Advertising
Tim Armstrong, Google’s advertising boss in North America, says that traditionally most firms would advertise only 5% to 10% of their wares — the blockbusters — in the mass media to publicise their brand, hoping that it shines a halo on the remainder of their products. Now, however, “companies market each individual product in that big digital stream,” from the best seller to the tiniest toothbrush. This is called exploiting the economics of the “long tail.”
They do this, first, because the internet, in effect, eliminates scarcity in the medium. There are as many web pages for advertisers as there are keywords that can be typed into a search engine, situations that game players might find themselves in, and so forth. Each one comes with its own context, and almost every context suits some product. The second reason is that if you can track the success of advertising, especially if you can follow sales leads, then marketing ceases to be just a cost-center, with an arbitrary budget allocated to it. Instead, advertising becomes a variable cost of production that measurably results in making more profit.
In the traditional media, advertisers are always “trying to block the stream of information to the user” in order to “blast their message” to him. In American prime-time television, advertising interruptions added up to 18 minutes an hour last year, up from 13 minutes an hour in 1992, according to Parks Associates. On the internet, by contrast, advertisers have no choice but to “go with the user.”