Pick up a newspaper or magazine these days and you find yourself judging its health by the quantity of advertising. Harper’s, the Nation, the New Republic—they are pitifully bare of ads. “Page” (online, of course) through an old copy of the New Yorker, look up Edmund Wilson’s essays on the Dead Sea Scrolls, and feel the self-confidence of another age: almost three pages of ads for every column of text. Reading the magazine online brings out an analogy that a physical copy would obscure—the huge ads, dominating the text, remind you of nothing so much as a flashy website.
A big mystery of the internet has been why the online editions of newspapers and magazines can’t make money when, with huge skyscraper ads covering half the homepage, their websites so closely resemble the most successful publications of the past. These aren’t regular old newspaper ads either but what amount to TV ads—all the better, you’d think, since you can click through to buy the product on offer without picking up a phone. What’s more, the New York Times has ten times as many readers online as it does in print (15 million versus 1.5 million)! Amid all the anxiety about the future of journalism it’s easy to overlook the absurdity of the situation: the Times is going bankrupt—while showing more ads to more readers than ever before.
What happened? One standard answer is that advertisers overpaid for ad placement in the past, and now the Gray Lady, confronted with precise readership metrics, is finally getting paid the pittance she always deserved. This seems implausible: could perpetually rationalizing, efficiency-maximizing capitalism really have misjudged the efficacy of print advertising for more than a century? Another notion is that Google, by removing the ad men from the transaction, has dropped the glamorizing “sizzle” of the hard sell—an idea only Don Draper could buy.
The numbers don’t add up. As average internet usage has risen from six hours a week in 2004 to twelve hours a week in 2009, time spent with TV, radio, and magazines has held about steady. Part of this can be accounted for by the advent of workplace computers, which, as no one familiar with the devices will be surprised to learn, has not led to any revolution in productivity: thanks to YouTube, you can now watch old music videos and get paid. Once you get home, you add the new medium to the old ones. Over the past decade, while taking out a second mortgage, Americans also bought new flatscreen TVs and equipped the whole family with laptops and cell phones. Gathered round the dinner table, we can watch TV, check email, and text all at once. In this way the Blade Runner nightmare of a universe wallpapered with ads—huge corporate blimps projecting ads onto the walls of buildings—has given way to a nimbler and more domestic reality. Along with ads on every public surface there are now ads in your home—not just on the TV stand but atop our desks, on our laps, and in our pockets. The ads line our intimate communications on Gmail and Facebook, and with the development of the Kindle, the Nook, and the iPad, they will before long infiltrate our books.
With so many new surfaces available to ads, newspapers will never make close to what they formerly earned, no matter how often we reload the Times website. As the space open to advertising continually expands, the value of each individual ad must correspondingly decline. Of course, ad revenue could go up if companies started increasing ad budgets, but over the past ninety years, through the rise of TV, radio, and the internet, total advertising spending has remained almost constant at between 2 and 3 percent of GDP. Ads themselves are premised on the infiniteness and malleability of human desire; ad budgets, on the other hand, recognize the relatively fixed and inelastic nature of disposable incomes.
It’s at this intersection of ever expanding advertising, stagnant median income, and constant ad budgets that journalism will have to live. The primary theory of the internet economy still comes from Chris Anderson, prophet-in-chief of Wired, who back in 2004 envisioned the world of the long tail, in which a few cultural commodities (Dan Brown novels) would retain huge popularity and account for half of sales, while the other half would come from selling single copies of a massive variety of more obscure items (n+1 Issues 1 through 8). This model, based largely on Amazon.com, works okay so long as what’s sold retains its value over time—unlike, say, newspaper articles. Yet journalists and editors were peculiarly well disposed to placing a low initial value on their work. The music, film, and book industries all fought piracy from the start; most newspapers simply gave away the store. Lulled by decades of massive ad profits, newspapers thought of subscriptions as little more than fees for printing and delivery; it seemed only natural, where physical costs were eliminated, to drop subscriptions as well.
