Maybe that acquisition is just good advertising.

Google and Facebook, they’re up to something. I mean, they have to be, right? All these acquisitions must mean something! This reminds me of when Lost hadn’t ended disappointed everyone yet — when we all needed to believe that the writers had an intricate master plan that would pay off fantastically in the end. Turns out they didn’t. They were making it up as they went along and we were Susan’s parents, riding up to the Hamptons in George Costanza’s car. But they certainly knew how to keep the hype going for the whole trip, right up until the moment they had no choice but to pull the curtain back in an ending that any eight-year-old could have come up with. Well, something tells me we’re in the same hype and speculation pattern with our Valley overlords. There must be a logic behind a social network and a search engine buying AI, robotics, virtual reality hardware, and everything else we’re talking about on Twitter!

But they’re so much more than that, you cry. You’re right. Calling Facebook a social network and Google a search engine isn’t entirely fair anymore. They’re both advertising companies. Pure and simple. We’d like to imagine that all of our “innovation” — all of our  “disruption” — are actually creating new economic opportunities, but in the end, it’s all still propped up by advertising.

How disappointing is that?

In both cases, we want to imagine some occult strategy because anything else — especially the notion that these are basically attention land-grabs that they hope to turn in to cash later — is far too mundane, too of the now. When Facebook bought WhatsApp for whatever obscene sum, we rushed to congratulate them for their brilliance, their savvy. But honestly, how was that a strategic move? Reaction only looks like strategy when it comes at a cost that no one else can afford. So buying WhatsApp — that’s no more strategic than someone buying China because that’s where all the people are. It’s widening the road you’re kicking the can down. This move is right out of the people=profit playbook. But as I’ve said before, I think it’s obvious that nobody has figured out how to actually balance the equation without advertising. And even that is more speculative than it’s ever been. The basic idea is, hey, we’ve got people. We’ll sell you access to them. The rest is on you. Sure, there’s some pretty complex demographics — kind of the next-generation version of throwing up a billboard that changes for every driver that passes by — but still it’s advertising. It’s show them something and hope they buy it. There’s nothing wrong with this business model, of course — it’s certainly made Facebook and Google a ton of money — except that it implodes when people decide they don’t want to play with you anymore. If people leave Facebook, Facebook has no ad network. And until they work out whatever magic most of us are already attributing to them, the ad network is everything.

So is it interesting that Google owns Boston Dynamics or that Facebook owns Oculus VR? No, not really. It’s actually pretty annoying. I liked how Matt Webb put it last night, “We lost a future.” I suspect that Google and Facebook aren’t much more than advertising companies rich enough to thicken their own hype cloud. Now, maybe they’ve got a brilliant plan. I don’t know enough to say they absolutely don’t. But it’s at least possible that it doesn’t matter. That a few billion dollars is what they’re willing to spend to continue to convince us all that they’re on an inexorable road to the future. Now that’s great advertising, isn’t it?

(And boy do I hope that’s true — especially in regard to Google — rather than the possibility that they get further immersed in government or military. I shudder to think.)

But back to the buys. Do acquisitions make either company more than an advertising company? I don’t think so. That’s like saying that McDonald’s is more than a fast food restaurant because they serve coffee and have a ball pit you can play in.

The question I want to ask is this: Is advertising even a relevant problem anymore? I mean really? Do any of us in the US have a problem being exposed to things we might actually want? No, of course not! And yet, I doubt we’re even close to peak advertising. I think we probably have a very long way to go before we could claim that. In the meantime, that subtle message that “advertising 2.0” has been trying to sell us, their product — that advertising is good for us because it connects us better to those products and services we actually want — should hardly be convincing anymore. Advertising isn’t going anywhere, so let’s stop pretending that it’s somehow evolved or that we have evolved beyond it.

There’s a reason that nobody admits to eating at McDonald’s, and it’s connected by the same nerve to the reason McDonald’s doesn’t admit that they sell very few salads. That same dissonance is at work with digital advertising. Old habits are hard to break.

P.S. A friend just mentioned on Twitter that he thought the Oculus buy was Facebook’s reaction to Google Glass. Perhaps so. Again, that’s reaction, not strategy. Also, it’s like, “Hey, we’ve got a face thing now, too. And it’s bigger! #winning”

Written by Christopher Butler on March 26, 2014,   In Essays

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