The three unknowns of the modern ad age

AS WELL ASPOUNDSTVIDTV a louche mystique, there has always been something murky about advertising. From P.T. Barnum’s “Mammoth Fat Infant: only three years old and weighing 196 ” to three-martini lunches at the dawn of the era, it was never quite clear whether the adman was artist, scientist, strong-livered schmoozer or con man. For all the wit and wiliness on Madison Avenue, the economic cycle had a much more direct impact on ad spending. And it was a wonder companies embraced the medium at all. As far back as 1904, the , an American magazine, wrote that an estimated 75% of advertisements did not pay; yet the other 25% paid so well “there is scarcely a businessman who is prepared to stand idly by.”In the digital age the guesswork should have become a thing of the past. User s, device-tracking technology and electronic marketplaces handling billions of transactions a day have turned the targeting of individuals into a drone strike rather than a hit-or-miss barrage. Costs have come down, so millions of online businesses, instead of renting premises, have turned digital ads into the Yellow Pages on steroids. People are spending more time glued to screens, giving advertisers more scope to seduce them. The result has been stunning growth. MoffettNathanson, a research firm, says digital ads have grown from 27% of all dollars spent on advertising in America in 2015 to 52% (, the second-biggest category, has dropped from 42% to 33%). Until recently, the main question asked on Wall Street was not whether the feast would continue but how soon the digital share would reach 80%?