads the newspaper and he ought to know". So, he cut down on his meat and roll orders. He cut out his advertising and no longer bothered to stand by the road to sell hamburgers, and his sales fell almost over night. "You're right son", the father said to the boy. "We are certainly headed for a recession".

Sources:
1. Micahel Humphry, "Facebook, DVR and Solving the Ad Conundrum," Forbes, 5/17/2012
2. Doug Gross, "Ad-skipping DVR Prompts Fight for the Future of TV," CNN Tech, 5/25/12