Sunday 6 July 2008

Sherlock Holmes and the Case of the Vanishing Advertising Budget

(Part of an increasingly irregular series on matters technological. It beats doing real work.)

The TV series Mad Men has recently finished its run in the UK. As in the States (where it won two Golden Globes), viewing figures have been small but the critical reception has been outstanding - "extraordinary" and "virtuosic" are pretty representative examples from the reviews.

But why is anyone writing, commissioning, buying, or (albeit in small numbers) watching what's effectively a costume drama set in a Madison Avenue advertising agency in 1960?

Obviously the main reasons are, er, obvious. It's extremely well-written and beautifully acted. It lacks the solipsism and whimsy of, say, Studio 60 - you wouldn't want to beat each and every one of the characters to death if you met them in real life. Mad Men possesses all the usual virtues of costume dramas, plus a more overt contemporary relevance - it's been fairly described as a prism for looking at recent American history.

However, this being a technology blog, we can draw out something a little more specific than that. Assuming that one has some skills, and therefore doesn't have to fall back on freak shows such as American Idol/Big Brother/Azerbaijan's Got Talent, there are two established routes to fame and fortune in contemporary society for the sort of people who are watching Mad Men: (a) sell your heart for a lump of gold in Wall St/the Square Mile, or (b) make a bazillion dollars out of the internet.

And the internet is all about advertising 1. Everyone's plans for world domination via the internet always involve working for the likes of Facebook, or selling services via something like Facebook, or setting up something similar to Facebook. All these putative business plans consist of building up a large user base, and then having that user base somehow magically deliquesce into cash through the power of advertising 2.

In short: Mad Men has a very specific contemporary relevance. The internet is the biggest thing around; the internet is all about advertising; Mad Men is all about advertising. More significantly, a large portion of Mad Men's audience wants to work in the internet advertising, and Mad Men shows them a saturated-colour dream of what that world can be like: booze, women, and your name in big letters on the side of the building. (Everyone used to know stories of excess such as investment banks filling their radiators with champagne at Christmas parties. Nowadays it's the number of Boeing 757s parked out the back of Google's offices for when Larry and Sergey want to pop down to the shops.)

For any reader who's unsure what Facebook et al have to do with advertising, there's a famous old barb about Ringo Starr: "not even the best drummer in the Beatles". You could argue something similar about Facebook: "not even the best social networking application created at Harvard during 2004". Regardless of its technical merits - and they really are very impressive these days - Facebook has always primarily been about marketing and advertising, not technology. Geeks rave about the elegance of its application architecture - the thing which makes it possible for you to play Scrabulous - but the point of that architecture and the reason why it exists are all to do with multi-level marketing, not technology.

The multi-level marketing brings us to the accusation you occasionally hear that Facebook (and its ilk) are pyramid schemes. This, clearly, is nonsense. However, Facebook et al do share one characteristic with pyramid schemes: you really, really want to think carefully about putting in money if you're near the bottom of the pyramid. Facebook is great if you're Mark Zuckerberg. It's still pretty good if you're providing Facebook-based services, such as the booming market for building Facebook applications to order. But things look much more murky if you're at the bottom of the pyramid: if you're the person who's paying for the advertising or third-party services, in the hope that you'll see a return on your expenditure. Noel Coward once said that "television is for appearing on, not looking at". Similarly, Facebook is for making money out of, not paying money into.

The trouble is that Facebook (and Myspace and Bebo and Flickr etc) are fundamentally different to Google (and Yahoo). The search engines, such as Google, can display advertising which is relevant to what you're searching for. They can serve up advertising based on what you're doing. At best, the likes of Facebook can only provide advertising based on who you are - i.e. based on your profile information. Their advertising is much more passive, and much less reliably targeted. In best Sherlock Holmes style, Facebook may be able to deduce that you are a one-eyed teetotal Albanian sailor, recently returned from a trip to Borneo, sporting a limp, but its advertising still won't be as relevant and effective as Google's.


1 except for the bits which are all about naked ladies.
2 UK readers should imagine the fat-babies in the "Partners in Crime" episode of Doctor Who at this point.