Monday, July 17, 2006

Expectations & future mind warfare

How do we decide what we are going to do in the next second, minute, hour, day, tomorrow, weekend, next week, year in year out until the next second does not appear?

I think it will take the whole lifetime of this blog to answer but I want to focus on the role Advertising plays in the context of the question above.

My economics studies taught me there were two type of advertising, 1. Provide product/service information to the market, 2. Provides information to persuade demand to choose between products/services. If I recall rightly, the hypothesis is that the second adds no economics value to the wider economy, infect it could be argued it will reduce the size of the overall economy as scarce resources are allocated to create no.2 type advertising, labor, capital, natural resources and time.

By way of a sweeping generalization most income from Internet businesses is in the form of ad's. Well, those are the revenues I am going to focus on. Ad sense, introduced by google, on one hand can be seen as the savour of the Internet economy, a way has been found to make an internet business sustainable, more than that it is a corner stone of an investment portfolio with its Fortune 500 status. Question, is ad sense and the others, yahoo, msn, myspace etc. offering type 1 or type 2 advertising?

It's type 1. Millions upon millions of clicks on ads up to billions of dollars of revenue therefore, it must have provided the individuals with information that they were looking for.

It's type 2. These product/services are already 'real' and are competing for the right to be consumed. In short, they are adding to the cost of other individuals products and diverting scarce resources away from the 'fathering of mankind'.

Both right?

I feel the answer lies in the hands in each and every individual. Do you set out with the goal of building an experience you have aleady envisioned or are you at the mercy of others to influence the future decisions forming in your mind? If you can be persuaded to change via ads is that alright? Even if you know what you are seeking to create, ads can still provide information that will help you create the unique experience you would not be able to create on your own.

Individual empowerment and control suggests and I am of the opinion that type 2 advertising will soon disappear from economic models. What does this mean for ad based businesses? They will go out of business right? Could do, but the smart ones will realize they are in the individual empowering business and the ad income was a stepping stone route they chose to take along the way. The years ahead will tell if that evolution can be made or will a new start ups, pure to the individual empowerment vision arrive and take over?

Individuals will decide.

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