In retrospect, it’s apparent that the commercial liability of newspapers and national magazines was the same as their cultural strength: they addressed issues of general interest in an all-purpose public sphere. But to advertisers this civics-class “everybody” was a consumer “nobody”: it meant the press didn’t know who its audience was, or what they could afford. To pack a reporter off to Congo or Pakistan was to spend a lot of money catering to a phantom demographic. When this was the best that advertisers could do, it’s what they did: if Macy’s was holding a sale, it advertised it in the front section of the paper between news of the defense of Kinshasa and the latest scandal in Congress, figuring that “everybody” saw it, one way or another. If Ford had a new truck to market, off it went in search of football games to interrupt. But how much more reasonable and efficient—for everyone, really—to advertise clothing sales to people who want clothing, and Ford trucks not to sports fans, but to people in the market for a truck. Before, the advertisers had to guess; now, with all the information we provide with keyword searches, on social networks, and in emails, advertising can be more precise. On top of that, the “content” of social networks, email, search engines, blogs—it somehow magically produces itself, that is to say the users produce it, that is to say it’s free. The extension of advertising to the domain of private chatter undermines the competitiveness of anything that costs more than private chatter to produce. Marx blamed the below-subsistence wages of the proletariat on the reserve army of labor; the below-subsistence revenues of the Times can be blamed on the reserve army of the social networks.
In the past we imagined a regime of total advertising as thoroughly desensitizing: you would be shown more and more ads for more and more things you didn’t need and couldn’t even want. Thus David Foster Wallace’s Year of the Depend Adult Undergarment, a calendarwide publicity campaign of questionable effectiveness for those under 60, and Year of the Whopper, less than suitable for the growing Hindu market. Truly perfect advertising, the ad-topia of the near future, will be different—personalized as well as pervasive. Tucked inside the Year of the Whopper will be, for one person, Boca Burger “Original Vegan” Week and for another person a month of Smartwater™ Sundays. Instead of desensitizing, it will be hypersensitizing. It may even be useful.
Today we Google ourselves to see what the world knows about us; tomorrow we’ll just watch the ads. The outlines of this can already be discerned in Gmail’s sometimes tactless data mining of your emails: write a friend that your cat has died and you learn, cruelly, of discounts on litter. And the extension of precision-guided advertising into social life is also there to be seen in Facebook’s “friend recommendations,” where, once we’ve added all our close friends and colleagues and vague acquaintances, we see nothing but ads for people we know of but can’t possibly ask to “friend” us—exes of significant others, secret crushes, CEOs. Personalized advertising will first solicit our minimal discretionary income and then, accidentally, show us what we badly want but can’t have.
In Brooklyn the cable companies already personalize TV ads based on demographics, and they’re about to expand the program nationwide. Our cell phones meanwhile find where we are on a street map and show sales in nearby stores—they can even send a coupon to flash to the clerk for a personalized discount. Our cell phone provider therefore knows where we go, how long we stay there, and which coupons we actually use. The company can use this information for its own advertising purposes, or sell it to another company. Combine all the different data streams and you get what’s called “reality mining.” Irwin Gotlieb, the “King of Advertising,” whose firm GroupM controls $60 billion of ad buys worldwide, gives a little taste of what this future will look like:
Today, if I decide I need to sell a high-end watch, who’s the prospect? I can identify people with discretionary income. I can identify males or females fifty or older. But down the road, I will know you’re a watch collector because I will have that data on you. How? I will know your purchase behavior. A lot of retailers have loyalty programs, and they will share this information. If consumers have searched on Google or eBay to look at watches, all these searches are data trails. So instead of assuming that because you’re wealthy you might buy a watch, I can narrow my target to the small percentage of watch collectors.
The upside is we won’t have to look at watch ads anymore. The downside: pick up a copy of even today’s slender New Yorker—about forty pages shorter than an issue from two years ago—and check out the ads that remain. There’s nothing you can afford, but don’t get offended—imperfect advertising is a dying form of progressive taxation. Not so many people are in the market for a Rolex, but they have to print the same magazine for everybody. So all subscribers shell out the same $47 a year—a cost held down by the surtax paid by a few Rolex-buyers. With perfect advertising, we won’t be able to keep riding the coattails of all the ads intended for our betters.
Newspapers and magazines (including the Times) say they’re going to start charging for online content, but the most likely way they’ll survive is by capitalizing on their tony readership. People refer to the success of the Wall Street Journal and the Financial Times, which make the most popular stories available for free (“Bear Stearns CEO Smokes Pot”) while hiding everything else that’s fit to print behind a pay wall. The next stage in online newspapers will be to throw a few scraps of gossip to the public at large; offer free and total access to readers wealthy enough to be worth advertising to; and charge everyone else on a per-story basis. In this way we will fork over a few bucks at a time to read reviews of the hardcovers we can’t buy (automatically sent to the iPads of the rich, with ads of course) and to read recaps of the Springsteen concert we can’t attend (sponsored by the Depend Adult Undergarment—tickets delivered by SMS to a “lucky” few). This is the real meaning of Chris Anderson’s latest book, Free: everything will be free, to those with purchasing power. This model may even save the New York Times—but not for those who can’t afford it.