Magazine article ADWEEK

Death by YouTube: Why User-Generated Content Is Killing the Ad Business

Magazine article ADWEEK

Death by YouTube: Why User-Generated Content Is Killing the Ad Business

Article excerpt

Is the Web 2.0 cultural revolution of user-generated content good news for the ad industry? Will the explosion of fashionable blogs and social networks increase the size of the advertising economy? Can the YouTubification of professional creative content and the wikifying of mainstream authoritative media benefit advertisers and advertising companies?

The answer to these three questions, I'm afraid, is unambiguously negative. No, no, no. Web 2.0 is, in truth, the very worst piece of news for the advertising industry since the birth of mass media. In the short term, the Web 2.0 hysteria marks the end of the golden age of advertising; in the long term, it might even mark the end of advertising itself.

It's not possible to talk about the meteoric rise of Web 2.0 without discussing the equally dramatic fall of mainstream media. These two profoundly significant historical events are occurring in parallel, each a cause and an effect of the other. And the fate of the advertising business is intimately bound up with both Web 2.0's growth and mass media's decline.

Evidence of the crisis of mass media is depressingly ubiquitous. The recorded music business is in free-fall, the tragic victim of mass digital kleptomania. As Craigslist gives away free classified ads and fewer and fewer of us are reading a daily newspaper, so journalists are being laid off while physical papers are shrinking in size and even being shuttered. Magazines aren't doing much better, nor is radio. Meanwhile, the advertising-driven television business is about to be engulfed by the perfect technological storm of the digital video recorder and the YouTube content revolution. Even the publishing business is on the verge of an equally hideous fate as Google's universal digital library undermines both the physical coherence and economic value of the traditional book.

As the mainstream media shrinks (and with it, advertising revenues), user-generated content and even user-generated advertising are becoming increasingly popular. Web 2.0, of course, is all about the so-called "empowerment" of the consumer through the disintermediation of traditional gatekeepers such as editors and publishers. Sites such as YouTube, MySpace, Wikipedia and BlogHer are essentially bringing the price of creating content down to zero, thereby unleashing amateur mobs of wannabe Maureen Dowds, Bonos and Steven Spielbergs. Instead of Schindler's List, we now have hundreds of thousands of personal videos on YouTube; instead of op-eds in The New York Times, we get tens of millions of ill-informed opinions from the blogosphere; instead of U2's hit song "Vertigo," we have the vertiginous cacophony of hundreds of thousands of aspiring bands on MySpace.

So how does this cultural freedom and its chaotic corollary, the eruption of infinite user-generated content, affect the advertising industry? The consequences are bleak for everyone except the newly minted multimillionaires at MySpace, Facebook and YouTube. What Web 2.0 is doing, compounded by the online consumer's shrinking attention span and his or her hostility towards the "inauthenticity" of commercial messages, is radically deflating the value of advertising. …

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