Introducing a week-long Atlantic take on the science of shopping, the secrets of marketing and the future of advertising.
One evening in late summer, my roommate told me he wanted to design a Web app. I asked him how he planned to turn his idea into a business. "We'll make money with ads," he said.
This sounded like the right answer. Twitter uses ads. Foursquare uses ads. Facebook is flirting with a $80 billion valuation based on its potential for ad revenue. And it's not just the young guns playing this game. Google still derives more than 90 percent of its revenue from Web ads. The entire online news industry, the same one that pays my salary, gives away almost all of its content for free and relies on ad display to pay the bills.
Still, I remember being struck by my friend's confidence that advertising would support his business. I was on my computer at the time, listening to Spotify, an ad-supported music network, with a TV show paused on Hulu, an ad-supported entertainment site. My browser was open to more than ten tabs, each for an ad-supported site, like Facebook or CNN. The television was on mute, and while I can't remember what was playing at that moment, we can safely assume there was some silent messaging seeping into the living room, since three out of every ten minutes of network TV are devoted to ads.
So here we were, sitting in a thick swirl of marketing campaigns, and my friend was telling me that, of course, there was always more money to squeeze from the American ad machine...
Was he being crazy or obvious?
Depending on how you define the word, advertising is as old as language. Historians place the first printed ad (for a prayer book) in 1472, and the first newspaper ad (a reward for lost horses) in the mid-17th century. But it was 5,000 years ago that the ancient Babylonians identified some of their most important buildings with clearly written words. This doesn't sound like a terribly savvy act of marketing, but calling attention to a thing is the very definition of advertising. After all, the word we use comes from the French advertir: to call attention.
Today's companies must consider us to be bottomless reservoirs of attention. The U.S. advertising is, by one count, grabbing $600 billion worth of attention every year. Each day, the typical American is exposed to more than 600 advertisements, about one every two minutes. That's a figure from a 2007 study, before anybody owned an iPhone, or an iPad, or any of the hundreds of competing smart-screens that have come to replace our morning newspapers and nighttime TV hits. These devices rely on thousands apps and web pages that are free to consumers and supported by ads.
To bring this to the point, The Atlantic is running a special series this week on marketing and the science of shopping. What we're interested in is how ads work and how we determine what to buy. Some of the questions we'll hit include...
-- Is advertising a bubble?
-- How do supermarkets learn to read their shoppers?
-- Does humor work?
-- Why are women such different shoppers than men?
-- Are ads doing something freaky to our brains?
-- Can an advertising campaign be too sexy?
... but wait, there's more! We're also working with McKinsey's "What Matters" team to offer an exclusive interview with Gary Shteyngart, the author of Super Sad True Love Story, which offered a dystopian vision of mass messaging; a conversation with Jack Stephenson, the head of mobile marketing and e-commerce at JPMorgan Chase; and more looks at the future of advertising.
There's a great joke, made duly famous by David Foster Wallace's 2005 commencement speech at Kenyon College, that goes like this: Two young fish meet an older fish swimming the other way. "Morning, boys. How's the water?" he says. And one of the young fish turns to the other and says, "What the hell is water?"
In media, advertising is water. It's the thing for-profit journalism needs to survive. More than that, for both consumers and producers of media, it's the thing that's all around us, which we're intuitively processing without fully contemplating. Thousands of companies and entire multi-billion-dollar industries would not exist unless other companies were desperate to print their names in front of their audiences in exchange for money. If mobile apps are the future of technology, then the future of technology depends in no small part on the future of advertising. That's something worth thinking about.