In The Good, The Bad, and The Ugly of Advertising Part1: The Good, I made the case that advertising has done a lot of good.

It gave businesses a way to find customers, made discovery easier, gave marketers better feedback about what was actually working, and helped smaller and more specialized businesses reach people they never could have reached through traditional media.

Then we marketers got really good at it.

That's when some of the side effects started showing up. Most of this happened the way a lot of complicated problems happen: thousands of individual decisions made sense on their own, while the system they created became something nobody quite intended -- at least I don't think. I mean, it's not like a room full of marketers got together and decided to make the internet more annoying.

But honestly, it's far more complicated than we all want it to be. So here are 5 advertising problems that came out of the good.

1. We started optimizing for attention instead of usefulness

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To me, the job of advertising has always competed for attention. The one thing that we marketers didn't think of was that the way we used digital media turned attention into something that could be measured, tested and optimized at an almost ridiculous scale. For example, we can start looking at specific data that did or didn't get your attention:

• Did you stop scrolling?
• Did you watch the video?
• Did you click?
• Did you comment?
• Did you share?
• Did you come back?

Unfortunately, those measurements are less useful when attention itself becomes the goal. They become more useful measurements when they're connected to an actual business outcome.

And if you're actually reading this post closely, that's where things get really funky, but not in a good way. Why? How?

This is where we start adding emotions into the strategy. The ads that were just static and informational started getting more personal. It made you curious. It made you angry. It scared you. It made you feel like you're missing out.

All those feelings and emotions can work.

From a pure performance standpoint, the marketing and advertising system doesn't inherently know the difference. In its natural form, the system knows what produced the behavior we told it to optimize.

Which, in turn, creates an uncomfortable incentive. If outrage produces more engagement than usefulness, the machine has no philosophical objection to outrage.

It's just going to do the math and follow it.

2. “Free” services created a trade most people didn't fully understand

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Have you ever noticed that we use the word free pretty casually on the internet? If you haven't, pay close attention:

• Free email
• Free search
• Free social media
• Free news
• Free apps

Many of those services aren't really free in the traditional sense. Advertising helps pay for them, and increasingly sophisticated advertising systems have relied on data to make advertising more valuable.

And you know what feeds that data? The things you knowingly provide, like an email address or purchase history. And, it can also come from your behavior. So what does behavior look like?

What you search for. What you click. What you watch. What you buy. What sites you visit. What device you're using. And in a lot of cases cases, information from multiple sources can be combined to create a much richer profile of guess who?

YOU.

Pew Research found that 77% of U.S. adults in its 2019 survey had heard at least something about companies using personal data to build profiles for targeted advertising and other purposes. At the same time, 81% said they had little or no control over the data companies collect about them.

Think about that...

The issue isn't simply that advertising uses data; it's whether people understand the exchange and whether they have meaningful control over it. Most people aren't sitting down at breakfast thinking, "Today I'd like to contribute another 47 behavioral signals to the advertising ecosystem."

They'd probably just like to read the news. Right?

3. "We" taught algorithms that human behavior is something to optimize

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(By the way, when I say "we," I mean the combination of marketers and companies like Facebook who control algorithms that we use to optimize for success)

This is where advertising starts crossing into psychology.

Marketers have always tested headlines, offers, images, calls to action and creative concepts.

The difference now is scale: "How can I scale these tests so that I can see a higher rate of engagement success at a faster velocity that ultimately [will] produce a better return on our investments?"

A platform like Facebook/Meta or Google can test enormous numbers of combinations and learn which ones generate a response. The system doesn't need to understand why something works in the human sense. It just need to recognize that it works (at least, before all the AI/LLM stuff)

To marketers, this data can be incredibly useful. Unfortunately, it can also produce some strange incentives. Here's what I mean:

• If fear gets more clicks, fear gets tested.
• If urgency gets more purchases, urgency gets tested.
• If social validation gets more engagement, social validation gets tested.
• And if something consistently performs, it tends to get more of a budget.

Again, nobody has to be malicious for this to happen. I don't think really good marketers with really good ethics (yes, I know that can be a dichotomy sometimes) are trying to be nefarious and malicious in intent.

I just think that the system is simply rewarding the behavior it was designed to reward based on the parameters set by its creators.

The problem comes when the metric becomes more important than the person on the other side of it.

4. We trained customers to wait for the sale

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Advertising also changed the way people think about price. Think about it:

Retailers have always used promotions (coupons aren't exactly a new invention!) But digital advertising made promotional pricing incredibly easy to repeat. Here's a cadence I have seen and done repeatedly (I'm looking at you Banana Republic):

• 20% off
• Then 25%
• Then free shipping
• Then “today only”
• Then “extended through Sunday”
• Then another sale two weeks later because the last one worked

Taking a look at that cadence above, I see that the problem isn't a sale, btw. It's what happens when customers learn that the advertised price isn't really the price.

Pretend I'm the customer of your business. If I see that behavior repeatedly, this is what I would think:

If I know you'll probably discount the product next month, why would I buy it today?

RIGHT THERE.... is where I think this strange feedback loop started to come up. Businesses use discounts to generate demand, customers learn to wait for discounts, demand becomes harder to generate without discounts, and the business needs another promotion to get people moving.

This loop shows that the ad worked, the promotion worked and the sale happened. But it also shows that economics may have gotten worse.

That's one of the reasons I don't look at ROAS as the finish line. Well, at least not all the time.

A campaign can produce revenue and still train customers to behave in a way that makes the business harder to run.

5. We started renting relationships instead of building them

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This one hits closer to home for marketers like me. Here's an uncomfortable but real scenario:

1. A business can spend money to acquire someone through Google, Meta, TikTok, LinkedIn or another platform.
2. The customer comes in, and eventually the sale happens.
3. Everyone celebrates!
4. Then the platform changes something.
   • Costs go up
   • Reach goes down
   • An algorithm changes
   • A tracking capability disappears
5. Suddenly the business has to spend more money to find the next customer.

I really think that this is when your customer acquisition system depends too heavily on someone else's audience.

I'm not saying using paid search/paid advertising is wrong. Paid advertising can be incredibly effective actually. I use it because it works. But for me, the best outcome isn't simply getting someone to click an ad. You have to turn that customer into someone who comes back without needing to see another ad.

That's where lifecycle marketing comes into play: email, customer experience, retention, referrals, loyalty and an actual relationship with the customer. These matter!

I truly believe that for anything paid, that paid ad should open the door for the customer; it shouldn't have to keep knocking forever on that door.

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Final Thoughts

None of these problems I mentioned above mean advertising is broken. Or maybe I should say that it's not broken completely. They just mean that advertising became powerful enough to create consequences beyond the original transaction.

The technology gave us marketers better targeting, better measurement and better optimization. It also created incentives to collect more information, chase more attention, squeeze more performance from every impression and rely more heavily on platforms that control the audience.

And we haven't even gotten to the part most people never see.

The ad you see is only the visible part of the system. Behind it is an entire machinery of data, identity, auctions, algorithms, attribution and prediction.

That's where things get ugly.

Part 3: The Ugly.