When Wharton Professors Don’t Know Jack

by Jason Wilk on March 22, 2009

erick-clemons

This is my comment on TechCrunch today in response to a guest author’s article on the death of advertising. Who’s this guest author? He’s Eric K. Clemons, Professor of Operations at Information Management at Wharton.  

Clemons, if you think that the internet is going to be some ad-free ecosytem in the near future, you’re completely wrong. You represent the type of liberal (not to say I am different), DIGG using type person (with Ad-Blocker) that is too smart for the advertising and thus can find many ways to pick apart why it’s not working. Well, don’t forget that the very content you just wrote is being monetized at this very second, whether you like it or not and the site that published it (TechCrunch), needs the money so it can continue to push quality content (unlike what you just wrote). You can’t just come out and trash every aspect of internet advertising and the freemium models that exist. I’ll give you 3 reasons why you are out of line. I can give you more at another time.

1. Don’t talk about Second Life as if it is a model to followed. Things like selling virtual goods is not a a direction everyone can follow, just as you said not everyone can buy their keywords on Google, so it is not a sustainable or scalable business model. Are you nuts? First of all, you openly admit you are not a part of a virtual community, so how do you know you would pay for goods and this is a model to be copied? SecondLife isn’t even doing well. You are a part of the content community, and seem to easily be able to bash the idea that you would ever interact with someone’s display ad. Get a life.

2. People do not trust advertising? Look at the ads surrounding your article. Is there one company or brand that you don’t recognize? No. So, what is so untrustworthy about any of these ads. And what kind of sites are these ads on that make people not want to trust them? Is it TechCrunch, is it Hulu, is it some random site no one has ever heard of? Such a general statement with little substance.

3. You would be equally happy to purchase a search service? What kind of Roger McNamee, acid-trip-palm-pre-will-succeed, type BS is this statement? It’s the same ingenious concept that if Facebook were to charge $1 a month, they would be making a killing. Not going to happen, not intelligent, and would certainly be a flop.

I just want to say that for a Wharton professor, you clearly don’t understand what monetization strategies are working on the Internet. I actually began to laugh when you started talking about mobile contextual advertising, as if you know what the future beholds for it. I don’t want to call you out any further. I’d love to make some sense for you over the phone though. Have a good one. 

[Post to Twitter] 

Tagged as: business school, Internet, joke, mockery, wharton

  • Read your comment on Techcrunch. I feel the same way. It's the same arguments against advertising as TV advertising was a decade ago. Good post.
  • I agree this was the most stupidest article I ever read on Techcrunch. I don't know how Mike allowed it to pass.
  • Insights
    Actually it was a very insightful article and I think you took a very defensive position. Mike was very courageous to have that article up since he makes his money through advertising.

    Anyways, advertising does work to a point by getting the company name and brand out there. But I think this works best on TV and radio with print magazines/newspapers coming in a far second where you are casually browsing or reading. On the web, people are actually doing something whether it be searching for something, reading a blog, or whatever. This is different in the sense that when you are relaxing you may just listen to a commercial because it entertains you. When you are actively doing something, you don't want any distractions and just want to complete the task on hand. This is simply why I have never clicked or even look at ads on the web.

    And the argument that models like Google are working is not a good argument. Just because something may work in the meantime does not mean it is a great idea that will always work. There may just not be a better solution which is the current case. There are many companies trying to find this better solution because when you are doing a search for something on Google, how relevant are the ads on the side? Do you ever click on them? And if you do, does it lead to a transaction?

    I think this professor knows exactly what he is talking about and is years ahead of his time. People like you either can't or don't want to see it. But years from now, you'll realize just how wrong you were.
  • Insights
    Oh one more point. I do disagree when he says all people find ads untrustworthy. But he is right to a point. People are skeptical when someone is trying to sell them something. The problem is that people don't do their won research or due diligence to find a solution that works for them. So they may sign up for something and then complain about it rather than doing the proper research to find the best solution. Anyways, ads can help by letting people know of the company so they can check out what they offer and research them. But as I said before, this works best on TV/radio rather than on the net. And this may be due to the fact that so many small, unknown companies can advertise for very little money while large well known companies advertise on tv/radio. This may lead to the untrustworthy feelings.
    While it is good that small companies have a chance to advertise, it does lead to many websites that either scam the user or don't offer exactly what they want.
  • Jason Wilk (editor)
    @insights. In response to the question "how relevant are the ads on the side, and when/if i do click on one, does it lead to a transaction?" My response is contained in the comment, when I said to Clemons "You represent the type of liberal (not to say I am different), DIGG using type person (with Ad-Blocker) that is too smart for the advertising and thus can find many ways to pick apart why it’s not working."

