Is an online-ad firm really worth $6 billion? has terrific article on on-line advertising today.

Here, I think, is the key quote:

Television, magazines, and newspapers may be hanging on because they are more powerful media for reaching the consumers companies most want to reach. But I suspect they’re hanging on for another demographic reason. Advertising is supposed to be a with-it, hot, trendy, tomorrow-based industry. But at root, the business of advertising is one of allocating capital, not cooking up clever jingles. And the people who make the decisions about how to allocate that $300-odd billion in capital each year—CEOs of consumer products companies, Fortune 500 executive vice presidents, media buyers, brand managers, agency heads—well, they’re old. It takes time to climb the corporate ladders to get to the rungs where really important decisions are made. Of course, these people, most of whom came of age as consumers in the 1960s, 1970s, and 1980s, use the Internet, spend a lot of time on it, and buy stuff on it. But they don’t understand it intuitively the way the younger crowd does. Do you think the CEOs of Ford, Citigroup, or Procter & Gamble are uploading photos to their MySpace pages, downloading music, and blogging.

I find this a lot with advertisers and studio executives I talk to.

It’s like there’s this huge infrastructure. This infrastructure is composed of a physical infrastructure (like buildings and avids and a high end production pipeline) and mental-infrastructure, which is all the work people have invested into thinking a certain way to succeed. And this huge infrastructure is the size of a huge oil tanker. And you say to people, “Really. You need to turn the direction of the boat.”

But they can’t or they won’t. Because they’ve already invested so much in this huge thing and the direction it’s going.

1 Response to “Is an online-ad firm really worth $6 billion?”

  1. 1 Ute August 23, 2017 at 3:14 pm

    Muito interessante

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