    The point I'm trying to make is that he is not the kind of demographic to be making such general statements about the status of advertising on the interent. I could name of a bunch of companies doing extremely well, just using Google AdWords.
  • Shook Rosenthal
    I think Clemons is an outdated and out of touch fogy who is frightened by advertising that doesn't involve his newspaper on the porch.
  • GotoApril
    Good Post. Clemons=lemons.. He seems a bit sour, and out of touch. I can see how Search works.. it isn't crazy, mystical or unbelievable that people who use to look at Traditional Marketing, now go online to learn and then purchase offline. My mom's 65 and just did it this weekend at Sears. I think people need to look outside of the lines of Online/Digital Marketing working or not working.. Why did she choose Sears, um.. the sale they Advertised on their website??

    Enough said.
  • Insights
    @GotoApril: I don't think thats the type of advertising he was talking about. I could be wrong. But obviously if your mom went to the Sears website and saw an ad for a sale and then went to the store to purchase something, then that "ad" worked. But I believe he is talking about ads such Sponsored Links and Ads by Google we see on search engines that usually have little to no relevance to what we are searching for. Your mom went to a well known store website and saw that they were having a sale. This is the 21st century version of having a flyer sent to her house in the mail advertising the sale. But do you think she would click a Sponsored Link that says "20% off" leading to some no name company website that sells similar products? I doubt many people would purchase from that site, for better or worse. Your mom has a trust in Sears since its been around so long and she has shopped there many times probably. Maybe it will take time for these no name companies to create their brand but I think even an ad for Amazon wouldn't work. I wouldn't search Google or Yahoo. I would just go to their website and look for stuff if thats what I wanted.

    @Jason: Again, just because there may be a few companies that are doing "very well" does not mean it is the best solution and that it will still be here tomorrow. I want to see the statistics that show how many people actually purchase something after clicking those links. Just because Google and companies using its AdWords program are making money now doesn't mean they will the next day. The clicking may be from accidental clicks or that an inexperienced user thinks its a search result or whatever. Obviously this system will be here till someone comes up with something better. I don't agree with the statement that most internet advertising will be gone in 5 years. Actually, I think there will be more but in a better format that actually leads to transactions. Look at TV. Commercials are still here (better than ever) but companies have tried other ways to advertise such as product placement in shows. Look at 24. Driving around in Toyotas and then reinforce that with a Toyota commercial. I think this season Hyundai is the sponsor.

    I don't agree with everything he said but I do agree that the current system will not sustain. Just my thoughts.
  • @Insights I think you should stick to things you actually know something about, I doubt anyone is going to show you actual statistics that you will believe because no one will want to show you what they are bidding on, etc, as it would be too easy to duplicate what they are doing. That said, I at least double the money I put into adwords, most of the time I will triple what I put in. That's not from accidental clicks, I am talking about stuff people have to buy before I get paid. The advertising no one can get to work is on social networks, because people aren't looking to buy or do anything else, those ads you are talking about on Google are the best ones, maybe not on the searches you are doing, but they are on the ones that I pay for.

    People looking to buy no longer have just the local options to buy something, now they can go into a store and look at what they are thinking about buying and then they can research it on the internet as well as look for better deals from companies with less overhead. TV wishes they could track transactions like you can on the internet, if they could, they would be making a LOT more money.
  • Jason Wilk
    @insights. If there wasn't a high percentage of people who clicked on links and ads, then affiliate marketing online should be a dead industry, right? hmmmm. Nope, it's an industry that is doing incredibly well, keeping companies like ValueClick who own Commission Junction afloat. Google has also ramped up their own affiliate network as well in the past 6 months. Sorry Insights, but this ain't the TechCrunch comment boards, come with substance.
  • Jason,

    I think you're off base with reason #2.

    "People do not trust advertising? Look at the ads surrounding your article. Is there one company or brand that you don’t recognize? No. So, what is so untrustworthy about any of these ads."

    Remember that advertising exists for the primary, overriding purpose of persuasion. Providing helpful, honest information about products and services is incidental to that goal. Consumers understand this. We might choose a product we've heard of over one we haven't, but that's because of *familiarity* -- not necessarily trust.

    I wrote a longer reaction to Clemons here:

    http://www.whyweworry.com/blog/2009/06/29/why-a...
blog comments powered by Disqus

Previous post: Twitter Founders Finalists For Time’s 2009 Most Influential People

Next post: If The Pre Flops, Palm Goes Down With It